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Overstock Knows How to Handle a Hostile Work Environment Claim

By Robyn Hagan Cain | Last updated on doesn't just sell discounted goods; it also responds swiftly to a sexual harassment claim.

Tuesday, the Tenth Circuit Court of Appeals dismissed a former employee's hostile work environment claim against Overstock, noting that the online discounter had done exactly what it needed to do to handle the situation.

In November 2002, Plaintiff Elizabeth Bertsch began work next to Dustin Latimer, a coworker supposedly "notorious" for viewing sexually explicit videos at work, putting up a poster of a "scantily clad" woman in his cubicle, and making sexist comments.

Bertsch's position is that she worked in the face of Latimer's sexual harassment, which Overstock knew but ignored. When she complained, the company criticized her, threatened reassignment, and eventually fired her. Overstock's view is that Bertsch was a difficult, high-maintenance employee who left the company with no choice but to part ways.

To establish that Latimer's alleged misogyny and disdain of her created a hostile work environment, Bertsch needed to present evidence that the workplace was "permeated with discriminatory intimidation, ridicule, and insult, that [was] sufficiently severe or pervasive to alter the conditions of [her] employment and create an abusive working environment" and that she was "targeted for harassment" because of her gender.

A company, as opposed to the individual directly responsible for the misbehavior, is liable on a negligence theory "if it knew or should have known about the conduct and failed to stop it."

The Tenth Circuit Court of Appeals noted that there's a difference between actionable conduct and conduct that is merely insensitive, tasteless, or vulgar. Title VII wasn't designed to "create a finishing school," but to address a hostile work environment characterized by "severe" or "pervasive" conduct alters the terms of employment.

Here, the appellate court agreed that Bertsch's claim should be dismissed because Overstock took prompt remedial action, which precluded liability. An "employer's liability for allowing a sexually hostile work environment after it is reported to the employer by the employee arises only if the employer fails to take adequate remedial and preventative responses to any actually or constructively known harassment," and Overstock responded properly.

If you advise clients on sexual harassment claims, take a look at the Tenth Circuit's opinion below in the Related Resources. This is an excellent example of how a company should address a hostile work environment claim.

Related Resources:

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