BOSTON—A Wal-Mart Stores Inc. unit must defend a lawsuit alleging sexual harassment and retaliation in a case in which its alleged negligence of the initial harassment complaints claim may have led to the retaliation claim, a federal appeals court has ruled.

According to Friday's decision in Jorge Pérez-Cordero vs. Wal-Mart Puerto Rico Inc., Mr. Pérez-Cordero had been employed at Wal-Mart's Sam's Club store in Humacao, Puerto Rico, as a butcher since 1998. In 2000, Madeline Santiago was assigned as his team leader and given some supervisory authority over him.

Early on, she would schedule her lunch breaks to coincide with his and soon “began sharing details about her private life, leading him to believe she was interested in pursuing a romantic relationship with him,” according to the ruling by the 1st U.S. Circuit Court of Appeals in Boston.

However, Mr. Pérez-Cordero made it clear he was uninterested in a romantic relationship.

Working conditions changed

“When it became clear to Santiago that Pérez-Cordero did not share her interest in pursuing a romantic relationship, his working conditions began to change,” said the opinion. He was consistently scheduled, for instance, to work the closing shift, which previously had rotated among employees and required more work than other shifts.

He also alleged unwelcome physical contact on the part of the supervisor.

Mr. Pérez-Cordero complained to management and asked to be separated from Ms. Santiago, but Caguas-based Wal-Mart Puerto Rico took no action. A supervisor responded to his complaints at one point by recommending “going out with her take advantage of the opportunity,” and he also was told it is “easier to find a new butcher than to find a team leader,” said the opinion.

Post-traumatic stress disorder

Mr. Pérez-Santiago was diagnosed with post-traumatic stress disorder resulting from Ms. Santiago's harassment and given prescription medication for insomnia, anxiety, depression and mental anguish, according to the decision.

He filed suit in October 2001, alleging sexual-based discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964 and Puerto Rico law.

Mr. Pérez-Cordero “offered evidence describing both an initial period in which Santiago pursued him romantically and a subsequent monthslong campaign of retaliation by Santiago as punishment for his rejection of her advances,” the three-judge panel said of the harassment claim.

Court's opinion

“Santiago's harassment of Pérez-Cordero involved nonconsensual physical contact, embarrassing sexual remarks, public scolding, exclusion from meetings and training opportunities, threats of discipline, and assignment to him of the task generally regarded as least desirable,” said the opinion.

On the retaliation claim, the court said, “Although Pérez-Cordero did not suffer a tangible employment detriment in response to his protected activity, such as a retaliatory firing, we have previously held that the escalation of a supervisor's harassment on the heels of an employee's complaints about the supervisor is sufficiently adverse action to support a claim of employer retaliation.”

The panel unanimously overturned lower court's summary judgment dismissing the case and remanded it for further action.

Commenting on the ruling, plaintiff attorney Paul W. Mollica, of counsel at Outten & Golden L.L.P. in Chicago, who is not involved in the case, said the record shows the professionals in this case “mishandled the complaint right from the first.” The harassment claim “not only continued to accrue, but it multiplied into two claims.”

“We have strong policies against any form of harassment and discrimination and we take these claims seriously,” a Wal-Mart spokesman said in reacting to the ruling.

In June, the U.S. Supreme Court ruled in favor of Bentonville, Ark.-based Wal-Mart Stores Inc. in its massive proposed class action litigation in which it was charged with sexual discrimination.