## F I L E D United States Court of Appeals Tenth Circuit 

### SEP 19 2000 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

RHONDA MALLINSONMONTAGUE, JESSICA ROTOLA, Plaintiffs-Appellees and Cross-Appellants,

v. JAMES POCRNICK, Defendant, and PROFESSIONAL BANK, Defendant-Appellant and Cross-Appellee. No. 98-1275 No. 98-1297

Appeal from the United States District Court for the District of Colorado (D.C. No. 95-WY-2969-AJ)

Ricardo M. Barrera, Special Counsel, (John N. McNam ara, Jr., McNamara Law Firm, P.C., Denver, Colorado, with him on the brief s) for Appellant. Bruce P. Fierst, (Rodney G. Loomis, Special Counsel , Law Offices of Bruce P. Fierst, P.C., Denver, Colorado, with him on the bri efs) for Appellees.-2-

Before HENRY, LUCERO, and MURPHY, Circuit Judges.

MURPHY , Circuit Judge.

I. INTRODUCTION Professional Bank (“ProBank”) appeals from a jury v erdict and resulting judgment finding it liable for damages under Title VII for the sexual harassment of Rhonda Mallinson-Montague and Jessica Rotola (th e “Plaintiffs”) by James Pocrnick, the Plaintiffs’ supervisor during their e mploy at ProBank. On appeal, ProBank asserts as follows: (1) it is entitled to j udgment as a matter of law under the affirmative defense set forth by the Supreme Co urt in Burlington Industries v. Ellerth , 118 S. Ct. 2257 (1998) and Faragher v. City of Boca Raton , 118 S. Ct. 2275 (1998); (2) the district court erred in instru cting the jury that Pocrnick was the “alter ego” of ProBank; and (3) the district co urt erred in awarding attorney’s fees to the Plaintiffs. On cross-appeal, the Plain tiffs assert the district court erred in concluding that they were not entitled to eitherfront or back pay because the jury found against them on their constructive disch arge claims. Exercising jurisdiction pursuant to 28 U.S.C. § 1291 and Feder al Rule of Civil Procedure 54(b), this court affirms the district court in all respects.

II. BACKGROUND-3-

At all relevant time periods, Pocrnick was employed by ProBank as Senior Vice-President of Consumer Lending. In that capaci ty, Pocrnick had the authority to hire and fire employees in the consumer lending department. Pocrnick answered directly to the President of ProBank, Char lie Drummond, while Drummond answered directly to ProBank’s Board of Di rectors. Pocrnick first met Mallinson-Montague when he close d a consumer loan for her in 1994. Despite the fact that Mallinson-Monta gue had no prior experience in the banking field, Pocrnick indicated that he thoug ht she had a great personality and offered her a position as a loan officer at Pro Bank. Pocrnick indicated that Mallinson-Montague would earn a base salary of $26, 000, up to an additional $11,000 per year in potential commissions based on the number of loans closed, and the possibility of additional bonus money depen dent on whether she met her goals and on ProBank’s fiscal performance. Althoug h Mallinson-Montague had reservations about the job, Pocrnick assured her th at he would “make sure that [she] was trained properly in sales” and that he wo uld provide her the necessary leads to meet her loan goals. Almost immediately after Mallinson-Montague began w ork at ProBank in July of 1994, Pocrnick began sexually harassing her . On one illustrative occasion, for instance, Pocrnick paged Mallinson-Mo ntague and instructed her to meet him at a park to go over business matters. Wh en she arrived at the-4-

designated meeting place, Pocrnick immediately pres sed himself against her, kissed her, and asked her if she could feel his ere ction. At trial, MallinsonMontague testified that when she rebuffed these adv ances, Pocrnick retaliated against her in the following two particulars: (1) h e began denying her the business leads he had earlier promised, which leads were nec essary for her to meet her monthly sales goals; and (2) he began rejecting loa ns she originated, resulting, at a minimum, in the loss of a $15 commission for each denied loan and in the losses of performance bonuses. Despite the fact that ProB ank had a sexual harassment policy in place during this time frame, Mallinson-M ontague never took advantage of the policy to report Pocrnick. Like Mallinson-Montague, Rotola was encouraged by P ocrnick to seek employment with ProBank. Pocrnick met Rotola while both were working at Colorado National Bank, although at separate branch es. During a first encounter, Pocrnick asked Rotola out for dinner and drinks butshe declined the invitation. After Pocrnick moved to ProBank, he contacted Rotol a and offered her a job. After Rotola accepted the job in November of 1993, her experiences at ProBank were remarkably similar to those described by Malli nson-Montague. At trial, Rotola testified that Pocrnick began sexually haras sing her soon after she began working with him. When Rotola rebuffed these advan ces, Pocrnick failed to carry through with his promises to provide business leads and loan training and began-5-

disapproving Rotola’s loans. Like Mallinson-Montag ue, Rotola failed to utilize ProBank’s sexual harassment policy. The Plaintiffs eventually contacted an attorney and that attorney sent a letter to ProBank President Drummond in January of 1995 informing him of the allegations of sexual harassment. Drummond initiat ed an internal investigation of the allegations and terminated all of Pocrnick’s au thority over the Plaintiffs. Although the Plaintiffs suffered no further instanc es of sexual harassment after they reported their allegations to Drummond, they f ound the working conditions at ProBank intolerable and eventually left the bank

. Plaintiffs thereafter brought this action alleging numerous violations of Title VII and state law. Prior to trial, the distr ict court granted summary judgement to ProBank on all of the Plaintiffs’ clai ms except those arising under Title VII. As to their Title VII claims, the distr ict court allowed the Plaintiffs to proceed at trial under the following three theories : (1) quid pro quo sexual harassment; (2) hostile environment harassment; and(3) constructive discharge. At the close of evidence, the jury concluded the Pl aintiffs had both proved that they were subject to sexual harassment while employ ed at ProBank, without specifying whether it was quid pro quo or hostile work environment harassment, but ruled against both on their constructive discharge claims. The district court entered judgment in conformity with the jury’s verd ict.-6- III. ANALYSIS A. Appeal, No. 98-1275 1. Judgment as a matter of law under Faragher and Burlington As discussed at length by this court in Harrison v. Eddy Potash, Inc. , the Supreme Court’s recent decisions in Faragherand Burlington provided much-needed clarification [in the Title VI I arena] by specifically outlining the various avenues for impo sing direct and vicarious liability on an employer for a supervisor ’s sexual harassment, and by establishing a general standard for imposing vicarious liability on an employer when a superviso r is alleged to have misused his or her delegated authority in sexu ally harassing a subordinate employee. 158 F.3d 1371, 1374 (10th Cir. 1998). In particular, in those cases the Supreme Court held as follows: An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defe nding employer may raise an affirmative defense to liability or da mages, subject to proof by a preponderance of the evidence, see Fed. R. Civ. Proc. 8(c). The defense comprises two necessary elements : (a) that the employer exercised reasonable care to prevent and c orrect promptly any sexually harassing behavior, and (b) that the p laintiff employee unreasonably failed to take advantage of any preven tive or corrective opportunities provided by the employer or to avoid harm otherwise. While proof that an employer had promulgated an ant iharassment policy with complaint procedure is not necessary inevery instance as a matter of law, the need for a stated policy suita ble to the employment circumstances may appropriately be addre ssed in any case when litigating the first element of the defen se. . . . No affirmative defense is available, however, when the supervisor’s1 These decisions were both handed down by the Court after the trial in this

case.

2 The jury was instructed that Pocrnick was the alterego of ProBank. As set forth below, this court concludes that Pocrnick is a sufficiently high-ranking managerial employee that the district court’s alterego instruction was appropriate under the particular, narrow facts of this case. See supraSection III.A.2. It is unclear whether the affirmative defense set forth b y the Supreme Court in (continued...) -7- harassment culminates in a tangible employment acti on, such as discharge, demotion, or undesirable reassignment. Faragher , 118 S. Ct. at 2292-93; Burlington , 118 S. Ct. at 2270. On appeal, ProBank asserts that it is entitled to j udgment as a matter of law under the newly-elucidated affirmative defense set out in Faragherand Burlington

. 1 Although ProBank does not contest on appeal the P laintiffs’ claims that they suffered sexual harassment at the hands o f Pocrnick, it asserts that: (1) the harassment did not rise to the level of a tangi ble employment action; (2) it took reasonable care, as evidenced by its antiharas sment policy, to prevent and correct promptly any sexually harassing behavior; and (3) the Plaintiffs unreasonably failed to utilize the antiharassment p olicy. For their part, the Plaintiffs do not appear to contest that if the Faragher/Burlington affirmative defense is applicable, ProBank is entitled to judgm ent as a matter of law. They assert, however, that the defense is not available because they each suffered a tangible employment action. See Faragher , 118 S. Ct. at 2293; Burlington , 118 S.
Ct. at 2270. 22 (...continued)

Faragherand Burlington is even applicable when the harassment is perpetrated by an alter ego of the employer. See Burlington Indus v. Ellerth , 118 S. Ct. 2257, 2267-68 (1998) (noting that an alter ego theory of indirect liability was not at issue in the case and establishing the affirmative defense while discussing the parameters of the aided-in-the-agency-relationship standard set out in the Restatement (Second) of Agency § 219(2)(d)). Nevertheless, because the Plaintiffs have not raised this question and becaus e the affirmative defense fails on the merits, this court need not address the ques tion. -8- ProBank is entitled to judgment as a matter of law under the Faragher/ Burlington affirmative defense “only if the evidence points b ut one way and is susceptible to no reasonable inferences supporting” the opposing party. Mason v. Oklahoma Turnpike Auth. , 115 F.3d 1442, 1450 (10th Cir. 1997); see also Baty v. Willamette Indus. , 172 F.3d 1232, 1241 (10th Cir. 1999) (“We must vi ew the evidence and any inferences to be drawn therefrom m ost favorably to the nonmoving party.”). This court does not “weigh the ev idence, pass on the credibility of witnesses, or substitute our conclusions for [th ose] of the jury.” Harolds Stores, Inc. v. Dillard Dep’t Stores , 82 F.3d 1533, 1546 (10th Cir. 1996). Nevertheless, this court must enter judgment as a m atter of law in favor of the moving party if “there is no legally sufficient evi dentiary basis . . . with respect to a claim or defense . . . under the controlling law” for the jury to find in favor of the non-moving party. Fed. R. Civ. P. 50(a). Acco rdingly, the sole question is whether, viewing the evidence at trial in the manne r most favorable to the3 For instance, Mallinson-Montague testified as follo ws about a particular

incident of sexual harassment:

A. I finally pushed him away, so he quit kissing m e. And he told me not to worry about it; that this was betwee n us; and that I would make my goals. We had plenty of time to make the cold calls and meet the people that we were supposed to meet a nd just that he (continued...) -9- Plaintiffs, no reasonable juror could conclude thatthey had suffered a tangible employment action. The evidence adduced at trial in this case, properl y viewed, was sufficient to establish that the Plaintiffs were both subjecte d to tangible employment actions. At trial, the Plaintiffs testified that t hey operated under the following compensation structure: (1) each received a base sa lary that was not pegged to the production of loans; (2) each received a commissionof $15 for each loan they originated if that loan closed; and (3) each was en titled to participate in bonus programs if they met their loan-origination goals. Accordingly, a substantial portion of the Plaintiffs’ compensation was directl y tied to their ability to originate and close loans. In that regard, the evidence at trial demonstrate s that shortly after they began working at ProBank, Pocrnick began repeatedlyrequesting sexual favors from the Plaintiffs. The Plaintiffs testified thatPocrnick indicated that they would meet their goals, and therefore get their com missions and bonuses, if they acceded to Pocrnick’s request for sexual favors. 3 They further testified, without3 (...continued)

would make sure that I was taken care of. And I to ld him– Q. What did he mean that you were taken care of? A. That I would hit my goals and that I would get leads. Mallinson-Montague further testified as follows with regard to this same incident of harassment:

Q. How may times do you think you heard him say th at you’ll owe me or you’ll owe me big time? A. Oh, quite a few. I would say the more frequent ly I went into his office and checked numbers, the more frequ ently I would hear it. Any time I brought up the numbers on the board, it was brought up. . . . Q. You stated what you thought he meant when he sa id “You’ll owe me. You’ll owe me big time.” How is i t you feel that what he meant, that you would owe him sexual favors ? A. I guess the correlation between that is from th e first time he said it was at Inspiration Point after he presse d himself against me and kissed me and then told me that he would make s ure that I made my goals, but I’d owe him, and so my correlation to that was that any time I wanted to hit my goals, that sex was obvious ly a– -10- contradiction, that Pocrnick had the absolute powerto approve or disapprove their loans. For instance, Rotola testified that “Mr. Po crnick always had control on whether we made our goals or not. No one else did. . . . Mr. Pocrnick, bottom line, had the final say on what was approved and wh at wasn’t approved.” Mallinson-Montague testified that “whatever happene d in the loan department was [Pocrnick’s] say.” Finally, the Plaintiffs tes tified that after it became clear that they would continue rejecting his sexual advan ces, Pocrnick no longer provided them with leads and began disapproving the ir loans, thereby seriously diminishing their commissions and bonuses and placi ng their jobs in jeopardy.4 For instance, Rotola testified as follows: Q. Your were in the new office with the glass. Wh at did [Pocrnick] do then? What was he doing to bother yo u? A. We went into his office and he shut the door an d started yelling at me about my sales and everybody in the w hole office heard. He verbally screamed at me over my sales wh en, in fact, there was nothing I could do with my sales because I was still bringing in volume, but he was turning everything I brought in down. So prior to what I was bringing in when I first started was the same things I was bringing in towards the end. Nothing had changed. Q. And were they being approved at the beginning? A. Yes, they were? Q. And were they being approved toward the end? A. No, they were not. Q. Was there any change in criteria, banking regul ations or anything as to why a loan would be approved at one time and then not afterwards? (continued...) -11- Despite this testimony, ProBank asserts that the ad verse employment actions suffered by the Plaintiffs are not sufficie ntly substantial or tangible under Faragher/Burlington to make ProBank responsible for Pocrnick’s actions

. See Appellant’s Brief at 19-20 (“ProBank submits that a s a matter of law disapproval of at best a few loan applications does not constit ute a ‘significant change in employment status’ or ‘a significant change in bene fits . . . .’). In contrast to ProBank’s characterization of the testimony at tria l, the Plaintiffs did not simply testify that a few of the loans they originated wer e denied. Instead, they testified that Pocrnick disapproved large numbers of their lo ans and that their compensation was significantly affected by the disapprovals. 4 Despite ProBank’s4 (...continued) A. No, just that I kept turning him down and that’ s why he kept turning my loans down. Q. Were your leads drying up? A. I had no leads. Q. Did there come a point that you decided you cou ldn’t take it any longer?

. . . . A. I couldn’t take any more because he was threate ning me. That I had bought a new home and I bought a new carand he told me that either I basically played his game or I would lose my house, I would lose my car. He said he was very upset with me, that I wasn’t do ing what I was supposed to be doing, bringing in the loans I w as supposed to be bringing in. And I explained to him that I was and he wouldn’t–like I said, he wouldn’t approve anything. He was alway s threatening me with my house and car. Mallinson-Montague testified in a similar vein:

Q. Did you find–I asked you if there was any corre lation between your having rejected his advances and getti ng leads[,] I believe I asked you; is that right? A. Correct. Q. What was that correlation? A. The more I rejected him and the less that I saw him, the less leads that I got. Q. And how did that affect your income? A. That affected my income greatly. I was still, of course, making my salary, but I wasn’t hitting my goals. I would only get the $15 for the loans that did close and not–and th ey didn’t add–my goals came nowhere close to what they had been in t he past. Q. Did you also find any correlation between you r ejecting Mr. Pocrnick’s advances and your loan applications being rejected by Mr. Pocrnick? A. Yes. It seemed like on several different occas ions there were loans that were good loans, that there was no reason that Mr. Pocrnick should decline these loans to these people and that it would get me so much closer to my goals and they wouldn’tget (continued...) -12-4 (...continued)

approved. . . .

5 In light of this court’s conclusion that Pocrnick’s disapproval of the Plaintiffs’ loans based on their refusal to accede to his sexual demands is a tangible employment action, we need not decide whet her Pocrnick’s denial of business and consumer leads for those same reasons, either alone or in conjunction with the disapproval of loans, also con stitutes a tangible employment action. -13- attempts to marginalize it, this testimony is clear ly sufficient to find that Pocrnick’s sexual harassment resulted in a signific ant change in the Plaintiffs’ benefits through the reduction of their commissions and bonuses. See Burlington , 118 S. Ct. at 2268 (“A tangible employment action c onstitutes a . . . decision causing a significant change in benefits.”). 5 ProBank asserts that the testimony of the Plaintiff s should be discounted in favor of the testimony of Pat Webber, an employee o f ProBank who preformed an analysis of the loan rejections after ProBank learn ed of Pocrnick’s sexual harassment of the Plaintiffs. Webber stated in a w ritten report and testified at trial that he agreed with ninety to ninety-five per cent of Pocrnick’s decisions regarding the rejection of loans originated by the Plaintiffs. ProBank’s reliance on the testimony of Webber is seriously misplaced. To the extent that Webber’s testimony conflicts with the testimony of the Plain tiffs, this court is not entitled to disregard the testimony of the Plaintiffs and grantProBank judgment as a matter of law based on the contradictory testimony of Webb er. See Baty , 172 F.3d at-14-

1241 (“We must view the evidence and any inferences to be drawn therefrom most favorably to the non-moving party.”); Harolds Stores , 82 F.3d at 1546 (noting that in determining whether a party is enti tled to judgment as a matter of law, this court does not “weigh the evidence, pass on the credibility of the witnesses, or substitute our conclusions for [those ] of the jury”). In any event, the testimony of Webber is simply notthat helpful to ProBank. Webber disagreed with, or could not expla in, five to ten percent of Pocrnick’s loan rejections. Even taking Webber’s t estimony as true, the jury was certainly entitled to infer that the unexplained lo an rejections were based on the Plaintiffs’ refusals to consent to Pocrnick’s advan ces. Furthermore, on crossexamination, Webber acknowledged that the bulk of t he rejection decisions with which he disagreed fell within the later periods of the Plaintiffs’ employ at ProBank, that period after which they had each repe atedly rejected Pocrnick’s sexual advances. This testimony is entirely consis tent with the testimony of the Plaintiffs that Pocrnick began to reject more and m ore of their loans as they remained steadfast in their rejection of his sexual advances. ProBank is not entitled to judgment as a matter of law based on th e testimony of Webber. As a final matter, we reject ProBank’s assertion th at only those adverse employment actions amounting to a constructive disc harge are sufficient to preclude the applicability of the Faragher/Burlington affirmative defense. If the-15-

Supreme Court had intended such a rule it could hav e easily said so. Instead, it used the term “tangible employment action,” a term, as noted by the Court itself, heavy with judicial gloss. See Burlington , 118 S. Ct. at 2268 (“At the outset, we can identify a class of cases where, beyond questio n, more than the mere existence of the employment relation aids in commis sion of the harassment: when a supervisor takes a tangible employment action aga inst the subordinate. Every Federal Court of Appeals to have considered the que stion has found vicarious liability when a discriminatory act results in a ta ngible employment action.”). In so noting, the Supreme Court cited and quoted this court for the following proposition: “‘If the plaintiff can show that she s uffered an economic injury from her supervisor’s actions, the employer becomes stri ctly liable without any further showing . . . .’” Id. (quoting Sauers v. Salt Lake County , 1 F.3d 1122, 1127 (10th Cir. 1993) (further quotation omitted)). Although the Court was careful to note that the resultant economic injury must be “tangibl e,” “significant,” and/or “material,” id. at 2268-69, it never even hinted that the injury m ust be of the magnitude necessary to support a constructive disch arge claim. See Spulak v. K Mart Corp. , 894 F.2d 1150, 1154 (10th Cir. 1990) (noting thatquestion on which constructive discharge cases turn is “whether the e mployer by its illegal discriminatory acts has made working conditions so difficult that a reasonable person in the employee’s position would feel compel led to resign”).-16-

In fact, in elucidating the tangible-employment-act ion standard, the Supreme Court cited with approval the opinion of th e Seventh Circuit in Crady v. Liberty National Bank & Trust Co. of Indiana , 993 F.2d 132, 136 (7th Cir. 1993). See Burlington , 118 S. Ct. at 2268-69. The court in Cradyspecifically noted that the question of whether the plaintiff was construct ively discharged was not at issue in the case. See 993 F.2d at 135 n.1. Instead, the sole question w as whether the plaintiff had demonstrated a “materially advers e change in the terms and conditions of employment.” Id. at 136. As did the Second Circuit in a recent case, we conclude it unwise to merge the Supreme Co urt’s specific language in Faragherand Burlington into the general umbrella concept of “constructive discharge.” Cf. Caridad v. Metro-North Commuter R.R. , 191 F.3d 283, 294 (2d Cir. 1999) (holding that Faragher/Burlington ’s “tangible employment action” is not synonymous with “constructive discharge” and no ting that not all constructive discharges will satisfy the Faragher/Burlington standard), cert. denied, 120 S. Ct. 1959 (2000). It is sufficient to note that the evi dence adduced in this case–Pocrnick disapproved substantial numbers of lo ans originated by the Plaintiffs because they would not submit to his sexual advances thereby adversely affecting their eligibility for commissions and bon uses–is sufficient to6Nor is ProBank entitled to a new trial in which it can present the

Burlington and Faragherdefense. The quid pro quo instruction given in this case required the jury to conclude that Pocrnick’s sexua l harassment of the Plaintiffs resulted in a tangible job detriment. As set forth at length above, the actions of Pocrnick did deprive the Plaintiffs of a tangible j ob benefit. Furthermore, as set forth below, the alter ego instruction provided by the district court in this case was properly given. Finally, as to the Plaintiffs’ hostile work environment claim, the jury was given the following affirmative defens e instruction: “[ProBank] is not liable for the so-called ‘hostile environment’ claim of sexual harassment if it took prompt and appropriate corrective action with respect to [Pocrnick’s] alleged actions once they became known by management of [Pr oBank].” -17- demonstrate that the adverse employment action at i ssue here was significant, material, and tangible. 6 2. Alter ego instruction In instructing the jury on the Plaintiffs’ claims o f quid pro quo sexual harassment, the district court provided the followi ng instruction:

Defendant [ProBank] is a corporation. A corporatio n may only act through natural persons as its agents or employ ees and, in general, any employee of a corporation may bind the corporation by his or her actions done and statements made while a cting within the scope of his or her employment. Where an employee such as Mr. Pocrnick serves in a supervisory position and exerc ises significant control over an employee’s hiring, firing or condit ions of employment, that individual operates as the alter e go of the employer, and the employer is liable for any unlawf ul employment practices of the individual even though what the supervisor is said to have done violates company policy. ProBank asserts on appeal that the district court e rred in giving the alter ego instruction, noting that Pocrnick’s mere status as Plaintiffs’ supervisor is not enough to render Pocrnick ProBank’s alter ego. In fact, ProBank asserts that7 In its limited and conclusory briefing of this issu e, ProBank simply asserts

that this court should decide the alter ego issue i n this case “as a matter of law.” Appellant’s Brief at 30. Our review of the record reveals that the testimony as to Pocrnick’s managerial status at ProBank is undisput ed and sufficient to allow this (continued...) -18- “Pocrnick’s position as [P]laintiffs’ supervisor, e ven with his authority to hire and fire them, does not make him ProBank’s alter ego, a nd this Court should so rule as a matter of law.” Appellant’s Brief. at 30. ProBank is certainly correct, as set out above in t his court’s discussion of Faragherand Burlington , that an employer is not automatically responsible for all sexual harassment perpetrated by its supervisory employees. See Burlington , 118 S. Ct. at 2267 (noting “general rule is that sexual harassment by a supervisor is not conduct within the scope of employment,” but re cognizing that “[s]cope of employment does not define the only basis for emplo yer liability under agency principles”). What ProBank refuses to recognize, h owever, is that Pocrnick is more than simply one of ProBank’s supervisory emplo yees. As the Supreme Court recognized in Burlington , an alter ego instruction is appropriate in those situations “where the agent’s high rank in the company makes him or her the employer’s alter ego.” Id. Despite the absolute scarcity of case law development of this alternate avenue of employer liability, a review of the record reveals that this is one of those rare c ases in which an alter ego instruction was appropriate based on Pocrnick’s hig h rank at ProBank. 7In that7 (...continued)

court to decide the question. Because the issue wa s not raised on appeal, however, this court does not decide whether, even i n light of undisputed evidence, the question of whether a high-ranking manager is h is or her employer’s alter ego is a question of fact for the jury or of law for th e court.

8 With regard to Pocrnick’s supervisory position and influence at ProBank, Rotola testified that “[e]verybody always referred to [Pocrnick] like he was God of that bank.”

9 Rotola and Mallinson-Montague both testified that P ocrnick had an exceedingly close relationship with Drummond.

10 Drummond testified as follows regarding Pocrnick’s demotion after the allegations of harassment came to light:

Q. Did you change [Pocrnick’s] title from senior v ice president to vice president? A. Yes. Q. Was that a demotion? A. That was a demotion. Q. Do demotions of that nature in terms of titles have any particular significance in your industry? A. Well, in my industry, titles are a really big d eal, especially (continued...) -19- regard, the evidence at trial demonstrates that dur ing all relevant time periods, Pocrnick was employed by ProBank as Senior Vice-Pre sident of Consumer Lending. In that capacity, Pocrnick had the author ity to hire and fire employees in the consumer lending department, was the ultimat e supervisor of all employees in the department, and had the ultimate authority t o disapprove all consumer loans. 8 Pocrnick answered only to Drummond, ProBank’s pre sident 9 ; Drummond in turn answered directly to ProBank’s Board of Dir ectors. Drummond testified at trial that a “senior level title” was “very importa nt” and a “really big deal.” 10 In10 (...continued)

a senior level title. Some say that bankers are pa id in titles, but they’re very important. Q. What was your intent in doing that to his title ? A. To lower his status and reach into the organization.

11 Drummond testified that “being on the loan committe e is, along with being a big responsibility, it increases your statu s in the bank.” Similarly, Drummond testified that service on the Bank Managem ent Committee carried significant prestige and that in his capacity as a member of the committee, Pocrnick had reviewed “human resource polices and things like that.” -20- addition to his “very important” position as seniorvice president, Pocrnick’s status at ProBank was heightened by his service on both the Loan and Bank Management Committees, committees exercising policy -making functions. 11 Although the district court erred in concluding that the alter ego instruction was appropriate simply because Pocrnick was the Pla intiffs’ supervisor and exercised a high degree of control over them, see Harrison , 158 F.3d at 1376, this court can affirm the district court for any reason that finds support in the record. See Smith v. Ingersoll-Rand Co. , 214 F.3d 1235, 1248 (10th Cir. 2000) (“We are free to affirm the rulings of a district court on a ny ground that finds support in the record, even where the lower court reached its conc lusions from a different or even erroneous course of reasoning.” (quotation omi tted)). The record evidence in this case, particularly the undisputed testimonyof Drummond, leads this court to conclude that the alter ego instruction was appr opriate under the particular,-21-

narrow facts of this case establishing Pocrnick’s h igh managerial rank at ProBank. 3. Attorney’s fees After prevailing on their Title VII claims at trial , the Plaintiffs moved for an award of attorney’s fees pursuant to 42 U.S.C. § 2000e-5(k). ProBank opposed the fee request, asserting, inter alia , that because Plaintiffs’ counsel’s time records were inadequate, the fee request should be denied in toto . Although the district court drastically reduced the amount of attorney’s fees ultimately granted the Plaintiffs, it rejected ProBank’s assertion that such fees should be denied altogether. The district court began by noting that “[u]nder th e Title VII provision, a prevailing plaintiff ordinarily is to be awarded attorney’s fees in all but special circumstances.” Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 39 F.3d 1482, 1492 (10th Cir. 1994) (quotations omitted). Nevertheless, when applying for attorney’s fees in federal civil rights actions , plaintiffs have the burden to “prove and establish [the] reasonableness of each d ollar, each hour, above zero.” Jane L. v. Bangerter , 61 F.3d 1505, 1510 (10th Cir. 1995). To satisfy this burden, attorneys must keep and produce “meticulous time re cords” which “‘reveal . . . all hours for which compensation is requested and how those hours were allotted to specific tasks.’” Id. (quoting Ramos v. Lamm , 713 F.2d 546, 553 (10th Cir. 1983)). Although the consideration of reconstructe d time records is permissible12 “The most useful starting point for determining the amount of a

reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart , 461 U.S. 424, 433 (1983). Although the reasonable-hourly-rate compon ent of the lodestar formula was vigorously contested by the parties below, thatportion of the district court’s fee order is not at issue on appeal. -22- in determining an appropriate fee award, this courthas noted that such records are likely to represent only an approximation of time a ctually expended. Ramos , 713 F.2d at 553 n.2 With this background in mind, the district court de termined that the following factors supported the Plaintiffs’ claims for attorney’s fees: Plaintiffs did prevail on their main claim of sexua l discrimination under Title VII. This case was fiercely defended b y able counsel and the defendant Bank appears to have spared no expens e on its defense. There were two plaintiffs, each with a different, b ut related, experience of discrimination. Plaintiffs’ trial co unsel . . . was prepared in the courtroom to efficiently present th e case. Nevertheless, in examining the number-of-hours-reas onably-expended portion of the lodestar formula, 12 the district court made, among others, the followi ng findings: (1) “[t]he evidence at the hearing reveal ed that [Plaintiffs’ lead counsel] kept only rough notes of his time and then would put the notes together every one to three weeks”; (2) “[w]ith [billing] entries lump ed together the documentation is simply not adequate to determine the work performed ” by Plaintiffs’ lead counsel; (3) “[t]he ‘lumping’ together of items makes it imp ossible to determine accurately how much of the time was spent on research althoughit is clearly excessive for13 Interestingly, ProBank fails to note that the fee r equest in this case

covered the work of three separate attorneys and on e legal assistant. As to the approximately 200 hours of time attributed to the l egal assistant and the two attorneys other than Plaintiffs’ lead counsel, the district court noted that there had been no specific objection to the reasonableness of the fee request. Furthermore,

(continued...) -23- attorneys who are charging rates as experienced att orneys”; and (4) “the claim for hours spent on unspecified research shows how poor record keeping makes it impossible for the court to identify and eliminate duplication.” In light of these findings, the district court noted that “inadequate documentation would justify denial of the entire [fee request].” Although the district court indicated it had the di scretion to deny the fee request altogether based upon the inadequate docume ntation, it declined to do so for the following reasons: First, [P]laintiffs prevailed on serious charges of unlawful conduct. The law provides for the payment of their attorneys fees as part of a comprehensive remedial scheme. They should not be denied the benefit of this law because their attorney failed t o do his part. Second, [Plaintiffs’ counsel] did do his job of pre paring and presenting the case, thereby allowing his clients’s rights to be vindicated. Lastly, to deny [counsel’s] fee applic ation in full would provide an unwarranted windfall to defendant Bank. The jury found the Bank committed unlawful discrimination. It wou ld be unjust to allow the Bank to evade the full measure of damages imposed by the law because [P]laintiffs’ attorney did not heed dis positive case law requiring meticulous and contemporaneous time recor ds. The district court did, however, drastically reduce the fee request, cutting the hours of Plaintiffs’ lead counsel 13 by one-third, from approximately 880 claimed13 (...continued)

the district court specifically found “the document ation for the hours claimed by these individuals to be sufficient.” In light of t his procedural history and the district court’s specific finding, ProBank’s assert ion that the district court was obligated to deny Plaintiffs’ fee request in toto is particularly suspect. -24- hours to approximately 590 awarded hours. In so do ing, the district court specifically took into account the lumping of tasks into large blocks of time, with its concomitant lack of specificity and possibility of overlap with the work of other attorneys, and the failure to maintain the ti me records contemporaneously with the work performed. ProBank’s contention on appeal is both exceedinglynarrow and easily resolved. ProBank asserts that once the district c ourt determined counsel’s time records were neither meticulous nor contemporaneous , it was obligated as a matter of law to deny the fee request in toto . To be clear, ProBank does not challenge any of the particulars of the district co urt’s order granting fees but, instead, only challenges the district court’s decis ion to award any fees at all. This court “review[s] the district court’s determin ation of reasonable hours for an abuse of discretion.” Jane L. , 61 F.3d at 1510. Under this standard, we will reverse the district court only if its determi nation is “arbitrary, capricious, whimsical, or manifestly unreasonable.” See Coletti v. Cudd Pressure Control , 165 F.3d 767, 777 (10th Cir. 1999) (quotation omitt ed). The real question in this case is whether the district court abused its discr etion in determining that it could-25-

arrive at a reasonable fee in light of the document ation submitted by counsel. In this regard, we note that the district court specif ically delineated those categories of hours claimed–research, meetings with the Plaint iffs, and trial preparation–in which counsel’s shoddy record keeping made it diffi cult to determine whether the hours claimed were reasonably expended. Because itwas difficult to evaluate the propriety of the fee request with regard to these c ategories of time, the district court reduced the fee request by 290 hours. Althou gh ProBank did not include the Plaintiffs’ fee application in its appellate ap pendix, it appears from the district court’s order that this reduction of hours accounts for a substantial number of those hours claimed in the three categories identif ied as suspect by the district court. In light of the district court’s superior p erspective in determining the reasonableness of the number of hours expended, thi s court cannot conclude that the district court’s tailored pruning of lead couns el’s claimed hours was manifestly unreasonable or abusive. This is especi ally true when, after presiding over this case from beginning to end, the district court specifically found that the complete denial of fees would be inconsistent with the interests of justice. As a final matter, this court notes that ProBank ha s not cited a single case setting forth the rigid, bright line rule it would have us impose. To the contrary, this court has specifically held that a district co urt did not abuse its discretion in reducing the hours-reasonably-expended portion of aloadstar calculation by-26-

thirty-five percent when “[p]laintiffs’ rather slop py and imprecise time records failed to document adequately how plaintiffs’ attor neys utilized large blocks of time.” Jane L. , 61 F.3d at 1510. Accordingly, contrary to the as sertions of ProBank, the actions of the district court are far from unprecedented. The district court specifically cited to, and relied upon, this court’s decision in Jane L. in arriving at a reasonable fee award. We are similar ly unconvinced that, absent ProBank’s proposed bright-line rule, civil rights attorneys will have no incentive to maintain the meticulous records required by this court in Ramos . As noted by the district court, it would have operated well wit hin its sphere of discretion in denying the fee request on the ground that it was n ot supported by adequate documentation. Practitioners in this circuit can t ake little comfort from our holding that, under the particular, narrow facts of this case, the district court did not abuse its discretion in awarding fees despite s uch inadequacies. B. Cross-Appeal, No. 98-1297 After prevailing on their Title VII claims before t he jury, the Plaintiffs sought an award of back and front pay from the dist rict court. In so doing, they recognized that they had resigned from ProBank and that the jury had rejected their constructive discharge claims. The Plaintiff s further acknowledged the Tenth Circuit has long held that an award of back p ay is not available absent a showing of constructive discharge. See Derr v. Gulf Oil Corp. , 796 F.2d 340, 34214 In Winsor v. Hinckley Dodge, Inc. , this court noted as follows in that

respect: Under pre-1991 law, plaintiff could not obtain comp ensatory damages, but was restricted to the traditional equi table remedies of reinstatement, back pay, and front pay, as well as declaratory and injunctive relief. See Landgraf v. USI Film Prods. , [511 U.S. 244, 252-55 (1994)]; Cox v. Phelps Dodge Corp. , 43 F.3d 1345, 1347 (10th Cir. 1994). “[E]ven if unlawful discriminati on was proved, under prior law a Title VII plaintiff could not rec over monetary relief unless the discrimination was also found to have so me concrete effect on the plaintiff’s employment status, such a s a denied promotion, a differential in compensation, or termi nation.” Landgraf , [511 U.S. at 255]; see also Derr v. Gulf Oil Corp. , 796 F.2d 340, 342 (10th Cir. 1986) (“[T]he remedies of back pay and r einstatement are not available to [plaintiff] unless she was constru ctively discharged.”). 79 F.3d 996, 1002 (10th Cir. 1996). -27- (10th Cir. 1986) (“We agree . . . that the remedies of back pay and reinstatement are not available to [a plaintiff] unless [that pla intiff] was constructively discharged.”). The Plaintiffs asserted, however, t hat Derrhas been superseded by the 1991 amendments to the Civil Rights Act of 1964

. See 42 U.S.C. § 1981a. In particular, the Plaintiffs’ noted that under pre -1991 law, victims of workplace discrimination were limited in their reco very to the narrow equitable remedies set out in 42 U.S.C. 2000e-5(g). See Winsor v. Hinckley Dodge, Inc. , 79 F.3d 996, 1002 (10th Cir. 1996). 14 The 1991 amendments embodied in § 1981a, however, created a “major expansion in the relief available to victims of employment discrimination,” allowing the recovery o f compensatory damages even where victims of the illegal employment practi ce had not suffered workplace15 The Plaintiffs do not acknowledge on appeal the exi stence of this (continued...) -28- discrimination sufficient to rise to the level nece ssary to constitute a constructive discharge. See Landgraf v. USI Film Prods. , 511 U.S. 244, 255, 253-55 (1994). According to the Plaintiffs, the expanded remedies set out in § 1981a include the right to recover back and front pay even if they ha d not been constructively discharged by ProBank. In concisely and cogently rejecting the Plaintiffs’ assertion that § 1981a expanded the availability of back pay as part of th e newly-available compensatory damages, the district court quoted from the followi ng passage in the Supreme
Court’s Landgraf

opinion: Before the enactment of the 1991 Act, Title VII aff orded only “equitable” remedies. The primary form of monetary relief available was backpay. Title VII’s backpay remedy, modeled o n that of the National Labor Relations Act, 29 U.S.C. § 160(c), i s a “make-whole” remedy that resembles compensatory damages in some respects. However, the new compensatory damages provision of the 1991 Act is “in addition to,” and does not replace or duplic ate, the backpay remedy allowed under prior law. 511 U.S. at 252-53 (citations and footnotes omitted ) (emphasis added). The district court further quoted the language of § 198 1a, noting that the compensatory damages awarded under that section “ shall notinclude backpay, interest on backpay, or any other type of relief au thorized” under § 2000e-5(g). 42 U.S.C. § 1981a(b)(2) (emphasis added). 15 Because the remedies available15 (...continued)

language in § 1981a(b)(2).

16 See Landgraf

, 511 U.S. at 252-55.

17 With regard to the Plaintiffs’ claims for front pay , the district court held as follows: Front pay is “a . . . supplement to back pay, not asubstitute for it.” Pitre v. Western Elec. Co. , 843 F.2d 1226, 1279 (10th Cir. 1988). Front pay is granted to compensate “victims of discrimination for the continuing future effects of discrimination until the victim can be made whole.” Id. at 1278. Thus, front pay may be used to supplement back pay when back pay will not adequate ly compensate the victim because immediate promotion cannot occurbecause there are no positions available, id. , or where reinstatement is not available and the victim is making less money at her current job. Carter v. Sedgwick County , 929 F.2d 1501, 1505 (10th Cir. 1991) . . . . -29- under § 1981a do not displace or alter the remedies available under pre-1991 Title VII law, but instead merely supplement those remedi es, 16 and because § 1981a(b)(2) specifically precludes the award of bac k pay as part of the new compensatory remedies provided therein, the distric t court concluded that “there is nothing in the 1991 Amendments to suggest that the case law applying those prior remedies is abrogated. Instead, it appears t hat those prior remedies, and the case law applying those remedies remain intact.” A ccordingly, the district court further concluded that the Plaintiffs’ entitlement to back pay was controlled exclusively by § 2000e-5(g) and the case law interp reting it and not by the separate, supplemental remedies set out in § 1981a. 17-30-

This court has nothing to add to the district court ’s thoughtful resolution of this issue. In light of the Supreme Court’s opinio n in Landgraf and the explicit statutory text of § 1981a(b)(2), it is clear that t he Plaintiffs’ claim for back and front pay is controlled by § 2000e-5(g). In Derr , this court explicitly held that the equitable remedy of back pay is only available unde r § 2000e-5(g) when the plaintiff has demonstrated that she was constructiv ely discharged. See 796 F.2d at 342. Because the jury rejected the Plaintiffs’ claims that they were constructively discharged, the district court did n ot err in concluding that they were not entitled to back or front pay.

IV. CONCLUSION The United States District Court for the District o f Colorado is hereby
AFFIRMED in all respects.