EEOC v. Management Hospitality of Racine, Inc.

Katrina Shisler and Michelle Powell (plaintiffs) worked as servers at a restaurant franchise (Racine restaurant) owned by Management Hospitality of Racine, Inc. (MHR) (defendant). Shisler worked at the Racine restaurant from March 2005 to April 2005; Powell worked there from late 2004 through June 2006. Both plaintiffs were teenagers at the time. In 2005, MHR implemented a formal policy prohibiting workplace harassment and imposing a mandatory reporting requirement on all employees. MHR charged individual restaurant managers with providing sexual harassment training to new hires, which consisted of watching a video and signing a written acknowledgement of the sexual harassment policy. In 2005, Steve Smith was the district manager for the Racine restaurant, Michelle Dahl was the general manager, and Nadia Del Rio and Rosalio Gutierrez were assistant managers. During Shisler and Powell’s respective periods of employment, Gutierrez subjected both women to frequent, sexually explicit comments, gestures, innuendo, and humiliation in front of other employees. Shisler reported the behavior to assistant manager Del Rio, who blew it off, and then to general manager Dahl, who was also dismissive. Powell complained to Dahl, who did nothing to address the complaints. The Equal Employment Opportunity Commission (EEOC) sued MHR on behalf of Shisler and Powell, alleging MHR was liable under Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000e et seq., for the hostile work environment that Gutierrez created. A jury found in favor of the plaintiffs on their sexual harassment claims. MHR appealed, arguing it was not liable, because it had taken sufficient preventive and corrective measures regarding the harassment.