Worker Harassment Cases Get ‘Tricky’ With Mentally Ill Patients

The EEOC’s recent federal appeals court loss in a case where assisted living residents harassed workers left unresolved the extent to which employers face liability over the use of racist slurs from mentally impaired people who aren’t employees.

Last week, the US Court of Appeals for the Seventh Circuit ruled against the Equal Employment Opportunity Commission, which sued Village at Hamilton Pointe LLC on behalf of several Black nurses and other staff. The appeals court upheld various lower court judgments and a jury verdict that mostly excused the assisted living facility operator from “third party” harassment liability for elderly residents’ repeated use of the N-word and other epithets.

The Seventh Circuit noted the “aspersions came from patients suffering severe mental impairment,” and weren’t severe or pervasive enough for a racial harassment claim under Title VII of the 1964 Civil Rights Act.

There’s no one-size-fits-all legal framework to assess cases where a third-party harasser’s mental state is considered, employment attorneys told Bloomberg Law. These types of disputes are most prevalent in health care or residential long-term care settings and usually involve unique facts specific to each case, they said.

“It’s always a balancing test,” said Jenna Brofsky, a partner at Husch Blackwell LLP. “It’s been a tricky issue for courts.”

Call for Guidance

The Seventh Circuit held that a “resident’s racist statement, although still very offensive, is not entitled to the same weight as would be warranted if the same statement was made by a co-worker.”

“This conclusion is especially true when the speaker is or could be perceived to be suffering from a medical condition,” it said.

That opinion is consistent with rulings from other federal circuits that have assessed similar disputes involving mentally ill patients, attorneys said. The Fifth Circuit, for example, affirmed the dismissal of a Title VII case based on an Alzheimer’s patient’s sexual harassment of a home caregiver.

Although the Fifth Circuit acknowledged the patient’s behavior was “clearly crude, humiliating, and insensitive,” the court said the case’s “unique circumstances” made the “elderly and obviously impaired” patient’s commentary insufficient to establish harassment.

Further guidance from the US Supreme Court “would still be useful” because the Seventh Circuit’s ruling “raises the question of what working conditions a medical professional or staff is entitled to expect when they are working with people with cognitive challenges,” said Erika Todd, a partner at Sullivan & Worcester LLP.

“It is still theoretically possible to have a harassment claim that is based on a patient’s behavior,” Todd said. “But the bar is seen to be higher for how severe or how frequent the misbehavior must be before there’s a possible legal claim.”

The decision also suggests that there’s a “certain amount of harassment or discrimination that you just have to put up with,” but not all health-care professionals “might be able to tolerate that,” she said.

The Seventh Circuit concluded that it merely applied the law, but stopped short of saying whether precise judicial or legislative guidance was needed.

“Our opinion constitutes, however, no approval of the situations portrayed in the pages of this record,” the ruling said. “Whether our legal norms ought to be tightened or updated at the federal or state level to ensure a higher level of civilization in our health care institutions is a pressing subject within the ken of our legislatures and regulatory agencies.”

An EEOC spokesperson declined to comment, saying the agency won’t “add anything at this point outside of proceedings.”

Counsel for Hamilton Pointe didn’t immediately respond to a request for comment.

Duty to Report

Federal anti-bias law doesn’t specifically state what, exactly, employers must do when a third party discriminates against or harasses their employees, attorneys said.

An employer could be held responsible for third-party liability if it doesn’t take proper corrective action after learning about the alleged harassment, according to established case law.

Seventh Circuit precedent further requires workers to give notice of the alleged harassment “to either someone with authority to take corrective action or, at a minimum, someone who could ‘reasonably be expected to refer the complaint up the ladder to the employee authorized to act on it.’”

In the Hamilton Pointe case, the appeals court found that some of the Black workers never reported the alleged harassing conduct to their employer or followed the proper complaint process.

Practical Steps

General workplace harassment training, as well as reporting protocols that are written and made accessible to customers and third parties, can be useful for employers in addressing discrimination and lowering liability risks, said attorney Maria Dwyer of Clark Hill PLC.

“By doing that and making sure the policy is enforced, employees will feel more comfortable speaking up,” Dwyer said. “In this case, you saw many of the folks said they didn’t report the conduct because they didn’t think anything would happen.”

Employers also should tread carefully when determining what corrective action may be reasonably likely to prevent the misconduct from recurring, attorneys said.

For instance, the complaining employee could be given the option of working in an area where they have no contact with the offending customer or third party, said Alec DiMario, an attorney with Michelman & Robinson LLP.

But moving the worker from the accused party might not always be the right call, he said.

Relocating that worker “might actually end up hurting the employer and lead to a retaliation claim if it somehow negatively impacts the terms and conditions of their employment,” DiMario said. “This is where, for employers, it gets kind of tricky.”

The case is EEOC v. Vill. at Hamilton Pointe LLC, 2024 BL 159667, 7th Cir., 22-2806, 5/9/24.