The basic facts are that plaintiff worked in the counter-terrorism dept of the state of New York.  The individual defendant was a contractor who sent out frequent email briefings that (from the court’s recitation) certainly contained racially derogatory material.  Plaintiff complained, but this did not stop the harassment.  Plaintiff was forced to continue to read the emails (unclear as to whether this was a part of his job function) and finally filed suit.  The contractor moved to dismiss on numerous bases. 

Defendant first argued that the emails were protected by the First Amendment and holding him liable for his speech would violate the First Amendment.  The court disagreed, and it's worth noting that one noted scholar thought the court reached the wrong conclusion.  The law in this area is not terribly clear.  Courts recognize the tension inherent in penalizing speech through anti-harassment/hate speech statutes.  While the US Supreme Court has struck down hate speech laws on First Amendment grounds (see, e.g., R.A.V.), one recent case (Virginia v. Black) went pretty far towards legitimizing such regulation, at least in extreme cases:  “just as one cannot burn down someone’s house to make a political point and then seek refuge in the First Amendment, those who hate cannot terrorize and intimidate to make their point”.  If there were a case to push the envelope on this issue, I don't think workplace harassment (and certainly not this case) is it.  There are a slew of reasons, but at the end of the day it's tough to think the court was not swayed by the fact that this is not speech that is merely overheard and tolerated in the workplace.  This is an email message that the plaintiff was supposedly forced to read as part of his job.  

The contractor also brought an argument under section 230, arguing that he was just a conduit for third party content.  The court quickly disposes of this argument on the basis that the contractor added his own commentary. (“Arabic may not be backwards, but the people speaking it are.”)  (This was an argument the city may be able to make, and probably would raise some interesting issues.) 

This outcome (at this stage) is not really all that surprising.  The court will likely see what other evidence is out there and then revisit the issues.  It illustrates what should be by now an obvious proposition that content in email could lead to employer liability.  If an employee brings these types of concerns to your attention, it’s probably best to deal with the issues somehow.  Finally, while I can definitely see the arguments around why imposing liability causes First Amendment concerns, when it comes to speech in the workplace (like posters, videos, and the like) this is a battle the defendants are very likely to lose.  It just doesn’t sit well with Americans when employees are forced to be subject to racially and sexually derogatory content in the workplace.  Regardless of what a doctrinal approach may dictate, in the end, courts will be practical about this and will impose liability in egregious cases.