Equal Employment Opportunity Commission v. Xerxes Corp., 2011 U.S. App. LEXIS 8481

Xerxes is a Minneapolis-based fiberglass tank manufacturer; Pearson, Wilson, and Graham worked as assemblers at the Williamsport, Maryland plant under supervisor Shifflett, with Green and the plant manager as higher-ups.
Xerxes maintained a Corporate Compliance Program and an anti-harassment policy requiring employees to report incidents to a supervisor, plant manager, or Compliance Committee; refresher training was conducted annually.
A collective bargaining agreement with the Union prohibited discrimination and required just-cause discipline, with a grievance procedure and active Union involvement.
Pearson alleges sustained racial slurs and pranks from mid-2005 to February 2006, first reporting to Shifflett, who allegedly did not act until February 2006.
Wilson alleges similar harassment beginning November 2005, reporting to Shifflett; on February 3, 2006, he and Pearson reported a racially offensive incident; Xerxes investigated through its EEO processes.
Graham, employed 2004–2007, claimed racial incidents by co-workers and alleged Shifflett’s conduct; he was terminated for absenteeism in April 2007 and did not file an EEOC race charge.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Xerxes had notice of pre-Feb 2006 harassment and failed to act	Pearson/Wilson claim notice and inaction violated Title VII	Xerxes acted reasonably and within policy after notice	Yes, as to pre-Feb 2006 notice, facts create a triable issue; remand for that period
Whether Xerxes’ post-Feb 2006 responses were reasonably calculated to end harassment	Xerxes’ responses were inadequate and failed to stop harassment	Responses were prompt, proportional, and effective; not liable	Yes, post-Feb 2006 responses were reasonably calculated to end harassment; liability not imputed for subsequent incidents
Whether Graham suffered a racially hostile environment	Graham experienced severe, pervasive racial harassment	Graham's evidence is vague and insufficient	Graham’s claim failed; no evidence of severe/pervasive harassment demonstrated
Whether isolated later incidents render Xerxes liable	Isolated incidents show employer failure to remedy	Isolated incidents do not establish liability if prior responses were reasonable	As to later incidents, not liable; continued harassment not shown to be imputable given reasonable responses
What is the appropriate standard of employer liability for coworker harassment	Employer should be held liable if it knew and failed to act	Liability requires a reasonably calculated, effective response; not strict liability	Liability requires reasonably calculated, effective action; not automatic for every incident

Spriggs v. Diamond Auto Glass, 242 F.3d 179 (4th Cir. 2001) (elements of hostile environment; evidence standards)
Ocheltree v. Scollon Prods., 335 F.3d 325 (4th Cir. 2003) (en banc; employer liability after notice for coworker harassment)
Howard v. Winter, 446 F.3d 559 (4th Cir. 2006) (employer duty to act; reasonableness of response)
Sunbelt Rentals, Inc., 521 F.3d 306 (4th Cir. 2008) (reasonableness of remedial measures; policy effectiveness)
Mikels v. City of Durham, 183 F.3d 323 (4th Cir. 1999) (progressive discipline and effectiveness of actions in remedying harassment)
Central Wholesalers, Inc., 573 F.3d 167 (4th Cir. 2009) (employer liability framework and remedial measures)
Adler v. Wal-Mart Stores, Inc., 144 F.3d 664 (10th Cir. 1998) (reasonableness standard for employer action; not strict liability when harassment persists)
Spicer v. Commonwealth of Va., Dep’t of Corr., 66 F.3d 705 (4th Cir. 1995) (en banc; standards for harassment remedies and employer responses)
Knabe v. Boury Corp., 114 F.3d 407 (3d Cir. 1997) (remedies need not be the most effective; reasonable actions suffice)