Lakeside Plastics Inc. in Oshkosh, Wis., has agreed to pay a former production technician $60,000 to settle a racial discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission.
The EEOC alleged in its original 2022 lawsuit that a Black employee was subjected to race-based derogatory comments from a white co-worker, including referring to the black employee as the N-word and threatening to have him fired.
The federal agency alleged that the Black employee was subsequently fired in retaliation for opposing the racial harassment at the company, which makes plastisol compounds, printing inks and plastic safety products like traffic cones, barrels and pedestrian crossing signs.
The Jan. 24 settlement in federal court in Wisconsin caps more than two years of winding litigation in the case, including a decision in June 2024 when U.S. District Judge William Griesbach had initially dismissed the case in Lakeside's favor.
But after the EEOC objected, Griesbach turned around and reversed himself in an Oct. 16, 2024, decision.
He said he had made a mistake in not properly considering precedents from the U.S. Court of Appeals for the Seventh Circuit in Chicago around what makes up a hostile work environment.
Specifically, Griesbach wrote in October that the Seventh Circuit had previously ruled that the use of the N-word is egregious and said the appellate court was "not concerned with the number of times the epithet is used."
Griesbach said the EEOC presented evidence that a white co-worker "used the N-word in plaintiff's presence multiple times on two separate occasions" and combined it with threats of violence.
In one case, Griesbach wrote, the white co-worker told the Black employee that when he lived in Milwaukee, the white employee "used to knock n------s out on the South Side," and when the Black employee objected, the white co-worker suggested they "go out and talk in the parking lot."
In another incident, the ruling said, EEOC alleged the white employee drove his truck behind the Black employee, who was riding his bicycle home from work, said they should fight and told the Black employee that "I'm gonna hand your n----- ass."
Griesbach wrote that the EEOC said the Black employee reported the racial slurs to supervisors but the company did not act.
"Given the failure of either supervisor to make any attempt to promptly correct [the white employee's] behavior, as opposed to encouraging [the Black employee] to 'keep focused' on his work or separate the two, a jury may conclude that Lakeside would fail in meeting its burden," the judge wrote.
The Black employee worked at Lakeside in June and July 2019, EEOC said.
Griesbach's October 2024 ruling said the company argued that it terminated the Black employee based on reports from supervisors that he did not get along with others, did not follow directions and had attendance problems.
But the judge ruled the case should be heard by a jury, rather than dismissed in Lakeside's favor, leading to the settlement talks.
Griesbach wrote that a jury would also have to consider Lakeside's allegations of the Black employee's "multiple moves [and] difficulties with attendance at other jobs." But the judge said in October 2024 that he had erred in dismissing the case.
"The court is persuaded that its decision granting Lakeside's motion for summary judgment failed to appreciate the Seventh Circuit's more recent holdings on hostile work environment," Griesbach wrote.
The Jan. 24 settlement requires Lakeside to revise its discrimination policies, provide annual training on employment discrimination and retaliation laws, and gives the EEOC the opportunity to review its training programs and make recommendations.