By Jonathan Stempel

NEW YORK General Motors was ordered by a federal appeals court on Thursday to defend against claims by a Black safety supervisor, who said she endured years of racism and sexism at an upstate New York plant where other workers displayed Confederate flags and nooses.

A three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan said a trial judge erred in dismissing Billie Banks' hostile work environment, disparate treatment and retaliation lawsuit against the automaker.

Banks sued over conditions at GM's components plant in Lockport, New York, where she began working in 1996.

She said she and other Black employees were called racial slurs, including one particularly offensive epithet, and that she saw Confederate flags on employees' vehicles and clothing. Three nooses were placed around Black employees' workstations, she said.

Banks said that after she took leave because of work stress and filed a complaint with the Equal Employment Opportunity Commission in late 2013, GM retaliated by suspending her disability benefits and demoting her upon her return. She sued in November 2014.

In a 74-page decision, Circuit Judge Denny Chin said the evidence suggested "pervasive and long-term sex and race-based animosity" that a reasonable jury could find created a hostile work environment.

Chin said use of the epithet, "probably the most offensive word in English," and even one placement of a noose, "imbued as it is with historical gravity as a symbol and tool of actual violence," supported Banks' hostile environment claim.

The appeals court also found sufficient evidence that bias and an intent to retaliate were factors in Banks' demotion.

It returned the case to U.S. District Judge William Skretny in Buffalo, New York.

GM declined to comment.

The Detroit-based automaker had said many incidents that Banks complained about were too old, and the "totality of the circumstances" did not show a hostile work environment.

Banks' lawyer did not immediately respond to requests for comment. Banks took disability leave again in January 2016 and as of last month remained on leave.

The EEOC supported Banks' appeal. In March, the agency sued Exxon Mobil after nooses were reported at the oil company's complex in Baton Rouge, Louisiana.

The case is Banks v General Motors LLC et al, 2nd U.S. Circuit Court of Appeals, No. 21-2640.

(Reporting by Jonathan Stempel in New York, Editing by Rosalba O'Brien)