Nabors Drilling USA, Inc., a drilling contractor, hired Max Taylor as a "floorhand" on an oil rig in June, 2010.  Joe Mason and Jaime Mendez were Taylor's supervisors.  Several times a day, Mason called Taylor a "queer," "faggot," "homo," and "gay porn star."  Taylor told Mason he was not a homosexual and that he had a girlfriend.  Despite knowing that Taylor had a girlfriend, Mason continued to direct gay slurs towards Taylor.

In addition, Mason posted a photograph of Taylor on a wall inside the employee's restroom with a big target around Taylor's mouth in reference to an act of oral sex.  Taylor confronted Mason about the photograph and Mason, during a crew meeting, stated that whoever posted the picture was going to hurt Taylor's gay porn career.

Mendez also sexually harassed Taylor.  One day when Mendez was standing on an elevated rig floor and Taylor was beneath him, Mendez urinated on Taylor.  Mendez would also come up behind Taylor and spank his butt.  On occasion, Mendez aroused himself and asked Taylor to sit on his lap.  Mendez did not consider Taylor to be gay.

In September, 2010, Taylor contacted the company's human resources department and complained of harassment.  Afterwards, Mason did not return to the oil rig and Mendez's harassment stopped.  The company investigated Mason's conduct and terminated him.

In December, 2010, the company terminated Taylor.  The company claimed that Taylor was often late to work, was late for a mandatory meeting and missed another, left his shift early without permission and cursed at Mendez after he was asked to do a simple job task. 

Taylor sued the company for sexual harassment, failure to prevent harassment, retaliation and wrongful termination in violation of public policy.  The jury returned a special verdict in favor of Taylor as to sexual harassment only.  The jury awarded Taylor $160,000.  The company filed a motion for judgment notwithstanding the verdict (JNOV) which the trial court denied.  The company then appealed.

The California Fair Employment and Housing Act prohibits harassment.  To plead a cause of action for sexual harassment, it is necessary to show that gender is a substantial factor in the discrimination.  A court can grant a motion for JNOV only if there is no substantial evidence to support the verdict. 

The company argued that the trial court should have granted its motion for JNOV because the evidence was insufficient to establish that Taylor was harassed "because of" his sex and/or perceived sexual orientation.  The trial court denied the motion and stated that there was significant communication that focused on the sexual nature of the comments made and that the comments were not mere derogatory comments, but were specifically sexual in nature.

The Court of Appeal affirmed.  Relying upon Singleton v. United States Gypsum Company (2006) 140 Cal.App.4th 1547, the Court held that sexual harassment occurs where sex is used as a weapon to create a hostile work environment.  Mason and Mendez attacked Taylor's identity as a heterosexual male as a tool of harassment, therefore substantial evidence supported the verdict.  In reaching this determination, the Court disagreed with another case, Kelley v. The Conco Companies (2011) 196 Cal.App.4th 191 which held that offensive gay comments directed towards a heterosexual male did not constitute sexual harassment because there was no evidence that the supervisor making the comments was expressing actual sexual desire or had a sexual interest towards the employee.

The company also based its motion for JNOV upon a defective special verdict form which erroneously instructed the jurors to not answer two pertinent questions:  (1) did Taylor consider the work environment to be hostile or abusive and (2) was the hostile or abusive work environment a substantial factor in causing harm to Taylor?  The company claimed the special verdict was "fatally defective" because it did not require the jury to establish two essential elements of a sexual harassment claim. 

The Court held that the company waived its claim that the special verdict form was fatally defective because it failed to object before the jury was discharged.  Therefore, there was no opportunity to cure the defect by further deliberation.  The Court also held that the erroneous verdict form was "harmless error" as there was substantial evidence to show that the jury would have answered "yes" to the two unasked questions. 

Note:

The Kelley case mentioned within the decision sparked a legislative change to the California Fair Employment and Housing Act (FEHA).  Government Code section 12940(j)(4)(C) now provides that sexually harassing conduct "need not be motivated by sexual desire."  Accordingly, where offensive comments are made between members of the same sex and are motivated by "horseplay" instead of sexual desire, a harassment claim under the FEHA can be established.  LCW attorneys routinely conduct training that covers this type of harassment and which warns of the risk of allowing an atmosphere where such "horseplay" is tolerated.

Taylor v. Nabors Drilling USA, Inc.  (2014) 166 Cal.Rptr.3d 676