Custom Companies Pays $1.1 Million for Sexual Harassment and Retaliation in Illinois

An Illinois trucking company was ordered to pay more than $1.1 million in a sexual harassment case, including use of “adult entertainment” in the workplace. According to the judge, the allegations of abuse from those in the company’s highest positions were true.

Custom Companies of Northlake, Illinois, was found to have committed sexual harassment under Title VII of the Civil Rights Act of 1964. In a 50-page decision, Judge Harry D. Leinenweber was sharply critical of the founder and CEO of the company, Perry Mandera. Leinenweber found that the CEO and other top managers practiced sexual harassment of female employees. These included evidence of repeated touching, sexually explicit comments and jokes, sexual advances, and a sexually charged atmosphere.” All of the harassment came, the judge said, “from employees in a position of power.”

Judge Leinenweber issued an injunction to change many of the company’s business practices, including company outings to topless bars and other forms of company-sanctioned “adult entertainment.”

Female sales reps were required to entertain Custom Companies customers and potential clients at a number of strip clubs on Kingsbury Street in Chicago, including “Crazy Horse Too” “Thee Doll House” and “VIP’s: A Gentlemen’s Club.” The EEOC found that three female sales reps were subjected to unwelcome groping, sexual propositions, pornography and lewd sexual language in the course of their job duties. Evidence included photos of strippers wearing very little posed at various holes at company golf outings for clients.

The EEOC found that Custom Companies CEO Perry Mandera owned and operated two of the strip clubs in question. When one female employee complained to the EEOC, she suffered retaliation led by CEO Perry Mandera, including a suit filed against her.

The judge wrote that, “Circumstances indicate that Defendants might engage in sexual harassment in the future. The sexual harassment was carried out by several individuals still employed by Defendants . . . The president and owner of the company, [Perry] Mandera, was even involved in the retaliation.”

In November 2006, a jury awarded $2.36 million to three former Custom Companies employees. The amount was reduced due to dollar-amount limitations imposed by the Civil Rights Act of 1964.

Under a four-year injunction, the company is forbidden to sponsor events at “a place of adult entertainment or which includes adult entertainers.” Custom Companies is also required to distribute a notice to its customers advising them of the verdict and the judgment. In addition, the company is required to post a notice informing all employees of the outcome of the EEOC investigation, and of their right to contact the EEOC with complaints, without fear of retaliation.”

EEOC Regional Attorney John Hendrickson said, “Judge Leinenweber’s final judgment will surely be a milestone in Title VII law, especially on sexual harassment. It addresses and resolves in a thoughtful and scholarly way a host of important issues… Make no mistake about it, this is a big decision–it’s really important.”

“But beyond all that,” Hendrickson added, “we think it is especially significant that the court was willing to follow the evidence heard by the jury right into the executive suite and to the desk of the chief executive in assessing the need for injunctive relief and designing that relief to fit the way this company has done business. That is critically important, and it is what is going to make a practical difference to women who work at Custom Companies now and who will work there in the future.”

Justice in the case worked slowly. The original EEOC lawsuit was filed in May, 2002 in the U.S. District Court in the Northern District of Illinois, located in Chicago. Chicago attorneys Marty Denis and Michael D. Robbins represented two of the women who intervened in the case.