Employers beware: your employees' actions can be costly

August 31, 2022

Educated employers know the importance of updating and enforcing their diversity, equity, and inclusion (DEI) initiatives. However, a well-written policy is only as good as it is enforced. If a company knows, or should have known, that one or more of its employees is unlawfully harassing or discriminating against fellow employees, clients, customers, or other partners in business, that company needs to take action. Failure to do so can, and often does, result in litigation. Even to a company as large and as presumably sophisticated as Walmart.

Last month, a jury in Multnomah County Oregon ordered Walmart to pay $4.4 million to a person of color who claimed that he was racially profiled while shopping.

At trial, Michael Magnum demonstrated that a Walmart loss prevention employee followed him around the store, demanded that he leave, and then called police and made false allegations against him. Magnum, who works as a counselor for at-risk youth, refused to leave.

When the police arrived, they declined to take any action against Mr. Magnum the plaintiff, citing, in part, the fact that the Walmart employee had a history of calling the police with fabricated claims. Despite this history, and even after the incident with Mr. Magnum, Walmart kept the employee for several more months. Interestingly, Walmart eventually terminated the employee for a separate, unrelated incident for “mishandling $35 of Walmart property.”

After the verdict, Mr. Magnum’s attorney stated that “Walmart . . . ha[s] no policy – or at least no policy they’re willing to enforce – to ensure the honesty and integrity of their loss prevention employees.”

A copy of the Magnum v. Walmart Inc. complaint can be found here.

The Magnum decision serves as a reminder to review the scope of their diversity, equity, and inclusion initiatives and training. Gross Shuman’s labor and employment group encourages our clients to proactively invest time with us reviewing anti-harassment and other workplace diversity policies. We invite businesses of all sizes to do the same by contacting any member of our labor and employment group: Kevin Burke; Hugh Carlin; Scott Philbin; or Katherine Liebner.

Kevin Burke’s practice includes wide ranging federal and state court experience in civil litigation within employment law, environmental defense, class actions, product liability defense, corporate dissolution and shareholder disputes, and “business divorce,” breach of contract, OSHA and insurance coverage disputes.

Kevin counsels employers on recent developments in employment law, and the implementation of policies and procedures which enable employers to be in compliance with federal and state laws.

He can be reached at 716-854-4300 ext. 292 or kburke@gross-shuman.com