Florida Mediation Group, Inc.
DEFENDING SEXUAL HARASSMENT CLAIMS AFTER FARAGHER AND ELLERTH
WHAT CHANGED AND WHAT DID NOT CHANGE



BY Donald J. Spero, Esq.

Employer Liability for a Supervisor’s Sexual Harassment

Before and After Faragher and Ellerth

One of the more frequently litigated issues in cases alleging sexual harassment in violation of Title VII of the 1964 Civil Rights Act, 42 U.S.C. §2000e, et seq, is whether employer should be held liable for the offending conduct. The Supreme Court in Faragher v City of Boca Raton, 118 S. Ct. 2275 (1998) and Burlington Industries, Inc. v. Ellerth, 118 S. Ct. 2257 (1998) provided guidelines for answering this question where the sexual harassment is committed by an employee’s immediate supervisor or one who is successively higher in the chain of command. In Ellerth the Court de-emphasized the use of the term quid pro quo harassment. The courts have applied this term to a supervisor’s requiring sexual favors in return for employment benefits such as a raise, promotion or retention of the employee’s job. Under prior authority employers have been found to be absolutely liable for this type of conduct by a supervisor even where the employer had no reason to be aware of it. Instead of attributing absolute liability where there is quid pro quo sexual harassment the Court ruled that "...a tangible employment action taken by an employer becomes for Title VII purposes the act of the employer." Burlington Industries v Ellerth, supra, 118 S. Ct. at 2270.(emphasis supplied) The Court then proceeded to render the draconian ruling that "No affirmative defense is available, however, where the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment."

The concept of "hostile environment" apparently remains intact with only the conditions for imposing vicarious liability having been altered. Hostile environment sexual harassment can be the result of conduct such as "[un]welcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature." EEOC Guidelines at 29 CFR 1604.11(a) Before Faragher and Ellerth courts had ruled that the employer was liable for the conduct of a supervisor who created a hostile work environment under the following circumstances:

1. Where the employer knew or should have known of the conduct and failed to take corrective action. Andrade v. Mayfair Management, Inc. 88 F.3d 255,261 (4th Cir. 1996)

2. An employers could also be held liable on a negligence theory where it had . hired or retained the offender if it had reason to know of the offender’s propensities.

Restatement (Second) of Agency (1957) §219 (2)(b)

3. Where the supervisor was acting in the scope or course of his or her employment. This situation exists if the supervisor’s acts in any way purported to promote the interests of the employer. Schwartz v. Zippy Mart, Inc., 470 So.2d 720 (Fla.. App. 1st Dist. 1985)

4. Where the supervisor "... purported to act or to speak on behalf of the [employer]

and there was reliance on apparent authority, or he was aided in accomplishing the

tort by the existence of the agency relationship." Restatement (Second) of Agency (1957) §219 (2)(d); see also Farley v. American Cast Iron Pipe Company, 115 F.3d 1548,1552 (11th Cir. 1997)

After Ellerth an employer could no longer rely on the absence of these circumstances to defend a hostile environment sexual harassment claim based on the actions of a supervisor or manager. The employer is now answerable even where it has no actual or constructive knowledge of the harassing conduct. It does not avail the employer that it properly selected and supervised the offender and that the abusive acts were not committed in the scope and course of employment. Under Ellerth the employer can prevail where a hostile environment based on sexual harassment is shown to exist only if it fulfills the conditions of an affirmative defense set out by the Supreme Court. The employer must prove by a preponderance of evidence that "...the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior and that the plaintiff failed to take advantage of any preventative opportunities provided by the employer or to avoid harm otherwise." Burlington Industries, Inc. v. Ellerth,, supra, 118 S. Ct. at 2270. Thus the Court expanded the liability of an employer for a supervisor’s hostile environment sexual harassment, but it fell short of imposing per se liability by allowing the affirmative defense.

Even before Faragher it was important to have a well disseminated and well enforced policy prohibiting sexual harassment. Obviously it is even more essential now that lack of knowledge of the supervisor’s conduct, exercise of due care and the fact that the acts were not committed to advance the interest of the employer or by the abuse of apparent authority are no longer defenses when a supervisor harasses a subordinate. With these defenses unavailable employers and their counsel will have to concentrate on the defenses that remain

The Federal Appellate Court for the Fifth Circuit provided an example of how the affirmative defense may be applied by a court in Scrivner v. Socorro Independent School District, 169 F.3d 969 (5th Cir. 1999). In that case the school district had responded promptly to an anonymous letter accusing a school principal of sexually offensive conduct by conducting a thorough investigation. When interviewed in that investigation Ms. Scrivner had stated that the principal did not engage in the offending conduct. Further she did not complain of any conduct of the principal towards her. The investigation did not substantiate the accusation against the principal. Approximately four months later Ms. Scrivner filed a formal complaint against the principal in which she accused him of calling her a lesbian. Again the school district promptly investigated. The principal was removed from his assignment. The appellate court affirmed the summary judgement entered by the trial court in favor of the school district. The court found that Ms. Scrivner failed to avail herself of the opportunity to inform the school district of the principal’s conduct during the first investigation, in fact misleading the investigators. No weight was given to Ms. Scrivner’s contention that she mislead the investigators because she was intimidated by the principal. The court also emphasized that the school district had responded promptly to both complaints with complete investigations.

The Court’s expansion of employer liability did not completely alter the defensive posture of employers in sexual harassment cases. First, it must be borne in mind that Faragher and Ellerth apply only where the conduct involved is that of a supervisor or one with successively higher authority over the complaining employee. The cases seem to have made no changes in the law where the harassment is perpetrated by the employee’s peers or by a supervisor who is obviously not in a position to exercise authority over the plaintiff. The defenses of notice to the employer, the exercise of due care and that the acts were not committed in the scope and course of employment or with the aid of apparent authority are apparently still viable where the offender is not one with supervisory authority over the plaintiff.

Second, it must be remembered that Faragher and Ellerth ruled only on the issue of when an employer is liable for a supervisor’s act. They did not alter the authority delineating what constitutes hostile environment sexual harassment. The defense that certain egregious conduct does not rise to the level of creating a hostile environment has not changed. Neither did the Supreme Court attenuate the defenses based on an employee’s failure to mitigate damages. Nor did the Court lower the burden of proof of employees to recover compensatory or punitive damages. Additionally, where a plaintiff claims constructive discharge her burden of proving that claim remains unchanged.

There are some instances where resort to the Faragher/Ellerth affirmative defenses may not save an employer from liability from a claim of sexual harassment. The plaintiff in Greene v. Dalton, 164 F.3d 671 (D.C, Cir. 1999) alleged that her immediate supervisor subjected daily to unwelcome sexual banter and advances, but she did not lodge a complaint until approximately a month after he allegedly raped her. The court ruled that it could not determine as a matter of law that her failure to invoke the employer’s complaint procedure prior to the rape shielded the employer from liability from that act. The court said it was up to a jury to determine whether the harassment was sufficiently severe and pervasive prior to the rape that the plaintiff should have reported it and thereby taken steps to prevent it.

The Fifth Circuit took a somewhat different approach in Indest v. Freeman Decorating, Inc., 164 F.3d 258 (5th Cir. 1999) where the employee promptly reported incidents of coarse and sexually offensive comments. The employer took prompt action and the offending conduct ceased. In ruling for the employer the court emphasized the duty of a plaintiff to mitigate damages by promptly invoking the employer’s complaint procedure. The court reasoned that prompt reporting may prevent the situation from intensifying and thereby permit redress before a more damaging hostile environment is created.

An employer may also be found liable for sexual harassment although the plaintiff failed to avail herself of its complaint procedure if the employer knew or should have known that it was taking place. The harassment may be so open and pervasive that the employer is charged with knowledge of it. An employer may also be found liable on a negligence theory. In Sharp v. City of Houston, 164 F.3d 923(5th Cir. 1999) the court held that an employer "...may be liable if it had constructive knowledge, i.e., if through the exercise of reasonable care it should have known what was going on but failed to address it." In that case two supervisors openly harassed the plaintiff, an officer in a police force mounted patrol unit, in front of her fellow officers. The unit was isolated and not closely supervised. Thus the court reasoned that the jury could have determined that the police department did not exercise sufficient control over the mounted patrol to prevent the harassment from occurring. The court also focused on evidence of a code of silence among the police that would intimidate one from making a complaint through the appropriate channels. The court thus found that an employer can be liable for sexual harassment on a negligence theory based on a failure to exercise reasonable care to prevent the harassment from occurring.

What Constitutes a Tangible Employment Action

Where an employee complains of sexual harassment resulting in a tangible employment action there may be the possibility of asserting the factual defense that the harassing conduct did not occur. That defense, of course, presents a fact issue for a jury to decide. Naturally the employer is in a better position if it can avoid the uncertainty and expense of a jury trial. This can be accomplished by the successful assertion of the legal defense that even if the plaintiff’s allegations are true, no alleged change in circumstances amounted to a tangible employment action. As indicated previously the Ellerth court stated that a tangible employment action involves a significant change in employment status such as a discharge, demotion or undesirable reassignment. The court further indicated "A tangible employment action in most cases inflicts direct economic harm". Ellerth, 118 S. Ct. at 2269 (emphasis supplied)

Since the Supreme Court decided McDonnell Douglas Corp v. Green, 411 U.S. 792 (1973), one of the elements a discrimination plaintiff must show as part of his or her case is that he or she suffered an "adverse action" such as discharge or demotion. While the Supreme Court did not use the term adverse action in Ellerth, it is likely that at least some of the precedent delineating what constitutes adverse action will apply to determine what constitutes a tangible employment action. The Federal Appeals Court for the 11th Circuit ruled that " ‘Adverse employment action’ is broadly defined and as a matter of law includes not only discharges, but also demotions, refusals to hire, refusals to promote and reprimands." McCabe v. Sharrett, (citations omitted) 12 F 3d 1558, 1564 (11th Cir 1994) In McCabe the plaintiff, who sued under 42 U.S.C. §1983, was found to have suffered an adverse action when she was transferred to a job two pay grades below her former position without a decrease in salary but with less responsibility and more menial tasks. The job also afforded less opportunity for future increases in compensation. In Wideman v. Wal-Mart Stores, Inc., 141 F. 3rd 1453 (11th Cir 1998) the court ruled that an adverse action did not have to be an ultimate employment decision such as a discharge, demotion or undesirable transfer, at least in a case where retaliation is alleged. In that case the employer was found to have acted adversely where it administered unwarranted discipline, sought negative comments from the employee’s co-workers, a supervisor threatened to shoot the employee and a manager delayed authorizing medical treatment for her when she had an allergic reaction while working. In Doe v. DeKalb County School District, 143 F 3d 1441 (11th Cir. 1998), an action filed under the Americans With Disabilities Act, the court held that whether and action is adverse - in that case a lateral transfer to a job that would require ten hours of additional training over the a three year period - was to be decided using an objective standard. It was not determinative that the plaintiff had a strong personal preference for the prior position. The court ruled that the decision should turn on whether a reasonable person in the plaintiff’s position would regard the transfer as adverse. See also Berman v. Orkin, No. 96-4852 (11th Cir. 1998) "... an involuntary transfer, when coupled with a sharp corresponding reduction in territory size, can constitute adverse action."

Not every transfer that involves some inconvenience or change in duties constitutes an adverse action. The plaintiff in Williams v. Bristol-Myers Squibb Co., 85 F 3d 270 (7th Cir. 1990), an action under the Age Discrimination in Employment Act (the "ADEA"), was a pharmaceutical detailer who was transferred to a different division where he had to learn new products and suffered a decline in commissions. The court found that the plaintiff had not suffered an adverse action. It noted that any involuntary transfer is likely to result in more work and initially less pay for a commission salesperson. Holding such changes were minor the court observed at 85 F 3d 274:

...otherwise every trivial personnel action that a chip-on-the-shoulder employee did not like would form the basis of a discrimination suit. The Equal Employment Opportunity Commission, already staggering under an avalanche of filings too heavy for it to cope with, would be crushed, and serious complaints would be lost among the trivial.

Since the decisions in Faragher and Ellerth there has been a dearth of cases deciding what constitutes a tangible employment action. The question was considered, however, in Reinhold v. Commonwealth of Virginia, 151 F 3d 172 (4th Cir. 1998) In Reinhold the court held that the plaintiff had not suffered a tangible employment action where she was assigned extra work, received inappropriate assignments and was denied the opportunity to attend a professional conference. The court reasoned that these actions did not result in "a significant change in employment status" as required by Ellerth. Reinhold v. Commonwealth of Virginia, 151 3d at 175. In Butler v. Ysleta Independent School District, No. 97-50362 (5th Cir. 11/16/1998) the court considered the affect of anonymous letters with sexual content (later determined to have been sent by an assistant principal) that a teacher received. As a result she discontinued participating in extracurricular activities. The court found that her withdrawing from extracurricular activities was not a significant change in employment status and thus was not a tangible employment action. The court’s comment appears to be gratuitous as the decision indicates that the complaint alleged only hostile environment.

A change in work schedule along with being assigned additional duties after the plaintiff complained about sexual harassment, was found not to be an adverse employment action in Watts v. The Kroger Company, 147 F.3d 460 (5th Cir. 1998). The change resulted in the plaintiff being unable to meet her work schedule in her second job. The court observed that she suffered no reduction in pay and "...employment actions are not adverse where pay, benefits and level of responsibility remain the same."

Even where an employee suffers a detrimental employment action the employer may defend the claim with proof that its actions were justified for non-discriminatory reasons. In Newton v. Cadwell Laboratories, 156 F.3d 880 (8th Cir. 1998) a salesperson who resisted her supervisor’s advances after their consensual affair ended was dismissed for poor sales performance. The court ruled that her dismissal was justified when she failed to improve here sales after being on probation for two consecutive quarters. However the employer did not completely avoid exposure to a judgement. The court remanded the case to the trial court to determine if Newton could establish a hostile environment claim and if so whether the employer could establish an affirmative defense.

When is There a Hostile Work Environment

Title VII bases its prohibition against sexual harassment in language making it "...an unlawful employment practice for an employer...to discriminate against any individual with respect to....terms, conditions or privileges of employment because of such individual’s...sex..." F.S. §760.10(1)(a) In Meritor Savings Bank v. Vincent, 48 FEP Cases 1822, 1827 (1986), the United States Supreme Court, citing Henson v. Dundee, 682 F.2d 897, 904 (11th Cir. 1982) and Rogers v. EEOC, 454 F.2d 234 (5th Cir. 1971), cert. denied 406 U.S. 957 (1972) held that

Of course... not all work place conduct that may be described as ‘harassment’ affects a ‘term, condition or privilege’ of employment within the meaning of Title VII. See Rogers v. EEOC, supra, at 238 (mere utterance of an ethnic or racial epithet which engenders offensive feelings in an employee" would not affect the conditions of employment to a significantly sufficient degree to violate Title VII);... For sexual harassment to be actionable it must be sufficiently severe or pervasive ‘to alter the conditions of [the victim’s] employment and create an abusive working environment.’

In Harris v. Forklift Systems, Inc., 126 L. Ed.2d 295, 302, the Supreme Court stated that:

Conduct that is not severe or pervasive enough to create an objectively hostile or abusive working environment - an environment that a reasonable person would find hostile or abusive - is beyond Title VII’s purview. Likewise if the victim does not subjectively perceive the environment to be abusive, the conduct has not actually altered the conditions of the victim’s employment and there is no Title VII violation. (emphasis supplied)

The Court in Harris further noted:

...that whether an environment is ‘hostile’ or ‘abusive’ can be determined only by looking at all the circumstances. These may include the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and wether it unreasonably interferes with the employee’s work performance. The effect on the employee’s psychological well-being is, of course, relevant to determining whether the plaintiff actually found the environment abusive. But, while psychological harm, like any other relevant factor, may be taken into account, no single factor is required. Harris v. Forklift Systems, Inc.,126 L. Ed. 2d 302,303

 

In Oncale v. Sundowner Offshore Services, 118 S. Ct. 998,1002 (1998) the Supreme Court affirmed that Title VII was not "...a general code of civility for the American workplace." The court noted that "...Title VII does not reach genuine but innocuous differences in the way men and women routinely interact with members of the same sex and the opposite sex... it requires neither asexuality or androgyny in the workplace." The Court also established that "...harassing conduct need not be motivated by sexual desire to support an inference of discrimination on the basis of sex." Oncale established that employees are protected by Title VII from same sex harassment by members of their own sex, even when it occurs among heterosexuals.

Thus it can be seen that under Supreme Court authority, to maintain an action for sexual harassment a plaintiff must pass several thresholds. First, she must show that on an objective basis the conduct of which she complains was both severe enough and pervasive enough that a reasonable person would find it hostile or abusive. Second, she must show that she subjectively perceived the conduct to be abusive. Third, she must also show that it altered her conditions of employment. However The Court held in Harris v. Forklift, Inc. supra 126 L. Ed. 2d at 302

...Title VII comes into play before the harassing conduct leads to anervous breakdown. A discriminatorilry abusive work environment, even one that does not seriously affect the employee’s psychological well-being, can and often will detract from employees’ job performance, discourage employees from remaining on the job or keep them from advancing in their careers.

Certainly not every offensive act or comment with sexual implications rises to the level of actionable sexual harassment. Courts may make a preliminary determination of whether conduct is such that a reasonable person would find it hostile or abusive as a matter of law . Watkins v. Bowden, 73 FEP Cases 518 (11th Cir. 1997) and Brooms v. Regal Tube, 881 F. 2d 412 ,420 (7th Cir. 1989)

Baskerville v. Culligan International Co., 50 F.3rd 428, 431 (7th Cir. 1995) provides an example of coarse conduct that a court found to fall short of what would adversely affect the environment of a reasonable person. In that case the office manager called the plaintiff a "Tilly," an Irish word for something added for good measure and a British slang term for truck. When she commented on how hot his office was, he replied that it was not until she stepped in. He called her a pretty girl and made a grunting sound when she was wearing a leather skirt. He spoke of the loneliness in his hotel room while looking suggestively at his hand to suggest masturbation. He told her his wife instructed him to clean up his act and told him to regard the plaintiff as Ms. Anita Hill. The court stated at 50 F.3rd 431:

It is no doubt distasteful to a sensitive woman to have such a silly man as one’s boss but only a woman of Victorian delicacy - a woman mysteriously aloof from contemporary American popular culture and all its sex saturated vulgarity - would find Hall’s patter substantially more distressing than the heat and cigarette smoke of which the plaintiff does not complain.

The court added the remark that nothing the manager said "...could not be repeated on prime time television."

Other explicit and offensive verbal conduct has been found as a matter of law not to create a sexually hostile environment. In Galloway v. General Motors Service Parts Operation, 78 F.3rd 1164 (7th Cir. 1996) the plaintiff was given an obscene gesture along with verbal abuse including being called a sick bitch. The Court found that the conduct did not create a hostile environment. There was a like finding in Weiss v. Coca Cola Bottling Company of Chicago, 990 F.2d 333 (7th Cir. 1993) where the plaintiff complained about being asked for dates, being called a dumb blond, being asked questions about her personal life, having a supervisor place his hand on her shoulder, having "I love you" signs put in her work station and one or more attempts to kiss her.

In Rabidue v. Oceola Refining Co., 805 F.2d 611 (6th Cir. 1986) an exceptionally vulgar supervisor frequently made obscene comments about women and directed obscenities at the plaintiff. Additionally there were pictures of nude or scantily clad women in the workplace. The court stated in 805 F.2d 622 that

...Henry’s obscenities, although annoying, were not so startling as to have affected seriously the psyches of the plaintiff or other female employees. The evidence did not demonstrate that this single employee’s vulgarity substantially affected the totality of the workplace. The sexually oriented poster had a de minimis effect on the plaintiff’s work environment when it is considered in the context of a society that condones and publicly features and commercially exploits open displays of written and pictorial erotica at the newsstands, on prime-time television, at the cinema and in other public places.

 

Even pervasive conduct will not always be found to create a hostile work environment. The plaintiff in Brennan v. Metropolitan Opera Association, Inc., No. 98-7749 (2nd Cir. 1999) shared an office in which seven postcard sized photographs of nude and partially clad men were displayed for two years. The court held that this would not create a hostile environment for a reasonable person. The court stated that the pictures along with isolated sexual talk were not physically threatening or humiliating nor were they shown to have hampered the plaintiff in the performance of her work. Similar reasoning was applied in Shepherd v. The Comptroller of Public Accounts of the State of Texas, 168 F.3d 871 (5th Cir. 1999) where the plaintiff alleged that for two years she endured gross comments about her anatomy and attempts to look down her clothing along with touching of her arms. The court ruled that the foregoing conduct did not create a hostile environment.

Examples abound where courts have held that conduct evincing sexual innuendo and hostility does not to rise to the level of a sexually hostile environment. In DeAngelis v. El Paso Municipal Police Officers Association, 51 F. 3rd 591, 595 (Th Cir. 1995) ten articles appearing in a departmental publication making fun of the concept of policewomen were "...the equivalent of the ‘mere utterance of a ... epithet which engenders offensive feelings in an employee.’" Meritor Savings, 477 U.S. at 596 ... Consequently they were not severe or pervasive enough to create an objectively hostile or abusive work environment." See also Black v. Zaring Homes, Inc., 72 FEB Cases 1631 (6th Cir. 1997), (comments about "sticky buns," "hootersville," "titsville" or "twin peaks" and twisting an individual’s name from "Busam" to "bosom" did not support a finding of sexual harassment); Scott v. Sears, Roebuck & Co., 798 F.2d 210, 213-14 (7th Cir. 1985) (winking, suggestion by male that he give plaintiff a rubdown, a slap on the buttock and comment that the plaintiff must moan and groan while having sex "...was not so severe, debilitating or pervasive that it created an actionable hostile environment claim within the current interpretation of Title VII.") McKensie v. Illinois Department of Transportation, 92 F.3rd 473 (7th Cir. 1996) (comment that a co-worker screwed around and made the plaintiff pregnant, asking her if she had been drinking coffee as it induces sexual arousal and suggestion that a male should "take it out in trade" did not interfere with the plaintiff’s working environment.) Skouby v. Prudential Insurance Co., 130 F.3d 794 (7th Cir. 1997) (co-workers frequently placing cartoon characters on plaintiff’s desk saying "I love you", one cartoon character with a match affixed to it to represent an erect penis, along with unwelcome sexual references including one agent asking another if he was "eating her" did not support a claim for hostile environment sexual harassment.)

In Thompson v. Campbell, 69 FEP Cases 727, 732 (DC Minn. 1994) where a manager placed or tried to place his arm around the plaintiff’s shoulders on a regular basis and made frequent crass sexist comments, the court described the severity of the conduct as "minor." In Raley v. Board of St. Mary’s County Commissioners, 752 F. Supp. 1272 (D. Md. 1990) there were varied offensive touchings by a manager including an occasion where the manager placed his hand on the plaintiff’s thigh underneath her dress. The court found the conduct not to be sufficiently severe and pervasive to create an abusive work environment for a reasonable person. A like result was reached in Creamer v. Laidlaw Transit, Inc., 86 F.3rd 167 (10th Cir. 1996), where the plaintiff, against her will, was kissed and on one occasion grabbed, forced onto a pool table and her back pinned against the table. In Koelsch v. Beltone Electronics Corp., 46 F.3rd 705 (7th Cir. 1995) the company president stroked plaintiff’s leg with his foot, grabbed her buttocks and importuned her to have dinner or drinks with him. The court found that the conduct was not sufficiently severe or pervasive to create a hostile work environment. In Saxon v. American Telephone and Telegraph Co., 10 F.3rd 526 (7th Cir. 1993) a male manager placed his hand several times on a female’s leg above the knee and rubbed his hand along her upper thigh. Later he pulled her into a doorway and kissed her. The court held that

Although Richardson’s conduct was undoubtedly inappropriate, it was not so severe or pervasive as to create an objectively hostile work environment. Certainly any employee in Saxon’s position might have experienced significant discomfort and distress as a result of her superior’s uninvited and unwelcome advances. At the same time Richardson’s offensive behavior was relatively limited, presumably because Ms. Saxon was forthright and persistent in making clear that the advances were unwelcome.

In Perry v. Harris Chernin, Inc., 74 FEP Cases 71, 74 (7th Cir. 1997), citing Baskerville v. Culligan International Co. supra, the court ruled that: "The workplace that is actionable is one that is ‘hellish’.

Even a hellish work place might not give rise to a violation of Title VII if the purported victim does not personally perceive the conduct to be abusive. Courts have found that a failure of the individual to speak out and complain of the conduct contributes to a finding that the person did not find the conduct hostile and abusive. The observation of the court in Schweitzer-Reschke v. Avnet, Inc., 71 FEP Cases 655, 661 N.6 (DC Kan.. 1995) is pertinent:

The court points out that although the plaintiff contends these comments were objectionable and happened over an extended period of time she never expressed or in any way indicated to him [plaintiff’s supervisor] that she considered these comments inappropriate. There is no evidence that plaintiff believed that expressing disapproval would be futile or that she would suffer adverse consequences as a result.

In Hardsell v. Duplex Products, 74 FEP Cases 1501, 1495 (4th Cir. 1997), Gleason v. Mesrsow Financial, Inc., 74 FEP Cases 1365, 1375 (7th Cir. 1997) and Balletti v. Sun Sentinel Company, 909 F. Supp. 1539 (M.D. Fla. 1995) the plaintiffs’ failure to inform management of their objections contributed to holdings that the conduct complained of was not subjectively perceived as unwelcome. Nor does the fact that an individual is uncomfortable because of the conduct substantiate that she subjectively found it abusive. In Jones v. Gatzambide, 71 FEP Cases 1657, 1660 (DC L 1996) where the plaintiff testified that she felt "uncomfortable" the court held that this was not an indicia of a hostile environment.

References to the foregoing cases are not a suggestion that employers should condone or permit such atavistic behavior in the workplace. Even where an employer prevails each case still represents significant cost, both in money and in distracting the attention of important personnel from the functions that they are employed to perform. These cases also suggest morale problems that may be a severe detriment to the employer and which may cost the employer the services of one or more valuable employee. Clearly such conduct should be purged from the employment environment. Relying on cases like those discussed above should be a last resort where a frivolous claim is made or where the employee’s inaction failed to provide an opportunity for corrective action.

What Corrective Action Should an Employer Take?

Ellerth requires the employee who suffers from sexual harassment to make use of opportunities provided by the employer to take corrective action before seeking legal redress. When the employer is aware of the offensive conduct the ball is in its court to take appropriate action to end it whether the offender is a supervisor or a peer of the employee.

At times nothing but discharging the offender will satisfy the employee. The law does not in every case require the employer to fire an individual accused of sexual harassment. Barrett v. Omaha National Bank, 726 F.2d 424, 427 (8th Cir. 1984) and Jones v. Gatzanbaide, supra at 71 FEP Cases at p.1661. The employer fulfills its obligation by ending the offensive conduct. Reinhold v. Commonwealth of Virginia, 135 F.3d 920 (4th Cir. 1998) vacated on other grounds 151 F.3d 172 The Jones’ court observed the reality of the fact "....that employers may face litigation from both accuser and accused when attempting to deal with allegations of discrimination within their work force" citing Sarsha v. Sears, Roebuck & Co., WL 46701 N.D. La. February 14, 1994. Sarsha was an action brought by a manager who was discharged for violating the no dating rule, the purpose of which was to avoid incidents of sexual harassment. The employer is merely required to do that which is reasonably calculated to prevent a recurrence. Reynolds v. CSX Transportation, supra 74 FEP Cases P. 286, Garcia v. Elf Atochem North America, 28 F.3rd 446, 451 (5th Circ. 1994). Guess v. Bethlehem Steel Corp., 913 F.2d 463 (7th Cir. 1990). In both Garcia and Guess discipline short of dismissal was found to meet the employer’s obligation. In Guess the foreman picked the plaintiff up under her arms, set her down and forced her face against his crotch. The employer’s response was held to be sufficient where it reprimanded the offender and later denied him a promotion and a merit raise. In Garcia a male employee complained of being grabbed in the genital area. There the court found a reprimand to suffice. In Barrett v. Omaha National Bank, supra, the plaintiff complained of offensive touching and talk about sexual activity. The court held that the law did not require the employer to fire the offender but merely to take "proper remedial action reasonably calculated to end the harassment" citing Katz v. Dole, 709 F.2d 251, 256 (4th Cir. 1983).

In Watts v. The Kroger Company, supra, the court found that the employer responded promptly to the plaintiff’s complaints and adequately disciplined the offending party by reprimanding him. The court emphasized that an employer need not impose the most severe penalties. The important factor is that the employer takes whatever action is necessary to stop the offending conduct. After the reprimand Watts was never again subjected to such conduct.

An offer of equivalent employment away from the control or influence of the offender will often be a legally acceptable solution, notwithstanding possible complaints that it is the offender who should be moved. As discussed infra, the employee has a duty to mitigate damages. In Reinhold v Commonwealth of Virginia, supra, the court held that the employer was justified in moving the office of the victim where it was more feasible than moving the offender.

Faragher and Ellerth Do Not Apply to Sexual Harassment Actions

Filed Under Title IX of the Educational Amendments.

Title IX of the Educational Amendments bars sex discrimination in federally assisted educational program in the following terms:

No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination

under any education program or activity receiving Federal financial assistance. 20 U.S.C. 1681(a)

It is clear that this provision allows a suit for damages incurred by a student in a covered institution as a result of sex discrimination including sexual harassment. Franklin v. Gwinnett County Public Schools, 503 U.S. 60 (1992) It is less clear whether an employee of a covered institution can obtain monetary damages from the institution for sexual harassment The Supreme Court stated that Title IX bars sex discrimination in employment in North Haven Board of Education v. Bell, 456 U.S. 512 (1992). This was a consolidated action by two school boards to challenge the Department of Health, Education and Welfare regulation, the terms of which were broad enough to protect employees as well as students. In Lakoski v. James 66 F.3d 751 (5th Cir. 1995) the Federal Appeals Court for the Fifth Circuit held that Title VII provides the exclusive remedy for money damages in sex discrimination suits by employees against federally assisted educational institutions. The court added that it was not expressing any opinion as to whether an individual could maintain an action under Title IX for declaratory or injunctive relief. Other federal appeals courts opinions seem to suggest the opposite view. See Murray v. New York University College of Dentistry, 57 F 3d 243, 248 (5th Cir. 1995) and Preston V. Commonwealth of Virginia, 31 F.3d 203 (4th Cir. 1994).

Whether a title IX sexual harassment suit is filed by a student or and employee, it is clear that Faragher and Ellerth do not apply in determining the institution’s liability. In Gebser v. Lago Independent School District, 118 S. Ct. 1989,1997 (1998) the Supreme Court stated that:

...it would ‘frustrate the purposes’ of Title IX to permit a damages recovery against a school district for a teacher’s sexual harassment of a student based on principles of respondeat superior or constructive notice; i.e., without actual notice to a school district official.

In Gebser the Court ruled that before a school district would be held responsible for sexual harassment of a student by a teacher, an official with authority to remedy the discrimination must have actual rather than constructive notice of the conduct. Of course, if the official fails to take appropriate action after obtaining knowledge the school would be held liable. Before liability accrues, however, the official’s "...response must amount to deliberate indifference to discrimination....The premise in other words, is an official decision by the recipient not to remedy the violation." id at 118 S. Ct. 1999 With this more defense friendly posture, employees of schools who are well informed will opt to pursue their remedy under Title VII, even in a jurisdiction where damages suits by employees under Title IX are permitted.

Employers Can Reduce Exposure to Damage Awards for Lost Wages

Commonly the plaintiff in a sexual harassment case has left her employment. Usually the plaintiff will complain that she has been constructively discharged. A plaintiff who contends that she was constructively discharged has the burden of proving that allegation. Garner v. Wal-Mart Stores, Inc., 807 F.2d 1536, 1437 (11th Cir. 1987). In Steele v. Offshore Ship Building, Inc., 867 F.2d 1311, 1307 (11th Cir. 1989) the court held that "To prove constructive discharge, the employees must demonstrate that their working conditions were so intolerable that a reasonable person in their position would be compelled to resign." The mere fact that the Plaintiff feels uncomfortable or considers her work or working environment unduly stressful is an insufficient basis for a constructive discharge claim. Maher v. Associated Services for the Blind. 70 F.E.P. Cases 1730, 1733 (E.D. Pa. 1996).

If an employee who has quit her employment can not meet the burden of proving that a reasonable person would find the employment circumstances intolerable she will not be entitled to lost wages. The employee can also be limited in collecting lost wages if the employer makes an unconditional offer to return the employee to her job or to a position that is equivalent to her former position. The Supreme Court ruled in Ford Motor Co. v. E.E.O.C., 458 U.S. 219, 73 L.Ed.2d 721, 102 S.Ct. 3057 (1982) that an unconditional offer of employment tolls back-pay liability. The court noted at 458 U.S. 231, 232 that

An unemployed or under-employed claimant, like all other Title VII claimants, is subject to the statutory duty to minimize damages set out in §706(g). This duty, rooted in an ancient principle of law, requires the claimant to use reasonable diligence in finding other suitable employment. Although the unemployed or under-employed claimant need not go into another line of work, accept a demotion, or take a demeaning position, he forfeits his right to back-pay if he refuses a job substantially equivalent to the one he was denied. Consequently, an employer charged with unlawful discrimination often can toll the accrual of back pay liability by unconditionally offering the claimant the job he sought and thereby providing him with an opportunity to minimize damages. (Footnotes omitted.) (emphasis supplied.)

The court further stated at 458 U.S. 232 FN. 18:

The claimant’s obligation to minimize damage in order to retain his right to compensation does not require him to settle his claim against the employer, in whole or in part. Thus, an applicant or discharged employee is not required to accept a job offered by the employer on the condition that claims against the employer be compromised. (citation omitted)

To avail itself of this doctrine the employer must make the offer unequivocally and unconditionally. The employer can not condition the offer on the employee’s dismissing the lawsuit or releasing the claim against the employer. The job offered must be truly equivalent. It should probably be a position in which the employee will not be supervised by or subject to interaction with the harasser.

The concept behind the holding in the Ford Motor case is that an employee must mitigate her damages by attempting to find other employment. An employee may not remove herself from the labor market and be compensated for lost wages. For the same reason an employee may be disqualified from collecting lost wages if she returns to school instead of seeking a job. In Miller v. Marsh, 766 F.2d 490, 492 (11th Cir. 1985) quoting Taylor v. Safeway Stores, Inc., 524 F.2d 263 (10th Cir. 1975), said:

[W]hen an employee opts to attend school, curtailing present earning capacity in order to reap greater future earnings, a back pay award for the period while attending school also would be like receiving a double benefit. We fail to see that the district court abused its discretion in not including the time Taylor was attending school in the computation of the back pay award.

In Hunter v. Allis-Chalmers Corp., 797 F.2d 1417, 1428 (7th Cir. 1986), the court held that "You cannot just leave the labor force after being wrongfully discharged, in the hopes of being some day made whole by a judgment of law." In Stanfield v. Answering Service, Inc., 867 F.2d 1290, 1295-1296 (11th Cir. 1989) the court held that plaintiff who was wrongfully discharged in violation of the ADEA was not entitled to recover lost wages or to be reinstated where she had refused her employer’s offer of reinstatement. In that case the Plaintiff had refused because of her husband’s death. The court found that this was not an adequate reason.

Another possible benefit of an unconditional offer is that it may bar the employee from proving that she was constructively discharged. Courts have held that a plaintiff can not establish a constructive discharge where she has declined to explore other avenues of employment with her employer.

The court in Killgore v. Thompson and Brock Management, Inc., 93 F.3d 752, 754 (11th Cir. 1996) stated:

A constructive discharge will generally not be found if the employer is not given sufficient time to remedy this situation. None of the plaintiffs returned to work after complaining to the company’s appropriate corporate management. Summary judgment on constructive discharge the claim was appropriate; the plaintiffs did not allow sufficient time for Thompson and Brock to correct the situation.

In Clowes v. Allegheny Valley Hospital, 991 F.2d 1159 (3rd Cir. 1993) the court observed that "A reasonable employee would usually explore alternative avenues thoroughly before coming to the conclusion that resignation is the only option." "To the extent that [the plaintiff] did not completely understand the nature of the alternative position, this is the result of deciding to retire before learning more at the planned follow up meeting." Shealy v. Winston, 929 F.2d 1009, 1013 (4th Cir. 1991). Thus in that case the court found no constructive discharge.

The foregoing discussion is not to suggest making offers to return disruptive or incompetent employees to the employer’s payroll. There are certainly cases where such an action would merely be exposing the employer to further litigation or postponing the day of reckoning with the employee. Nevertheless there are some litigating former employees who are capable of making a contribution to the employer and who have left for a justifiable reason. In these cases an unconditional offer may be very much to the employer’s advantage.

Faragher and Ellerth Did Not Change the Law Applicable to Employers’ Liability for Acts of Persons Other Than One With Supervisory Authority Over an Employee

 

The framework for analyzing employer liability for a supervisor’s hostile environment sexual harassment was recently articulated by the Federal Appellate Court for the Eleventh Circuit in Farley v. American Cast Iron Pipe Company, 115 F.3d 1548, 1552 (11th Cir. 1997).

. . . an employer is indirectly liable for hostile environment sexual harassment by a superior if (1) the harasser was acting within the scope of his employment in perpetrating the harassment or if (2) the harasser was acting outside the scope of his employment but was aided in accomplishing the harassment by the existence of the agency relationship. In the latter instance, "the employer is liable only if the harassment is accomplished by an instrumentality of the agency or through conduct associated with the agency status." (Citations omitted)

In Schwartz v. Zippy Mart, Inc., 470 So.2d 720, 723 (Fla. App. 1st Dist. 1985) the court described what is required for conduct to be within the scope of an individual’s employment:

1. It must have been the kind he was employed to perform;

2. It must have occurred within the time and space limits of his employment; and

3. It must have been aggravated at least in part by a purpose to serve the master.

In the Schwartz case, the plaintiff alleged that a supervisor of nine company stores manhandled her with such acts as pawing her breasts, forcing french kisses, hugging, embracing, patting and pinching. The Court found that these actions did not give rise to respondeat superior liability as he was not "...doing what his employment contemplated." 470 So.2d at 724. See also Fleming v. Boeing Co., 120 F.3d 242 (11th Cir. 1997). While this would no longer be a defense to harassment by one in the plaintiff’s supervisory chain, it would still apply to other company employees.

The Federal Appellate Court for the Eleventh Circuit held in Steele v. Offshore Ship Building, Inc., 867 F.2d 1311, 1316 (11th Cir. 1989) that "Strict liability is illogical in a pure hostile environment setting. Corporate liability, exists where the corporate defendant knew or should have known of the harassment or failed to take prompt remedial action against the supervisor." After Faragher and Ellerth an employer can not defend a claim of sexual harassment by an employee’s supervisor or manager with a showing that it had no reason to know of the conduct. This defense is, however, still valid where the offender does not have supervisory authority over the plaintiff.

In Torres v. Pisano, 73 FEP Cases 1771 (2d Cir. 1997), the court held the employer could not be held liable for sexual harassment where the plaintiff told a manager about the conduct, but prevailed on him to keep it confidential and take no action. Other decisions of the courts have considered when knowledge of a manager is deemed to be knowledge of the employer. Not all managers are part of "higher management." In Andrade v. Mayfair Management, 71 FEP Cases 192 (4th Cir. 1996), the court found notice to the manager of the facility in which the plaintiff was employed did not impute notice to the employer even though he had authority to hire and fire. The court emphasized that the plaintiff knew the individual to whom her harasser reported but failed to notify that individual. See also Kilgore v. Thompson & Brock Management, 93 F.3rd 752 (11th Cir. 1996) where the report of sexual harassment by a co-worker to the facility manager was found not to be a complaint to higher management. In Reynolds v. CSX Transportation, 74 FEP Cases 281 (11th Cir. 1997), the knowledge of a manager of a department other than the one in which the plaintiff was employed was not constructive notice to the employer.

Employers should not rely too extensively on the foregoing authority. At least one court has reasoned that Faragher and Ellerth apply where a manager has reason to know that co-worker harassment is occurring and fails to take appropriate action. In Coates v. Sundor Brands, Inc. No.97-9102 (11th Cir. Jan. 14, 1999) an individual who was being harassed by a co-worker was found not to have been sufficiently explicit in complaining to members of management to put them on notice of her complaint. On one occasion she had told the human resources manager about the problem without revealing the name of the offender. It was agreed that a co-worker would talk to the offender. Although the conduct did not stop, every time the human resource manager asked her she stated that there was no problem. The plaintiff’s showing a mash note received from the offender to a manager was not found to be a sufficiently express complaint. When the plaintiff finally made it quite clear that the harassment was continuing the employer took prompt action. Although the employer prevailed, the court expressed that once a manager is aware of a hostile environment, the company must act because only one in a position of authority can remedy the situation. The court did not make any distinction based on the function, title or position of the manager. The language of the decision was sufficiently inclusive to cover any supervisor or manager. The decision suggests that an employer should tell all members of management that they must call attention to a hostile environment situation to one with authority to take remedial action.

Employers should be mindful of another troublesome doctrine that will present problems in cases where non-supervisor sexual harassment is claimed. Where the employer has no direct knowledge of sexual harassment by virtue of reports to management or observation It still may have constructive knowledge that will impose liability. Where the harassment is highly pervasive the fact finder may draw the inference that the employer had actual or constructive knowledge of it. In Huddleston v. Roger Dean Chevrolet, Inc., 845 F.2d 900, 904 (11th Cir. 1988) the court observed "The employee can show that the employer had knowledge of the harassment ... by demonstrating that the harassment was so pervasive that inference of constructive knowledge arises." (emphasis supplied). See also Splunge v. Shoney’s, 97 F.3d 488 (11th Cir. 1996) and Henson v. City of Dundee, 782 F.2d 897,905 (11th Cir. 1982)

Not Every Unpleasant Feeling Justifies an Award of Emotional Damages to a Plaintiff

Prior to the passage of the 1991 Civil Rights Act a Tile VII plaintiff’s damage recovery was limited to lost wages. One of the amendments to Title VII by that act is found in 42 U.S.C. §1981. That section permits an award of compensatory damages "... for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non-pecuniary losses. " 42 U.S.C. §1981(b)(3) Punitive damages are also recoverable. Compensatory and punitive damages are only available for acts of intentional discrimination. They are not allowed for cases where the discrimination is the result of disparate impact. 42 U.S.C. §1981(a)(1)

The Supreme Court has ruled that damages for mental and emotional distress "...cannot be presumed to occur, and that plaintiffs at least should be put to their proof on the issue, as plaintiffs are in most tort actions." Carey v. Piphus, 435 U.S. 47, 262 (1978). The Court stated at 435 U.S. 263, 264, FN. 20. "Although essentially subjective, genuine injury in this respect may be evidenced by one’s conduct and observed by others . . . and an award of damages must be supported by competent evidence concerning the injury. " (citations omitted).

In Patterson v. PHP Health Care, 72 FEP Cases 613,622 (5th Cir. 1996) a race discrimination action brought under 42 U.S.C. §1981 and Title VII, the plaintiff testified that he felt "frustrated", "real bad", the work environment was "unbearable" and was "tearing my self-esteem down." The court held this testimony sufficient to sustain no more than a nominal damage award. Merely being made uncomfortable does not entitle one to compensatory damages. There is "... no authority ... which would create liability of justify damages on the grounds that [a plaintiff] was ‘uncomfortable’ in her work environment." Jones v. Gatzambide, 71 F.E.P. Cases 1357, 1361 (N.D. Ill. 1996). See also Easton v.Crossland Motor Corp. 70 FEP Cases 597,609-10, (C.D.Ca. 1995) "Being uncomfortable or disturbed with sexually or other offensive conduct does not rise to a violation of Title VII."

The court in Price v. City of Charlotte, 93 F.3d 1241, 1251 (4th Cir. 1996) held that " . . . conclusory statements that the plaintiff suffered emotional distress could [not] support an award of compensatory damages." The court further noted at 93 F.3d at 1255 that the plaintiffs’ testimony about feeling "disappointed and embarrassed", "devastated", "used as a pawn", "betrayed, lied to, used" justified no more than an award of one dollar in nominal damages.

A plaintiff may recover damages for pain and suffering based exclusively on her own testimony, but courts may be inclined to view such limited proof with scepticism. In Erebia v. Chrysler Plastic Products Corp., 772 F.2d 1250, 1259 (6th Cir. 1985) the court held that the plaintiff was not entitled to compensatory damages for emotional distress where his "... only proof of emotional harm consisted of the statements that he was ‘highly upset’ about the slurs and that ‘you can only take so much.’" Additionally he complained to management regularly. The court found that he was entitled only to nominal compensatory damages.

In Dougherty v. Barry, 604 F. Supp. 1424, 1436, 1443 (D.D.C. 1985) the plaintiff claimed that his failure to obtain a promotion caused a loss of self-esteem, a decision to retire and difficulty in adjusting to retirement. This testimony was found to be too speculative to justify an award of compensatory damages. In Biggs v. Village of Dupo, 892 F.2d 1298,1304 (7th Cir. 1990) the court found that the Plaintiff was not entitled to compensatory damages for mental distress where his evidence consisted of conclusory statements "... that he was affected emotionally by being fired, and that he was concerned over" the idea of my family going through it." The court stated that the plaintiff must show "demonstrable emotional distress." In Nekolny v. Painter, 653 F.2d 1164, 1172 (7th Cir. 1991) testimony that the plaintiff was "very depressed", "a little despondent" and [lacking] motivation, and that he was "humiliated" was found to be "... insufficient to constitute proof of compensable mental or emotional injury." The court stated in Gunby v. Pennsylvania Electric Co., 840 F.2d 1108, 1121 (3rd Cir. 1988) "The plaintiff must present evidence of actual injury, however, before recovering compensatory damages for mental distress." Gunby’s testimony that he had been treated unfairly and was "very upset" about being passed over for a position did not justify an award of compensatory damages for emotional distress.

Punitive Damages are Not Available to Every Sexual Harassment Plaintiff

Until the enactment of the 1991 Civil rights Title VII plaintiffs could recover only lost wages (including loss of future earnings in some cases) and attorney’s fees. Since the passage of that statute both compensatory and punitive damages are available. Under 42 U.S.C. §1982 (a)(b)(1) punitive damages may be awarded where the plaintiff demonstrates that the employer "... engaged in a discriminatory practice or practices with malice, or with reckless indifference to the federally protected rights of an aggrieved individual." The combined total amount of punitive and compensatory damages that a plaintiff may recover ranges from $50,000 for those with no more than 100 employees, to $300,000 for those with 500 or more employees. 42 U.S.C. §1981(b)(3)

Prior to the Supreme Court decision in Kolstad v. American Dental Association, __U.S.__, __S.Ct.__ (1999), the federal appellate courts were in disagreement as to what constitutes "malice and "reckless indifference". The Federal Appellate Court for the First Circuit had taken the position that in any case where the employer’s acts violate the law, punitive damages are available to the plaintiff. It has held that the intent necessary to show a violation in the first place is the same measure of intent required for an award of punitive damages. See Dichner v. Liberty Travel, 141 F.3d 24 (1st Cir. 1998) and Criado v. IBM Corporation, 145 F.3d 437 (1st Cir. 1998)

Other courts were more restrictive in allowing punitive damages. In Ngo v. Reno Hilton Resort Corporation, 140 F.3d 1299,1304 (9th Cir. 1998) the court held that to recover punitive damages the plaintiff must do more than prove intentional discrimination. The discriminatory acts must be "wilful and egregious or display reckless indifference to the plaintiff’s federal rights." The court held that punitive damages would not be awarded where the discrimination was the result of negligence.

In Splunge v. Shoney’s, Inc., 97 F. 3d 488 (11th Cir. 1996) the court declined to allow punitive damages for sexual harassment committed by lower level managers where a higher level manager did not have actual knowledge of the harassment. The court reasoned that Shoney’s had only constructive knowledge of the harassment as it had not been duly vigilant. This fact did not indicate that Shoney’s acted with malice or reckless disregard of the employee’s rights. There was a similar result in Reynolds v. CSX Transportation, Inc., 115 F. 3d 860 (11th Cir. 1997) where management clearly did not condone sexual harassment by those at a lower level. The facts that Shoney’s had a well disseminated anti-sexual harassment policy, that it reacted promptly to the plaintiff’s complaint and appropriately disciplined the offender all demonstrated that the company did not foster or condone the offending conduct. The court therefore found an absence of the requisite malice and reckless indifference to the plaintiff’s rights necessary to support a punitive damage award.

In Kolstad the Supreme Court settled the split in opinion among the federal appellate courts. The Court rejected the First Circuit’s view that punitive damages were recoverable in any case in which a plaintiff proved intentional discrimination. The decisions in Faragher and Ellerth did not effect any changes in the interpretation of this language. The Court found that the availability of punitive damages was not based on how severely egregious the conduct was, but rather on the state of mind of the employer. The court further reasoned, however, that the severity of the conduct might provide evidence of the employer’s state of mind. The state of mind turns on the employer’s knowledge that it is violating the law. Where an employer reasonably believes its conduct is lawful the necessary intent is lacking. The court further reasoned that the common law agency principal under which an employer is liable for the acts of an employee for wrongs committed within the scope and course of the individual’s employment is not necessarily applicable to a finding that an employer is liable for punitive damages for a manager’s acts. An employer may escape liability where it has made a good faith effort to comply with Title VII. This may be demonstrated by a showing that the employer has disseminated and enforced a policy prohibiting violations of Title VII.

The holding in Kolstad is another good reason for an employer to formulate, disseminate and provide effective means of enforcing an equal employment opportunity policy

Corrective action by an employer resulted in an employee being denied punitive damages in Dhyne v. Meiners Thriftway, Inc., 184 F.3d 983 (8th Cir. 1999). The employer warned the individual who was committing the sexually offensive actions. When the conduct persisted the offender was transferred to a different shift than the plaintiff’s. The court found that the employer’s decisive responses to the plaintiff’s complaints demonstrate that the evil motive or intent necessary for allowing punitive damages was not present.



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