The former marketing director of Coldwell Banker Americana has sued the Hutchinson, Kan., company and its office manager, Laurie Scofield, for breach of the company’s internal policy forbidding discrimination on the basis of sexual orientation.

Kansas does not prohibit discrimination on the basis of sexual orientation. Instead, Tim Watchous, who is gay, is suing the company for breach of contract and Scofield for improper interference with a contract by sexually harassing him. According to the lawsuit, Coldwell Banker’s handling of the alleged harassment and its firing of Watchous breached the contract allegedly created by the company’s own anti-discrimination and harassment policies.

Jay F. Fowler, attorney at Foulston Siefkin LLP, in Wichita, Kan., who represents both Scofield and Coldwell Banker Americana, said that “many of the allegations are just plain wrong” and both “plan to vigorously defend against the claims.” The defendants have answered the complaint, and the case is currently in the discovery stage, where the parties exchange information related to the case.

Watchous served as the company’s marketing director for three years before he was terminated. In his complaint, he alleges that Scofield made repeated and graphic sexual advances to him, despite knowing he was gay. He also alleges that Scofield told Watchous several times that she could change his sexual orientation if she could be with him physically just one night and that she gave him a sexually explicit “poem” stating she wanted to have sex with him.

When he complained to the company’s broker, Shirley Brooks, Watchous claims Brooks penalized him by moving his office to the basement of the building. He also alleges that Scofield urged Brooks to fire him, which Brooks eventually did.

When he was fired, Watchous claimed he received an e-mail from Brooks in which she stated, “I’m sorry things had to end the way they did. We just never seemed to get past the bump in the road between Laurie and you and with some of the concerns other agents had with your lifestyle.”

“Under Kansas law, a company policy can create a contract, and an employee can sue for the breach of the policy,” said Gregory Nevins, senior staff attorney in Atlanta with Lambda Legal, an advocacy group that represents gays and lesbians who allege discrimination and is representing Watchous. “Disclaimers in the policy don’t resolve the issue of whether there’s a contract. A jury will have to determine whether there was contractual agreement between the parties and whether there was a breach.”

But Watchous’s case will be a tough one to win, said Richard Olmstead, an attorney who concentrates in employment law with Kutak Rock LLP in Wichita, Kan. “We see this type of case – breach of company policy under a contract theory – a lot,” he said, “and I’ve yet to see one be successful. Under Kansas law, it takes pretty unusual circumstances for a typical handbook or company policy to become a contract. There has to be an understanding on both sides that there’s a contract being created, and nothing in this complaint suggests that was the case here.”

“Based on the facts alleged, this is a pretty good plaintiff’s case if I were filing a cause of action for sexual harassment,” Olmstead said. “But my guess is that the plaintiff came forward only after the deadlines to file a claim for sexual harassment under Title VII or the Kansas Human Rights Act passed.” Title VII is the federal law barring sexual harassment in the workplace, and the Kansas Human Rights Act governs such claims in the state. Under both laws, a complaint must be filed within 300 days of the alleged harassment.

As to the note from Brooks after Watchous was fired, Olmstead said, “It’s insulting and offensive, but it’s an admission of something that’s not prohibited by law. If it shows that she decided to fire him based on sexual orientation, that’s not something that’s prohibited by Kansas law.”

Watchous seeks damages for lost wages and benefits, lost advancement opportunities, expenses in attempting to secure new employment, “humiliation” and “embarrassment.” Although Nevins admits that humiliation and embarrassment aren’t typically compensible damages in a breach of contract case, he argues they’re recoverable if Watchous prevails because of the rationale behind the company policy.

“In most cases, the existence of the contract isn’t designed to guard against emotional distress,” he said. “But when you contract with somebody that you’ll have a harassment-free workplace, it’s very different. Humiliation and embarrassment are exactly what’s intended to be avoided by that contract.”

“That’s a novel argument,” Olmstead said. “But I don’t know whether it’ll fly.”

Nevins said that Watchous hasn’t found new employment since his firing but that he’s “actively looking for other jobs.” Although Watchous was an agent with the company before becoming marketing director, Nevins says Watchous isn’t looking for a real estate sales position, despite the legal requirement that a plaintiff mitigate his damages. “He hasn’t been doing that for a couple of years,” Nevins said. “I don’t think anybody would expect him to start new real estate business and be successful right away.”

But Olmstead said, “If I’m the plaintiff’s attorney, I’d tell him to go out and get any job. The plaintiff has a duty to find any type of job, not just one with comparable duties and pay. If he’s pigeonholed himself in one area of his job search, the defense lawyer will use that against him.”

Nevins declined to comment as to whether the parties have had settlement discussions. But he says his client would have to think hard about whether to accept an offer of reinstatement, which he’s seeking in his complaint. “That would involve lengthy discussions with the defendant about what type of workplace that would involve, because he wouldn’t go back to the same situation without the problems addressed.”


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