Discrimination in Business Suit Given New Life

January 11, 2010 (PLANSPONSOR.com) – A New Jersey state appellate court has ruled that the female owner of a tire sales company can sue a customer's employer over allegations the client stopped doing business with her after she spurned his sexual advances.

Judge Susan Reisner, writing for the Appellate Division of the New Jersey Superior Court, said Middlesex County Superior Court Judge Edward Ryan was wrong in throwing out Eileen Totorello’s suit against United Rentals North America and its local branch manager, Harold Hinkes.Reisner said Ryan was wrong in concluding that the evidence supporting the allegations in the Totorello suit was too weak to maintain a claim under New Jersey’s Law Against Discrimination that bars refusing to do business with someone based on their sex (or other protected categories).

“The quid pro quo sexual harassment alleged in the complaint, if legally permitted, would stand as a barrier to women’s ability to do business on an equal footing with men,” wrote Reisner. “Construing (the Law Against Discrimination) to prohibit such opprobrious conduct is consistent with the legislature’s intent to eliminate sex discrimination in contracting.”

Totorello said Hinkes’ company started buying tires from her in 1998 and was spending about $29,000 monthly with her by 2007. Totorello alleged that Hinkes pressured her for sex and when she refused, began to cut back and eventually stopped doing business with Totorello’s tire company,  J.T.’s Tire Service. 

Specifically, the tire store owner alleged that starting in 2005, Hinkes began pressuring her for a sexual relationship and, when she refused, stopped buying her tires until she agreed to have lunch with him.Hinkes then periodically made advances and, when she turned them away, withheld his business from her. Finally, in late 2007, according to the Totorello suit, Hinkes groped and kissed Totorello against her will and, when she again rejected him, cut off his business entirely.

Reisner rejected United Rentals argument made on appeal that sexual harassment is only prohibited in an employment setting and that it does not rise to the level of sex discrimination in business covered by the Law Against Discrimination. United also argued that female business owners do not need protection against sexual harassment.

“We find no merit in any of these arguments,” wrote Reisner, noting that the law covers sexual harassment. “Where, as here, the harassment consists of sexual overtures and unwelcome touching or groping, it is presumed that the conduct was committed because of the victim’s sex.”

The ruling is available here.