Thomas O'Connor Constructors, Inc. v. Massachusetts Commission Against Discrimination

Thomas O’Connor Constructors, Inc. (O’Connor), appeals from a judgment of the Superior Court affirming a decision and order of the Massachusetts Commission Against Discrimination (MCAD) on a claim brought by Jarvis Aldridge, an African-American employee of Rustic Fire Protection (Rustic). The MCAD ordered O’Connor to pay Aldridge $50,000 in emotional distress damages on account of offensive racial remarks made to or about Aldridge on four different occasions by Paul Daley, O’Connor’s job site superintendent. The MCAD also ordered O’Connor to pay a $10,000 civil penalty and to conduct annual training sessions for a period of five years.

On appeal, O’Connor asserts that (1) imposition of liability on O’Connor under G. L. c. 151B, § 4(4A), for the racially offensive remarks of Daley, is error where no employment relationship existed between O’Connor and Aldridge and O’Connor neither knew nor had reason to know of Daley’s remarks; (2) Daley’s remarks were insufficiently severe and pervasive to create a racially hostile work environment; and (3) the evidence was insufficient to support an award of emotional distress damages. We affirm, albeit on grounds different from those relied on by the MCAD. We conclude that O’Connor is directly liable for tolerating the hostile work environment created by Daley where it had notice of Aldridge’s claim but failed to remedy or take sufficient corrective action and, instead, returned Daley to supervise the work site.

1. Background. On December 7, 1998, Aldridge filed a complaint with the MCAD against O’Connor claiming that he was an employee of O’Connor and that Daley, a supervisor, had engaged in unlawful discrimination on the basis of race and color in violation of G. L. c. 15IB, § 4(1). The alleged unlawful discrimination consisted of Daley’s use of racial epithets when talking with or about Aldridge.

A hearing officer concluded that Daley made the racially offensive remarks alleged; that Aldridge was not the employee of O’Connor, but of Rustic; and that notwithstanding the absence of an employment relationship with Aldridge or liability under § 4(1), O’Connor was liable under G. L. c. 151B, § 4(4A), on *551account of Daley’s interference with Aldridge’s right to a non-hostile work environment. The hearing officer awarded Aldridge $25,000 in emotional distress damages2 and ordered O’Connor to pay a $10,000 civil penalty and to conduct annual training sessions for all of its employees, managers, and supervisors for a period of five years. On review, the MCAD affirmed the hearing officer’s findings of fact and conclusions of law, but deemed the award of emotional distress damages inadequate and vacated it. The MCAD also modified the annual training order by hmiting its application to managers and supervisors. On remand, the hearing officer awarded $50,000 to Aldridge for emotional distress damages and the MCAD affirmed. A judge of the Superior Court affirmed the MCAD decision and order and this appeal followed.

2. Facts. We summarize the facts found by the hearing officer. O’Connor was the general contractor on a project for renovation of two buildings at the University of Massachusetts at Lowell (UMass-Lowell). Rustic was a subcontractor at the project, responsible for installation of a new sprinkler and fire protection system. Besides Rustic, two other subcontractors worked on the project.

Daley, who was the job site superintendent, served as O’Con-nor’s chief spokesperson and authority at the project. His responsibilities entailed overseeing of the work of the subcontractors, including coordinating and assisting in scheduling of the work. Daley unlocked and opened doors to various areas of the job site, and occasionally gave keys to the subcontractors and their employees, including Aldridge.

Daley did not assign work to Rustic’s employees, order supplies on their behalf, supervise them, or tell them what to do. Ron Russell, Rustic’s foreman, directly supervised and provided materials to Rustic’s employees, including Aldridge. When Russell was on vacation, Aldridge served as acting supervisor. Aldridge received compensation only from Rustic for his work on the project.

From November 27, 1997, until the end of August, 1998, Da*552ley and Aldridge interacted without difficulty. Thereafter, on four separate occasions, Daley made racially offensive remarks to or about Aldridge or James Lucas, an African-American who worked for O’Connor as a laborer. Specifically, on August 27, 1998, in the presence of Russell and Aldridge, Daley referred to Lucas as a “fucking dumb nigger.” When Aldridge asked Daley if he knew what the word meant, Daley responded, “It’s a phrase used in the Holocaust with reference to Jews.” Upon being told that the slur referred to “black people,” Daley laughed.

A few weeks later, on September 21, in the presence of Aldridge alone, Daley again referred to Lucas as a “fucking dumb nigger.” Aldridge turned and walked away. The next day, during the lunch break and following a conversation about sports, Daley referred to Aldridge as a “black bastard” in the presence of Russell and other pipefitters. Although angered by the remark, Aldridge did not respond.

Finally, on September 24, 1998, while Daley and Russell were driving to New Hampshire, Daley complained to Russell that Aldridge reaped the benefits of a prevailing wage job because he is a “fucking nigger.” On returning to the job site, Russell told Aldridge of Daley’s remark. Aldridge became visibly upset. Russell also told Rustic’s project manager, Chad Duboc, of Daley’s comments. Aldridge informed John Duboc, Rustic’s owner, about Daley’s remarks and requested that he (Aldridge) be removed from the work site. John Duboc told Aldridge that Rustic needed him at the project and denied his request to work elsewhere.

Aldridge wrote a letter, dated September 30, 1998, and addressed “To Whom It May Concern,” detailing the four incidents. He gave the letter to Lucas and then to a union business agent in the hope that the letter would find its way to O’Connor, which it did.

Joseph Vogel was O’Connor’s project manager for the UMassLowell project. Vogel visited the work site one or two times per week. In October, 1998, upon hearing that Daley had made racial comments to Aldridge, Vogel went to the work site and asked Aldridge, “Jarvis, what’s going on?” Aldridge responded angrily, “There’s nothing wrong with being a black man.” Aldridge told Vogel that he should “read the letter” and that he *553(Aldridge) would be pressing charges against O’Connor. Vogel told Aldridge that he would “get to the bottom of it.”

Daley was away on his honeymoon when Vogel began his investigation. When Daley returned, Vogel told him not to report to the job site. On October 19, Vogel and other O’Connor officials met with Daley to discuss the charges. Daley adamantly denied making any racial slurs. Vogel then spoke with Russell and with Lucas, one of O’Connor’s own employees. Russell corroborated Aldridge’s account, advising Vogel that he would “back his man.” Lucas denied ever being directly subjected to discrimination in any form by Daley; but when O’Connor presented Lucas with a written statement to that effect, Lucas refused to sign the document.

O’Connor concluded its investigation without again speaking with Aldridge, without disciplining Daley, and without notifying Aldridge of the results of its investigation or that Daley would be returned to the work site. In its internal investigation summary, O’Connor took the position that “[sjince the specific situation is not known at this time, we will wait until a ‘claim’ is actually in house and review before taking action. (The term claim in house is referencing an ‘official action’ generated against O’Connor ... — this might not happen at all).” O’Connor reassigned Daley to the project job site. Daley had been off the site for two weeks while on his honeymoon and an additional two weeks while the matter was investigated. Upon seeing Daley back at the job site, Aldridge packed up his tools and left work that, in his words, he loved — a job with “good money” and at which he worked with “good people” — because he could no longer tolerate working there while Daley was present.

The hearing officer credited the testimony of Aldridge and his wife that at the time of the racial remarks, Aldridge began coming home from work very disturbed and angry. He confided to his wife that his attitude was in response to Daley’s racial slurs. Aldridge experienced physical manifestations of distress. He lost weight and had difficulty sleeping. He became withdrawn and isolated; he stopped playing with his children, ceased communicating with his wife, and locked himself in his room to avoid contact with them. Aldridge’s outlook improved temporarily when Daley was away, but the withdrawn behavior returned when Daley returned to the job site.

*5543. Liability of O’Connor. The working arrangement that serves as backdrop to the present claim is commonplace in large construction projects where a general contractor and specialized subcontractors interact at a common work site. Aldridge’s claim is unusual, however, in that he sought recovery not against Rustic, his employer,3 or even against Daley, the perpetrator, but against O’Connor, the general contractor, on account of Daley’s racially offensive remarks.

The MCAD did not rest its decision on G. L. c. 151B, § 4(1), under which Aldridge brought his claim.4 The hearing officer found, and the parties do not challenge, that Aldridge was an employee of Rustic, but not of O’Connor.5 Absent such an employment relationship, the MCAD concluded that O’Connor could not be liable to Aldridge under § 4(1), either directly or derivatively, for the acts of its supervisor, Daley.

Instead, the MCAD ruled that O’Connor was liable to Aldridge under G. L. c. 151B, § 4(4A), inserted by St. 1989, c. 722, § 14, which makes it an unlawful practice:

“For any person to coerce, intimidate, threaten, or interfere with another person in the exercise or enjoyment of any right granted or protected by this chapter . . . .”

Guided by one of its decisions6 that imposed liability on a *555direct perpetrator7 of discrimination not part of the employment unit, the MCAD interpreted G. L. c. 151B, § 4(4A), so as to make O’Connor liable for Daley’s actions regardless of its knowledge. See Modern Continental/Obayashi v. Massachusetts Commn. Against Discrimination, 445 Mass. 96, 105 (2005) (Modern Continental) (statute to be interpreted liberally to effectuate purpose of eliminating workplace discrimination). The MCAD reasoned that O’Connor and Aldridge were “person[s]” as defined in G. L. c. 151B, § 1(1), inserted by St. 1946, c. 368, § 4, and that the right to work in an environment free from unlawful racial harassment is among the rights encompassed by the statute. Moreover, relying on College-Town, Div. of Interco, Inc. v. Massachusetts Commn. Against Discrimination, 400 Mass. 156,163-167 (1987) (College-Town) (employer hable under § 4[1] for intentional acts of its supervisory personnel regardless of its notice of those acts), it concluded that O’Connor could be held hable under § 4(4A) for the acts of Daley regardless of its knowledge of those acts.

We agree with the MCAD that O’Connor could not be liable to Aldridge under § 4(1) because there was no employment relationship between O’Connor and Aldridge.8 Indeed, no Mas*556sachusetts appellate decision ever has interpreted § 4(1) to apply to an action brought by or against someone outside the employment unit. See Modem Continental, 445 Mass, at 97, 105 (declining to read G. L. c. 151B in manner that would absolve employer of all responsibility to its own employee for hostile work environment attributable to actions of subcontractor).

We also agree with the MCAD that O’Connor, the general contractor, is liable to Aldridge, the employee of a subcontractor at the work site, under § 4(4A). Where on the present facts we conclude that O’Connor is liable to Aldridge for failing to remedy a racially hostile work environment of which it had notice, we need not resolve the more difficult question whether O’Connor could be liable under § 4(4A) solely on account of Daley’s remarks without regard to its awareness of those remarks.9

Although no Massachusetts appellate decision ever has interpreted § 4(4A) to make an employer liable to someone other than its employee, the statutory language admits of such a result.10 General Laws c. 151B, § 4(4A), makes it unlawful for “any person” to “coerce, intimidate, threaten, or interfere with another *557person” in the exercise or enjoyment of rights granted under the chapter. O’Connor, Aldridge, and Daley are all “persons” as defined in G. L. c. 151B, § 1(1), and the right to work in an environment free from unlawful racial harassment is unquestionably among the rights encompassed by the statute.11

In our view, the present problem lies in the application of § 4(4A) not to acts of which O’Connor was aware but to acts of O’Connor’s employees of which O’Connor was not aware. We acknowledge that, generally speaking, a corporation is a legal entity that must act through agents and employees. Nevertheless, we are concerned that broad application of this principle in the context of § 4(4A) could produce untoward results not contemplated by either the language or the intent of that subsection.

Unlike the language of § 4(1), as appearing in St. 1989, c. 516, § 4, which contemplates derivative liability by making it unlawful for “an employer, by himself or his agent,” to engage in discriminatory practices, the language of § 4(4A), by contrast, omits any reference to agents and speaks only to the direct liability of a “person.” Nor does the tort doctrine of respondeat superior dictate vicarious liability under § 4(4A). “[RJespondeat superior is the proposition that an employer, or master, should be held vicariously liable for the torts of its employee, or servant, committed within the scope of employment” (emphasis supplied). Dias v. Brigham Med. Assocs., 438 Mass. 317, 319-320 (2002). See Kavanagh v. Trustees of Boston Univ., 440 Mass. 195, 198 (2003). A discrimination action under G. L. c. 151B is, however, a statutorily created right, not a common-law tort. See Jancey v. School Comm. of Everett, 421 Mass. 482, 500-501 (1995) (despite historical connection statute prohibiting discrimination *558may have with common-law tort or contract claims, “acts of discrimination — whether intentional or unintentional — do not thereby become torts”).

That principles of vicarious liability operate differently, and that caution is in order in applying such principles throughout the various subsections of G. L. c. 151B, § 4, is evident from College-Town, 400 Mass, at 163-167. There, the court considered the scope of an employer’s vicarious liability under § 4(1) for discrimination in the workplace arising from the acts of its agent. Taking note that language of § 4(1) “prohibits discrimination by ‘an employer, by himself or his agent,’ ” the court concluded that the Legislature had made clear its intent to impose vicarious liability under that section. Id. at 165, quoting from G. L. c. 151B, § 4. “It is clear that the Legislature intended that an employer be liable for discrimination committed by those on whom it confers authority.” College-Town, supra. Guided by the Legislature’s expressed intent, and without resolving the extent to which “G. L. c. 151B, § [4(1)], imposes an affirmative obligation on an employer to ensure that its workplace is not pervaded by harassment based on race, color, religious creed, national origin, sex, or ancestry, regardless of [its] source,” the court held that the employer was “vicariously liable for the acts of its agents — its supervisory personnel.” Ibid.

Significantly, in our view, College-Town limited the employer’s vicarious liability under § 4(1) to the acts of its supervisory personnel, not those of all of its workers, as would have been the case in a common-law tort. We note, as well, that the considerations relied on in College-Town for holding an employer vicariously liable under § 4(1) for its supervisor’s discriminatory actions either do not exist, or exist with diminished force in the context of a claim under § 4(4A) by a person like Aldridge who is not part of the employment unit. When the claimant is not part of the employment unit, the supervisor does not exercise direct supervisory authority over him. Nor does harassment by the supervisor carry the same implied threat of punishing resistance through exercise of supervisory powers as exists within the employment unit. See id. at 165-166. Likewise absent is the concern regarding the anomaly that a notice requirement creates when the perpetrator is also the supervisor to whom notice would be given by an *559employee. See id. at 166-167. When the claimant is not part of the employment unit, no chain of command considerations restrict his ability to notify those with the ability to rectify the problem. Indeed, as was done here, he is free, if not obliged, first to approach his own employer, which has an obligation to protect its employee, whether by notifying the perpetrator’s employer or by removing the claimant from the situation should notification or other protective measures prove unsuccessful. See Modem Continental, 445 Mass, at 108-109.12 Likewise, as was done here, the claimant is free to provide notice of the discrimination to those in the corporate hierarchy of the perpetrator’s employer and seek protection from them.

We are concerned that application of principles of vicarious liability enunciated in College-Town for a claim under § 4(1), to a claim under § 4(4A), would render an employer strictly and immediately hable for discrimination directed at nonemployees that it had no opportunity to control. Such liability would arise regardless of the employer’s knowledge of the discrimination, regardless of the remedial steps taken upon learning of the discrimination, and regardless even of the existence of strong preventive programs already in place to combat discrimination in the workplace. Such a broad application of derivative liability in the context of § 4(4A) could render an employer liable to a broad spectrum of third-party nonemployees, including subcontractors, delivery persons, and canteen workers who conduct their business on the employer’s work site.

Without need to do so, we are hesitant to resolve the difficult, uncertain, and potentially limitless contours of an employer’s derivative liability under § 4(4A) for acts of its own personnel of which it is unaware.13 We need not do so here where O’Con-nor is liable to Aldridge under § 4(4A) directly for its failure to *560remedy a racially hostile work environment of which it had notice. “An employer who passively tolerates the creation of a hostile working environment implicitly ratifies the perpetrator’s misconduct and thereby encourages the perpetrator to persist in such misconduct, whatever the employer’s precise legal relationship to the perpetrator.” Modem Continental, 445 Mass, at 105. See College-Town, 400 Mass, at 167-168 (employer that fails to take remedial action after notification of harassment is liable therefor).

Having commenced an investigation into Aldridge’s allegations against Daley and corroborated the existence of at least those comments made in the presence of Russell, O’Connor failed to take the remedial steps that would discipline Daley and assure Aldridge that his concerns had been heard and that Daley’s behaviors would not be tolerated. Instead, O’Connor returned Daley to his job as work site superintendent. Such apparent inaction led directly, and reasonably predictably, to Aldridge’s leaving the work that he loved at considerable emotional cost. In such circumstances, we hold that an employer who is on notice of unlawful discriminatory acts by its supervisor, directed toward an employee of a subcontractor at a unitary work site, and fails to take reasonably adequate remedial action is liable under G. L. c. 151B, § 4(4A).

4. The severity and pervasiveness of the hostile work environment. We need not dwell long on O’Connor’s contention that there was insufficient proof that Daley’s conduct created a racially hostile work environment. Daley’s repeated, offensive, racist remarks were sufficiently severe or pervasive to create a hostile work environment. See Gnerre v. Massachusetts Commn. Against Discrimination, 402 Mass. 502, 508-509 (1988); Muzzy v. Cahillane Motors, Inc., 434 Mass. 409, 411 (2001); Cuddyer v. The Stop & Shop Supermarket Co., 434 Mass. 521, 522 (2001). *561Daley’s remarks intimidated, humiliated, and stigmatized Aldridge and other workers of his race in such a way as to pose a “formidable barrier to the full participation of an individual in the workplace.” College-Town, 400 Mass, at 162. A workplace at which the job site superintendent of a general contractor repeatedly refers to African-American employees of subcontractors at the work site with epithets such as those employed by Daley and at which the general contractor, upon learning, fails to take appropriate remedial action creates a racially hostile work environment that is sufficiently severe and pervasive as to permit recovery.

5. The emotional distress damages award. The award of emotional distress damages fully was supported by the record. See Stonehill College v. Massachusetts Commn. Against Discrimination, 441 Mass. 549, 576 (2004) (emotional distress damage award must be supported by “substantial evidence” and factual basis must be “made clear on the record”). Substantial evidence supports the hearing officer’s findings and conclusion that Aldridge suffered emotional distress, lost weight and had difficulty sleeping as a result of the racially hostile work environment. Aldridge came home from work very disturbed and angry as a result of Daley’s racial slurs. He experienced physical manifestations of distress, became withdrawn and isolated, stopped playing with his children, and ceased communicating with his wife. Such evidence was sufficient to support the determination that Aldridge suffered emotional distress and was compelled to curtail his life’s activities as a result of the unlawful discrimination. See ibid. The award of emotional distress damages and the other remedial action ordered was within appropriate bounds. See DeRoche v. Massachusetts Commn. Against Discrimination, 447 Mass. 1, 9 (2006).

Judgment affirmed.