Refusal to sign arbitration agreement that covered pre-existing claim constituted “protected activity” under Title VII

For the week of January 21, 2008

Against the historical backdrop of Dr. Martin Luther King’s remark that eliminating segregation in Birmingham was the key to eliminating segregation in the South, the 11th U.S. Circuit Court of Appeals has affirmed a jury award in favor of an individual African-American employee in the Northern District of Alabama. The individual, Greg Goldsmith, claimed that his firing was in retaliation for his refusal to sign an agreement to arbitrate that would have impeded his pursuit of a previously-filed EEOC charge of hostile environment. Goldsmith v. Bagby Elevator, 11th Circ., No. 06-14440, Jan. 17, 2008.

Goldsmith was hired by Bagby in 1998 to work in its Birmingham shop as an elevator fabricator. During his employment, Goldsmith reported racial slurs made by his supervisor, Ron Farley, in his presence and in the presence of others, but no action was taken to end those remarks. In fact, Goldsmith was told “that’s just the way Ron [Farley] is. You are just going to have to accept it.” In addition to racial slurs, Goldsmith experienced threats of violence at work, including an instance when Farley’s nephew – a co-worker of Goldsmith’s – said that he planned to make Goldsmith’s son an orphan. Although Goldsmith reported the remark, no action was taken to reprimand or move the offending co-worker. In October 2001, Goldsmith filed an EEOC charge, claiming that his work environment was racially hostile, and that the company had failed to promote him on the basis of race.

On June 6, 2002, Goldsmith was given a document entitled “Dispute Resolution Agreement” which included an agreement to arbitrate all “past, present, and future” claims against Bagby Elevator; he was instructed to sign and return the document by the following day. When Goldsmith and a white co-worker both refused to sign the agreement, they were told they would be fired unless they signed. As the two men packed their belongings to leave the building, the white co-worker was approached by a supervisor and was asked to reconsider his stance. That co-worker subsequently signed the agreement and continued his employment. Goldsmith was not asked to reconsider his decision, even though he suggested that he would sign the document if it was limited to future complaints. The company rejected the suggestion and ultimately fired Goldsmith.

On June 7, Goldsmith filed a second EEOC charge, claiming both wrongful termination and retaliation. The EEOC issued a “for cause” determination in September 2002, finding retaliation, discrimination with respect to promotion, and a hostile work environment. Goldsmith filed a federal court lawsuit in May 2003, and the case was tried in June of 2006. The jury returned a verdict in Goldsmith’s favor on the wrongful termination and retaliation claims, awarding him over $50,000 in back pay and damages and $500,000 in punitive damages, in addition to more than $150,000 in attorney fees.

Bagby appealed the verdict and argued that Goldsmith had failed to prove his claims. On appeal, the 11th Circuit found that Goldsmith established retaliation. It specifically found that Goldsmith was able to establish a causal relationship between his first EEOC charge and his firing, and that Bagby did not have a legitimate non-discriminatory reason for Goldsmith’s termination. Goldsmith was terminated immediately after refusing to sign an agreement that applied to his pending EEOC charge; he attempted to limit the agreement to future charges, but Bagby insisted that the agreement must apply to pending claims. Goldsmith was the only employee with a pending EEOC charge at the time, and the company was aware of that charge. Further, while a white employee was asked to reconsider his unwillingness to sign the agreement, Goldsmith was not. These facts, taken together, were sufficient for the jury to find a relationship between Goldsmith’s EEOC charge and his firing, and established unlawful retaliation.

Further, because of the Bagby’s failure to enforce its non-discrimination policy, the Court upheld the jury’s punitive damage award against the company. It found that there was evidence that Bagby was “recklessly indifferent” to Goldsmith’s federally protected rights, that the company’s policy was ineffective, and that the actions of the company – for instance, telling Goldsmith that he would have to accept Farley’s actions because “that’s just the way Ron is” – proved that the company was apathetic to Goldsmith’s rights.

In upholding the jury award of over $550,000 in Goldsmith’s favor, the Court reminds us that in spite of existing forward momentum, we must continue working to remedy racism and discrimination in the workplace. It is also a wake-up call to employers that not only are employees’ substantive civil rights important, but methods for pursuing those rights must be respected, without artificial barriers being erected to impede their progress.