Reference no: EM132989612

Several years, Otto May, Jr., a pipefitter at Chrysler Group, LLC, was the target of racist, homophobic, and anti- Semitic remarks and conduct, including death threats, vandalism, and other acts. May complained to Chrysler. The company investigated and held two meetings to remind the workers in attendance that harassment was not acceptable. But the harassers were never identified and the harassment continued. May filed a suit in a federal district court against Chrysler for hostile work environment harassment (a violation of May's federal civil rights). A jury awarded May $709,000 in compensatory damages and $3.5 million in punitive damages. The court overturned the punitive award. May appealed.

The U.S. Court of Appeals for the Seventh Circuit reinstated the punitive damages based on the reprehensible and unethical nature of Chrysler's actions in failing to address the harassment sufficiently. "It was appropriate for Chrysler to be held responsible for the hostile work environment: Its response was shockingly thin as measured against the gravity of May's harassment."

1. How can business leaders encourage their companies to act ethically?

2. Should Chrysler have been held liable for the actions of May's harassers?

3. How might the employer have avoided the dispute in this case?

4. Does an organization have an ethical obligation to secure a safe and harassment-free workplace for its employees? Why or why not? Discus