Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-03236/USCOURTS-ca8-06-03236-0/pdf.json

Parties Involved:
DeVilbiss Air Power Company
Appellant
William J. Dominic
Appellee

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-3236

___________

William J. Dominic, *

*

Plaintiff - Appellee, *

* Appeal from the United States

v. * District Court for the Western

* District of Arkansas.

* 

DeVilbiss Air Power Company, *

* 

Defendant - Appellant. * 

___________

Submitted: April 10, 2007

Filed: July 20, 2007

___________

Before MURPHY, BRIGHT, and BENTON, Circuit Judges.

___________

MURPHY, Circuit Judge.

William J. Dominic sued his employer DeVilbiss Air Power Company

(company) for sexual harassment and retaliation in violation of Title VII of the Civil

Rights Act, 42 U.S.C. §§ 2000e et seq., and the Arkansas Civil Rights Act, Ark. Code.

Ann. §§ 16-123-101 et seq. A jury found in favor of Dominic on several claims and

awarded compensatory and punitive damages, and the district court denied the

company’s motion for judgment as a matter of law or new trial. The company

appeals, focusing only on the award of punitive damages. We reverse.

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William J. Dominic was hired by DeVilbiss Air Power Company as a cost

accountant in the company's Decatur, Arkansas manufacturing facility in January

2003. The Decatur plant employs 200 permanent full time workers and 110 temporary

employees. Dominic was promoted to accounting manager by early 2004.

Throughout his employment at the company, he was directly supervised by Patricia

J. Fant, controller for the Decatur facility. As accounting manager, Dominic was

Fant's second in command of the accounting department. On Friday, April 30, 2004,

plant manager Chuck Chism overheard Dominic telling another employee that Fant

had made sexual advances toward him. Dominic then stopped Chism and told him

about the incidents. Chism asked Dominic to submit a written description of Fant's

behavior. Dominic submitted a first draft that day and a more detailed report the next

Monday, May 3. 

In his written description Dominic claimed that around March 11, 2004, he and

Fant met after work for drinks at a country club. While they were at the club Fant

tried to unzip Dominic's pants and grab his crotch area. About one week later

Dominic, Fant, and other members of the accounting department met for drinks. At

that outing, Fant offered the group the use of her parents' van and her brother's

pornographic movies for a team building trip. Dominic reported that after the rest of

the group left, she asked if he wanted to rent a hotel room so she could tie him up and

attack him. He also stated that Fant brought him coffee, did unrequested favors for

him, stopped by his office, called him up even though she had no business to discuss,

and acted jealous when he spoke to other women. 

After Chism reviewed Dominic's claims, he set up a meeting to discuss the

charges. At the meeting Larry Hoover, the company's human resources manager, and

Chism agreed to investigate the charges and Dominic gave them a list of people who

could substantiate his claims. The next day Hoover and Chism met with Fant to

discuss Dominic's allegations. She denied all his claims. She was nevertheless sent

home on paid leave, instructed not to contact anyone at the office, and was to remain

home while the company investigated the charges. 

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As part of the company's investigation, Chism and Hoover questioned each

person on Dominic's list of employees who could substantiate his claims as well as all

other workers in the departments headed by Fant and Dominic. Chism and Hoover

were particularly concerned about what they considered the most serious allegations,

that Fant had unzipped Dominic's pants and suggested that they get a hotel room. A

list of questions was prepared by Chism and Hoover to be asked of each interviewee.

These questions included: How is your job going? How would you describe the work

climate in your department? How is your relationship with Patricia Fant? Does the

department socialize outside work? Did you attend an event at a bar with the group

around March 19? Tell us about that experience. Has the group been planning a team

building trip? Have you ever observed any conduct that you thought was

inappropriate in the department? The employees who were interviewed did not

confirm Dominic's allegations, except for his claims that Fant stopped by his desk,

brought him coffee, and sometimes acted jealous when he interacted with other

women. On May 6 Chism and Hoover again met with Dominic at the plant and with

Fant offsite to ask some follow up questions. 

Later in the day on May 6, Chism and Hoover also contacted Claude Kelly, a

vice president of Pentair which was the corporate owner of the company. Kelly

oversaw the human resources area for Pentair. After he heard about the results of the

investigation by Chism and Hoover, he traveled to Decatur from his office in Jackson,

Tennessee to discuss the matter with Chism, Hoover, and Dominic. Chism, Hoover,

and Kelly also consulted Pentair's attorney several times to ensure that their

investigation met all legal requirements. Management agreed that there were not

grounds to terminate Fant even though she had acted inappropriately by engaging in

"bar talk" with employees she supervised. 

Kelly and Hoover met again with Dominic on May 10. They told him that their

investigation had not substantiated the most serious allegations and that Fant would

be returning to work. Although Fant would remain in her position as Dominic's

supervisor, they explained that the accounting department would be required to meet

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daily as a group to minimize one on one communication between Fant and Dominic.

 They encouraged Dominic to report any incidents of retaliation and gave him the rest

of the day off with pay. Kelly then met with the employees who reported to Fant and

Dominic and asked them to make it as easy as possible for the two to work together.

Kelly and Hoover also met with Fant on May 10; she again denied the

allegations. Kelly told Fant she would be allowed to return to work, but that she had

acted unprofessionally and should refrain from socializing with employees in bars

after work. They warned her that she would be terminated if she retaliated against

Dominic. They also gave Fant a letter explaining the conditions of her return and

listing specific examples of what could be considered retaliation. These examples

included dramatic changes to Dominic's work assignments, threats of termination, and

inappropriate discipline of him. Fant signed the letter and Chism followed up with

three members of the department on May 27 to gauge the effectiveness of the daily

meetings and to ask them if they had noticed any behavior by Fant toward Dominic

that could have been retaliatory. None of the employees reported any inappropriate

behavior. Dominic did not complain of any further sexual harassment after the

company's investigation.

Soon after Dominic and Fant began working together again, Dominic sent

management a series of emails alleging retaliation by Fant. He claimed Fant criticized

his work publicly, gave him too much work, assigned him busywork, tried to

sabotage his work, and gave him false instructions. He also alleged that Fant had

given him an order that would have caused him to violate the Sarbanes-Oxley Act;

he did not give any details about her request or explain why it would be illegal,

however. Dominic complained that someone had deleted work after he completed it,

and he began asking for technical support to backup his work. Chism and Hoover met

with Dominic on May 14, the same day they received his first email alleging

retaliation. They asked him for more details because of the conclusory nature of some

of his claims. Dominic refused to provide further details, claiming attorney client

privilege. After this meeting, management spoke to Fant about Dominic's complaints.

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She denied all allegations and submitted a written memorandum on May 15

responding to each of Dominic's allegations. 

On May 20 Dominic sent another email alleging that Fant had been rude and

obnoxious toward him, had visited him in his cubicle for 15-30 minutes which had

made him uncomfortable, and had interrupted one of his telephone calls. He claimed

that Fant embarrassed him in front of coworkers by publicly criticizing his work,

harassed him about a trainee's work, and told lies about him to other employees. He

also complained that Hoover had raised his voice in a recent meeting. Chism and

Kelly interviewed other employees in the departments of Fant and Dominic to see if

they had noticed any retaliation and reviewed Fant's written response denying

Dominic's claims of retaliation. They concluded that Dominic disagreed with Fant's

management style, but that Fant had not been retaliating against him. They reported

their findings to Dominic and asked him for more details about Fant's retaliation, but

he did not provide them. Dominic then wrote a letter of complaint to the chief

financial officer of Pentair, Tom DeWitt, alleging its subsidiary was using irregular

accounting practices. An investigation into these particular allegations did not verify

Dominic's claims.

In late June 2004 Pentair hired the law firm of Leonard, Street, and Deinard to

review the company's own internal investigation and to conduct an additional

investigation into Dominic's allegations of sexual harassment and retaliation. The

record reflects that Leonard, Street, and Deinard is a law firm headquartered in

Minnesota with extensive experience with employment discrimination claims. The

firm attorneys undertook their investigation by reviewing the files on record, asking

Fant to provide another response to Dominic's allegations of retaliation, and

conducting additional employee interviews. Their investigation concluded that the

company's investigation had been adequate, that Dominic's harassment complaint did

not show he had experienced a hostile work environment, and that there was no

evidence of unlawful retaliation. 

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Kelly wrote a letter to Dominic informing him of the results of the study by the

outside firm, and directed Hoover to set up sexual harassment training, to arrange

mandatory supervisor training classes for Fant, and to speak with Fant daily about her

communications with Dominic. Since Dominic objected to further contact with Kelly,

management made arrangements for him to report to a human resources manager in

a separate subsidiary of Pentair who had no previous association with the plant.

From late June until August, Dominic was placed on special paid assignment

and worked at home with full pay. Tom DeWitt wrote a letter to Dominic on July 27,

explaining that his home assignment would end and that he would be returning to the

office in early August. DeWitt also told Dominic that Fant would be required to

transmit all of his assignments via email and that these emails would be monitored by

John Uitz, the plant's previous comptroller, to ensure that no retaliation occurred. 

Dominic returned to work on August 3 and attended a sexual harassment

training session required of all salaried employees. He claims that Chism commented

during the session about his "dislike of sexual harassment laws" and that Chism used

hypotheticals similar to Dominic's own experience as examples of discrimination. He

claims that after the session employees made jokes about it, grabbed each other's

breasts, performed pelvic thrusts against one another, and simulated masturbation.

Dominic also complains that upon his return he was required to meet impossible

deadlines. Dominic was not in the office after August 5 until December due to

vacation, medical leave, and another home work schedule.

Dominic met with psychiatrist Dr. Stanley Rest on August 5. Dr. Rest

recommended he seek a transfer or leave the company. Dominic's attorney sent the

company a letter on November 3 requesting a transfer to a different plant. Kelly

replied two days later that the company's accounting department was too small to be

able to accommodate Dominic's transfer request. At that time the company was in a

hiring freeze and was laying off hundreds of employees. Kelly asked Dominic for

other suggestions that would assist him in returning to work. On November 30,

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Dominic's attorney submitted a list of 26 written demands, including a request that

Fant be removed as his supervisor, that he not be required to attend the department's

daily meetings, that he would no longer be required to report or have personal contact

with Chism, that several supervisors be required to "stay away from [him] altogether,"

and that neither Fant nor Chism be allowed to modify his work. The company denied

several of these demands after determining that they were unreasonable and could not

be met, but it sent Dominic a letter stating that communications between Fant and him

would continue to be monitored, that he could address any complaints to the employee

responsible for the monitoring, and that an alternative human resources contact had

been arranged for him. Dominic resigned on December 11.

Dominic later filed this action asserting sexual harassment and retaliation in

violation of Title VII of the Civil Rights Act, 42 U.S.C. §§ 2000e et seq., and the

Arkansas Civil Rights Act, Ark. Code. Ann. §§ 16-123-101 et seq. His complaint also

included state law claims for constructive discharge, negligent hiring, and negligent

supervision. A jury trial commenced at the end of November 2005. The company

moved for judgment as a matter of law at the close of the evidence, and the district

court granted it as to the negligent hiring claim but denied it in all other respects. The

jury returned a verdict in Dominic's favor for his claims for sexual harassment,

retaliation, and negligent supervision, but found for the company on the wrongful

discharge claim. It awarded Dominic $50,000 in compensatory damages on the

negligent supervision claim, $50,000 in compensatory damages on the sexual

harassment and retaliation claims, and $13,000 in lost wages and benefits on the

retaliation claim. The jury additionally awarded $250,000 in punitive damages based

solely on the Title VII sexual harassment and retaliation claims. After the district

court determined that Dominic should recover $50,964.51 in attorney fees, judgment

was entered in the total amount of $413,964.51. 

The company filed a post trial motion for judgment as a matter of law or

alternatively for a new trial or remittitur. One of the errors asserted in the motion was

the submission of the issue of punitive damages to the jury. The court denied the

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motion on August 4, 2006. The company appeals only the punitive damages award,

arguing that the district court should not have submitted the question of punitive

damages to the jury, particularly in light of its extensive good faith efforts to comply

with Title VII. 

We review the denial of a motion for judgment as a matter of law de novo,

applying the same standard as the district court. Voeltz v. Arctic Cat, Inc., 406 F.3d

1047, 1050 (8th Cir. 2005). The motion should be granted if the responding party has

been fully heard on an issue and a reasonable jury would not have a legally sufficient

basis to find for that party on that issue. Fed. R. Civ. P. 50(a)(1). The evidence is

viewed in the light most favorable to the jury verdict which should not lightly be set

aside. Canny v. Dr. Pepper/Seven-Up Bottling Group, Inc., 439 F.3d 894, 900 (8th

Cir. 2006) (citation omitted). We reverse only when the evidence is not susceptible

to any reasonable interpretation supporting the verdict. Warren v. Prejean, 301 F.3d

893, 900 (8th Cir 2002).

Punitive damages are appropriate for victims of Title VII if the plaintiff has

shown that the employer engaged in intentional discrimination and acted with “malice

or with reckless indifference" to the plaintiff’s federally protected rights. 42 U.S.C.

§ 1981 a(b)(1); Kolstad v. American Dental Ass'n, 527 U.S. 526, 535 (1999). Malice

and reckless indifference can be shown by demonstrating that an employer

discriminated “in the face of a perceived risk that its actions will violate federal law.”

Id. at 536. This standard refers to the employer's state of mind regarding its

knowledge that it "may be acting in violation of federal law, not its awareness that it

is engaging in discrimination." Id. at 535. Even if the plaintiff can show that

individuals in the company demonstrated the requisite intent, punitive damages are

only appropriate if such intent can be imputed to the employer. Id. at 539. When an

employer promptly and conscientiously responds to complaints of harassment or

discrimination with good faith efforts, punitive damages are not warranted. Id. at 545-

46. 

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Dominic claims that the company did not make good faith efforts because the

investigations it initiated were cursory and biased. Examples of cursory or biased

investigations may be seen in Williams v. ConAgra Poultry Co., 378 F.3d 790, 796

(8th Cir. 2004) (employer terminated plaintiff instead of offender and took no action

despite repeated complaints); MacGregor v. Mallinckrodt, Inc., 373 F.3d 923 (8th Cir.

2004) (employer conducted only minimal investigation, issued no reprimand to

offender, and failed to communicate results of investigation to plaintiff); and Ogden

v. Wax Works, 214 F.3d 999 (8th Cir. 2000) (employer conducted "cursory

investigation" focused on plaintiff's performance rather than offender's behavior).

Here, the company had a zero tolerance sexual harassment policy, and it sponsored a

total of four investigations after Dominic made his complaint. None of the

investigations revealed evidence that would have justified firing Fant. In their

interviews, coworkers of Fant and Dominic were asked neutral questions which were

open ended and not suggestive. The company also hired outside employment law

specialists to look into whether its internal investigations had been proper and

thorough and contracted with them to investigate Dominic's claims further. The

outside specialists determined that the company's investigations had been thorough

and confirmed the company's conclusions. 

Dominic argues that it was unreasonable for Fant to remain as his supervisor.

The company responds that the small size of the plant and of the accounting

department made it impossible to accommodate his request for another supervisor

unless it were to terminate Fant. Terminating her without more evidence would have

exposed the company to legal action by her. Moreover, there were no further

complaints by Dominic of any sexual harassment after the company took its actions

in response to his initial complaint.

The company did far more in response to Dominic's complaint than the

defendants in the cases cited by Dominic. In Williams, MacGregor, and Ogden, the

defendants had ignored complaints, done cursory investigations, and focused their

responses on the plaintiff's wrongdoing instead of the behavior of the alleged

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offenders. The company's response here was more like that of the employer in Carter

v. The Kansas City Southern Railway Co., 456 F.3d 841 (8th Cir. 2006). In Carter,

the employer had an antidiscrimination policy, conducted an immediate investigation

once it was notified of harassment claims, and terminated the primary offender when

the charges were substantiated. Dominic seeks to distinguish Carter on the basis that

the offender in that case was ultimately fired. In contrast to the Carter employer, the

company here did not uncover any information that corroborated Dominic's serious

claims or provide it grounds to terminate Fant. As in Carter, it would be "illogical to

ascribe malice or reckless indifference" to a company which responded appropriately

to charges of discrimination. Id. at 847. We conclude that Dominic has not

demonstrated that the company exhibited malice or reckless indifference toward their

obligations under federal law in response his complaints of sexual harassment. 

Dominic also contends that the company was reckless and malicious in

responding to his claims of retaliation, but the record shows that it attempted to

prevent retaliation by giving Fant a written warning explicitly listing examples of

retaliation and explaining that she would be terminated if she took any of those actions

against Dominic. The company quickly investigated and responded when Dominic

complained about retaliation. It met with Fant to get her response to his allegations

and limited direct communication between the two by requiring daily departmental

meetings. Chism later interviewed Dominic's coworkers to gauge the effectiveness

of these meetings. The company required Fant to put all of her assignments for

Dominic in writing and assigned an employee who had once held Fant's job to monitor

the assignments. Kelly directed Hoover to arrange for Fant to attend mandatory

supervisor training classes and to speak to Fant daily to monitor her interactions with

Dominic. Dominic was encouraged to report any incidents of retaliation, was given

two special paid assignments that allowed him to work from home, and was provided

an alternative human resources contact after he said he did not want to continue

dealing with Kelly. 

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Chism, Hoover, and Kelly interviewed members of the departments supervised

by Fant and Dominic several times as part of the investigation into his allegations and

conducted follow up interviews with them to ensure that no retaliation occurred.

When Chism, Hoover, and Kelly determined that some of Dominic's retaliation claims

were conclusory, he was given the opportunity to furnish more information. At least

one member of management reported the results of each investigation to Dominic and

explained what actions would be taken to remedy his complaints and prevent future

ones. After explaining why his request for a transfer could not be accommodated,

Dominic was asked for other suggestions to assist him in returning to the office; he

responded with a list of 26 demands. 

Dominic urges that punitive damages were warranted because Fant, Chism, and

Kelly all exhibited malice and reckless indifference and their states of mind should be

imputed to the company. Malice or reckless indifference exhibited by employees

working in a managerial capacity can be imputed to the employer if they were "acting

in the scope of their employment." Kolstad, 527 U.S. at 541 (citing Restatement

(Second) of Torts, § 909). An employer cannot be vicariously liable, however, for

"discriminatory employment decisions of managerial agents where those decisions are

contrary to the employer's good-faith efforts to comply with Title VII." Id. at 545.

Dominic argues that Fant's behavior after being warned against retaliation is evidence

of malice and reckless indifference toward federal sexual harassment law, as are

Chism's comment during the sexual harassment training and Kelly's lack of response

to his complaints and unwillingness to transfer him. Chism and Kelly's extensive

efforts to respond to Dominic's complaint belie malice or reckless indifference on their

part, and the company's good faith efforts to remedy Dominic's complaints of sexual

harassment and retaliation by Fant would defeat any imputation of liability for her

conduct. See id. at 541.

We conclude the company made sufficient good faith efforts regarding

Dominic's claims to make punitive damages inappropriate. See id., see also Carter,

456 F.3d at 847-48. The company had a formal zero tolerance antiharassment policy,

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and it launched thorough investigations in response to Dominic's complaints about

sexual harassment, retaliation, and accounting irregularity. Plant management

consulted with the company's human resources experts, Hoover at the Decatur facility

and Kelly at corporate headquarters. Hoover and Chism drew up a set of neutral

questions that was used in their first internal investigation. They consulted with

counsel about the sufficiency and efficacy of their investigations. Although the

investigations did not substantiate most of Dominic's claims, the company minimized

communication between Fant and Dominic, kept a written record of those

communications, granted Dominic's request to report to a human resources manager

in a separate subsidiary, and offered him several accommodations, including an at

home work schedule for two separate periods. Kelly also directed Hoover to require

Fant to participate in a supervisor training session and to organize sexual harassment

training for all salaried employees. 

In sum, the company demonstrated good faith efforts to respond to Dominic's

complaints, to prevent sexual harassment and retaliation, and to fulfill its obligations

under Title VII. We conclude that on this record punitive damages should not have

been submitted to the jury.

Accordingly, we reverse and remand to the district court for modification of the

judgment consistent with this opinion. 

_________________________________

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