Costco Hit With $250K Verdict in Customer Harassment Suit

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By Kevin McGowan

Costco Wholesale Inc. must pay $250,000 in damages to a female former employee who was sexually harassed by a male customer for more than a year, a federal district court jury in Illinois decided ( EEOC v. Costco Wholesale Corp. , N.D. Ill., No. 14-6553, judgment entered 12/21/16 ).

The Equal Employment Opportunity Commission had sued Costco for failure to stop the harassment of Dawn Suppo, who worked in its Glenview, Ill., warehouse store. Although the customer’s conduct included unwelcome touching and stalking, Costco didn’t take effective steps to address the harassment, the EEOC alleged.

After a seven-day trial, the jury in the U.S. District Court for the Northern District of Illinois unanimously found Costco violated Title VII of the 1964 Civil Rights Act. The court on Dec. 21 entered judgment for the EEOC based on the jury’s verdict.

Employers can be held liable under Title VII for third-party harassment of their employees if they know about the conduct and fail to take steps reasonably calculated to stop the harassment.

Swift, Effective Response Required

The EEOC said the customer in the Costco case told store managers about his ongoing contacts with Suppo.

Even though Suppo complained that she considered the customer’s conduct to be harassing, Costco didn’t act promptly to stop it, the agency said. Suppo was forced to obtain a restraining order against the customer, the EEOC said.

Judge Ruben Castillo in 2015 denied Costco’s attempt to dismiss the EEOC’s claim that it allowed a sexually hostile work environment to persist.

A jury could reasonably find Costco’s eventual decision to ban the customer from its Glenview location wasn’t adequate because it came a more than a year after Suppo first complained, the court said.

Costco and its attorneys didn’t respond to Bloomberg BNA’s requests for comment Dec. 23.

EEOC attorneys in Chicago represented the commission. Seyfarth Shaw LLP represented Costco.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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