Blatant Sexual Harassment at Zillow (Alleged) and Legalities of Weight Loss Contests [e127]

December 8, 2014

Nasir and Matt start the week by discussing the blatant forms of sexual harassment alleged at Zillow. They also answer “My office is planning on doing a weight loss competition at the beginning of the year. Is this legal?”

Full Podcast Transcript

NASIR: All right, welcome to our podcast where we cover business in the news and answer some of your business legal questions, where you, the listener, can send in to
My name is Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: Nice. Perfect intro, that time.

MATT: Perfect intro. Short intro, I guess.

NASIR: Nice and succinct.

MATT: I guess we’ll just get into the story. this is a pretty interesting one. We’ve talked about similar things in the past in terms of – oh, I guess we talk about employee – bad employee or employee practices all the time. This one’s a little bit different.

NASIR: Sure.

MATT: We’ve got to the point where we have to find very, very unique ones because we’ve basically talked about everything else.

NASIR: That’s true, but what’s interesting is that, for those that have been listening since for about a year, you can already tell what the biggest issues that small, medium, and large businesses go through just by the recurrence of the topics, and this is, I think, a very common issue.

MATT: I don’t know how big Zillow is, but it’s…

NASIR: It’s a good size.

MATT: Yeah, it’s a pretty good size. But, apparently, Zillow is a very – how did they describe it? – “adult frat house” culture. So, there’s a lot of men that work there and not as many females. Apparently, I guess the men just think they can do whatever they want. We’ll link this article because you have to see, I guess, read the text messages. I’m not going to read the text messages now of what was said, like, back and forth.

NASIR: You’ve got to give some kind of indication of what it is – maybe paraphrase or something.

MATT: Basically, I think this is the female asking, “Wanna go join a gym and work out tonight?” and then, the response is basically asking for sexual favors.

NASIR: Yeah.

MATT: So, like, very non sequitur at the least, right? And, of course, the response is, “Not really.” But it seems like a situation where the guy has just gotten way too comfortable. It’s definitely not a work environment – I guess that’s the point to really nail down here. The things that these guys were saying to this – at least this woman here, and I’m sure the other ones that work there – were just way past the line of anything that should be said in a work environment or probably even just a normal environment in general.

NASIR: Yeah, I’m just reading these texts and we read one text that it’s just obviously, like, not appropriate. But then, these are texts between also the possible victim of harassment and another co-worker, and they’re just kind of talking back and forth, you know, “I feel bad though because he’s already ready to have a kid and I don’t want to basically tell him,” and then the other person’s like, “Oh, he won’t get fired. I would just tell Eddie about it to watch this video,” and then it just shows you how they are reluctant to even report about it and, even if they do, they know nothing is going to happen anyway so what’s the point? And this is what I think the complaint is talking about – this kind of hostile work environment.

MATT: Yeah, and we’ve talked about culture before and how important that is in the work environment. But, like, in this example, there was some guy, one of the guys there watching non-appropriate video at work and the female was trying to figure out whether she should tell someone. I think the supervisor actually even knew about it and saying, “Well, he’s about to have a kid so he’s having a pretty tough time right now.” It’s like, well, that’s a whole different issue going on that this guy’s about to be a dad and is watching this video, but whatever. It seems like the supervisor knew what was going on and I think they’ve even since terminated a couple of people after this lawsuit has come out. But, I mean, from how it’s described and at least these text messages that are out here now, it’s pretty damning evidence that the people there were not doing the right things and I think they’ll probably settle like all these lawsuits are.

NASIR: Yeah.

MATT: But this woman has a pretty strong argument in terms of sexual harassment and I don’t know the details of how she was fired but I’m assuming it has to do something with this so that’s probably going to play into it as well.

NASIR: Yeah, and these are, of course, this is all assuming the facts are true and, looking at the complaint, there are some other allegations, I can bring it home a little bit for these small businesses and how it relates to us because not all of us have these kind of work environments, obviously, but here’s the complaint. It says Mr. Schmidt, who was the plaintiff’s supervisor, referred to a new employee as “Rachel 2.0” since, as he explained, she was like Rachel but with… uh, more pretty, I suppose. I don’t know how else to paraphrase that but, again, inappropriate.
One thing to note here is that this person who’s made these inappropriate remarks was a supervisor and this is a case filed in California. Again, not all states are like this. We’ve discussed this in the past. But, when it comes to sexual harassment, the employer is pretty much strictly liable for the actions of their supervisors, if they’re considered a supervisor within the law.
Now, the problem with this is that, of course, if you have a supervisor, even if you had no idea that this person was acting this way and even if you’d trained them to not act this way, but if they act that way, then all of a sudden the employer is responsible for that, and that’s why when Zillow responded in a statement saying – and I’m not sure if they’re talking about the same person but they say – “Zillow takes any allegations about our work environment very seriously. When this allegation was first made, we immediately investigated these claims and, as a result, took quick action and terminated a sales employee in our Irvine office. The allegations in the complaint do not reflect Zillow’s culture or workplace and are completely inconsistent with our values. We do not tolerate harassment of any kind.”
And so, that’s all well and good, and that may be more geared towards us from a PR perspective, but not necessarily from a legal argument.

MATT: Yeah, and I’m looking up here, I guess she was terminated because her failure to meet sales goals for two preceding months but I think she’ll probably make a pretty strong argument of the reason why she couldn’t make the… even if this wasn’t the case the reason she couldn’t make her sales goals – she was constantly distracted by all these guys in the office. So, yeah, there are some interesting exhibits in the complaint. I think that’s a pretty slam dunk argument if you look through that.

NASIR: I actually didn’t see that. I’m scrolling to it. Okay, there’s a lot more text message screenshots. But here’s another ting and, in this day and age, I think – okay, I didn’t need to see that, there are some inappropriate pictures as well – well, one thing about it that’s different now than it was before is that it’s just so easy to get caught in recording – not only text messages but even audio recordings which aren’t legal in California to do so without the other party’s consent. But, other than that, everyone has a smartphone device that is able to, you know, record some of this stuff so easily.

MATT: Yeah, bad calls all around on Zillow’s front here. I’m trying to think, I feel like I knew someone who worked for Zillow. I think he worked for Zillow, off to sea.

NASIR: Yeah, maybe we should ask him. Maybe it’s one of the defendants.

MATT: I guess Zillow’s the only… they didn’t go after any individuals – at least yet. It’s just a company as a whole.

NASIR: That’s actually uncommon. Usually, you include the harasser themselves as well. But, what ends up happening, that defendant usually doesn’t have any money anyway and the company ends up paying for their legal cost, especially if it’s a supervisor or especially upper level management anyway. And so, it all ends up being the same case. But I’m not sure why, they may be added later. We don’t know yet.

MATT: Oh, yeah, there’s always time. So, another lesson in bad employer actions, I guess. Or bad supervisor, bad culture. I’m sure this happens in other places just because, if you have a predominantly male population in the office, I can see in certain instances where that would happen. But, I mean, you just can’t do that. It’s just dumb. So, I don’t know how else to put it.

NASIR: I don’t even know if it’s just necessarily the predominance of males over females either because I think there’s plenty of work environments that are like that that are just fine. It’s just a different culture. And I’m just trying to think, it’s not as if Zillow in particular is in a particular industry where it cultivates that kind of mentality – at least traditionally – and I’m of the same opinion every time. You know, it comes down to the leadership at the top. Middle management – which I think this is who’s responsible in this particular location – follows the lead from the top down. And so, at the end of the day, the employer should be held responsible if this is all true.

MATT: And it probably is. The text messages alone and all that, it’s a pretty slam dunk case.

NASIR: All right. Well, let’s get to our question of the day.

MATT: Question of the day. All right.
“My office is planning on doing a weight loss competition at the beginning of the year. Is this legal?”

NASIR: Well, weight loss competitions, it reminds me, of course, of The Office. We have to talk about that, right? When they had a weight loss competition of each branch and I think the winning branch would get some kind of benefit and so forth.

MATT: I forget what it was but, yeah, that was a pretty good episode.

NASIR: Yeah.

MATT: Two episodes, I think.

NASIR: Yeah, it was good. But, besides that, there’s some interesting law coming out right now because, first, of course, we have the Affordable Care Act and even the ADA which actually promotes these wellness programs. But then, you have the EEOC which, for whatever reason, is kind of being aggressive towards combatting these wellness programs because they say that it can be discriminating and treat people unequally and so forth. Then, it comes down to whether these wellness programs are voluntary or involuntary. So, we’re actually, especially now where wellness programs are a part of benefit plans for employers, that is that employers are given breaks on their insurance plans if their employees are part of this wellness program because, you know, they’re contributing to their overall health and so health care costs go down and that’s where the Affordable Care Act comes in, that these are becoming more prominent.

MATT: What you’re saying with the EEOC that was the big thing. Are these programs discriminating its people of disabilities? And I can see the argument but, at the same time, it’s beneficial overall as a whole so maybe you can just have it optional. You can’t make it mandatory, I would say. But, like, have an optional weight loss competition that, if people want to participate in, they can, they don’t have to.

NASIR: Yeah, but the only problem with the voluntary-involuntary thing – again, this is an issue being discussed – is that there can actually, in a lot of wellness programs and they’re done in many different ways, but sometimes, if an employee doesn’t participate in a wellness program, it’s not that they’re penalized, but they don’t get a benefit. So, then the EEOC is arguing, well, that’s pretty much involuntary then because, if they don’t do it, they’re pretty much penalized. And so, there’s an argument back and forth.
But then, there’s also this bona fide exception under the ADA which allows, if there is a bona fide benefit plan, then these wellness programs as they’re put forth are okay, but it seems like thee EEOC is kind of ignoring that so there’s a couple of cases going on right now that just haven’t been resolved. I think most people are expecting it to go the way of the wellness program because, frankly, that’s where everything’s headed. That’s where from President Obama’s administration is pushing forth so that’s probably where it’s going to end up. But, right now, it’s a little uncertain.

MATT: You know, it seems like it’s something that would be good overall. But you can always find problems with something – too good to be true.

NASIR: That’s the problem with the law is, even if you think it’s beneficial, there’s always some trap somewhere someone’s setting for you.

MATT: They think, “This is a good idea. We’re going to help people lose weight. Maybe it’ll get them active and maybe they’ll find out if they have some sort of problem – they can catch it before it gets too serious.” But no, there’s people that come in and complain.

NASIR: Well, if you recall, one of the problems with The Office is that they took it so seriously that, like, you know, I can’t remember her name – she was the Indian girl – Kelly.

MATT: Kelly.

NASIR: Kelly, that’s right. She, like, went to the extreme where I think she fainted or whatever. She wasn’t eating and then she got a tapeworm from what’s his name?

MATT: Creed.

NASIR: How come I can’t remember these guys’ names? From Creed. That was pretty funny. And then, I think Dunder Mifflin ended up shutting down the program because it became too extreme, right?

MATT: No, I think they ended up finishing because the found out that that was the last day and the other office had already submitted their number and so they came in like, “We have a couple of hours left. Let’s see if we can drop this weight really quickly.” So, they all, like, turned the thermostat up all the way and then trying to…

NASIR: Dwight wearing a trash bag like he’s a wrestler or something.

MATT: Yeah, it was pretty funny.

NASIR: But, see, I mean, that’s a good example of, like, you mean well but then something like that happens. That’s probably unlikely to happen but, you know, the analogy sticks.
All right, guys. Well, thanks for joining us for this long episode. We covered some deep topics here. I mean, I think you need to listen to it again and take some notes.

MATT: Yeah, rewind it back from this point and listen to it again.

NASIR: No, no, from this point.

MATT: Keep doing it in a loop. You’ll never stop.

NASIR: Nice. All right, guys, thanks for joining us.

MATT: Keep it sound. Keep it smart.

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Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
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