A federal appeals court ruling that says even an isolated discriminatory act, if extreme, can create a hostile work environment that violates the law demonstrates the necessity of employers establishing the right workplace environment, say experts.

Atron Castleberry and John Brown, who are African-American, were hired by San Juan Capistrano, California-based staffing agency STI Group Inc., a subcontractor for Oklahoma City-based Chesapeake Energy Corp., as general laborers in March 2010, according to the July 14 ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia in Atron Castleberry; John Brown v. STI Group; Chesapeake Energy Corp.

They said, among other incidents, while working on a fence-removal project, a supervisor told Mr. Castleberry and his co-workers that they would be fired if they rigged the fence, using as an epithet the ruling referred to as the “n-word” to define rigged.

The plaintiffs complained about the incident to a supervisor and were fired two weeks later without explanation. They were rehired shortly afterward, but then terminated for “lack of work.”

The men filed suit in U.S. District Court in Williamsport, Pennsylvania, on charges of harassment, discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964. The court dismissed the charges.

A unanimous three-judge appeals court panel reinstated the charges. “Under the correct ‘severe or pervasive’ standard, the parties dispute whether the supervisor’s single use of the ‘n-word’ is sufficient to state a claim under that standard.

“Although the resolution of that question is context-specific, it is clear that one such instance can suffice to state a claim,” said the ruling.

“The Supreme Court’s decision to adopt a ‘severe or pervasive’ standard … lends support that an isolated incident of discrimination (if severe) can suffice to state a claim for harassment,” said the ruling, which remanded the case.

The ruling says while its own precedent is “inconsistent” on this issue, other circuit courts have similarly held a single incident can generate a hostile work environment claim: the Richmond, Virginia-based 4th Circuit; the 7th Circuit in Chicago; the 11th Circuit in Atlanta and the District of Columbia Circuit.

“The ruling itself is consistent with a line of cases that distinguishes between situations where plaintiffs can only point to one or two isolated statements that are possibly offensive, but are not necessarily evidence of a hostile work environment, and recognizes there are certain words that are out there that really can’t be walked back or explained away,” said Peter J. Gillespie, of counsel with Laner Muchin L.L.P. in Chicago.

The ruling is a “clarion call” to employers to recognize even if a wrongdoing happened only once, “sometimes once is too much,” said Jonathan Segal, a partner with Duane Morris L.L.P. in Philadelphia.

It conveys the message “You can have handbook policies, you can train, you take other proactive steps, but one person acting out could create a big headache for you,” said Eric B. Meyer, a partner at Dilworth Paxson L.L.P. in Philadelphia.

Andrew J. Horowitz, an associate with Obermayer Rebmann Maxwell & Hippel L.L.P. in Pittsburgh, said, “In certain cirucmstances, it’ll be harder” for employers to get a workplace harassment case, whether it be sexual, racial or religious, dismissed “because only a single incident of harassment was involved.”

However, he said, the ruling “makes it pretty clear it has to be a very extreme circumstance to create such a hostile work environment to give rise to a claim of harassment, and the court doesn’t necessarily provide a lot of guidance about what is really severe.”

Mr. Horowitz said employers should foster a culture “where everyone knows certain things just aren’t funny,” which makes it “much less likely” someone will say or do something “really severe.”

The ruling “is a good reminder for employers to review their policies relating to workplace behavior and to refresh those policies if they think it’s necessary,” said Jo Bennett, a partner with Schnader Harrison Segal & Lewis L.L.P. in Philadelphia.