In Davis v. Fred’s Appliance (pdf), the Court of Appeals held that individuals who suffer workplace discrimination due to perceived sexual orientation are not members of a protected class therefore cannot recover on a hostile work environment claim under the Washington Law Against Discrimination (“WLAD”).  The Court also affirmed dismissal of a claim for defmation, which ruling prompted a strong (and persuasive) dissent (pdf). 

BACKGROUND

Albert Davis, who is straight, was a delivery driver for Fred’s Appliance, Inc.  Steve Ellis managed a Fred’s Appliance store in Spokane.  As manager, Ellis had authority to direct some of Davis’s work in connection with deliveries, but he did not have authority hire, fire, or punish any employees or authority to create or execute company policy.

On three separate occasions in the span of one week, Ellis taunted Davis during Davis’s deliveries by calling him “Big Gay Al” (a reference to the South Park character) in front of customers and other employees.  Each time Ellis engaged in this behavior, Davis asked him to stop.  On the third occasion, Davis reminded Ellis that he had previously asked not to be called “Big Gay Al” and allegedly yelled and swore at Ellis before leaving the store.

Upper management at Fred’s Appliance subsequently planned to reprimand Davis for his alleged outburst in front of customers.  Davis, in turn, informed management about Ellis’s repeated taunts and may have indicated that he desired to bring a formal complaint against Ellis.  Management assured Davis that Ellis would be required to apologize to Davis during a scheduled meeting and, according to Davis, made an oblique reference to Davis’s continued employment, which Davis interpreted as a veiled threat to dissuade him from lodging a formal complaint.

The eventual meeting arranged between Davis and Ellis was not successful.  Davis and management disagreed about his behavior during this meeting, but it was undisputed that Davis believed Ellis’s apology was insincere and lashed out at Ellis in front of management.  Management subsequently terminated Davis’s employment, citing Davis’s reaction to Ellis’s apology as the reason.

Davis then sued Fred’s Appliance, asserting, claims for hostile work environment in violation of the Washington Law Against Discrimination (WLAD), RCW 49.60, retaliatory discharge, and defamation.  The trial court dismissed Davis’s claims on summary judgment.

The Court of Appeals affirmed, and Judge Siddoway dissented on the issue of Davis’s defamation claim.   

ANALYSIS

Hostile Work Environment: Although it was undisputed that Ellis’s comments were unwelcome, Davis could not establish the remaining three elements of a hostile work environment claim: discrimination (1) against a protected class that (2) affected the terms and conditions of Davis’s employment and (3) was imputable to Davis’s employer.

• Davis’s hostile work environment claim was not based on a contention that he was harassed because of his sexual orientation (heterosexual) but, rather, on a contention of harassment based on perceived sexual orientation.
• Following the pronouncement in Glasgow v. Georgia-Pac. Corp. 103 Wn.2d 401, 407, 693 P.2d 708 (1985), that the plaintiff’s gender must be the motivating factor to establish sexual harassment under the WLAD, the court explained that to prevail on a hostile work environment claim based on sexual orientation, a plaintiff must prove that he or she was discriminated against because of his or her sexual orientation. 
• Based on the absence of any mention of perception in the WLAD definition of “sexual orientation” (as opposed to “gender expression or identity,” which is embedded in the definition of “sexual orientation”) and applying the interpretive rule that different words used in the same statute must be given different meanings so as not to render particular terms superfluous or meaningless, the court ruled that “‘perceived sexual orientation’ is not a protected class” and that Davis was therefore not a member of a protected class.
• Ellis’s comments, although offensive, were only casual, isolated, and trivial and therefore did not affect the terms of conditions of Davis’s employment to a sufficiently significant degree to create a hostile work environment.
• Ellis’s conduct could not be imputed to Fred’s Appliance for two reasons.  First, even though Ellis was a store manager and could direct some of Davis’s work, Ellis did not qualify as a supervisor because he had no authority to hire, fire, or punish employees or executive authority implying that he was an alter ego of Fred’s Appliance.  Second, the record showed that Fred’s Appliance management responded promptly and reasonably after learning of Ellis’s conduct, and Davis had failed to establish a veiled threat of termination for filing a formal complaint.

Retaliatory Discharge.  The court ruled that it need not address the question of retaliation for engaging in a protected activity because it already ruled that the WLAD does not create a cause of action for discrimination based on perceived sexual orientation and therefore activity in connection with such alleged discrimination would not be protected.

Defamation.  The majority affirmed dismissal of Davis’s defamation claim, reasoning that Ellis’s statements wer not actionaable and that Davis failed to establish special damages.  

Addressing the quality of Ellis’s statements, the majority observed “[t]he workplace can be a place that invites ‘exaggeration and personal opinion'” and concluded that Ellis’s comments were “apparently intended to be comical or pjeorative, or both.”  The majority also concluded the individuals who heard Ellis’s statements likely would have perceived Ellis’s statements as teasing because co-workers “were likely familiar enough” with Davis’s sexual orientation and others (customers) would likely understood the statements as a reference to South Park.  In light of those circumstances, the court concluded, listeners likely would have been able to discern that Ellis was simply joking.

With respect to the element of damages, the majority reasoned that because statements imputing homosexuality are not defamatory per se, Davis was required to establish special damages and failed to point to evidence creating a genuine issue of material fact on this element.

DISSENT

Judge Siddoway dissented from the majority’s ruling on Davis’s defamation claim.  With respect to whether Ellis’s statements were actionable, the dissent first noted that none of authorities cited by the majority supported the proposition that a workplace is a setting in which “reasonable listeners automatically diccount statements made by one employee about another.”  Further, given the lack of evidence that persons in the audience knew Davis was straight, the dissent explained that Ellis’s statements were sufficiently capable of conveying that Davis was gay such that a jury — not a court — should decide the meaning of Ellis’s statements.  Second, the dissent acknowledged that while imputation of homosexuality is not defamatory per se, the governing standard (articulated in the Restatement (Second) Torts) is whether the statements “would tend to prejudice [Davis] in the eyes of a substantial and respectable minority” and that majority “overstep[ped] [its] role” to hold that an impuation of homosexuality is not defamatory as a matter of law.  Thidrd, the dissent noted that Fred’s Appliance would face respondeat superior liability under negligence principles and that whether Ellis acted within the scope of his employment was a question for the jury.

Finally, turning to the issue of special damages, the dissent sharply criticized the majority for affirming on this basis when Fred’s Appliance had addressed the issue of damages in a cursory manner before the trial court.  In the dissent’s view, Fred’s Appliance never shifted the burden of production to Davis as required by Young v. Key Pharmaceuticals and that even if it had, Davis easily met the liberal standard for providing damages resulting from defamatory statements.