In late August, the Equal Employment Opportunity Commission (EEOC) won a huge case against Fry’s Electronics Inc. that should be turning employers’ heads nationwide. The Washington State litigation ended with a consent decree to the tune of $2.3 million dollars, one of the highest payouts on a per-claimant basis for any EEOC lawsuit.
Here are the facts:
Fry’s employed twenty-year-old America Rios as a sales associate. A supervisor started making advances, which she rebuffed. But soon, the supervisor was sending her sexually harassing text messages, so she sought help from her direct supervisor, Ka Lam. Mr. Lam took action, reporting the harassment to the legal department. Fry’s reacted by terminating Mr. Lam, citing a poor performance record—despite his usual positive reviews.
Enter the lawyers.
The EEOC brought suit for discrimination and retaliation for Mr. Lam, and similar charges for Ms. Rios. The Washington District Court permitted the EEOC to represent both parties in the same suit.
Fry’s lawyers were not happy, and engaged in questionable (at best) legal strategy. In its order imposing sanctions, the court expressed disgust for their legal tactics, calling Fry’s actions “unfair, unwarranted, unprincipled, and unacceptable.” The court also accused Fry’s of spoliating or destroying evidence relevant to the case.
In the end, the court sanctioned Fry’s with a $100,000 fine, and ordered payments to Mr. Lam and Ms. Rios of $1,564,000 and $736,000, respectively, in damages, attorney’s fees, and lost wages. Fry’s will also undergo mandated harassment trainings for two hours per employee, per year. The company will be closely monitored to ensure compliance with the standard expected from businesses nationwide.
Employers should learn from Fry’s mistakes. If an employee complains of harassment, supervisors must follow proper procedure or risk being thrown out of the frying pan and into the fire. Furthermore, destroying evidence is never a good idea.