Opinion
Cause No. IP 99-0882-C H/G.
March 16, 2001.
ENTRY ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Plaintiff Karla Harbison has sued her former employer, Prestige Group, Inc., which does business as Pilot Air Freight, for sexual harassment and retaliation in violation of Title VII of the Civil Rights Act of 1964 and for negligent retention under Indiana law. Harbison alleges that a Prestige supervisor harassed her and that Prestige retaliated against her after she complained about the harassment to the Equal Employment Opportunity Commission. A few months after she complained, Harbison resigned from Prestige, and she contends she was constructively discharged. Prestige seeks summary judgment on all of Harbison's claims. For purposes of that motion, the court must accept plaintiff's evidence on disputed facts. There are many disputed facts in this case. The factual discussion in this entry should be understood only as an account of plaintiff's evidence, plus any additional undisputed facts that are favorable to Prestige. Considering the evidence in the light reasonably most favorable to plaintiff, as the court must, defendant's motion is denied in its entirety.
I. Local Rule 56.1 Issues
Motions for summary judgment can serve an essential function by avoiding trials that would be pointless, where the court can tell before trial that one side or the other must lose even if that side receives the benefit of all disputes in the evidence and all reasonable inferences from the evidence. See Mason v. Continental Illinois Nat'l Bank, 704 F.2d 361, 367 (7th Cir. 1983) (describing "gratuitous cruelty to parties and their witnesses to put them through the emotional ordeal of a trial when the outcome is foreordained"). In such cases, motions for summary judgment offer an efficient way to resolve a case in accordance with law without the expense and effort of a trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (summary judgment is not a "disfavored procedural shortcut" but "an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action'").
Too easily, however, a summary judgment motion can turn into a massive paper trial that only adds delay and expense because material facts are plainly in dispute. See Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994) ("because summary judgment is not a paper trial, the district court's role in deciding the motion is not to sift through the evidence, pondering the nuances and inconsistencies, and decide whom to believe"). In this three-count sexual harassment case, the summary judgment procedure has not served its intended purpose. The briefs on the summary judgment motion itself. total 119 pages. These are supplemented by 548 pages of statements of assertedly material facts and related responses and objections. Pursuant to Local Rule 56.1, Prestige has filed motions to strike asking the court to rule on its objections (usually multiple) to approximately 582 of Harbison's 675 factual assertions. The tension with Rule 1 of the Federal Rules of Civil Procedure (calling for the just, speedy, and inexpensive determination of cases) is palpable.
The summary judgment papers put essentially this entire case on paper and ask the court to rule on a motion for judgment as a matter of law on the record of a paper trial, complete with far more evidentiary objections than the court would likely encounter in any jury trial. This use of a summary judgment motion is legally permissible, but one may fairly wonder whether it is sensible. See Grace v. Ansul, Inc., 61 F. Supp.2d 788, 796-98 (N.D. Ill. 1999) (illustrating cost-benefit analysis for filing motions for summary judgment in employment discrimination cases). The court addresses the most significant categories of objections made pursuant to Local Rule 56.1.
A. Allegations that Harbison did not Report to Prestige
Harbison has complained in this action about numerous actions and statements by Kent Gauger, the number two executive at Prestige. Prestige has objected to every allegation that Harbison makes about Gauger in this lawsuit that she did not previously report to Prestige when she worked there. Harbison has testified that she complained to Prestige owner William Larson at least twice about Gauger's conduct. The parties dispute the extent of those complaints, although Harbison does not claim that she reported every offensive incident. See, e.g., Harbison Dep. 421-23; Larson Dep. 187. Prestige asserts that any allegation. of previously unreported conduct should be stricken from the summary judgment record. See Def. Resp. to Pl. Statement of Additional Material Facts at ¶ 61 (a recurring objection), citing Perry v. Harris Chernin, Inc., 126 F.3d 1010, 1013 (7th Cir. 1997) ("employers are liable only when they have been negligent either in discovering or remedying the harassment").
Prestige's objections on this ground are overruled. Even if there were a clearer and undisputed record of exactly what Harbison reported, Prestige's objections fail because the rules that govern employer liability for sexual harassment are not evidentiary rules. It is clear that Harbison complained to Prestige that some conduct by Gauger amounted to sexual harassment. Harbison may testify in this lawsuit about facts she did not report to Prestige. Harbison's allegations of inappropriate conduct (reported or not) are relevant to whether she experienced a hostile work environment and whether she was constructively discharged. See Perry, 126 F.3d at 1015 (not considering plaintiff's failure to report any harassment until after she quit in its review of her constructive discharge claim). If Harbison did not report all of her allegations to Prestige, that fact is relevant to whether Prestige responded reasonably to Harbison's complaints. See Perry, 126 F.3d at 1014-15 (plaintiff did not have a duty to report harassment or to cooperate in harassment investigation, "but the reasonableness of the employer's attempts to rectify harassment is measured against how much it knows or should have known."). Testimony about such additional incidents is not, for that reason, inadmissible.
B. Non-Party Declarations.
In opposing Prestige's motion for summary judgment, Harbison has submitted 18 declarations from non-party witnesses. Many of Prestige's objections challenge all or portions of those declarations on grounds including asserted lack of personal knowledge about Gauger's titles, duties, and authority; hearsay; and relevance (where address events before Harbison's employment). Beyond these evidentiary objections, Prestige argues that the declarations about Gauger's conduct towards other women (which Prestige calls the "me too" evidence) cannot serve as a basis for Harbison's claims because she did not experience that alleged conduct.
Prestige's objections to the declarations regarding Gauger's titles, duties, and authority are overruled. Prestige's own evidence demonstrates that, at a minimum, there was internal confusion about Gauger's role. In fact, Prestige issued an internal memorandum to address this issue directly. In this context, Harbison is entitled to offer evidence of her own and other employees' perceptions of Gauger's role over time. This evidence is relevant to the issue of whether Gauger was a supervisor under Title VII or reasonably could have been perceived as one.
The court also overrules Prestige's hearsay objections to the declarations regarding complaints about Gauger to Prestige by persons other than Harbison. Evidence of such complaints is not hearsay where it is not offered for the truth of the matter asserted (i.e., that Gauger engaged in the complained about conduct). Instead, it is evidence on the critical issue of Prestige's knowledge of Gauger's alleged conduct. See Fed.R.Evid. 801(c); see also Griswold v. Fresenius USA, Inc., 978 F. Supp. 718, 722 (N.D. Ohio 1997) (affidavits regarding plaintiff's complaints about harassment to affiants were admissible not for the truth of the matter asserted, "but for the fact they were articulated"); Huitt v. Market Street Hotel Corp.,. Civ. A. No. 91-1488-MLB, 1993 WL 245744, at *2 n. 2 (D. Kan. June 10, 1993) (harasser's statement to employer was not hearsay because it was offered as evidence of notice and not for the truth of the matter asserted; "In judging the reasonableness of the employer's response, the court must consider all the evidence supporting or refuting the complaint of sexual harassment — regardless of the truth of that evidence.").
The court also overrules the relevance objections to evidence of other complaints to Prestige about Gauger. That evidence is relevant for several reasons, including to establish whether Prestige acted reasonably to prevent and respond to sexual harassment. See Molnar v. Booth, 229 F.3d 593, 603-04 (7th Cir. 2000) (although evidence that co-worker complained about harassment to harasser's subordinate was not relevant to the issue of notice, it was admissible as evidence of modus operandi under Federal Rule of Evidence 404(b) and as impeachment evidence where harasser denied making advances to any employee under his supervision). Evidence of other complaints about Gauger also is relevant to Harbison's negligent retention claim. See Frye v. American Painting, 642 N.E.2d 995, 999 (Ind.App. 1994) (in negligent retention cases, evidence of prior similar actions committed by an employee is "often admissible to establish the employer's actual or constructive knowledge of the employee's propensity to commit a later act").
It is true that Harbison cannot base her sexual harassment claim on conduct that allegedly happened to other women without Harbison's knowledge. See Pryor v. Seyfarth, Shaw, Fairweather Geraldson, 212 F.3d 976, 978 (7th Cir. 2000) (harassment of other women without plaintiff's knowledge could not have affected plaintiff's conditions of employment); Mason v. Southern Illinois University at. Carbondale, 233 F.3d 1036, 1046 (7th Cir. 2000) (race discrimination plaintiff must be aware of incidents directed at others for those incidents to be relevant to his hostile environment claim); cf. Van Jelgerhuis v. Mercury Finance Co., 940 F. Supp. 1344, 1361 (S.D. Ind. 1996) (Barker, J.) ("where a plaintiff maintains she was aware of defendant's hostile treatment of women in a work environment she will not be precluded from having those other allegedly discriminatory incidents be considered in the determination of whether a work environment was objectively hostile"). It is unclear on this record the extent to which Harbison was aware of other women's allegations about Gauger during her employment. For the purposes of the summary judgment motion, the court considers Harbison's evidence only about what she personally experienced as evidence in support of her sexual harassment claim. This evidence alone is sufficient to create an issue for trial on whether Harbison was subjected to a sexually hostile work environment.
A related but more difficult question is whether Harbison should be allowed to offer evidence of Gauger's alleged harassment of other women to show that Prestige knew or should have known about Gauger's conduct because it was "open and obvious," as Harbison argues. Notice to the employer may be presumed where the work environment is permeated with pervasive harassment. See Wilson v. Chrysler Corp., 172 F.3d 500, 509 (7th Cir. 1999) (it was reasonable to conclude that employer had knowledge of at least some acts of harassment, which took place on the floor of an assembly plant; "[t]o hold otherwise, we must believe that every member of Chrysler's management team was oblivious to such openly hostile behavior."); see also Mason, 233 F.3d at 1046 n. 8 (pervasiveness of coworker conduct could show the employer's constructive notice of harassment, presumably even if the plaintiff is not present). Determining whether other women's allegations of harassment by Gauger is admissible as evidence of notice to Prestige is not essential to the court's summary judgment analysis. Harbison can. create a fact issue on the Ellerth affirmative defense based on her evidence of actual complaints of others about Gauger to Prestige, without relying exclusively on a theory that Gauger's conduct was so open and obvious that Prestige should have known about it. The court does not decide now whether evidence that Gauger harassed other women will be admissible at trial.
C. Other Objections
Prestige also has objected to many of Harbison's factual assertions on the grounds that Harbison did one or more of the following: (1) failed to cite record evidence to support the factual assertion; (2) incorrectly cited or misconstrued the record; (3) agreed with Prestige's statement but added additional argument; and (4) impermissibly responded with "conclusory" statements instead of record evidence. Prestige's objections are overruled with respect to these matters.
It is entirely appropriate, of course, to respond to an assertion of a material fact or an assertion that a fact is disputed by articulating the objections that Prestige has made. Without neglecting responsibilities to parties in other pending cases, however, the court simply does not have the time to provide a written ruling on each of the many hundreds of individual objections here. To expect the court to do so would turn the purpose of Local Rule 56.1 on its head. Instead of working to narrow and identify the disputed facts, the parties have succeeded in greatly expanding the effort needed to evaluate whether Harbison has presented a genuine issue of material fact for trial. The court has considered both parties' objections and has incorporated those objections into the fact statement below by disregarding any argument or any factual assertion that is not supported by the record. The court now turns to Prestige's summary judgment motion.
II. Summary Judgment Standard
The purpose of summary judgment is to "pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). However, summary judgment is not a substitute for a jury's determination about credibility or about whether a reasonable inference should be drawn from circumstantial evidence of a person's intentions. Under Rule 56(c) of the Federal Rules of Civil Procedure, the court should grant summary judgment if and only if there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Pafford v. Herman, 148 F.3d 658, 665 (7th Cir. 1998).
On a motion for summary judgment, the moving party must first come forward and identify those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, that the party believes demonstrate the absence of a genuine issue of material fact. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. at 323. Where the moving party has met the threshold burden of supporting the motion, the opposing party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e).
In determining whether a genuine issue of material fact exists, the court must construe all facts in the light most favorable to and draw all reasonable inferences in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Haefling v. United Parcel Service, Inc., 169 F.3d 494, 497 (7th Cir. 1999). However, the existence of "some alleged factual dispute between the parties,". or "some metaphysical doubt" does not create a genuine issue of fact. Piscione v. Ernst Young, L.L.P., 171 F.3d 527, 532 (7th Cir. 1999). Rather, the proper inquiry is whether a rational trier of fact could reasonably find for the party opposing the motion with respect to the particular issue. See, e.g., Vitug v. Multistate Tax Comm'n, 88 F.3d 506, 512 (7th Cir. 1996).
Although intent and credibility are critical issues in employment discrimination cases, there is no special rule of civil procedure that applies only to them. See, e.g., Wallace v. SMC Pneumatics, Inc., 103 F.3d 1394, 1396 (7th Cir. 1997). In employment discrimination cases, as in all cases, the court must carefully view the evidence in the record in the light reasonably most favorable to the non-moving party and determine whether there is a genuine issue of material fact.
III. Undisputed Facts
For purposes of Prestige's summary judgment motion, the following facts are either undisputed or reflect the record in the light reasonably most favorable to Harbison, the non-moving party.
A. Background
Defendant Prestige Group, Inc. is an Indiana corporation in the business of providing heavy air freight forwarding services under franchise agreements with Pilot Air Freight. Larson Dep. 7, 24. Prestige has offices in Indianapolis, Indiana and Dallas, Texas. Id. William G. Larson is the president and owner of Prestige. Id. Plaintiff Karla Harbison worked at Prestige as its sales manager for almost 15 months from October 29, 1997, until January 1999. Harbison alleges that she was sexually harassed by Kent ("K.C.") Gauger, who has been known by various titles at Prestige, including operations manager.
B. Gauger's Titles, Duties, and Authority
The legal rules that govern employer liability for sexual harassment require a close analysis of Gauger's titles, duties, and authority at Prestige, especially in relation to Harbison. Larson hired Gauger as operations manager in early 1993. According to Larson, in the airfreight industry an "operations manager" typically works for the "station manager" who is responsible for all facets of operations, sales, personnel, and human resources issues at a particular facility. Larson Dep. 52. The operations manager traditionally has sole operational responsibility but no responsibility for sales or corporate reporting. Id. Under Larson's own definitions, however, there is no difference between the operations manager and station manager positions. Id. at 51. Larson has talked to Gauger about the possibility of becoming an owner or part-owner of the Indianapolis franchise. Id. at 54-55.
In 1996 or early 1997, Larson changed Gauger's title from operations manager to station manager. Id. at 53. In 1997, Prestige issued an organizational chart showing that all employees except Larson, his assistant, and an accountant, reported to Gauger, who in turn reported only to Larson. Milton Decl. ¶ 2, Ex. A. See also Macek Decl. ¶ 5 (according to employee who worked at Prestige from October 1996 until March 1997, Gauger managed all employees except Larson and his assistant); Waldschmidt Decl. ¶ 9 (according to employee who worked at Prestige in late 1997, Gauger was second in command; sales people reported directly to Gauger, who had direct sales responsibilities).
Larson later changed Gauger's title back to operations manager because Gauger did not exhibit the qualities that Larson was looking for in a station manager. Larson Dep. 53-54. Gauger did not deal effectively with employees. Id. He sometimes had "outbursts" ("screaming, yelling, upsetting people") and personality conflicts with employees. Id. Gauger is the only person at Prestige other than Larson who has ever held the title "station manager." Id. at 52-53.
Gauger's own account of his titles over time differs from Larson's. At his deposition in February 2000, Gauger testified that his title was "director of operations" and that he had held that position for two or three years. Before that, according to Gauger, he was the "terminal manager" for about a year — although his title during that period may have been "station manager." Gauger Dep. 57-58. Before that, consistent with Larson's description, Gauger was operations manager for about three years at the beginning of his employment with Prestige. Id. at 57.
In 1998, during Harbison's employment, administrative consultant Jim Byroad prepared an organizational chart for Prestige. Byroad Dep. 36 Ex. 42. His draft of the chart identified Gauger as the station manager, but did not have Harbison reporting to Gauger. See Byroad Dep. Ex. 42. After Byroad prepared the draft, Larson informed Byroad that Gauger's title was operations manager and not station manager. Byroad Dep. 36.
Turning from Gauger's titles to his duties and authority, in general, Gauger's job at Prestige includes "anything that needs to be done." Gauger Dep. 56. Harbison testified that Gauger "runs that place." Harbison Dep. 176. Although Gauger's title has changed over time, the titles are "all the same"; he has continued to do the same types of things at Prestige. Gauger Dep. 57-58.
Gauger has participated extensively in sales-related activities since before Harbison's employment at Prestige. See Kirby Decl. ¶ 2 (according to sales representative from March 1995 until December 1996, Gauger was involved in directing the sales force, including telling representatives how to do their jobs and providing sales quotes and rates). Gauger's involvement in sales was significant during Harbison's employment. See Buddenbaum Decl. ¶ 3 (according to international operations manager from August 1992 through August 1998, Gauger was "extremely involved in sales" and oversaw all facets of sales). Gauger received requests for quotes from sales representatives or from customers directly. Gauger Dep. 59-60. When he spoke with customers, Gauger tried to solicit additional business. Id. Gauger sometimes accompanied sales representatives on sales calls. Harbison Dep. 171. Gauger also interacted with the sales staff about what business Prestige received. Gauger Dep. 58 (Gauger's department (operations) doesn't need to but would like to talk with the sales staff every day). Gauger usually talked to the sales staff in sales meetings, where he played an important role even though Harbison was the sales manager. See id. (according to Gauger, he occasionally attended sales meetings); Harbison Dep. 143, 297; see also Scheevel Decl. ¶ 10 (Gauger ran sales meetings). In addition, Gauger completed sales reports on a weekly basis and assigned accounts to territories and to sales representatives. Harbison Dep. 286-87; Decramer. Decl. ¶ 8 (Gauger had the authority to assign credits for accounts); Ellington Decl. ¶ 4 (Gauger could affect a sales associate's commissions because he could remove accounts from a territory and place them into the house account for which no commission was earned); Kirby Decl. ¶ 5 (Gauger could assign accounts to sales associates). Gauger sometimes took accounts away from sales representatives. Harbison Dep. 208-09, 286-290, 312-312; Kirby Decl. ¶ 5 (Gauger took accounts away from Kirby); Scheevel Decl. ¶ 12 (Scheevel observed Gauger remove accounts from sales employees). In addition, Gauger made revenue projections for sales representatives based on their previous sales. Harbison Dep. 312-13; Gauger Dep. 217, 220-21.
A "quote" is an estimate that Prestige provides to a customer (or to a sales representative calling on the customer's behalf) of how much Prestige will charge the customer to move a particular shipment. See Milton Dep. 22-23. Quotes are derived from a rate schedule to which a customer previously has agreed. See Larson Decl. ¶¶ 11-12. Employees in the operations and customer service departments provided quotes. See Larson Dep. 266-67. Unlike a regular quote, a "spot quote"is not based on the agreed upon rate schedule. Instead, it is calculated by adding a mark-up to costs associated with a particular shipment. Larson Decl. ¶ 10.
According to Greg Scheevel, a sales account executive at Prestige from September 1997 until April 1998, the degree of the operations staff's involvement in the sales side of the business at Prestige was surprising based on Scheevel's 20 years of experience in the air freight industry before joining Prestige. Scheevel Decl. ¶ 6. Gauger and Larson told Scheevel that Scheevel's principal function as a sales associate was to have the customer call Gauger, and Gauger then would close the deal. Id., ¶ 7.
Gauger was further involved in sales because his operations department made decisions about whether Prestige could handle a customer's particular shipping request. See Harbison Dep. 406-07. In addition, many quotes required Gauger's approval. See id. at 158-59; Scheevel Decl. ¶ 8 Kirby Decl. ¶¶ 4-6; Buddenbaum Decl. ¶ 4 (nearly all sales rates or quotes went through Gauger, with the exception of international sales which Buddenbaum handled); Decramer Decl. ¶ 8.
In addition to his operational duties and sales activities, Gauger sometimes was involved in recruiting employees. Gauger met with Harbison several times before she joined Prestige. In addition, Gauger assisted with the recruitment of sales representative Stephanie Flanagan, who worked at Prestige during Harbison's employment. Flanagan Dep. 13-14. Similarly, Gauger recruited Greg Lawrence for a position in the operations department. Lawrence Dep. 5-8.
In October 1998, after Harbison filed her EEOC charge, Larson drafted a memorandum regarding Gauger's role at Prestige. See Larson Dep. Ex. 25. (The memorandum was dated September 9, 1998; it actually was written on October 9, 1998, and distributed to sales department employees on October 12, 1998. Larson Dep. 280-81.) The "subject" of the memorandum was "sales reporting." The memorandum stated, in relevant part:
As a point of protocol, Mr. K.C. Gauger is not the station manager, a title many individuals have ascribed to him over the past several months. He was officially designated as the operations manager in 1996 with no direct sales responsibilities. Over the months each of you have elected to according [sic] him sales involvement due to his ongoing contact with customers for price and service issues.
Effective immediately, Mr. K.C. Gauger will no longer have any further direct interface will [sic] sales personnel for sales related issues.
Larson Dep. Ex. 25. According to Larson, although the memorandum referred to "the past several months," questions about Gauger's role probably dated back a few years. Larson Dep. 281-82.
C. Harbison's Hire and Job Duties.
Gauger first approached Harbison about the sales manager position at Prestige. Harbison Dep. 88. They had known each other on a professional basis for about 14 years but did not consider each other "friends." Gauger Dep. 181. Gauger met with Harbison alone on three or four occasions and recommended that Larson hire Harbison. Id. at 184. Larson wrote three offer letters to Harbison over the course of about 18 months. See Harbison Dep. Exs. 4 (letter dated January 9, 1996), 6 (letter dated April 18, 1996), 7 (letter dated October 3, 1997). Harbison's start date at Prestige was October 29, 1997. The October 3, 1997, offer letter did not identify Harbison's supervisor or reporting structure. See Harbison Dep. Ex. 7. Harbison perceived that Gauger was her supervisor. Harbison Dep. 175.
The January 9, 1996, offer letter also was silent on the identity of Harbison's supervisor. Harbison Dep. Ex. 4. The April 18, 1996, letter stated that Larson would be Harbison's "immediate supervisor." Harbison Dep. Ex. 6.
As Prestige's sales manager, Harbison's duties included assisting sales representatives in developing accounts. Id. at 148. Harbison contends that she was denied the normal managerial power accompanying such a position, and that it was Gauger who actually exercised most of the managerial powers over sales. See id. at 158, 170, 205; see also Scheevel Decl. ¶ 9-10 (Harbison was a "glorified sales associate"); Kirby Decl. ¶ 4-5; Buddenbaum Decl. ¶ 3-4; Waldschmidt Decl. ¶ 9.
D. Prestige's Harassment Policy
Harbison received two copies of Prestige's Personnel Manual during her employment. Harbison Dep. 151-54, Exs. 34-37. Both manuals contained harassment policies with identical texts. See id. The harassment policy provided, in pertinent part:
Harassment
• Harassment at work based on sex . . . is exploitative and intimidating. For example, sexual harassment is unwelcome sexual attention and is defined from the victim's perspective. In the context of Title VII of the Civil Rights Act of 1964, the Supreme Court of the United States has determined that sexual harassment constitutes illegal discrimination based on sex.
* * *
• Sexual harassment includes any acts, statements or suggestions indicating that an employee's job security, professional advancement, salary, benefits, work assignment or other conditions of employment depend upon tolerating sexual harassment or will be adversely affected by refusing to condone sexual harassment anywhere in the workplace.
• It also includes any acts, statements or suggestions that an employee's physical attractiveness or perceived lack of physical attractiveness in the eyes of the harasser is a factor in obtaining and securing professional opportunities.Policy Statement
• Harassment creates a hostile work environment, violates a victim's civil rights and will not be tolerated.
• All incidents of harassment are to be reported to management by any employee who feels he/she might be the victim of workplace harassment.
• A confidential investigation will be conducted. All employees are expected to cooperate with such investigation and comply with any resulting preventive or corrective measures.
• Violation of this policy will lead to discipline, which can include immediate discharge.
E. Harbison's Accusations
Harbison has testified about numerous incidents of inappropriate conduct by Gauger over approximately 12 months. In general, her evidence concerns many offensive comments and a few incidents of unwelcome touching. In the briefing, the parties have summarized Harbison's accusaions in different ways. Because the sequence of events is relevant to an understanding of the environment Harbison experienced, Harbison's response to that environment, and Prestige's response to Harbison's harassment complaints, the court summarizes the incidents chronologically based on the record evidence provided. There is no doubt that some of the incidents involve crude or boorish comments that fall short, taken in isolation, of establishing a sexually hostile work environment. Because the court must also consider the cumulative effects of such incidents, however, a detailed account is necessary.
The chronology in large part follows the notes that Harbison started keeping about Gauger on February 25, 1998, based on advice she received from a lawyer she knew but did not retain. Harbison Dep. 364-65, 394-95, 411, 437, 490-91, Exs. 29 70. According to Harbison, the notes recount some but not all of Gauger's inappropriate conduct. See id. The excerpts from Harbison's deposition included in the summary judgment record address many (but not all) of the incidents described in the notes.
Beginning in November 1997, shortly after Harbison joined Prestige, Gauger commented on Harbison's physical appearance. Harbison Dep. Ex. 29. Gauger "quite often" asked Harbison what her breast size was by making comments like "34C, right?," as she walked by. Harbison Dep. 355, Ex. 29. Gauger said he needed to know because he wanted to buy her something at Victoria's Secret. Id. at 366. He also asked Harbison what color and style of underwear she wore (regular or thong). Id. at 355, 366, Ex. 29.
Prestige has argued in a footnote that Harbison's allegations of conduct that occurred before December 9, 1997, are time-barred because she filed her charge on October 4, 1998, and any such conduct therefore would fall outside the 300-day limitations period. See Def. Br. at 7 n. 2. (Harbison alleges that she filed her charge on October 6, 1998.) Prestige did not identify any particular allegation that it contends that the court should not consider, but did refer to Harbison's notes. The notes state that Gauger commented about Harbison's appearance and asked Harbison about her bra size during November 1997. The court declines to consider the statute of limitations issue as part of Prestige's summary judgment motion because, relegated only to footnotes, it was not properly presented. See, e.g., To-Am Equipment Co. v. Mitsubishi Caterpillar Forklift America, Inc., 152 F.3d 658, 663 (7th Cir. 1998) ("truncated presentation" of argument in footnote of brief waived the issue); Bonds v. Coca-Cola Co., 806 F.2d 1324, 1328 (7th Cir. 1986) ("collateral allusions to a legal issue do not require the court to decide difficult questions"). As a result, Harbison has not had a reasonable opportunity to respond to it. See, e.g., Malhotra v. Cotter Co., 885 F.2d 1305, 1310 (7th Cir. 1989). In addition, whether the November 1997 allegations are time-barred is unlikely to have much of an impact on Harbison's case overall. The vast majority of Harbison's allegations are not time-barred. Also, application of the time-bar to a claim of a hostile work environment can be problematic because of uncertainty about when the cumulative effect of many incidents added up to a violation of Title VII. Even where some incidents are time-barred for purposes of liability, evidence of those incidents may still be admissible for any of several reasons.
Sometime before February 1998, Gauger asked Harbison about "getting together" at an annual sales meeting in Washington, D.C. He told Harbison he wanted to have a "threesome" with her and co-worker Stephanie Flanagan. Id. at 373-74, Ex. 29. On another occasion, after Gauger saw Harbison place a memorandum in his mail box at work he said, "you're not getting any tonight." Harbison Dep. Ex. 29.
On February 26, 1998, Gauger asked Harbison if she would like it if he lifted up her skirt and looked under her dress. Id.
On March 6, 1998, Gauger asked Harbison if she was wearing a new bra. He told her that she "looked lonely" and asked, "you want me to take care of you tonight?" Gauger put his arm around Harbison and walked her back to her office. He said that he was by himself that weekend and that she could "keep her eyes shut." A few minutes later, Gauger came back to Harbison's office and said, "you look really good today," and asked, "underwear or pantyhose or both?" Id.
On March 10, 1998, Harbison called the office and asked Gauger what was going on. Gauger responded, "what is going on or what would I like to be going on?" He said that he wished they had a hot tub room at the Adam's Mark hotel and that he wanted to sprinkle "Magic Shell" (the dessert topping) on her. Id.
Many of Harbison's allegations relate to telephone conversations with Gauger. Harbison and other sales employees spent much of their time out of the office calling on customers. Harbison would call the office for quotes and rates. See Harbison Dep. 174-75.
On March 11, 1998, Harbison leaned under her desk to unlock it. Gauger looked in her office and said, "can I get under there with you?" Later that day, Harbison was with Flanagan when Flanagan called the office. Gauger asked to speak to Harbison and told her, "I bought two bottles of Magic Shell." Id.
On March 12, 1998, Gauger asked Harbison, "have you thought any more about the Magic Shell?" when she called in to retrieve messages. He then said, "come on, we have known each other long enough, we should just get it over with." Later that day, Harbison called to ask if Gauger needed her to come in to answer the telephone. Gauger addressed her as "Big Ones," referring to her breasts. Gauger asked Harbison if she was working with co-worker Lawrence that day and said "can you imagine him on top of you?" After Harbison arrived back in her office, Gauger said, "I'm going to buy you some new outfits and do those things to you that I've been talking to you about on the phone." About five minutes later Gauger stopped by her office again and said that she was really going to love the Magic Shell. He stated, "you just pour it on and it hardens up and you have to eat it off." Id.
On March 13, 1998, Harbison called Gauger from a customer's office to tell him that the customer needed to have some freight picked up. The customer was present in the office. Gauger told Harbison, "I got the Magic Shell in butterscotch. You're going to love it. I know you're embarrassed because your customer is sitting right in front of you. I'll bet your face is red." A couple of hours later when Harbison called for messages, Gauger asked if she had thought any more about the Magic Shell and said that he knew she was thinking about it and was having so much fun. Id.
On March 25, 1998, Gauger told Harbison that he liked her "look" and asked her to go to dinner with him. He also said that he wanted to be seen with her wearing "that little skirt with a slit up the front" that she had worn to the Christmas party. Id.
On March 26, 1998, Harbison called the office to respond to a page. Harbison asked Gauger what was going on. Gauger said he couldn't say because it involved the two of them. When Harbison said "shut up," Gauger responded, "I know you want it." Id.
On March 27, 1998, Harbison asked Gauger if she could look at something. Gauger said, "As gorgeous as you are, you can do anything you want." He also asked how she was doing that day and then commented, "I wore you out last night." Harbison understood that Gauger was talking about a dream because he had previously told her that he had dreams about her. Id.
On March 30, 1998, Harbison complained to Larson about Gauger. Her complaint is described in detail in the next section of this entry.
On April 3, 1998, Harbison called to ask that Gauger place a fax from a potential customer in her mailbox at the office. Gauger commented to Harbison, "Tell me to get into your box and put me in a good mood for the rest of the day." Harbison Dep. 423-24, Ex. 29.
On April 6, 1998, Gauger entered Harbison's office and said, "do you want to make out?" Later that day, when Harbison bent over to pick up dropped paperwork, Gauger told her, "if you bend over like that again, I'm going to pop you." Harbison Dep. 426, Ex. 29.
On April 22, 1998, Harbison called the office in the morning to check for messages. Gauger said he was thinking about her and "wearing [her] out." When she called back in the afternoon, Harbison told Gauger she was planning on having dinner with a customer that evening. In response, Gauger said, "don't show him too much, just a little at a time." Harbison Dep. at 427, Ex. 29. Harbison understood Gauger's statement to refer to showing the customer her body. Harbison Dep. Ex. 29.
On April 29, 1998, Gauger said to Harbison, "can I do you tonight?" Harbison responded, "shut up, K.C. It looks like it's going to rain." Gauger said, "well, that's one thing out of the way." When Harbison asked what he was talking about, Gauger said he couldn't say because "it's really dirty" but then said, "no, I'll tell you — if it's raining, you will already be wet." Id.
Prestige objects to Harbison's inclusion of the "do you" allegation, relying on the familiar rule that a party may not create a fact issue for trial by coming up with new or different allegations after her deposition, at least without a good explanation for the change. See, e.g., Sullivan v. Conway, 157 F.3d 1092, 1096 (7th Cir. 1998) ("a deponent is not allowed to change what he said in his deposition by giving an affidavit later") This rule does not apply here. The "do you" allegation has been a part of the evidence in this matter since the complaint was filed. See Ver. Cplt ¶ 16 ("he asked if he could `do her tonight'"). A verified complaint, like other affidavits that the plaintiff may submit, can be part of the evidence in opposition to summary judgment. See Ford v. Wilson, 90 F.3d 245, 246 (7th Cir. 1996). If Prestige wished to elicit specific deposition testimony from Harbison about the "do her" allegation, all it had to do was ask. Against this background, defense counsel's generic "any other facts" question after more than 500 pages of deposition testimony did not close the door on this issue. Prestige's objection is overruled.
On June 5, 1998, Gauger hugged Harbison, pressed against her, and told her, "I love you." Id.
On June 12, 1998, Gauger told Harbison that she was in his dreams last night. Gauger then said that Harbison wouldn't get credit for a sale they were discussing unless she listened to the story about his dream. Id.
On June 19, 1998, Harbison called to tell Gauger about a customer who was concerned about his business with Prestige. Harbison told Gauger that she thought they needed to "baby" the customer. Gauger replied that he needed to baby her. Gauger told Harbison he likes to "role play" and had thought about a scenario in which he would take her home, "powder [her] butt, and put a diaper on [her] and put a rattle in [her] hand . . . [they] would have so much fun." Harbison Dep. 431, Ex. 29.
On June 22, 1998, Gauger told Harbison, "you look good enough to put in my bed — seriously, that is probably the best outfit that I have seen you wear." Harbison Dep. Ex. 29.
On June 25, 1998, Harbison called in for messages. Gauger said, "I'm busy unless you want to take me to a hotel, which would be very good for your career I might add." Id.
On July 16, 1998, Gauger said to Harbison, "Are you horny? Come on, I know you are." The next day, Gauger told Harbison, "I'm going to get you one of these days." Around this time, Gauger repeatedly put his arms around Harbison and told her that she looked either fat or thin. Id.
On July 27, 1998, Gauger grabbed and hugged Harbison. Harbison pulled away. Gauger hugged Harbison again on July 29, 1998. This time, when Harbison pulled away, Gauger kissed her neck. Id.
On August 17, 1998, Gauger told Harbison that she looked bloated and asked if she were "on her period." Id. On August 21, 1998, Gauger told Harbison, "you look old today." Id.
On September 28, 1998, Harbison, Gauger, and Byroad were on the dock at Prestige. Harbison bent over to pick up a quarter and then asked if it belonged to anyone. Gauger put his hand in his pocket as if to reach for change and said, "if it's that easy to get you to bend over, I'll give you all of my quarters." Harbison Dep. Ex. 70.
Harbison did not have any contact with Gauger after October 12, 1998. Harbison Dep. at 476.
F. Harbison's Complaints to Prestige and Prestige's Response
On March 30, 1998, Harbison reported to Larson that Gauger made crude remarks during telephone conversations with her, including references to her bra size and underwear. Harbison Dep. 421-23. Harbison also told Larson that Gauger said he would not provide her certain sales information unless she told him her bra size and what kind of underwear she was wearing. Id. Harbison believes she provided to Larson other examples of specific conduct by Gauger, including possibly that he had grabbed her. Id.
Larson told Harbison that he was surprised by what Harbison told him. Harbison Dep. 411. However, he also commented that other people had mentioned things like that to him in the past, but he had not put much credence in the stories. Id. Larson asked Harbison how she would like to see the matter resolved and she told him that "she just wanted it to stop." Larson Dep. 187; Harbison Dep. 423. Larson told Harbison that he would speak to Gauger. Larson Dep. 187. Larson asked Harbison to let him know if other instances of unacceptable conduct occurred. Harbison Dep. 423.
On April 3, 1998, Larson spoke with Gauger about Harbison's allegations. Larson Dep. 187. Gauger denied them. Id. Larson told Gauger that he had instructed Harbison to come to him if any more problems arose and that there could serious consequences for Gauger. Id. at 191.
In her Local Rule 56.1 submissions, Harbison has denied that Larson's April 3, 1998, meeting with Gauger occurred and that Larson's April 6, 1998, letter was drafted as Larson has described. In support of her denial, Harbison argues that it is "reasonable to infer" that Larson's assertions about the meeting and the letter are untrue because (1) Larson did not speak with Gauger regarding other complaints about him; (2) Gauger's offensive conduct towards her continued beyond April 1998; (3) Larson did not tell her that he had spoken with Gauger; (4) Larson issued a later memorandum about Gauger with an incorrect date (the memorandum regarding "sales reporting"); and (5) Prestige's human resources representative testified that Larson gave him only one document regarding Harbison to place in Gauger's personnel file, which Harbison argues was the November 1998 letter Larson drafted to both Gauger and Harbison regarding the conclusion of his investigation of Harbison's second complaint. See Pl. Resp. to Def. Statement of Undisputed Material Facts ¶¶ 100 — 105. In response to a defendant's summary judgment motion, a plaintiff is required to come forward with specific evidence to controvert defendant's factual assertions. See Local Rule 56.1(g). Harbison's denial of Prestige's allegations relies only on argument based on circumstantial evidence. As such, Harbison's response is insufficient to controvert Prestige's supported factual assertions for summary judgment purposes, although Harbison may present her argument to the jury. In any event, the resolution of this issue is not decisive. Even taking Prestige's assertions as true, Prestige cannot establish as a matter of law that it is entitled to assert the Ellerth affirmative defense or, if it were so entitled, that it has satisfied its burdens under that defense. See discussions, infra.
On April 6, 1998, Larson followed up his conversation with Gauger with a letter. Larson Dep. Ex. 20. The letter directed Gauger to refrain from any unnecessary contact with Harbison. Id. The letter also stated that Larson had given Harbison similar instructions. Id. (Harbison disputes that Larson spoke to her about avoiding contact with Gauger in the spring of 1998 although she believes he did so later. Harbison Dep. 418-19.)
As shown in the chronology discussed above, Gauger continued to make offensive comments to Harbison after her complaint. Harbison testified about several incidents in April, June and July 1998.
Sometime in the summer of 1998, during a conversation with Harbison about business, Larson asked her, "Oh, by the way, is your situation getting any better?" Harbison responded, "A little bit, but not all the way." Larson did not inquire further, was paged for a telephone call, left, and never got back with Harbison. Harbison Dep. 201-203, 437-38.
Harbison complained to Larson again on September 3, 1998. Larson Dep. 201. Harbison told Larson that she wanted to file a sexual harassment complaint against Gauger because he asked her about her underwear when she was on the telephone with him while at a customer's office and then asked her whether her face was turning red yet. Harbison also reported that Gauger told her it would be good for her career if she went to a hotel with him and that Gauger grabbed her, putting his arm on her breasts, and kissed her on the neck twice, which required her to push him off of her. Harbison Dep. 463-65.
Around September 16, 1998, Larson spoke with Gauger about Harbison's renewed allegations. Again, Gauger denied them except that he stated that he did hug Harbison or put his arm around her to congratulate her on something. Larson Dep. 210-11.
Harbison disputes that this meeting (and subsequent related events) occurred in the sequence described by Larson. For example, she alleges that Larson told her that he did not speak with Gauger until October 10, 1998. See Pl. Resp. to Def. Statement of Undisputed Material Facts ¶¶ 127-136. Harbison may offer evidence of Larson's inconsistencies at trial, but her argument based on circumstantial evidence does not controvert Prestige's factual assertions for the purposes of establishing the summary judgment record, as the court has discussed above. See footnote 7, supra. Again, this dispute is not determinative of any of the issues before the court.
On September 21, 1998, Larson wrote Gauger a "Letter of Reprimand." Larson Dep. Ex. 21. This letter reiterated some of Harbison's charges and explained that Larson would conduct an investigation to "determine the measure of [Gauger's] culpability in this matter and what further action is necessary." Id. Larson advised Gauger to refrain from having any contact with Harbison. Id. Larson considered the letter a "reprimand" under a "progressive process" because of Harbison's prior allegations. Larson Dep. at 264.
On or about September 28, 1998, Larson asked Harbison for the notes she had been keeping about Gauger. Harbison Dep. at 499, Ex. 70. (Harbison does not recall if Larson asked her for the notes earlier. See id.) Larson said he wanted to give the notes to Prestige's lawyer. Harbison Dep. Ex. 70.
Harbison met with Larson again on October 12, 1998. Harbison Dep. at 467, Ex. 70. During this meeting, Larson again asked Harbison for copies of her notes. See Harbison Dep. Ex. 70. Harbison told Larson that she did not have her notes and that he should contact her attorney for them. Harbison Dep. at 506, Ex. 70. Harbison provided Larson with the name and telephone number of her attorney. Harbison Dep. at 506.
On November 11, 1998, Larson wrote Harbison and Gauger a joint letter to inform them that he had completed his investigation of Larson's complaint. Larson Dep. Ex. 22. Larson stated that Gauger had denied Harbison's allegations and that Larson was unable to corroborate Harbison's allegations. Larson also said he had spoken with all witnesses whom Harbison identified. Larson advised Harbison and Gauger to continue to avoid contact with each other. Id. Within 10 days after Larson drafted the letter, he met with Harbison and Gauger individually.
G. Reports of Other Harassing Conduct by Gauger
Harbison has produced evidence of other women's complaints to Larson about Gauger. In his deposition, Larson testified that, prior to Harbison's complaints, no employee or customer of Prestige ever had complained to him about Gauger engaging in sexually harassing conduct. Larson Dep. at 81-84. Viewing the evidence in the light most favorable to Harbison, Larson's statement is not accurate.
Prestige's asserts that, prior to Harbison's complaint in March 1998, "[t]here were only two other complaints of sexual harassment, and neither involved Gauger." See Def. Br. in Supp. at 15, n. 3 (emphasis in original). That is a bold assertion on summary judgment on this record. Prestige has attempted to discount the evidence described in the above section in various ways. In particular, Prestige dismisses Lisa Milton's complaints to Larson as "non-specific." Id. at 21-22. However, an employee is not required to state that she is making a "sexual harassment complaint" to put an employer sufficiently on notice of inappropriate conduct to trigger Title VII's obligation to respond. See Gentry v. Export Packing Co., 238 F.3d 842, 849 (7th Cir. 2001) (affirming jury verdict for plaintiff and reasoning that plaintiff's comments about feeling uncomfortable with touching and hugging in the office should have raised suspicions; "this should be sufficient to alert an employer about a potential harasser, assuming the proper sexual harassment policy and training are in place.") Prestige also has argued that some of the complaints described above were too remote in time to put Prestige on notice that Gauger was harassing Harbison. This may be true, but evidence of earlier complaints still is relevant to assessing Prestige's fulfillment of its duty to take appropriate steps to prevent and promptly correct sexual harassment in the workplace. Taking the record evidence as true, in 1995 or 1996 Diane Lawton complained of some of the same conduct by Gauger that Harbison has alleged. See Lawton Decl. (Gauger asked questions about Lawton's underwear and hosiery and said that he would not give her information until she talked to him about those matters). The jury will be entitled to consider evidence of Lawton's complaint (and other complaints) in determining whether Prestige took appropriate actions to prevent or stop the alleged harassment of Harbison. In addition, Prestige has taken issue with the fact that some of Harbison's evidence of other employee complaints about Gauger relates only to complaints about him to Milton. Such evidence may be admissible if Milton was authorized to receive complaints under Prestige's Harassment Policy. See Harbison Dep. Exs. 34 35 ("all incidents of harassment are to be reported to management"). Milton testified that she was the "customer service manager." Milton Dep. 22. In the statement of facts above, the court has referred to complaints to Milton only if there is evidence that the complaints also were communicated to Larson (either by Milton or by the person making the complaint).
In 1995 or 1996, Diane Lawton, the representative of a former customer of Prestige, met with Larson and Prestige sales associate Darrel Kirby to complain about Gauger's behavior. (Kirby was the sales associate assigned to her area.) Lawton Decl. ¶ 7; Kirby Decl. ¶¶ 16, 18. Lawton told Larson and Kirby that Gauger routinely made sexual remarks, called her a bitch and a slut, asked if she were wearing fishnet stockings, and refused to give her rate quotations unless she told him what color panties she was wearing. Lawton Decl. ¶ 8; Kirby Decl. ¶¶ 16-18. (In its Local Rule 56.1 submissions, Prestige admits that this conversation occurred, at least for purposes of this motion.) According to Lawton, Larson made excuses for Gauger's behavior and asked if she was encouraging it. Lawton Decl. ¶ 9. Larson did not tell Lawton that he was going to do anything about her complaint. Id. at ¶ 10. Lawton had the impression that Larson did not take her complaint very seriously. Id. Gauger's offensive behavior towards Lawton did not stop. Id at ¶ 11. As a result, Lawton stopped doing business with Prestige except in cases where one of her customers specifically requested a shipment with Prestige. Id.
Former Prestige customer service manager Lisa Milton complained to Larson about Gauger's conduct three to six times, some involving sexual conduct and others not. Milton Dep. 61-62. (Milton does not recall the details of each such conversation.) Milton first complained to Larson that Gauger had screamed and yelled at her. Id. at 63. On one occasion, Larson was present when Gauger screamed at Milton and called her an "asshole." Id. at 42-43. In addition, in 1997, Milton went to Larson because an employee had complained to her about Gauger's conduct. (Milton does not recall whether the employee who complained to her was Cara Kelsey (now Waldschmidt) or Chris Parker. Id. at 67-68.) Milton told Larson that the employee came to her office crying because Gauger had made sexual comments and had suggested that if the employee did not perform sexual favors for him, she would be "on the outside looking in." Id. at 73-74. During that meeting, Milton also told Larson that somebody probably would sue him one day because of Gauger's conduct. Id. at 66. On another occasion, Milton told Larson that Gauger stuck his hand down the shirt of "one of the girls," probably Chris Parker. Id. at 75. Milton also told Larson that Kari Thompson said that Gauger grabbed her breasts. Id. at 131.
Milton made her final complaint to Larson on the day she resigned, sometime during the last week of August 1998. Id. at 70. Milton told Larson that "things still were happening" with Gauger "as far as him saying things to people in the office and to customers." Id. Milton specifically recalls telling Larson that on one occasion when Milton's sister telephoned the office and asked to speak with her, Gauger told her sister that Milton was unable to come to the telephone because she was under his desk with her mouth full. Id. at 71.
Cara Waldschmidt worked in the customer service department at Prestige for two months in late 1997. Waldschmidt complained to Larson about Gauger's temper and his sexually offensive behavior before she quit. Waldschmidt Decl. ¶ 11. She also had complained about Gauger to Milton, her immediate supervisor. Waldschmidt Decl. ¶ 7. The night after Waldschmidt left Prestige, Larson called her at home to ask her to come back to work. Waldschmidt told Larson that Gauger's behavior and the rude things he had said to her were the "last straw" and that she did not want to return to Prestige. Waldschmidt Decl. ¶ 12.
Sharen Macek worked at Prestige from October 1996 until March 1997. Before she resigned, Macek told Larson that she had a problem with the way Gauger treated women. Larson told Macek he was thinking of sending Gauger to sexual harassment classes. Macek Decl. ¶ 19.
Judy Ellington worked in Prestige's customer service department from August 1995 until September 1997. Ellington complained to Larson about Gauger on at least three occasions, starting when Gauger asked her to have an affair. Ellington Decl. ¶ 8. Ellington also told Larson that Gauger was hugging female employees too tightly and saying sexually offensive things to them. Id. Larson made excuses for Gauger and said that he was under a lot of stress. Ellington also complained about Gauger to Milton, her immediate supervisor. Id. at ¶ 9. Ellington left the company after two years because she believed that Gauger was sexually harassing her and other employees and nothing was done to correct the behavior. Id. at ¶ 10. When she left Prestige, Ellington wrote Larson a letter about Gauger's conduct towards her and other women. She placed the letter in a sealed envelope with her key to the building, addressed the envelope to Larson, and left the envelope on Larson's desk. Id. at ¶ 11. (Larson denies receiving the letter.)
Shawn Draper worked in the operations department at Prestige from 1991 until April 1998. On at least two occasions, she told Larson that he "needed to put the reins on K.C." because of the offensive way that he spoke to women. Draper Decl. ¶ 11.
H. Harbison's EEOC Charge and Subsequent Events
Harbison filed a sexual harassment charge with the EEOC on or about October 6, 1998. Prestige received the charge on or about October 8, 1998. During the week of October 12, 1998, Harbison's computer was disconnected and she stopped receiving the "COMAT," the corporate reports she distributed and discussed at sales meetings. Harbison Dep. 290, 297. According to Larson, discussing the COMAT was one of Harbison's duties as sales manager and was her primary function at sales meetings. Larson Dep. 162-63; Def. Resp. to Pl. Statement of Additional Material Facts ¶ 262. That same week, Prestige refused three shipments from National Foods, one of Harbison's long-time customers that she had brought with her to Prestige, and another shipment from Harbison's customer, Ventra. Harbison Dep. 477-79; Harbison Decl. ¶ 17. In addition, two of Harbison's accounts, Ivy Hill and Gosport Manufacturing, were overcharged. Harbison Dep. 477-79. In November 1998, Harbison received a complaint from her customer, Megasys, about the rising price of spot quotes it had received. Harbison Decl. ¶ 20.
Also after Harbison filed her EEOC charge, four accounts (Aircom, Eaton Corporation, CF Industries, and Cybo Robots) were moved from Harbison's territory to other employees' territories. Harbison Dep. 206-07, 315-16; Harbison Decl. ¶ 21.
In addition to not receiving the COMAT, Harbison also stopped receiving weekly sales reports that showed how new accounts were credited. See Harbison Dep. 521. According to Prestige, new accounts are initially coded to a geographical territory by a data entry clerk. The weekly sales reports are generated and circulated so that sales personnel can identify any miscoded shipments. Larson Decl. ¶¶ 33-34. Harbison did not have a managerial code needed to retrieve reports from Prestige's computer system herself. Harbison Dep. 170; Harbison Decl. ¶ 13.
In a letter dated October 27, 1998, Larson wrote Harbison about her delinquent itineraries, sales call recaps, and expense reports, which were due on a weekly basis. See Harbison Dep. Ex. 15. She had not submitted these documents for three weeks. The letter concluded by stating "your failure [to submit the missing documents] will result in adjustments to your automobile mileage advance and [sic] have no choice but to considered [sic] you to have resigned your position as Sales Manager." Id. This was the first time Larson had ever said anything negative to Harbison about her performance.
On November 18, 1998, Larson altered the terms of Harbison's commission program by denying her commission consideration for certain house accounts that had been assigned to her territory. Harbison was supposed to receive commission consideration on all accounts that she worked. Harbison Dep. 249-50; see also id. at 133-35 Exs. 7 10. For the first quarter of 1998, Harbison had a total of $206,345 in sales, of which Larson did not credit her $97,000 attributable to house accounts. This left Harbison with a revised total of $108,636 in sales against a budget of $107,402. Harbison Dep. 237.
These numbers do not add up precisely, but the numbers in the text are those reflected in the question by defendant's counsel in Harbison's deposition transcript.
In December 1998, a sales meeting was held to discuss Christmas gifts for Prestige's customers. Harbison was in the office but was not asked to attend. Harbison Decl. ¶ 26.
On December 22, 1998, Larson wrote Harbison a letter about her failure to perform certain job duties and about her disruptive behavior in the office. The letter stated that Harbison would be terminated if she did not attend her performance evaluation on December 28, 1998. Harbison Dep. 295-302, Ex. 21. The letter accused Harbison of failing to appear for her performance review on December 14th. See Harbison Dep. Ex. 21. However, Harbison was never informed that her review was scheduled for December 14th, and she was in the office on that day if Larson had wished to meet with her. Def. Resp. to Pl. Statement of Additional Material Facts ¶¶ 281-82.
Harbison stopped holding sales meetings sometime in late 1998 because she did not have the reports she needed to participate in the meetings. Sales meetings continued on an informal basis, but Harbison was not asked to attend. Harbison Decl. ¶ 27.
On January 4, 1999, Harbison submitted a resignation letter to Larson. The letter stated, "the conditions that I have been forced to work under have made it impossible for me to continue." Harbison Dep. at 521, Ex. 23. Harbison gave Larson two weeks' notice of her intent to resign and continued working through the notice period at his request. Harbison's last day of work at Prestige was January 16, 1999. Additional facts are stated below as needed, using the standard for deciding a motion for summary judgment.
V. Discussion
A. Sexual Harassment
Title VII makes it an unlawful employment practice for an employer "to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin." 42 U.S.C. § 2000e-2(a)(1). Sexual harassment is actionable under Title VII as a form of sex discrimination if it is sufficiently severe or pervasive to alter the conditions of the victim's employment and to create an abusive working environment. Faragher v. City of Boca Raton, 524 U.S. 775, 786 (1998); Meritor Savings Bank v. Vinson, 477 U.S. 57, 67 (1986).
Whether an employer is liable for sexual harassment depends on several factors, including whether the harassment was committed by a supervisor or by a co-worker; whether the harassment culminated in a tangible employment action; and whether the employer and the plaintiff acted reasonably to prevent or correct the harassment. See Burlington Industries v. Ellerth, 524 U.S. 742, 760-65, 751 (1998) ("Cases based on threats which are carried out are referred to often as quid pro quo cases, as distinct from bothersome attentions or sexual remarks that are sufficiently severe or pervasive to create a hostile work environment. The terms quid pro quo and hostile work environment are helpful, perhaps, in making a rough demarcation between cases in which threats are carried out and those where they are not or are absent altogether, but beyond this are of limited utility."); Faragher v. City of Boca Raton, 524 U.S. at 786; see also Mosher v. Dollar Tree Stores, ___ F.3d ___, No. 00-1508, 2001 WL 128087, *2 (7th Cir. Feb. 16, 2001) (acknowledging departure from classifying claims as quid pro quo or hostile work environment in order to analyze employer liability); Molnar, 229 F.3d at 599-600 (same).
Prestige has moved for summary judgment on Harbison's sexual harassment claim on the grounds that, as a matter of law, (1) Harbison did not experience a hostile work environment; and (2) even if she did, there is no basis for employer liability.
1. Severity of Harassing Conduct
Whether sexual harassment is sufficiently severe or pervasive to be actionable under Title VII is viewed from both subjective and objective standpoints. Harris v. Forklift Systems, Inc., 510 U.S. 17, 21 (1993). Thus, Harbison must show that she believed her work environment was sexually hostile and that her belief was objectively reasonable. Id.
There are ample facts in the record to permit a reasonable jury to find that Harbison subjectively believed her work environment was sexually hostile. Harbison has testified that she often told Gauger to "shut up" when he made offensive comments. Ver. Cplt ¶ 18. Harbison complained to Larson at least twice about Gauger. She also talked to some of her co-workers about some of Gauger's conduct, and she has produced evidence from co-workers who witnessed Harbison recoil from physical contact with Gauger. See Flanagan Dep. 32-33; Waldschmidt Decl. ¶ 8; Kelso Dep. 57-60. In addition, Harbison sought advice from lawyers about the situation, kept notes about Gauger, and eventually filed an EEOC charge to protest Gauger's conduct.
Prestige argues that Harbison did not subjectively perceive her work environment as hostile as a matter of law because she admitted that she "laughed off" some of Gauger's comments and because she once told Gauger she was wearing "leopard" underwear in response to his recurring questions on the topic. In addition, one witness testified that Harbison seemed flattered by Gauger's attention. Prestige may argue this evidence to the jury. To prove that she subjectively perceived her work environment as hostile, Title VII does not require the target of sexual harassment to protest explicitly every incident of inappropriate conduct. See Gordon v. Southern Bells, Inc., 67 F. Supp.2d 966, 980 (S.D.Ind. 1999) (Barker, J.) (plaintiff adduced sufficient evidence to defeat summary judgment on the subjectively offensive element of her hostile environment claim even though she never explicitly told the alleged harasser "no" when he asked her out and never asked him to stop making offensive comments).
Such an approach would be out of step with the social conventions of office life, especially in a situation, like this one, where the plaintiff had to have regular contact with her alleged harasser to do her job. See Dey v. Colt Construction Co., 28 F.3d 1446, 1455 (7th Cir. 1994) (reversing summary judgment on subjectively offensive element: "A reasonable fact-finder would not necessarily expect [plaintiff] to completely disassociate herself from [the alleged harasser], particularly in light of the fact that he was second in command" in a small office; "[t]urning her back and having nothing further to do with [the alleged harasser] was, in all likelihood, not an option if [plaintiff] wished to keep her job, regardless of how offensive she may have found his behavior.").
In addition, although the subjectively offensive element requires a plaintiff to prove she was actually offended by the challenged conduct, it does not preclude a plaintiff from suing successfully if she ever responded to harassment with sarcasm or humor as a defense mechanism. Cf. Dey, 28 F.3d at 1454 (Title VII does not penalize the employee "who has the dedication and fortitude to complete her assigned tasks even in the face of offensive and abusive sexual banter.")
Harbison must also come forward with evidence that would allow a reasonable jury to find that her work environment was objectively hostile because of her sex. The Supreme Court explained in Oncale v. Sundowner Offshore Services, Inc. that the issue "should be judged from the perspective of a reasonable person in the plaintiff's position, considering `all of the circumstances.'" 523 U.S. 75, 81 (1998), quoting Harris, 510 U.S. at 23. This analysis includes considering "the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance." Wilson, 172 F.3d at 510, quoting Harris, 510 U.S. at 23. Sexual harassment violates Title VII if it is severe or pervasive. E.g., Hostetler v. Quality Dining, Inc., 218 F.3d 798, 808 (7th Cir. 2000) ("[O]ne or the other will do. There is no magic number of incidents required to establish a hostile environment.") (internal quotations and citation omitted).
There is no bright line defining what is and is not actionable sexual harassment. The determination of whether a work environment is objectively hostile is very fact sensitive. As Prestige has pointed out, "it is not enough that a supervisor or coworker fails to treat a female employee with sensitivity, tact, and delicacy, uses coarse language, or is a boor." Minor v. Ivy Tech State College, 174 F.3d 855, 858 (7th Cir. 1999); see also Baskerville v. Culligan International Co., 50 F.3d 428, 430 (7th Cir. 1995) ("occasional vulgar banter, tinged with sexual innuendo, of coarse or boorish workers" does not always create a sexually hostile environment).
Prestige has cited several of many Seventh Circuit decisions holding as a matter of law that specific conduct in the workplace fell short of creating a hostile environment. See Pryor v. Seyfarth, Shaw, Fairweather Geraldson, 212 F.3d 976, 978 (7th Cir. 2000) (affirming summary judgment for employer in relevant part where plaintiff alleged that her boss asked if he could see pictures of her in outfits from Frederick's of Hollywood; stated he preferred to see her in open-toed shoes; and asked her to look at pictures of women in bondage); Galloway v. General Motors Service Parts Operations, 78 F.3d 1164, 1168 (7th Cir. 1996) (affirming summary judgment for employer where co-worker called plaintiff, with whom he had had a failed relationship, a "sick bitch" numerous times over a four-year period and made an obscene gesture); Baskerville, 50 F.3d at 430 (affirming summary judgment for employer where supervisor referred to plaintiff as "pretty girl" and made a few isolated off-color comments, but never touched or physically threatened plaintiff or invited her to have sex with him); Saxton v. American Telephone and Telegraph Co., 10 F.3d 526, 528-29 (7th Cir. 1993) (no actionable harassment when supervisor touched and kissed plaintiff in a bar, "lurched" at her while taking a walk in a park, and then refused to speak to her after she rebuked his advances); Weiss v. Coca-Cola Bottling Co. of Chicago, 990 F.2d 333, 337 (7th Cir. 1993) (summary judgment for employer upheld when one co-worker asked plaintiff for dates, called plaintiff a "dumb blond," put his hand on her shoulder several times, placed "I love you" signs in her work areas, and attempted to kiss her in a bar).
Prestige also relied on Hostetler v. Quality Dining, Inc., No. 3:97-CV-160RP, 1998 WL 456436 (N.D.Ind. April 23, 1998), where the district court held that plaintiff's allegations that co-worker grabbed her face and stuck his tongue down her throat, tried kissing plaintiff again a few days later, placed his hands on her back and unsnapped her bra, and told her that he "could eat [her] pussy so well that [she] would do cartwheels" were insufficient as a matter of law to satisfy the severe or pervasive element of her sexual harassment claim. Shortly after Prestige filed its opening brief, the Seventh Circuit reversed. 218 F.3d 798 (7th Cir. 2000). In relevant part, the Seventh Circuit held that "physical, intimate, and forcible character of the acts at issue" would permit a fact finder to conclude that the plaintiff's work environment was hostile. 218 F.3d at 809.
The Seventh Circuit has also held that a plaintiff can base a sexual harassment claim on offensive sexual conduct that is not isolated or innocuous. In Dey v. Colt Construction Development Corp., the Seventh Circuit held that the plaintiff satisfied the objectively offensive element for summary judgment purposes where she alleged that the vice president, the number two person in the company, engaged in a pattern of sexually offensive conduct over a two-year period. 28 F.3d at 1454. The plaintiff could specifically remember only that he: (1) referred to a female attorney with whom he was then working as a "flat-chested cunt;" (2) suggested that plaintiff had not gotten a tan during her vacation because she had spent the week on her back in bed; (3) stated that he "would eat [plaintiff] no matter how [she] smelled;" and (4) unzipped his slacks while he and plaintiff were alone in the elevator. 28 F.3d at 1456-57. In addition, the plaintiff made several other more general allegations about occasions where the vice president made offensive comments. The plaintiff acknowledged that her other, more general charges involved conduct that was less "blatant" than the incidents she recalled most vividly.
The Seventh Circuit concluded that the plaintiff's allegations satisfied the objectively offensive element for summary judgment purposes because the specific incidents she remembered were "extremely offensive," "overtly sexual," and directed at the plaintiff, and because plaintiff's more general allegations tended to support her claim that the vice president was "consistently boorish." Id., see also Doe v. R.R. Donnelley Sons Co., 42 F.3d 439, 445 (7th Cir. 1994) (affirming summary judgment on statute of limitations grounds but expressing "serious reservations as to whether it was appropriate for the district court to hold as a matter of law that [plaintiff's supervisor's] conduct was not actionable" where plaintiff alleged that her supervisor regularly commented on her clothing; told her that she looked attractive and appeared to have lost weight; and "patted her posterior" on a number of occasions).
Here, Harbison has produced sufficient evidence of an objectively hostile work environment to create a fact issue for trial. She has produced evidence that she was subjected to actions and comments that were much more pervasive and, in many cases, more severe than the allegations that the Seventh Circuit rejected in the decisions in favor of employers cited above. Using Harbison's notes as a basis for calculation, Gauger allegedly made about 40 offensive comments to her over a year-long period. The comments sometimes occurred more than once a day and sometimes several days in a row.
In addition, while some of Gauger's off-color comments viewed in isolation would not be severe enough to be actionable, many comments at issue in this case are far more crude than the comments that the Seventh Circuit has rejected as evidence of a hostile environment. For example, the Seventh Circuit summarized its conclusion that the plaintiff in Baskerville v. Culligan International did not allege sufficiently severe or pervasive conduct to prove a hostile work environment by observing that her boss "never said anything to her that could not be repeated on prime time television." 50 F.3d at 431. In Baskerville, the plaintiff complained of about nine different comments, the two most offensive of which arguably were (1) a comment (accompanied by a gesture) to suggest masturbation; and (2) a comment that the public address announcement meant that "all pretty girls run around naked." Id.
In contrast, and more like the plaintiff in Dey, Harbison has come forward with evidence that Gauger made many more comments that were far more graphic in nature. Among other things, Gauger allegedly said or suggested that he wanted to "get in [Harbison's] box"; pour "Magic Shell" on her and eat it off; "pop" her; "do" her; "make out" with her; have a "threesome" with her; diaper her; and go to a hotel with a hot tub with her. He also stated that he "wore her out last night" and made numerous comments about her appearance, including remarks about her bra, breasts, underwear, pantyhose, and general level of attractiveness. A reasonable jury could find that these comments, in combination with Gauger's suggestion that Harbison's career would benefit if she went to a hotel with him and Gauger's unwelcome hugging, touching, and kissing, all within approximately one year, were objectively hostile. The Seventh Circuit has specifically cautioned that "a court must be careful to evaluate the `isolated' incidents cumulatively in order to obtain a realistic view of the work environment." Doe, 42 F.3d at 444, quoting Dey, 28 F.3d at 1454.
Prestige tries to minimize Gauger's alleged conduct as "immature antics" and "acting out." See Def. Br. at 11. Prestige may make that argument to the jury. Prestige also argues that a lack of eyewitness corroboration for harassment of Harbison tends to demonstrate that her working environment was not objectively hostile. Whether Harbison has eyewitness corroboration for her accusations has no bearing on whether a jury could find those incidents sufficient to create an objectively hostile environment based on sex. The court assumes that many harassers are sophisticated enough to avoid engaging in offensive conduct in the presence of others. See Perry, 126 F.3d at 1015 (Wood, J., concurring) (commenting in the context of a discussion of employer liability for harassment, "what manager, in front of other employees, would use the kind of language [plaintiff] alleges [her supervisor] did?").
2. Employer Liability for Harassment
Once a Title VII plaintiff establishes that her work environment was both subjectively and objectively hostile, she must also establish a basis for employer liability. The general rule is that an employer is vicariously liable for a supervisor's harassment of a subordinate. Ellerth, 524 U.S. at 765. When a supervisor does not take a "tangible employment action" against the victim, however, a defendant employer may raise the " Ellerth" affirmative defense. Id.
An employer is liable for its employees' sexually harassing behavior only when the employer has been negligent in discovering or remedying the harassment. See Faragher, 524 U.S. at 779; accord, Parkins v. Civil Constructors of Ill., Inc., 163 F.3d 1027, 1032 (7th Cir. 1998). Thus, an employer may be held liable for co-worker harassment "only if, knowing or having reason to know of the misconduct, the employer unreasonably fails to take appropriate corrective action." Guess v. Bethlehem Steel Corp., 913 F.2d 463, 465 (7th Cir. 1990).
Prestige argues that it is not vicariously liable for Gauger's conduct as a matter of law because Gauger was not Harbison's supervisor and because Prestige was not negligent in discovering or responding to Harbison's alleged harassment. Prestige further contends that, even if Gauger were a supervisor, Prestige is entitled to assert an affirmative defense under Ellerth and it can establish that defense as a matter of law. Both questions turn on disputed issues of fact.
a. Liability for Supervisor Harassment
Title VII does not use or define the term "supervisor" for these purposes. The Supreme Court did not give a precise definition of the term in Ellerth and Faragher, but it provided guidance for the lower courts to determine when the general rule of vicarious liability is appropriate. In distinguishing the employer's liability for supervisor's conduct from liability for a co-worker's actions, the Supreme Court focused on a supervisor's power, unlike a co-employee, to make economic decisions affecting other employees under the supervisor's control:
A co-worker can break a co-worker's arm as easily as a supervisor, and anyone who has regular contact with an employee can inflict psychological injuries by his or her offensive conduct. But one co-worker (absent some elaborate scheme) cannot dock another's pay, nor can one co-worker demote another. . . . [A] supervisor's power and authority invests his or her harassing conduct with a particular threatening character, and in this sense, a supervisor is always aided by the agency relation.Ellerth, 524 U.S. at 762-63 (citations omitted). See also Meritor Savings Bank, 477 U.S. at 77 (Marshall, J., concurring in judgment) ("it is precisely because the supervisor is understood to be clothed with the employer's authority that he is able to impose unwelcome sexual conduct on subordinates"). Because an employer's liability depends on misuse of supervisory authority, the ultimate inquiry for determining supervisory status is the extent of authority possessed by the person in question. Parkins, 163 F.3d at 1033. Whether an individual is a "supervisor" under Ellerth depends on whether his authority was "of a substantial magnitude." Id., see also Bruso v. United Airlines, Inc., ___ F.3d ___, Nos. 00-1688, 00-1699, 2001 WL 87635, at *7 (7th Cir. Feb. 2, 2001) (discussing Kolstad standard for imputing liability for punitive damages: "[D]etermining whether an employee acts in a managerial capacity is necessarily a fact-sensitive inquiry, and the fact finder ought to consider the kind of authority the employer has given the employee, the amount of discretion given to the employee in executing his job duties, and the manner in which those duties are carried out.")
In Parkins, decided after Ellerth and Faragher, the Seventh Circuit held for purposes of establishing a supervisor's status that the necessary extent of a supervisor's authority should include the ability to affect the terms and conditions of the plaintiff's employment. An employee does not qualify as a supervisor unless he is entrusted with at least some of the power to hire, fire, demote, promote, transfer, or discipline the plaintiff. 163 F.3d at 1034. In Parkins, the Seventh Circuit found that dump-truck crew foremen for a construction company were not supervisors under Ellerth where the foremen were paid an hourly wage, were members of labor unions, did not decide what work had to be done, did not have authority to decide how many employees would be assigned to their crews, and would at most tell a driver where to dump or pick up a load. Id. at 1034-35.
Prestige contends that Gauger was not Harbison's supervisor under Ellerth and Parkins because he did not have the ultimate power to hire, fire, or discipline Harbison. That is not the standard. The record evidence, including Prestige's own evidence, creates a fact issue on the question of whether Gauger had authority "of a substantial magnitude" and whether he could affect the terms and conditions of Harbison's employment. See Parkins, 163 F.3d at 1033. See also Simon v. City of Naperville, 88 F. Supp.2d 872, 876 (N.D.Ill. 2000) (police officer who trained new recruits did not have the power to hire, fire, or discipline, but was a supervisor for purposes of Ellerth because he made recommendations that affected new employees' future employment status and thereby "obviously has authority that affects terms and conditions of employment").
The evidence tends to show that Gauger was the "number two" person at Prestige (under Larson) before, during, and after Harbison's employment. Both Larson and Gauger agreed that Gauger has had a broad range of duties and responsibilities at Prestige. Both Larson and Gauger also agreed that there was no real difference between the various titles or jobs Gauger has held. Prestige issued an organizational chart in 1997, while Gauger was station manager, that showed that all employees at Prestige other than Larson, his assistant, and an accountant reported to Gauger. And although Gauger may not have had the ultimate authority to hire employees, it is undisputed that Gauger was involved to some extent in the recruitment of Harbison, Flanagan, and Lawrence. In addition, the record contains evidence (although disputed) that Gauger was deeply involved in Harbison's field of sales; had authority or substantial influence over many quotes; had the authority to decide that Prestige could not handle a particular piece of business solicited by sales employees, including Harbison; and had the ability to affect how accounts were assigned or credited. Viewing this evidence in the light reasonably most favorable to Harbison, a reasonable jury could conclude that Gauger had the power to affect the terms and conditions of Harbison's employment and therefore was a supervisor of Harbison for purposes of Title VII.
In addition, the record of confusion at Prestige concerning Gauger's title and authority could allow a reasonable jury to find that Harbison reasonably (even if mistakenly) believed Gauger was her supervisor. See Ellerth, 524 U.S. at 759-60 (although the "aided in the agency" rule generally governs the vicarious liability analysis "in the unusual case," a plaintiff may be able to proceed under an apparent authority theory if the plaintiff reasonably but mistakenly believed that the individual was a supervisor); see also Parkins, 163 F.3d at 1034 (considering apparent authority analysis but rejecting it on the facts of that case). Prestige's October 1998 memorandum regarding "sales reporting" acknowledged that there were questions in the workplace about Gauger's role and authority and that Gauger may have appeared to have more authority than Larson actually granted him. In addition, Harbison has testified that Gauger said that it would be good for her career to go to a hotel with him. In this way, Gauger held himself out to Harbison as someone who could affect the terms and conditions of her employment. In light of the record evidence, it would not necessarily have been unreasonable for Harbison to view him that way. See Anderson v. Dillard's Inc., 109 F. Supp.2d 1116, 1124 n. 4 (E.D.Mo. 2000), citing Parkins, 163 F.3d at 1034 (alleged harasser did not have the power to hire, fire, or discipline plaintiff, but there was a fact question about whether harasser purported to have supervisory authority over plaintiff where supervisor stated that plaintiff would have to engage in sex to receive a raise and told plaintiff after a complaint of harassment that "further disrespect" could result in her termination).
b. Tangible Employment Action
When a supervisor's harassment culminates in "tangible employment action," an employer cannot seek the protection of the affirmative defense recognized in Ellerth. See Ellerth, 524 U.S. at 766. To bar the application of the defense, the tangible employment action must be taken by the harassing supervisor. See Johnson v. West, 218 F.3d 725, 731 (7th Cir. 2000) ( Ellerth defense not barred where harassing supervisor played no role in the decision to terminate plaintiff); see also Hill v. American General Finance, Inc., 218 F.3d 639, 643 (7th Cir. 2000) (employer was allowed to assert Ellerth defense where plaintiff was terminated by a different supervisor other than the alleged harasser; plaintiff alleged that her termination was an act of retaliation and not that it related to her alleged racial and sexual harassment).
The Supreme Court has identified "termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices that might be unique to a particular situation" as possible "tangible employment actions." Ellerth, 524 U.S. at 761. The Seventh Circuit further has explained that a tangible employment action must cause a "substantial detriment to the plaintiff's employment relationship." Molnar, 229 F.3d at 600 (internal quotations and citation omitted). See also Savino v. C.P. Hall Co., 199 F.3d 925, 932 n. 8 (7th Cir. 1999), citing as examples of actions that are sufficiently adverse or significant to constitute a tangible employment action under Ellerth, the cases of Knox v. State of Indiana, 93 F.3d 1327, 1334 (7th Cir. 1996) (moving an employee "from a spacious, brightly lit office to a dingy closet" could constitute an adverse employment action for purposes of a retaliation claim), and Collins v. State of Illinois, 830 F.2d 692, 704 (7th Cir. 1987) (holding that the retaliation plaintiff suffered an adverse employment action when she was deprived of her office, telephone, business cards, and title).
In Molnar, in a "close call," the Seventh Circuit affirmed a jury verdict finding a tangible employment action based on a school principal's confiscation of art supplies from an interning art teacher. Id. The teacher alleged that she was sexually harassed by the principal. The court reasoned that the jury could have concluded that the supplies were necessary for the teacher to perform her job. Id. The court also held that a temporary negative evaluation by the principal was an additional tangible employment action because the jury could have believed that it effectively ended the intern's career for a time. Id. The intern needed a positive evaluation to obtain her teaching license. Id. The fact that the negative evaluation later was reversed was relevant to damages but did not diminish its impact while it lasted. Id. at 601.
Here, Harbison has offered evidence that Gauger made decisions that affected her commission income by refusing to credit her for a sale when she told him she did not want to hear about one of his dreams; by deciding to reject delivery orders from Harbison's customers; and by transferring accounts to other employees' territories. See Harbison Dep. 205-213, 217, 249-50, 406-07, 429-430. According to Harbison, Gauger took some of these actions when he was harassing her and some of them after the harassment stopped. (The later allegations also form the basis for Harbison's retaliation and constructive discharge claims.) The court considers Gauger's alleged actions together. Regardless of timing, they all reasonably could be construed as part of Gauger's reaction to Harbison's response to his allegedly harassing conduct, as Harbison argues. See Pl. Br. at 23-26. Cf. Hill, 218 F.3d at 643 (affirming finding of no tangible employment action where plaintiff did not argue such action as part of her harassment claim but did allege a retaliatory discharge). On this record, a reasonable jury could conclude that Gauger took tangible employment actions against Harbison by making decisions that caused a substantial detriment to Harbison's employment relationship with Prestige. Like the principal's actions in Molnar, Gauger's alleged actions threatened Harbison's career as Prestige's sales manager and limited her ability to make sales and earn commissions. See Harbison Dep. 520 ("I pretty much couldn't do my job.") Accordingly, Prestige is not entitled, at least not as a matter of law, to assert the Ellerth defense because an essential precondition is disputed.
The Seventh Circuit recently noted that it has not decided whether constructive discharge can be an adverse employment action that prevents an employer from asserting the Ellerth defense. Mosher, 2001 WL 128087, at *2 ("we have yet to determine whether a constructive discharge is a tangible employment action within the meaning of Ellerth and Faragher"). The Second Circuit has held that it is not. See Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 294 (2d Cir. 1999) (observing, among other things, that the plaintiff in Ellerth alleged a constructive discharge and that the Supreme Court remanded the case with instructions to apply the newly-articulated affirmative defense which is available only where a plaintiff has not experienced a tangible employment action). The Third Circuit has held that it is. See Durham Life Ins. Co. v. Evans, 166 F.3d 139, 153 (3d Cir. 1999) ("Under [the employer's] theory, any substantial adverse action, such as a demotion in authority and pay, would not be a tangible adverse employment action if it led the affected employee to quit before the demotion took effect. This is contrary to Title VII doctrine which recognizes a constructive discharge under such circumstances.").
c. The Ellerth Affirmative Defense
Assuming that Prestige is entitled to assert the Ellerth affirmative defense, Prestige contends it can establish this defense on the summary judgment record as a matter of law. However, fact questions prevent Prestige from proving the defense at this juncture, even provisionally.
To establish the first element of the Ellerth affirmative defense, Prestige must prove that it (1) exercised reasonable care to prevent sexual harassment; and (2) exercised reasonable care to correct promptly any sexual harassment. See Ellerth, 524 U.S. at 765. The existence of an appropriate anti-harassment policy will often satisfy the first prong of the first element of the Ellerth defense "because Title VII is designed to encourage the creation of anti-harassment policies and effective grievance mechanisms." Shaw v. Autozone, Inc., 180 F.3d 806, 811-13 (7th Cir. 1999) (internal quotations and citations omitted) (employer established Ellerth defense as a matter of law where it maintained an anti-harassment policy; the alleged harasser had attended about 20 meetings where sexual harassment policies were discussed; and there was no evidence that anyone — including plaintiff — ever complained about the alleged harasser's conduct). It is undisputed that Prestige maintained a Harassment Policy and that Harbison received copies of it. Prestige's Harassment Policy adequately provided some examples of sexual harassment and included a mechanism for making a sexual harassment complaint to any manager.
However, the fact that Prestige had a sexual harassment policy does not end the court's inquiry. "[A] sexual harassment policy will not shield a company from its responsibility to actively prevent sexual harassment in the workplace." Gentry, 238 F.3d at 847 (affirming jury's rejection of Ellerth defense where harassment policy was not implemented effectively). See also Bruso, 2001 WL 87635, *8 ("Every court to have addressed this issue thus far has concluded that, although the implementation of a written or formal antidiscrimination policy is relevant to evaluating an employer's good faith efforts at Title VII compliance, it is not sufficient in and of itself to insulate an employer from a punitive damages award."). The record contains evidence that Prestige received complaints of offensive and/or sexually harassing conduct by Gauger before Harbison's employment. On this record, a reasonable jury could conclude that Prestige did not exercise reasonable care to prevent sexual harassment by Gauger when, in the face of specific information about Gauger, Prestige did no more than maintain a written harassment policy. Under these circumstances, Prestige's harassment policy is insufficient to carry its burden on the Ellerth defense, at least as a matter of law.
The second part of the first element of the Ellerth affirmative defense requires Prestige to prove that it exercised reasonable care to correct promptly any sexual harassment in the workplace. In Savino, the Seventh Circuit affirmed a jury verdict for the employer on this part of the Ellerth defense (and on other grounds). See 199 F.3d 925. Regarding the Ellerth defense, Savino involved circumstances that are analogous to Harbison's case in several respects. The employer investigated but was unable to corroborate Savino's sexual harassment complaint, and the alleged harasser denied the allegations. At the conclusion of the investigation, the employer reprimanded the alleged harasser and told him to avoid contact with the plaintiff. The court held that this evidence was sufficient to uphold the jury's verdict for the employer. 199 F.3d at 936. The court also rejected the plaintiff's argument that, as a matter of law, the employer was not entitled to assert the Ellerth defense because plaintiff alleged that harassing conduct continued after her harassment complaint. 199 F.3d at 933.
Savino is not controlling here, however, because of a significant factual difference. In Savino, the alleged harasser had never been accused of harassment before. 199 F.3d at 930. As the Savino court explained, the reasonableness of an employer's corrective actions must be judged based on an employer's knowledge at the time it took the action. 199 F.3d at 933; see also Shaw, 180 F.3d at 812 (Title VII does not require an employer to succeed in preventing sexual harassment, but it must act reasonably). Harbison has presented evidence that several women complained of offensive conduct by Gauger before Harbison's employment. There is no evidence that Prestige did anything at all to respond to these complaints. (As Harbison points out, because Prestige disputes that most of these complaints ever occurred, it would be hard pressed to assert at this point that it reasonably responded to them.) In addition, Harbison alleges that she continued to experience offensive conduct by Gauger after her first complaint about him to Larson. On this record, there is an issue for trial on whether Prestige exercised reasonable care to respond to Harbison's first complaint when Larson apparently did nothing other than speaking with Gauger, who denied Harbison's allegations, and writing him a letter informing him that there could be serious consequences if he did engage in sexually harassing conduct. In light of Prestige's (Larson's) alleged knowledge of earlier and substantially similar complaints about Gauger, a jury could conclude that Prestige was required to do more sooner.
The second element of the Ellerth affirmative defense requires Prestige to prove that Harbison "unreasonably failed to take advantage of any preventive or corrective opportunities provided by [Prestige] or to avoid harm otherwise." Ellerth, 524 U.S. at 765. Evidence that an employee unreasonably failed to use any complaint procedure provided by the employer will normally satisfy the employer's burden under the second element of the defense. Id.
Prestige argues that, as a matter of law, Harbison unreasonably failed to avail herself of "preventive or corrective opportunities" and failed to avoid harm otherwise because: (1) she waited about six months before making her first complaint; (2) she did not give her notes about Gauger to Larson; and (3) she did not avoid contact with Gauger. Viewing the record in the light most reasonably favorable to Harbison, a jury could find that she did not act unreasonably. According to Harbison's notes, although Gauger's offensive conduct began shortly after Harbison started working at Prestige, the conduct became more frequent and more offensive over time during her first six months of employment. Harbison alleges several incidents of inappropriate conduct in March 1998. She made her first complaint on March 30, 1998. Under the standards that govern sexual harassment claims, a jury could conclude that it was reasonable for Harbison to make a complaint only when the conduct reached a certain level of persistence and offensiveness. See Galloway, 78 F.3d at 1166 ("In its early stages [sexual harassment] may not be diagnosable as sex discrimination, or may not cross the threshold that separates the nonactionable from the actionable. . . ."); see also Minor, 174 F.3d at 857 ("Sexual harassment often consists of a series of harassing acts, often minor in themselves, and it may not be apparent to the victim that they add up to harassment until some time after the first act.").
In addition, the fact that Harbison did not give Larson the notes she had begun keeping about Gauger does not prove as a matter of law that she acted unreasonably. According to Harbison, Larson requested the notes only after Harbison's second complaint about Gauger. Harbison testified that she told Larson that he could obtain the notes by contacting her lawyer. Moreover, a plaintiff's failure to participate fully in a sexual harassment investigation does not necessarily mean that the plaintiff unreasonably failed to avail herself of preventive or corrective opportunities, especially where the harassment did not stop after the plaintiff's first complaint. See Gentry, 238 F.3d at 852 n. 2 (where managers were otherwise aware of offensive conduct by harasser, plaintiff's failure to participate directly in investigation did not hamper employer's efforts to correct the situation; plaintiff provided a written complaint and asked the company to communicate about the matter with her attorney).
Harbison also disputes the timing of when Larson instructed Harbison to avoid contact with Gauger. Even if Larson did instruct Harbison to avoid contact with Gauger from the time of her first complaint, a jury could conclude that Harbison's subsequent contacts with Gauger were reasonable in light of Gauger's high level of involvement in sales at Prestige.
B. Retaliation
To protect an employee's ability to assert her rights, Title VII also makes it an unlawful practice for an employer to retaliate against an employee because the employee has opposed an unlawful employment practice or participated in an investigation or proceeding involving practices made unlawful under Title VII. 42 U.S.C. § 2000e-3(a). To establish a prima facie case of retaliation, Harbison must show that (1) she engaged in statutorily protected activity; (2) she suffered an adverse employment action; and (3) there was a causal link between her protected activity and the adverse action. See Mathur v. Board of Trustees of Southern Illinois University, 207 F.3d 938, 941-42 (7th Cir. 2000); Eiland v. Trinity Hospital, 150 F.3d 747, 753 (7th Cir. 1998). Retaliation claims based on indirect evidence are analyzed under the McDonnell Douglas paradigm. Miller v. American Fam. Mut. Ins. Co., 203 F.3d 997, 1007 (7th Cir. 2000); cf. Bourbon v. Kmart, 223 F.3d 469, 475-76 (7th Cir. 2000) (Posner, J., concurring) (questioning conventional adaptation of McDonnell Douglas test to retaliation claims). If the plaintiff establishes a prima facie case of retaliation, the employer must articulate a legitimate, non-retaliatory reason for its actions. If it does, the plaintiff then must show that the proffered reasons are a pretext for unlawful retaliation. Miller, 203 F.3d at 1007.
Harbison satisfied the first element of her retaliation claim by filing a charge with the EEOC on or about October 6, 1998. Prestige argues that it is entitled to summary judgment because Harbison cannot prove the second and third elements of her claim (adverse employment action and causal link) or pretext. The court disagrees.
1. Adverse Employment Action
The Seventh Circuit has defined "adverse employment action" broadly. Smart v. Ball State University, 89 F.3d 437, 441 (7th Cir. 1996); McDonnell v. Cisneros, 84 F.3d 256, 258-59 (7th Cir. 1996). An adverse employment action is "not limited solely to loss or reduction of pay or monetary benefits. It can encompass other forms of adversity as well." Collins v. Illinois, 830 F.2d 692, 703 (7th Cir. 1987). However, it is well established that "not everything that makes an employee unhappy is an actionable adverse action." E.g. , Bell v. E.P.A., 232 F.3d 546, 555 (7th Cir. 2000) (citations omitted). To be adverse, the action must be materially adverse, "meaning more than a mere inconvenience or an alteration of job responsibilities." Cullom v. Brown, 209 F.3d 1035, 1041 (7th Cir. 2000) (internal quotations and citations omitted).
An adverse employment action is tantamount to the "tangible employment action" defined in Ellerth. See Bell, 232 F.3d at 555, quoting Ellerth, 524 U.S. at 761 ("For an employment action to be actionable, it must be a `significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.'") See also Crady v. Liberty Nat'l Bank Trust Co., 993 F.2d 132, 136 (7th Cir. 1993) ("A materially adverse change might be indicated by a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices that might be unique to a particular situation."). A serious erosion of responsibilities evidencing a qualitative change in employment is also an adverse employment action. Dahm v. Flynn, 60 F.3d 253, 257 (7th Cir. 1994) (although defendant ultimately was protected by qualified immunity, summary judgment was inappropriate on the adverse employment action prong of plaintiff's Section 1983 retaliation claim where she alleged a reduction of her responsibilities accompanied by an increase in the less-skilled administrative tasks she was asked to perform).
Although there is not a predetermined "laundry list" of conduct that satisfies the adverse employment action element of a retaliation claim, see Knox v. State of Indiana, 93 F.3d 1327, 1334 (7th Cir. 1996), the Seventh Circuit has held that certain types of conduct, including much of the allegedly retaliatory conduct alleged by Harbison, are not actionable as retaliation as a matter of law.
The Seventh Circuit has rejected retaliation claims based on negative or inaccurate performance ratings, "shunning" by coworkers, and changes to the terms and conditions of employment that are not "material." See Rabinovitz v. Pena, 89 F.3d 482, 489 (7th Cir. 1996) (lower performance rating — from "exceptional" to "fully successful" — was not an adverse employment action); Smart, 89 F.3d 437, 441-42 (7th Cir. 1996) (lower performance rating was not an adverse employment action); Cullo, 209 F.3d at 1041 (overrating employee and failing to place him in remedial program which might have provided some benefits were not adverse employment actions); Williams v. Bristol-Myers Squibb Co., 85 F.3d 270, 274 (7th Cir. 1996) (transfer of employee to another division with "minor and indirect effect" on employee's commission and placement of employee in performance "coaching" program coupled with warning that failure to improve performance may lead to further disciplinary action did not constitute adverse employment action); Parkins, 163 F.3d at 1039 (affirming summary judgment for employer because there was no evidence that employer ordered employees not to talk to plaintiff and because there was no indication that alleged shunning resulted in material harm to plaintiff); Bell, 232 F.3d at 555 (voluntary transfers were not adverse employment actions where there was no evidence that the terms and conditions of plaintiffs' employment changed; the cancellation of a conference called by plaintiff by decision maker who refused to speak to plaintiff was not an adverse employment action); McKenzie v. Illinois Dep't of Transportation, 92 F.3d 472, 486 (7th Cir. 1996) (attempt to obstruct litigation of underlying complaint was not an adverse employment action for purposes of establishing a retaliation claim; such a matter must be addressed pursuant to court rules, not Title VII); see also Chisolm v. Foothill Capital Corp., 3 F. Supp.2d 925, 937 (N.D.Ill. 1998) (single threat of termination was not an adverse employment action; court did not even consider other allegations of retaliatory conduct, which included the plaintiff's exclusion from business-related social events and her supervisor's failure to return her calls as quickly as he once did).
Harbison claims that Prestige retaliated against her in the months following her EEOC complaint by engaging in a "pattern of materially adverse actions towards her" which included: (1) disconnecting her computer; (2) giving her negative feedback about her performance for the first time, including warning letters; (3) failing to provide her with information and sales reports; (4) excluding her from sales meetings; (5) falsely accusing her of slamming doors and throwing objects at work and threatening to terminate her for such conduct; (6) failing to respond to a memorandum that she drafted to Larson about problems with her accounts; (7) influencing employees to shun her; (8) trying to influence Kim Cheverko's testimony in this case; (9) refusing to provide operational support for her customers and otherwise "sabotaging" her accounts, including by quoting certain jobs at an unusually high price; (10) transferring five accounts to other employees; and (11) changing the terms of her commission program. See Pl. Br. at 42-44.
Prestige argues in a footnote in its reply that Harbison cannot base her retaliation claim on the allegation that Larson altered the terms of her commission program and thereby deprived her of commission because this allegation is outside the scope of her EEOC charge. See Def. Reply Br. at 17 n. 6; see also Cheek v. Western and So. Life Ins., 31 F.3d 497, 500 (7th Cir. 1994) ("a Title VII plaintiff cannot bring claims in a lawsuit that were not included in her EEOC charge"; the charge encompasses allegations "like or reasonably related to the allegations of the charge and growing out of such allegations"). In her EEOC retaliation charge, Harbison alleged among other things that Prestige retaliated against her by "not crediting her for sales she made; sabotaging her accounts so that she would not get sales. . . ." See EEOC Charge (Retaliation). The evidence of lost commissions in the lawsuit is sufficiently close to the EEOC retaliation charge.
Several of Harbison's allegations do not support a retaliation claim because they are not adverse employment actions as a matter of law under the holdings and reasoning of the cases cited above. Specifically, of the eleven different allegations of retaliatory adverse employment actions in the preceding paragraph, the first eight are not actionable as retaliation based on the record in this case as matter of law.
However, Harbison's testimony relating to loss of accounts and commission is sufficient to carry her burden to produce evidence of an adverse employment action for summary judgment purposes. Loss of commission from several accounts could materially affect Harbison's employment as the sales manager. In contrast to Williams v. Bristol-Myers Squibb, where the Seventh Circuit rejected as an adverse employment action a transfer that indirectly caused a reduction in commission because the plaintiff was forced to start selling new products, Harbison essentially alleges that her commission rate was cut by Prestige changing the rules that governed her commission income. See Williams, 85 F.3d at 274 ("since commission earnings are proportional to sales, a transfer that has the effect of reducing the employee's sales and hence commissions is an unlikely candidate for discrimination, since the employer in such a case is hurting the employee by hurting itself, that is, by reducing its sales"; however, a reduction in the commission rate would constitute an adverse employment action, like a reduction in base pay.) Prestige appears to assert that Harbison's allegations in this regard are legally insufficient because she has not alleged commission loss in any specific amount. See Prestige Reply Br. at 6. This criticism goes to the weight that a fact finder should give to Harbison's evidence and not to its sufficiency at the summary judgment stage.
2. Causation
Harbison also must prove a causal link between her protected activity and the adverse employment actions she has alleged. A close temporal connection between protected opposition and an adverse employment action is enough, under most circumstances, to state a prima facie case of retaliation. See Rabinovitz, 89 F.3d at 489, citing Holland v. Jefferson Nat'l Life Ins. Co., 883 F.2d 1307, 1315 (7th Cir. 1989); accord, Hunt-Golliday v. Metropolitan Water Reclamation Dist. of Greater Chicago, 104 F.3d 1004, 1014 (7th Cir. 1997) (suspicious timing constitutes circumstantial or indirect evidence to support a claim of discrimination).
Prestige received Harbison's EEOC charge on October 8, 1998. Harbison has testified that Prestige began refusing orders from her customers immediately, during the week of October 12, 1998, and that retaliatory conduct continued for the next three months until she resigned. Evidence that the retaliatory conduct began as soon as Prestige received her complaint provides a sufficient temporal connection between Harbison's charge and her retaliation allegations to create a fact issue on the causal link element of her prima facie case. Compare Sweeney v. West, 149 F.3d 550, 557 (7th Cir. 1998) (commenting that one week between protected activity and adverse action may be a sufficiently close temporal relationship to raise an inference of retaliation), with Hughes v. Derwinski, 967 F.2d 1168, 1174 (7th Cir. 1992) (four-month gap was too large, on its own, to create inference of retaliation), and Juarez v. Ameritech Mobile Communications, Inc., 957 F.2d 317, 321 (7th Cir. 1992) (six-month gap between complaint and termination did not raise inference of retaliation).
3. Proffered Reasons and Pretext
Prestige has responded to Harbison's actionable retaliation allegations by asserting that (1) Gauger did not have the authority to change the assignment of accounts; (2) Gauger had no involvement or no control over the specific shipments about which Harbison has complained; (3) the acceptance rate for "spot quotes" that Gauger provided to Harbison's customers in 1998 (62.4%) is consistent with Prestige's average acceptance rate (62.6%); (4) employees do not have the ability to quote customers "too high" because Larson sets the parameters for quotes; and (5) without admitting or denying Harbison's allegation that Larson changed her commission plan, Prestige argues that any such changes were permissible under her employment agreement. See Prestige Reply Br. at 17-18.
Harbison disputes the accuracy of these figures. According to her, spot quotes often were not documented. Harbison Decl. ¶ 3.
In large part, Harbison's allegations of actionable retaliatory conduct and Prestige's response are like ships passing in the night. Prestige has not articulated legitimate business reasons for the adverse actions. Prestige instead asserts that the actions alleged could not have occurred and that, to the extent Gauger was not involved, there was no retaliatory motive. However, Harbison's evidence is sufficient to carry her burden to establish a prima facie case under the McDonnell Douglas analysis. At the next step, Prestige must "must clearly set forth, through the introduction of admissible evidence, the reasons for [the allegedly retaliatory actions]. If the defendant carries this burden of production, the presumption raised by the prima facie case is rebutted, and the factual inquiry proceeds to a new level of specificity." Klein v. Trustees of Indiana University, 766 F.2d 275, 280 (7th Cir. 1985) (internal quotations and citation omitted).
Because Prestige has not articulated legitimate business reasons for the alleged actions, the court has no pretext analysis to perform at this juncture. Prestige can defend against Harbison's retaliation claim by arguing that the actions did not occur and/or were not inspired by a retaliatory motive. However, these questions cannot be resolved as a matter of law on this record.
C. Constructive Discharge
Harbison also alleges that her resignation from Prestige was a constructive discharge. The term "constructive discharge" refers to a situation where an employee is forced to resign because her working conditions, from the standpoint of the reasonable employee, have become unbearable. See Mosher, 2001 WL 128087, at *3, citing Lindale v. Tokheim Corp., 145 F.3d 953, 955 (7th Cir. 1998). To prove constructive discharge, a plaintiff must show that (1) her working conditions were so intolerable that a reasonable person would have been compelled to resign; and (2) the conditions were intolerable because of unlawful discrimination. See, e.g., Tutman v. WBBM-TV, Inc./CBS, Inc., 209 F.3d 1044, 1050 (7th Cir. 2000); Simpson v. Borg-Warner Automotive, Inc., 196 F.3d 873, 877 (7th Cir. 1999). Prestige argues that Harbison's constructive discharge is legally deficient because she cannot prove that her working conditions were intolerable as a matter of law.
The Seventh Circuit has explained that a plaintiff who claims constructive discharge must, to survive summary judgment, show more than "ordinary" discrimination to establish the first element of her claim. Absent "extraordinary conditions," an employee is expected to remain employed while seeking redress. Mosher, 2001 WL 128087, at *3. A constructive discharge plaintiff must prove that quitting was the only way she could extricate herself from intolerable conditions. Sweeney, 149 F.3d at 558.
Seventh Circuit case law also instructs that the "extraordinary conditions" sufficient to support a constructive discharge claim must entail more than the mere existence of some negative job actions. For example, in Harriston v. Chicago Tribune Co., the Seventh Circuit affirmed summary judgment for the employer on plaintiff's constructive discharge claim where she alleged that she was excluded from office activities, was reprimanded, was assigned undesirable sales territories, and was not allowed to supervise two white employees because of race discrimination. 992 F.2d 697, 705 (7th Cir. 1993). The court held that plaintiff's allegations were not so onerous or demeaning that she was compelled to leave her employment. Id. Plaintiff Harriston was a long-time employee who had moved up in rank over time and had received salary increases and bonuses. She did not allege harassment generally.
Similarly, in Rabinovitz, the Seventh Circuit held that there was no constructive discharge where the plaintiff alleged that he was subjected to insults; was denied a bonus; received lower performance ratings; and was refused a schedule accommodation. 89 F.3d at 489. The court noted that the plaintiff's salary and responsibilities were not affected.
In contrast, the Seventh Circuit has held that constructive discharge occurs when an employee reasonably concludes that her job is over or has materially changed for the worse. In Hunt v. City of Markham, the Seventh Circuit reversed summary judgment for an employer on a police officer's constructive discharge claim where the police chief had told him that he would never live up to the mayor's expectations. 219 F.3d 649, 655 (7th Cir. 2000). The court reasoned: "A person who is told repeatedly that he is not wanted, has no future, and can't count on ever getting another raise would not be acting unreasonably if he decided that to remain with this employer would necessarily be inconsistent with even a minimal sense of self-respect, and therefore intolerable." Id.
Likewise, in Parrett v. City of Connsersville, the Seventh Circuit affirmed a jury verdict finding that a transfer without a reduction in pay was a constructive discharge where the plaintiff, an "ambitious professional," was assigned to a windowless room that formerly had been a storage closet. 737 F.2d 690, 694 (7th Cir. 1984). Formerly the chief detective, the plaintiff was asked to perfom tasks that amounted to "enforced idleness." Id. The court observed that the employer's actions effectively foreclosed plaintiff's career opportunities internally or with another employer. Id. The court upheld the constructive discharge finding because "anyone with some self-respect" would have found the plaintiff's working conditions intolerable. Id.
On the constructive discharge issue, this is a close case, but Harbison's evidence is sufficient to raise genuine issues of material fact. A reasonable jury could find that Prestige's alleged retaliatory conduct, following as it did a period of harassment, rendered Harbison's work environment intolerable under Hunt and Parrett. Although no one at Prestige expressly told Harbison that her career as a sales manager there was over, she reasonably could have inferred as much from Prestige's retaliatory actions discussed above. In addition, unlike in Harriston and Rabinovitz, Harbison alleges that Prestige effectively reduced her responsibilities by making it impossible to perform certain important functions of her job and that Prestige took actions that would affect her commission, a regular and non-discretionary component of her compensation.
Prestige argues that the fact that Harbison gave Prestige two weeks' notice of her intent to resign and that she continued working during the notice period proves that Harbison was not experiencing intolerable working conditions. In light of Harbison's position as sales manager, a reasonable jury could conclude that Harbison's conduct was not inconsistent with her allegation that her work environment had become unbearable. A constructive discharge plaintiff should not be precluded from proving her claim as a matter of law merely because she observed a formality often expected of someone of her rank. (Such a requirement also could make it more difficult for constructive discharge plaintiffs to mitigate their damages by securing replacement employment.)
D. Negligent Retention
Prestige has moved for summary judgment on Harbison's negligent retention claim on two grounds. First, Prestige contends that the exclusivity provision of the Indiana Workers' Compensation Act bars Harbison's claim. Second, on the merits, Prestige argues that Harbison has not produced evidence that Prestige was aware of inappropriate conduct by Gauger. The court disagrees.
1. Workers' Compensation Exclusivity
The Indiana Workers' Compensation Act makes benefits available under the Act an employee's exclusive remedy against her employer. See Ind. Code § 22-3-2-6 (remedies under the Act "shall exclude all other rights and remedies of such employee. . . ."); see also Guess, 913 F.2d at 466 (the Act "provides an administrative remedy not litigable in federal court under either the pendent or the diversity jurisdiction of the federal courts."). Benefits are available under the Act for (1) personal injury (or death); (2) occurring by accident; (3) arising out of employment; and (4) arising in the course of employment. See Evans v. Yankeetown Dock Corp., 491 N.E.2d 969, 973 (Ind. 1986). Claims that do not satisfy each of these elements are not covered by the Act and may be pursued in court. Id.; Perry v. Stitzer Buick GMC, Inc., 637 N.E.2d 1282, 1285 (Ind. 1994).
The Act's exclusivity provision does not bar Harbison's negligent retention claim against Prestige. As a threshold matter, Harbison does not seek a remedy for "personal injury." In Perry v. Stitzer Buick GMC, Inc., the plaintiff based his intentional tort claims on allegations of racial discrimination in the workplace. 637 N.E.2d at 1284-85. The Supreme Court of Indiana held that the plaintiff's intentional tort claims were not barred by Indiana Code § 22-3-2-6 because he sought a remedy for emotional or psychological injuries (specifically, embarrassment, humiliation, stress, paranoia and damage to reputation) and not for physical injury, impairment, or disability, which constitute "personal injury" under the Act. 637 N.E.2d at 1288-89; accord, McCreary v. Libbey-Owens-Ford Co., 132 F.3d 1159, 1166 (7th Cir. 1997) (under Perry, exclusivity provision did not bar intentional infliction of emotional distress damages where plaintiff did not seek damages for physical injuries); Tacket v. General Motors Corp., 93 F.3d 332, 335 (7th Cir. 1996) (same; reversing summary judgment); Coble v. Joseph Motors, Inc., 695 N.E.2d 129, 133 (Ind.App. 1998) (same; rejecting argument that relevant portion of Perry was dicta); Landis v. Landis, 664 N.E.2d 754, 755-56 (Ind.App. 1996) (same).
Here, Harbison seeks emotional distress damages for Prestige's alleged negligent retention of Gauger. See Ver. Cplt ¶ 29 (alleging emotional and financial damages and denying any physical injury); Harbison Dep. 364, 597-601. She has not alleged any physical injury. See id. Under Perry, the workers' compensation exclusivity provision does not bar Harbison's negligence claim as a matter of law.
Prestige argues that Harbison's claim is barred because, by alleging negligence instead of an intentional tort, she necessarily claims an injury "by accident" — which satisfies the second element of workers' compensation coverage. See Evans, 491 N.E.2d at 973; Perry, 637 N.E.2d at 1285. However, for the workers' compensation exclusivity bar to apply, all of the coverage elements must be satisfied. See Perry, 637 N.E.2d at 1285. In Perry, the court agreed with the defendant that the plaintiff's intentional tort claims gave rise to injuries "by accident" because they did not fall within the intentional tort exception announced in Baker v. Westinghouse Electric Corp., 637 N.E.2d 1271 (Ind. 1994). However, that conclusion was not decisive. The Perry court held that the exclusivity bar did not apply because the plaintiff did not allege "personal injury." Perry, 637 N.E.2d at 1289; see also Tacket, 93 F.3d at 335 (although plaintiff's claim did not fit into the Baker v. Westinghouse intentional tort exception, Perry provided "a thin reed on which his claim remains afloat").
Prestige also relies on cases decided beforee Perry holding that the workers' compensation exclusivity provision barred negligence claims. See Def. Reply Br. at 19, citing Guess, 913 F.2d at 466 (exclusivity provision barred claims of intentional infliction of emotional distress and failure to provide a safe workplace arising out of sexual harassment); Fields v. Cummins Employees Fed. Credit Union, 540 N.E.2d 631, 636 (Ind.App. 1989) (exclusivity provision barred negligent retention claim); Hansen v. Von Duprin, Inc., 507 N.E.2d 573, 576 (Ind. 1987) (employee was eligible for workers' compensation benefits for accidental injury as a result of on-the-job harassment); see also Garus v. Rose Acre Farms, Inc., 839 F. Supp. 563, 568 (N.D.Ind. 1993) ("Whether common-law claims are precluded by the exclusivity provision of the Act turns on whether those claims allege intentional torts or negligence."). However, these cases do not undermine Harbison's negligent retention claim because they did not consider whether the plaintiff sought a remedy for a "personal injury" under the Act. Since Perry, the nature of the remedy sought — and not the theory of relief — may ultimately determine whether the workers' compensation exclusivity bar applies.
2. Knowledge of Misconduct
Prestige also argues that summary judgment is appropriate on Harbison's negligent retention claim because she has not made a sufficient showing that Prestige was aware of Gauger's alleged misconduct to create an issue for trial. To prove negligent retention, a plaintiff must prove that her employer had reason to know of an employee's misconduct and failed to take appropriate action. Grzan v. Charter Hospital of Northwest Indiana, 702 N.E.2d 786, 793 (Ind.App. 1998); see also Briggs v. Finley, 631 N.E.2d 959, 966-67 (Ind.App. 1994) (negligent retention plaintiff must show the employer "knows the employee is in the habit of misconducting himself in a manner dangerous to others").
Prestige argues that Harbison's decision to join Prestige after knowing Gauger for 14 years demonstrates that she did not believe Gauger was in the habit of behaving himself in a manner dangerous to others. In addition, Prestige again contends that Larson was not aware of Gauger's allegedly harassing conduct. A negligent retention claim focuses on what the employer knew about the employee whom it retained — not on what the plaintiff knew. As discussed above in the context of the Ellerth affirmative defense to sexual harassment, summary judgment on Harbison's negligent retention claim is inappropriate because Harbison has come forward with evidence that would permit a reasonable jury to conclude that Prestige knew (let alone had reason to know) of Gauger's alleged conduct and failed to take appropriate action.
Conclusion
For the foregoing reasons, defendant's motion for summary judgment is hereby denied. The court will hold a scheduling conference at 4:30 p.m. on April 18, 2001, in Room 330, U.S. Courthouse, Indianapolis, Indiana, to set a new trial date.