Shaun, a woman of Hispanic origin, waits tables at Mongomey's Restaurant. Phil, an African-American local businessman who frequently brings clients to Mongomey's for lunch, dislikes Hispanics. As a result, he lies to the owner of the restaurant and tells the owner that Shaun referred to him by an ugly racial epithet.

Once this complaint is brought to Shaun's attention, she is demoted from waitress to dishwasher. Shaun filed a Title VII claim against Phil, even though Shaun works for Mongomey's, not for Phil. Analyze the basis for the cause of action, the company exposure, steps that could have been taken by the company to reduce exposure, the outcome, and support for the outcome. Utilize applicable law in your analysis.