Why it matters

The U.S. Court of Appeals for the Fourth Circuit reversed the district court’s dismissal of a Title VII retaliation and discrimination lawsuit after determining that the denial of voluntary overtime could constitute a tangible employment action. Tamika Ray was hired as a bundler by International Paper Company in 2002 and allegedly sexually harassed by her supervisor beginning the following year. According to Ray’s lawsuit, the supervisor made repeated sexual comments, offered to pay her to perform sexual acts and, on one occasion, grabbed her thigh. Ray first reported the harassment in 2013 but, despite company policy mandating that supervisors pass such reports along to the legal or human resource departments, her new supervisors failed to do so. When her original supervisor learned of her complaint, he told her she could no longer perform voluntary overtime before her shifts—resulting in a significant decrease in her income. Other workers were still allowed to do such work. Ray sued, and a district court judge granted summary judgment in favor of the employer. The Fourth Circuit reversed, finding that the denial of voluntary overtime could be a tangible employment action, allowing Ray’s suit to move forward.

Detailed discussion

International Paper Company (IPC) hired Tamika Ray in 2002 to work as a bundler and, later, as an operator. In both positions, Johnnie McDowell was Ray’s supervisor, but in 2013, after a transfer to a new department, Ray reported to new supervisors. Ray told her supervisors that McDowell had been sexually harassing her since 2003. She claimed that he repeatedly asked her to engage in sexual activity with him and offered to pay her for those acts. He also made several overtly sexual comments to Ray and, on one occasion, grabbed her thigh while the two were alone in his office.

Under IPC’s anti-harassment policy, a supervisor is required to report an allegation of sexual harassment to a human resources (HR) representative or the legal department. Ray’s new supervisors did neither. In 2014, when McDowell learned that Ray had complained about his conduct, he confronted her and informed her that she could no longer perform “voluntary” overtime work before her regular work shift began.

Ray then reported McDowell to the HR department. Other employees backed up Ray’s statements, and investigators determined that McDowell was lying when he denied the harassment. The company did not discipline McDowell, however. Ray made additional complaints that McDowell was sabotaging her work on the production line. Again, other employees confirmed this behavior, and again, IPC took no action against McDowell.

Ray filed suit alleging that she was subjected to a hostile work environment in violation of Title VII and asserting a separate claim of retaliation. A district court judge granted IPC’s motion for summary judgment, and Ray appealed.

The Fourth Circuit reversed, rejecting the employer’s argument that the elimination of voluntary overtime hours did not qualify as a tangible employment action under the statute.

“Ray testified that McDowell’s decision preventing her from performing this higher-pay work negatively affected her income,” the federal appellate panel wrote. “Prior to McDowell’s action, Ray regularly was permitted to work for four hours before her shift, earning around $24 per hour instead of her normal rate of $16.25 per hour. Ray explained that these almost daily voluntary overtime hours were a ‘significant part of [her] earnings.’ A reasonable jury could determine that losing this amount of income constituted a ‘significant change in [Ray’s] benefits.’”

This conclusion was not altered by IPC’s contention that Ray received a greater amount of overtime hours in 2015 than she received in 2014, the court added. Ray did not claim that her ability to earn overtime pay was eliminated completely, and the employer still required certain overtime work of its employees.

“Thus, Ray’s total amount of overtime income in 2015 bears little relevance to her claim that her income was affected negatively, at least for a period, because she was denied the opportunity to do voluntary overtime work,” the court said.

Nor was the panel persuaded by IPC’s argument that Ray lacked evidence that McDowell denied her the ability to perform voluntary overtime work because she refused to submit to his sexual demands.

“Here, the record shows that McDowell was responsible for the decision to eliminate Ray’s voluntary overtime work,” the court said. “On one occasion after eliminating her ability to perform voluntary overtime work, McDowell asked Ray whether she wanted to make extra money and told her to meet him after work. Thus, on the present record, it is impossible to separate McDowell’s motive for eliminating Ray’s voluntary overtime work from McDowell’s inappropriate conduct.”

Turning to Ray’s retaliation claims, the court again disagreed with IPC that the plaintiff failed to establish a causal link between her complaints about McDowell’s conduct and the elimination of her voluntary overtime hours. It was sufficient that Ray presented evidence that she lost a “significant part of [her] earnings,” the court said, and it remained a dispute of material fact regarding whether her loss was severe enough to constitute an adverse employment action.

“Based on the record before us, a jury reasonably could determine that McDowell retaliated against Ray after learning that she had complained about him to other IPC supervisors,” the panel wrote. “Accordingly, we conclude that there are disputed issues of material fact with respect to Ray’s retaliation claim against IPC.”

The court remanded the case to the district court for further proceedings.

To read the opinion in Ray v. International Paper Company, click here.