Virginia Pollard worked as a cashier and clerk for Teddy’s Supplies, a family-owned chain of film production equipment supply stores in Pennsylvania and New Jersey. During a routine performance evaluation, Virginia's supervisor at Teddy's complained that she made too many personal phone calls when she worked in the West Orange store. The supervisor noted this on Virginia's annual review, and warned her to keep personal calls to a bare minimum while at work. Soon thereafter, Teddy transferred Pollard to guard film equipment in the main warehouse behind the storefront; Virginia couldn't make personal calls there, and her work became exemplary. Her performance evaluation three months after her transfer was "meeting expectations" with no negative comments.

Virginia Pollard was the only woman working in the warehouse, and she was often the victim of pranks perpetrated by her six male colleagues. Her co-workers taped her drawers shut, locked her out of the guard shack she sat in to watch the inventory, filled the guard shack with trash, and backed a forklift up to the door and made it backfire in her ear. One day a Teddy delivery driver sat in Pollard's chair and, when she tried to push him out of it, he bent her over his lap and spanked her. Pollard's new supervisor, XXXXX XXXXX, rarely enforced Teddy's rules against smoking, horseplay, foul language, and sexual harassment, and often indulged in such behaviors himself. Teddy's had a written sexual harassment policy which included a method for employees to report sexual harassment - the method included filing a complaint with the direct supervisor unless the direct supervisor was the perpetrator. In that event, the employee was to file the complaint online at www.ReportTeddysafely.com. The form for reporting was a one page document. A copy of the policy which Virginia Pollard signed is located here. The policy specifically states, "In the event of a violation of this policy, employees should report the violation to their direct supervisor, unless doing so would put the employee at risk of further discrimination or harassment. In that case, the employee should report using the company website form which will submit the incident to Human Resources."

Pollard never filed a complaint with XXXXX XXXXX, her supervisor; she also did not file a complaint at the website, although she claimed she told King in July 2008 that she felt she was being "picked on" by the guys she worked with. She claims XXXXX XXXXX told her to "grow some balls" and to "get over herself." She testified during the NJ Human Rights Commission hearing that she tried to file an anonymous complaint but the website wasn't working the day she tried to do so.

In August of 2008, King and the other warehouse workers put a sign on a truck that read "HARDHAT REQUIRED/BRA OPTIONAL." King and another employee called Pollard over to look at the sign and encouraged her to do as it said. She refused and tried to walk away. King promised not to report her to management, whereupon she lifted one side of her shirt in the back and exposed part of her bra on her backside. Upper management learned of the incident that October by a co-worker who filed an anonymous complaint online. After a brief investigation, Pollard was fired for exposing her bra. None of the men were disciplined. A man replaced Pollard in the guard shack.

That November, Pollard filed a charge of sex discrimination with the New Jersey Commission on Human Rights. The Commission found that Pollard had been the victim of sex discrimination and that Teddy's reasons for firing her were pretext, and awarded her back wages and damages. Teddy's appealed to the circuit court, including in their case that Pollard had committed several infractions, including participating in the spanking incident. They reported that Pollard had failed to report any sexual harassment and included a copy of their sexual harassment policy as part of their defense case. The Circuit Court found that Teddy did have good reason to discipline Pollard but that firing her was in fact disparate treatment when compared with the utter lack of discipline given to King. The circuit court reversed the Commission's award of damages because it believed that Teddy had been right to discipline Pollard, but they ordered Teddy's to reinstate Pollard to her old position. Pollard appealed to the New Jersey Court of Appeals and refused to accept her job back.


1. Teddy's Supplies' CEO has asked you to advise him on the facts of the case, and your opinion of their potential liability. He wants to settle the case. Write a memo to him which states your view of whether the company is exposed to liability on all issues you feel are in play. Include in your memo any laws which apply and any precedential cases either for or against Teddy's case which impact liability. Include in the memo your suggested "offer of settlement" to Virginia. Back up your offer using your analysis of the case against Teddy

Optional Information:
State/Country relating to Question: Illinois