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. e du/thir dc ir c uit_1999/9Filed January 15, 1999

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NOS. 97-1683 and 97-1712

DURHAM LIFE INSURANCE COMPANY

v.

DIANNE EVANS (E.D. Pa. No. 94-cv-00801)

DIANNE EVANS, Appellant in No. 97-1712

v.

PEOPLES SECURITY LIFE INSURANCE COMPANY (E.D. Pa. No. 95-cv-02681)

Durham Life Insurance Company and Peoples Security Life Insurance Company, Appellants in No. 97-1683

On Appeal From the United States District Court For the Eastern District of Pennsylvania

Argued: September 24, 1998

Before: BECKER, Chief Judge, WEIS and GARTH, Circuit Judges.

(Filed January 15, 1999)DANIEL MARINO, ESQUIRE

(ARGUED) Seyfarth, Shaw, Fairweather &

Geraldson 815 Connecticut Avenue, NW

Suite 500 Washington, DC 20006-4004

Attorney for Durham Life Insurance Company and Peoples Security Life Insurance Company

RAYMOND J. QUAGLIA, ESQUIRE (ARGUED)

1313 Race Street Philadelphia, PA 19107

Attorney for Dianne Evans

OPINION OF THE COURT

BECKER, Chief Judge.

These cross-appeals arise from the District Court's judgment following a bench trial in favor of Dianne Evans and against Durham Life Insurance Company ("Durham" ) and Peoples Security Life Insurance Company ("Peopl es") on Evans's Title VII sex discrimination counterclaim; in favor of Durham/Peoples on Evans's claim for punitive dam ages; and in favor of Evans on Durham/Peoples' claim for Evans's breach of a non-competition agreement. Most importantly, the appeal of Durham/Peoples, which co mes in the wake of the Supreme Court's landmark sexual harassment decisions last Term, Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998), and Burlington Indus tries, Inc. v. Ellerth, 118 S. Ct. 2257 (1998), requires u s to explicate several of the ways in which employers ma y be held liable under Faragher and Ellerth. In the cour se of so doing, we must also flesh out the notion of tangibl e adverse

action.

Evans was a successful life insurance salesperson earning close to six figures with Metropolitan Life Insurance

2Co. when she was recruited away and began working f or

Durham. She enjoyed even greater success in herfirs t two years with Durham, but when Durham was acquired by Peoples and new management took over, her situation changed for the worse. According to Evans's trial e vidence, essentially credited by the District Court, the new management resented her for being a successful woma n and set out to undermine her, humiliating her perso nally with sexist remarks and crude sexual advances, and stripping her of the support she needed to do her j ob, support that had been a negotiated condition of her employment at Durham. Ultimately, when her private office was taken away and critical files mysteriously disa ppeared, she resigned and began to work for a competing insu rance company. Durham thereupon sued Evans, seeking an injunction and damages for breach of a noncompetiti on agreement Evans had signed while in Durham's employ

. Evans counterclaimed, alleging sex discrimination, defamation, and intentional infliction of emotional distress.

The District Court found that the noncompetition agreement was no longer in effect and that Evans ha d suffered a hostile work environment. It entered jud gment in her favor for $310,156 in lost earnings and fringe benefits and $100,000 for intentional infliction of emotiona l distress. It found against Evans on her defamation claim.

Durham makes numerous claims on appeal. (We will no w refer to Durham and Peoples, Durham's successor, as "Durham.") It challenges the District Court's fact finding on the ground that the allegedly offending incidents w ere so few and far between and their veracity so suspect t hat we should set the verdict aside as clearly erroneous. We decline that invitation. Durham also disputes its l iability for the acts of its supervisory employees under Ellerth and Faragher. We conclude that Durham is not entitled t o the affirmative defense that Evans unreasonably failed to use an available effective sexual harassment policy bec ause the defense is only available in the absence of tangibl e adverse employment action, and Evans suffered such adverse action. The concept of a tangible adverse employmen t action is not limited to changes in compensation, a lthough Evans's pay was certainly affected by the actions t aken

3against her. "Tangible adverse employment action" i ncludes

the loss of significant job benefits or characteris tics, such as the resources necessary for an employee to do hi s or her job; that Evans suffered such loss is detailed infr a.

Durham also contends that it is not liable for inte ntional infliction of emotional distress because Pennsylvan ia workers' compensation law preempts Evans's claim. Ultimately we need not resolve this difficult quest ion, because we find that the award may be upheld under Title VII. Additionally, Evans challenges the District Co urt's refusal to award punitive damages, but we find this ruling to have been fairly within the court's discretion. Finally, Durham takes issue with the District Court's back p ay award, but we uphold that also as within the court' s discretion, particularly given Durham's acts after Evans left Durham's employment.

Durham alleges that Evans was bound by a covenant n ot to compete and argues that the collective bargainin g agreement required her to grieve rather than sue. T he District Court found that a vice president's statem ent to Evans that the covenant and the collective bargaini ng agreement were no longer in force estops Durham fro m enforcing them against her. This finding is not cle arly erroneous. In view of all these conclusions, we wil l affirm the judgment of the District Court in its entirety.

I. Facts and Procedural History

The evidence adduced at trial, which we view in the light most favorable to Evans, the prevailing party at tr ial, see Keith v. Truck Stops Corp., 909 F.2d 743, 745 (3d C ir. 1990), showed the following facts. Evans was an ext remely successful life insurance salesperson. She worked a t Met Life for seventeen years, and in her last few years there she consistently earned $90,000 per year. Durham recrui ted her in 1991, promising her that she would have her own office and secretary, as well as unlimited phone an d mailing costs paid for by Durham. When Evans joined Durham, she signed a non-competition agreement, which provided that, if she left, she could not sell insurance to Durham customers for a limited time. At Durham, she was co vered

4by the collective bargaining agreement in place bet ween

Durham and its agents while that agreement was in e ffect.

Durham was a "home service" or "debit" insurance company whose business generally came from door-to- door sales. Evans, however, was recruited as an "ordinar y life agent," which meant that she sold a different type of policy. She worked almost exclusively from her office, enco uraging existing debit customers to upgrade their policies. Evans's special skills and support system facilitated her s uccess in the new job. She earned $128,000 in 1991 and $119,0 00 in 1992, mainly from commissions.

In 1991, Capitol Holding Company purchased Durham. In 1992, Capitol assigned the management of Durham to Peoples Security Life Insurance Company, and People s managers took over in October. Evans was the only f ulltime female life insurance agent at that location; there were thirty male agents. The collective bargaining agree ment between Durham and its agents expired in November 1 992. When it expired, Peoples unilaterally reduced the compensation rate of the agents. At that point, Tom Biancardi, a regional vice-president who was then negotiating with the union, told Evans that the col lective bargaining agreement and the non-competition agreem ent were no longer in force. After that time, no new co llective bargaining agreement was put in place.

The new managers, particularly William McKaskill an d Doug Sebastionelli, believed that Evans should not continue to receive special treatment.1 They told her that she did not fit the profile for a debit life insura nce company: Her clothes and shoes were too expensive a nd she dressed too well for the job. McKaskill told he r that she "made too much money for a goddamn woman." In March 1993, William Owens, the acting agency manager, ask ed Evans to go dancing "into the fields with him" and reminded her that he had the power to fire her if s he did not behave as he wished. The next morning, he place d a newspaper article on her desk discussing a large ve rdict

___________________________________________________ ______________

1. McKaskill and Sebastionelli were Associate Custo mer Service Unit

Leaders who were three levels above Evans in the hi erarchy until mid1993, when one of those levels was eliminated.

5that Peoples had obtained against another life insu rance

company because of an agent who moved business from Peoples to the other company. At that time, Owens t old her that if she reported the previous night's incident or if she quit and tried to take her business with her, Peopl es would

sue and "attach her house before she left the court room." Evans was frightened but did nothing because she wa nted to succeed in the restructured company.

Evans suffered repeated slights from the new management. At an awards dinner, the top-selling ag ents were honored for selling more than $25,000 in premi ums during a set period of time. Evans was the top prod ucer, but while the exact sales numbers of the male agent s were announced, Evans was only identified as selling in excess of the required minimum. Evans felt that she had be en humiliated in front of her colleagues and her son, who was also present. At a training session in June 1993, s he was publicly mocked for her walk and her speech by Chuc k Gardner, an agency sales manager. Evans tried to re tain the business of an important client, the Mercy Vote ch School, but the school administrators had questions that Evans needed legal help to answer. Although she was promised legal assistance from the home office, no one showed up at the scheduled meeting and Evans lost t he account. Evans testified that male agents routinely received legal help when necessary. When she tried to explai n to McKaskill what had happened, he cut her off and ask ed, "What do you know about annuities, you're only a wo man."

The new managers fired Evans's secretary and attemp ted to get her to leave her private office. McKaskill c ame into her office and began to use it as his own on severa l occasions, disrupting Evans's work and ignoring her discomfort and embarrassment. In June or July 1993, McKaskill grabbed Evans's buttocks from behind whil e she was bending over her files and told her that she sm elled good. She immediately left the office and never ent ered it again when McKaskill was at her desk. She did not r eport

the incident because she wanted to avoid further

humiliation and because she believed that McKaskill 's position would allow him to decide her fate.

6Management assigned Evans numerous "lapsed books,"

policies that were no longer active because the pol icyholders had switched insurance companies. The agent assigned to a lapsed book was supposed to try to re activate the policies. These were debit policies rather than the ordinary policies with which Evans was used to deal ing. Evans initially responded to the changes by working hard on the lapsed books and performing well. However, b ecause of the way commissions were calculated, the assignm ent of lapsed books had a severe negative impact on the calculation of Evans's bonus. Male agents were not assigned a similarly heavy load of lapsed books.

The problems came to a head in September 1993, when Jim La Grossa, the agency manager, told Evans that she was being transferred to another location. He instr ucted her

to clear her furniture out of her office and assemb le her files for the move. Evans complied, but when she re turned on the next work day, she was informed that she was not moving at all. She was advised by her manager, John Heyman, that she no longer had an office and that h er former office was now his conference room. La Gross a testified that Owens and McKaskill had pressured hi m for months to get Evans out of her office.

The "non-move" had an even more important consequence than Evans's public loss of her office. In preparation for the move, Evans had assembled all h er files. Her files were uniquely important to her bec ause, in the transition from the Durham computer system to t he Peoples system, billing problems had developed for certain customer accounts. As a result, Evans was authorize d to open a special bank account in which she would depo sit pre-paid premiums and then pay the premiums as they came due using money orders and small amounts of ca sh, which were kept with her files. On the day she was told that she had lost her office, she also discovered t hat her files, including the money orders and cash, were go ne. At that point, Evans concluded that she had been effec tively fired because it was impossible for her to work wit hout her files. A few days later, Evans sent a resignation l etter stating that she was resigning based on the sex

discrimination she had suffered and that she would pursue her legal remedies.

7After her resignation letter, Evans three times req uested

a final audit of her accounts. It is industry polic y, and also the policy of both Durham and Peoples, to allow an agent a final exit audit upon request when he or she leav es an insurance company's employ. It was Heyman's duty as agency manager to assume responsibility for Evans's files after she left the company until another salesperso n was assigned her customers and "book of business." Heym an refused her audit requests because he believed that she

was not entitled to an audit and because he was alr eady conducting an audit of Evans's debit book of busine ss. Heyman knew, however, that the debit book comprised only a part of her accounts in view of her large number of ordinary policies; 575 of her 1272 customers were o rdinary

life accounts.

Evans then took a position at the Paul Revere Life Insurance Company. Heyman threatened to sue her if she moved any business from Durham/Peoples to Paul Reve re. At Paul Revere, Evans replaced sixteen Durham/Peopl es policies with Paul Revere policies. A male agent, T om Burke, had moved to a different insurance company a nd replaced 170 Durham/Peoples policies, and Durham ha d not taken any action against him. Instead, Durham h ad assigned those lapsed policies to Evans.

If Heyman had conducted a final audit or allowed Ev ans access to her files, the billing problems that soon developed could have been prevented. Because he did nothing, however, customers began to receive notices that th ere were problems with their policies. Durham then wrote to all of

Evans's customers that Evans had terminated her employment with Durham and could no longer act on Durham's behalf. The letter precipitated numerous inquiries about pre-payments that had been made to Evans. Because of the billing problems, these inqui ries soon became complaints, and Durham forwarded the complaints to the Pennsylvania Insurance Department . In approximately three-fourths of the complaint cases, Evans had worked with her sales manager, Tom Carl, on the policies, and on many Carl had signed the applicati on and policy, but only Evans was mentioned in the complai nt

letters.

8Early in 1994, Durham sued Evans to enforce the

covenant not to compete, seeking an injunction and damages for breach and alleging that Evans had intentionally interfered with a contract (the non-c ompetition agreement). Also in 1994, Heyman sent a letter to t he Pennsylvania Insurance Department that inaccurately stated that Evans had filed only two of five replac ement forms required to replace certain policies. Heyman knew that failure to file replacement forms was a seriou s offense that would subject Evans to investigation and proba bly sanctions by the Insurance Department.

Before the events described above, Evans was in goo d mental health. After Peoples took over, she began t o suffer from chest pains, severe headaches, nausea, and sho rtness of breath. When she started work at Paul Revere, he r health improved, and she was in the management program at Paul Revere. She was the leading agency producer there u ntil the litigation and the complaints to the Insurance Department began. After the lawsuit began and she l earned of the complaints, her performance at Paul Revere d eclined sharply. She became absentminded, unable to concent rate on her duties, and obsessed with the litigation. Ac cording to Paul Revere, Evans no longer met the company's production requirements. She was dropped from the management program in late 1994, and her income was only $48,000 that year. In 1995, it dropped to $38, 000, and it declined further to $28,000 the next year. Paul Revere estimated that she would only produce $15,000 in premiums for 1997. She would have been discharged b ut for the fact that she is on partial disability. Cur rently, she requires continuing mental health treatment to deal with her distress and depression.

II. Fact Finding in the District Court

In order to reject a district court's findings of f act, the reviewing court, after examining all the evidence, must be

left with a definite and firm conviction that a mis take has been committed. When there are two permissible view s of the evidence, the district court's choice between t hem cannot be clearly erroneous. See Ezold v. Wolf, Blo ck, Schorr & Solis-Cohen, 983 F.2d 509, 525 (3d Cir. 19 92).

9Much of Evans's case against Durham comes down to a

credibility contest. Evans says that certain incide nts occurred and that Durham's managers had discriminat ory motives. Durham disputes those claims, and argues, even on appeal, that Evans's factual position is so weak as to be unsupportable. Since Title VII does not have a corroboration requirement, Durham's attempts to res urrect its factual claims on appeal are unavailing.2 Altho ugh testimony on Durham's side contradicts Evans's, her story is facially plausible, and the district judge credi ted it. We see no basis for finding clear error here. See Ande rson v. City of Bessemer City, 470 U.S. 564, 575 (1985) (wh en a district judge credits one of two opposed coherent and facially plausible stories and the story is not con tradicted by extrinsic evidence, "that finding, if not intern ally inconsistent, can virtually never be clear error").

Durham complains that the District Court adopted Evans's proposed findings of fact with little alter ation. Although we do not encourage verbatim adoption of proposed findings of fact, their review requires no greater scrutiny on appeal than other fact finding. See Lan sfordCoaldale Water Auth. v. Tonolli Corp., 4 F.3d 1209, 1215 (3d Cir. 1993). The District Court's discussion fol lowing its findings of fact demonstrated a keen familiarity wi th the record. Moreover, the court declined to adopt all o f Evans's proposed findings, which shows that it was exercisi ng independent judgment.3

___________________________________________________ ______________

2. The McKaskill incident is an example. Evans test ified that McKaskill grabbed her buttocks from behind. No one else witne ssed it and she did not tell anyone about it until the lawsuit. Durham argues that she is therefore not credible. Durham repeats these argume nts about many of the specific instances of harassment to which Evans testified. This strategem fails. Credibility determinations are for the finder of fact.

See United States v. Bethancourt, 65 F.3d 1074, 1078 (3 d Cir. 1995); Government of Virgin Islands v. Gereau, 502 F.2d 91 4, 921 (3d Cir. 1974). If the District Court found Evans a credible witness, it was perfectly correct to credit Evans's account even if she told no one at the time the harassment occurred. The only "prompt comp laint" requirement in Title VII is the statute of limitations, and Eva ns's counterclaim was filed well within the statutory period.

3. Durham objects that some of the findings of fact contradict Evans's own testimony about the timeline of events. Evans w as occasionally

10Durham's main objection to the District Court'sfind ings

appears to be that the court aggregated numerous ev ents to support its finding of a hostile work environment. Some of these events were apparently triggered by sexual de sire, some were sexually hostile, some were non-sexual bu t gender-based, and others were facially neutral. Wef ind no error, because Title VII may be applied to all of t hese types

of conduct.

Title VII prohibits sex discrimination. Although"se x" has several common meanings, in Title VII it describes a personal characteristic, like race or religion. We generally presume that sexual advances of the kind alleged in this case are sex-based, whether the motivation is desir e or hatred. Likewise, hostile or paternalistic acts bas ed on perceptions about womanhood or manhood are sex-base d or "gender-based."

"Gender" has often been used to distinguish sociall y- or culturally-based differences between men and women from biologically-based sex differences, but we have not considered "sex" and "gender" to be distinct concep ts for Title VII purposes. See Price Waterhouse v. Hopkins , 490 U.S. 228, 250-51 (1989) (plurality opinion) (holdin g that reliance on gendered stereotypes of appropriate fem ale behavior is sex discrimination); cf. Sheridan v. E. I. Dupont De Nemours & Co., 100 F.3d 1061 (3d Cir. 1996) (en banc) (using "sex" and "gender" interchangeably), cert. d enied, 117 S. Ct. 2532 (1997); Wilson v. Susquehanna Towns hip

___________________________________________________ ______________

confused about when exactly certain incidents occur red, but it was hardly unreasonable for the court to have selected one of the timelines she offered. Moreover, Durham offers no explanation of why it would matter whether one of her superiors made his "pass" in May rather than June, which is the most that Durham's argument can be said to prove. Arguably, the more distant in time the event was fr om Evans's resignation, the less plausible is her claim that d iscrimination led her

to quit, but since she alleged a continuing, long-term series of harassing events not limited to sexual propositions, feuding over dates is unhelpful. See Hassine v. Jeffes, 846 F.2d 169, 172 n.1 (3d Cir. 1988) (adoption of defendant's proposed findings of fact that contained

inconsistencies with defendant's earlier admissions was legitimate and

did not "so undermine the ultimate conclusion that the district court reached" as to require reversal).

11Police Dep't, 55 F.3d 126 (3d Cir. 1995) (character izing a

sexually hostile environment as evidence of gender bias). Therefore, we will treat the sexual misconduct and the gender-based mistreatment in this case as sex discrimination. The facially neutral mistreatment p lus the overt sex discrimination, both sexual and non-sexua l, in

sum constituted the hostile work environment. See A man v. Cort Furniture Rental Corp., 85 F.3d 1074, 1083 (3d Cir. 1996) (acts of harassment, if motivated by sex or r ace, can constitute a hostile work environment regardless of their content); Andrews v. City of Philadelphia, 895 F.2d 1469, 1485 (3d Cir. 1990) (overtly sexual harassment is unnecessary to establish a sexually hostile work environment; discriminatory treatment is the only requirement).

As we stated in Andrews, the record must be evaluat ed as a whole when we consider whether Evans proved he r

case:

Particularly in the discrimination area, it is often

difficult to determine the motivations of an action and any analysis is filled with pitfalls and amb iguities. A play cannot be understood on the basis of so me of its scenes but only on its entire performance, a nd similarly, a discrimination analysis must co ncentrate not on individual incidents, but on the over all scenario.

Id. at 1484; see also Vicki Schultz, Reconceptualiz ing Sexual Harassment, 107 Yale L.J. 1683 (1998) (argui ng that non-sexual harassment is often a major part of a ho stile work environment). In its appeal, Durham attempts t o disaggregate the various allegedly discriminatory a cts and endeavors to cast doubt on each one, arguing that t he overtly sexual acts did not occur and that the non- sexual actions taken against Evans have innocent explanati ons. We conclude, however, that the District Court appro priately

refused to consider each incident in a vacuum and t hat its findings are not clearly erroneous.

III. Employer Liability

The next issue on appeal is whether Durham may be held liable for its supervisors' acts. Although Dur ham

12presents extensive evidence and argument about its antiharassment policies, we find that they are not rele vant to this case because Evans's supervisors took tangible adverse employment action against her.4

A. Liability under Ellerth and Faragher5

___________________________________________________ ______________

4. We must briefly address a certain terminological confusion that Durham uses to argue that the District Court made a mistake in finding employer liability. At one point, the District Cour t stated that it did

not see this case as a "disparate treatment" case, but as a "hostile work environment" case. Thus, Durham suggests, only evid ence of sexualized

abuse or sexual advances is relevant to Evans's cla im, and that evidence

alone is insufficient. The District Court's charact erization lacks analytic precision. Hostile work environment claims are foun ded in Title VII's prohibition of unequal treatment of men and women; the hostile

environment here consisted of abuse that a man in E vans's position would not have suffered. Perhaps the District Court simply meant that there was no other employee who had Evans's abiliti es and her specially negotiated benefits, so that there was no similarly situated person who could have been better treated. In any event, the S upreme Court has

now made clear that labels such as "hostile work en vironment" are not dispositive and that the ultimate issue is whether the plaintiff has

suffered actionable discrimination based on her sex . See Ellerth, 118

S. Ct. at 2264.

5. Although Judge Garth concurs in the result reach ed by Chief Judge Becker, he cannot agree that the discussion of when and how the affirmative defense provided by the holdings in Bur lington Industries,

Inc. v. Ellerth, 118 S. Ct. 2257 (1998), and Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998), and Chief Judge Becker's at tempted clarification of that defense, see infra, have a place in the opi nion.

As Judge Garth reads the Supreme Court decisions, t heir holdings are unequivocal and are directly applicable to this app eal without extending the analysis beyond the facts of this case. Ms. Eva ns provided proof of a tangible adverse employment action (i.e., she was made to leave her job), and this action was on the basis of her super visors' behavior. Here, Ms. Evans was the subject of a tangible adverse emp loyment action, the District Court found that her supervisors were resp onsible for her constructive discharge and the District Court retur ned a verdict compensating her for the damages she suffered.

This being so, the initial holding in Faragher and Ellerth attaches and binds us: "An employer is subject to vicarious liab ility to a victimized employee for an actionable hostile environment crea ted by a supervisor with immediate (or successively higher) authority o ver the employee."13Durham argues that the District Court applied the w rong

liability standard because the Supreme Court's rece nt sexual harassment liability decisions substantially reshaped the law. In Ellerth and Faragher, the Supr eme Court drew a line between (1) discriminatory work-r elated supervisory acts, such as discriminating against wo men in work assignments to placate pervasive male hostilit y or reprimanding women "in harsh or vulgar terms" while merely bantering with men for identical behavior, a nd (2) expressing sexual interest "in ways having no a pparent object whatever of serving an interest of the emplo yer." Faragher, 118 S. Ct. at 2289.

___________________________________________________ ______________

Ellerth, 118 S. Ct. at 2270; Faragher, 118 S. Ct. a t 2293. Judge Garth believes that is all the Court is called upon to re view through the lens

of Ellerth and Faragher and he agrees that the Distric t Court properly entered judgment in favor of Ms. Evans.

However, Judge Garth takes no position and disassoc iates himself from the discussion in Section III.A of Chief Judge Becker's opinion involving situations and examples where no tangible adverse employment action was taken, matters that concern t he second holding of Ellerth and Faragher. This second holding provid es that "[w]hen no tangible employment action is taken, a defending em ployer may raise an affirmative defense to liability or damages," Eller th, 118 S. Ct. at 2270; Faragher, 118 S. Ct. at 2293, and specifies the ele ments that must be established for the defense to prevail. (To the ext ent that Judge Weis in his concurring opinion would make an affirmative de fense available even when a tangible adverse employment action resulted, Judge Garth rejects his analysis as being contrary to and in de rogation of the explicit holdings of Ellerth and Faragher).

In the present case, there is no issue that require s resort to the second holding, and Judge Garth fears that unnecessary exa mples and discussion, even in an attempt to enlighten the bar and bench, may only lead to confusion when it does not clarify the stan dards to which this Court must adhere. In a case such as this one, wher e Ms. Evans was constructively discharged by her supervisors' actio n after their own actionable behavior, the holdings and instruction o f Ellerth and Faragher are clear: the employer, Durham Life Insurance Comp any, is automatically liable and no affirmative defense is available. The District Court so held, and Judge Garth, in accordance with the separate opinions of his colleagues, Chief Judge Becker and Judge Weis, agrees that the District Court's judgment must be affirmed

.

14The first kind of discrimination, the Court conclud ed,

would automatically subject the employer to liabili ty because such discrimination is within the scope of the supervisor's employment, even if the employer does not want the supervisor to discriminate. Acts fall with in the scope of employment when they are " `of the kind [a servant] is employed to perform,' occurring `substa ntially within the authorized time and space limits,' and ` actuated, at least in part, by a purpose to serve the master. ' " Id. at 2286 (quoting Restatement (Second) of Agency S 228( 1) (1957) (alteration in original)). The Court further stated that "it is accepted that `it is less likely that a will ful tort will properly be held to be in the course of employment and that the liability of the master for such torts wil l naturally be more limited.' " Ellerth, 118 S. Ct. at 2266 (qu oting F. Mechem, Outlines of the Law of Agency S 394, at 266 (P. Mechem ed., 4th ed. 1952)).

The Court, after citing some of the various conflic ting cases on scope of employment, and concluding that s exual harassment by a supervisor is generally not within the scope of employment, see id. at 2267, went on to pa rse the second category more carefully. In cases of harassm ent falling outside the scope of employment, the Court found, the employer could be vicariously liable when the"t ortious conduct is made possible or facilitated by the exis tence of the actual agency relationship." Faragher, 118 S. C t. at 2290. The Ellerth/Faragher "aided by the agency rel ation" test is divided into two categories:

An employer is subject to vicarious liabilit y to a victimized employee for an actionable hostil e environment created by a supervisor with imm ediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence, see Fed. Rule Civ. Proc. 8(c). The defense comprises two necessary el ements: (a) that the employer exercised reasonable c are to prevent and correct promptly any sexually ha rassing behavior, and (b) that the plaintiff employe e unreasonably failed to take advantage of any preventive

15or corrective opportunities provided by the employer or

to avoid harm otherwise. . . . No affirmativ e defense is available, however, when the supervisor's ha rassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassign ment.

Ellerth, 118 S. Ct. at 2270; see also Faragher, 118 S. Ct. at

2292-93.

The aided by the agency relationship test is not, h owever, all-embracing. Rather, the Court discusses it only as a "starting point." Faragher, 118 S. Ct. at 2290 & n. 3. One question is whether we should treat the supervisory acts in this case as falling within or without the scope of employment, for the scope of employment discussion is where the Court began its reformulation of Title VI I jurisprudence. In a definitional sense, scope of em ployment plays no role in the Ellerth/Faragher test as such. But a sexual harassment plaintiff might still argue, in a n attempt to avoid the affirmative defense, that the harassme nt she suffered falls within the scope of employment becau se her harassers intended, at least in part, to serve thei r employer. For example, the District Court found that McKaskil l told Evans that she made "too much money for a goddamn woman" and that she did not know anything about annuities because she was "only a woman." This coul d readily be interpreted as evidencing a belief that women were not suited to Durham's business and a purpose to serve Durham by ridding it of Evans or at least of the qualities that made Evans stand out from other agen ts, which qualities the harassers apparently regarded a s linked

to her womanhood.

Although a scope of employment analysis would be theoretically possible here, we apply the Ellerth/F aragher aided by the agency relation test. We would have gr eat difficulty deciding the case on scope of employment grounds in the absence of a specific finding by the District

Court about the harassers' intent. We therefore bel ieve that we can better evaluate Evans's claim by asking whet her her harassers were aided by the harassment by the agenc y relation. More generally, we suggest that harassmen t that could be analyzed as falling within the scope of em ployment because of a supervisor's biased beliefs about a cl ass of

16workers--a claim that Evans might be able to make o n

these facts--might be better evaluated in thefirst instance under the more specifically delineated standards of the Ellerth/Faragher aided by the agency relation test. 6 Scope of

(Text continued on page 19)

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6. We note that despite the Court's attempt to atta in "categorical clarity," Faragher, 118 S. Ct. at 2290, there is a potential overlap between harassment falling within the scope of employment a nd harassment aided by the agency relationship, for "scope of emp loyment" and "aided by the agency relation" are not hermetically sealed concepts. Both may fit the facts of a case, yet point towards dramatic ally different liability standards, since only in an "aided by the agency re lation" situation is the affirmative defense potentially available.

An example will elucidate the point. If a male supe rvisor routinely delivered his reprimands to female employees by way of unwelcome remarks and touching while treating male employees with respect, the conduct would seem to fall in both categories, sinc e the explicit sexual misbehavior would suggest an aided by the agency re lationship analysis, while the disparate treatment with respect to work- related activities would put the problem within the scope of employmen t. Even though unwelcome remarks and touching might be done to gra tify the harasser's own desires, this situation would fall within the s cope of employment because the harassment would be the supervisor's ma nner of giving out otherwise authorized reprimands to women. Giving re primands is clearly within the scope of the supervisor's authority, and the law of agency teaches that the manner of doing an authorized act may subject an employer to liability even though the employer inst ructs that the act be done differently. See Ellerth, 118 S. Ct. at 2266. Although we doubt such situations occur with any frequency, the example he lps develop the issue analytically.

The Court's conclusion that sexual harassment will ordinarily fall outside the scope of employment connotes an expecta tion that sexual harassment is often connected only opportunisticall y to the work environment--that is, that supervisors' harassment usually does not have any inherent relationship to the fact that the women targeted are working women. However, there may be cases in which a harasser thinks that he is doing what is best for his workfo rce when he deploys sexual harassment as a weapon to drive female worke rs away. See, e.g., Steiner v. Showboat Operating Co., 25 F.3d 1459, 14 63 (9th Cir. 1994) (finding that a supervisor used sexual harassment t o reprimand a female employee for her perceived failings as a worker rat her than to fulfill his desires). There are other cases in which sexual har assment seems fundamentally connected to the work situation, as w hen it is part of a campaign against women in nontraditional jobs. See, e.g., Annis v.17County of Westchester, 36 F.3d 251 (2d Cir. 1994); Bohen v. City of East

Chicago, 799 F.2d 1180 (7th Cir. 1986); see also Sc hultz, supra, at 1755-61 (suggesting that a desire to preserve a mas culine image of work often motivates sexual harassment). A supervisor wh o dislikes women for personal reasons may be predisposed to believe, how ever wrongly, that his employer would be better off without them, and his harassing acts could therefore be thought to fall within the scope of employment. Sexual harassment by co-workers may follow the same pattern and create the same analytic difficulties.

The distinction between acts within and without the scope of employment would turn on a fact finder's perception of whether the supervisor believed that he was acting, at least in part, in his employer's interests, perhaps because he believed that men wer e better workers. Yet it will often be difficult to distinguish personal misogyny falling

outside the scope of employment from misogyny directed at f emale workers. Does a supervisor who satisfies his sexual urges by targeting women he perceives as worthless to his employer's business a ct sufficiently within the scope of his employment?

It is therefore difficult to reconcile intent as th e touchstone of "scope of employment" with Ellerth's blunt statement that "[t]he general rule is that sexual harassment by a supervisor is not condu ct within the scope of employment." Ellerth, 118 S. Ct. at 2267. We cou ld, of course, understand this as a factual prediction, particular ly given the variety of cases discussed--and not completely reconciled--in the two opinions. See id. at 2266-67; Faragher, 118 S. Ct. at 2286-87 . But we also consider this statement in light of Faragher's coge nt explanation that "scope of employment" is ultimately a question of l aw, not fact, expressing a court's conclusion that it is appropri ate to hold an employer liable for its agents' acts in a particular case. S ee Faragher, 118 S. Ct.

at 2287-88.

In Faragher itself, supervisors, in the course of c arrying out their supervisory duties, repeatedly subjected female lif eguards to uninvited and offensive touching and to lewd and discriminato ry remarks. See id. at 2280. The Court rejected the argument that haras sment is a risk that employers should fairly be required to bear as a co st of doing business

and that this kind of harassment should therefore b e treated as falling within the scope of employment. See id. at 2288-89. Instead, the Court found that it would be preferable as a matter of so cial policy to apply

the aided by the agency relation test to the facts of t hat case. See id. at 2292. In short, "scope of employment" is not a shar ply delineated concept in law or logic, and that is what makes it so troublesome. We

18employment remains an elusive concept, while the Su preme

Court has given us clearer instructions on how to determine liability under the aided by the agency r elation standard. We are also mindful of the Supreme Court' s stated reason for formulating the affirmative defen se, the need to give employers incentives to establish anti harassment programs, see Ellerth, 118 S. Ct. at 227 0, and believe that too broad an interpretation of scope o f employment might make effective anti-harassment programs irrelevant to employer liability in many h ostile environment cases, undermining the Court's intent.

However, we need not resolve the almost metaphysica l questions surrounding scope of employment today, fo r under Ellerth and Faragher's aided by the agency re lation test, sex-based mistreatment by a supervisor--wheth er overtly sexual or facially neutral and whether moti vated by lust or by dislike--creates automatic liability whe n it rises to the level of a tangible adverse employment actio n. The Court squarely held that, when there is a tangible adverse employment action or the employer fails to make out its affirmative defense, it is fair and just to hold th e employer responsible for harassment. A supervisor can only t ake a tangible adverse employment action because of the authority delegated by the employer, see Ellerth, 1 18 S. Ct. at 2269, and thus the employer is properly charged with the consequences of that delegation.7 As we will no w

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also note our belief that the aided by the agency r elation test is similarly a product of legal and policy considerations, and t he Court may yet have occasion to revisit the issue to clarify the remain ing questions.

7. Concomitantly, we observe that, if the employer does not prove that it exercised due care and that the employee's failure to use its safeguards was unreasonable, the harassment can fairly be said to have been facilitated by the power delegated to the superviso r, and thus aided by the agency relationship. Conversely, if there is no tangible adverse employment action and the employer does prove due c are and unreasonable employee behavior, the employer's anti -harassment efforts and the opportunities for redress it offered a hara ssed employee will generally justify the conclusion that the employer should not be required to bear the costs of supervisory harassment. That i s, the aided by the agency relation standard seems to us to reflect a v alue judgment, not a

19explain, Evans suffered tangible adverse employment

action. Hence we find that the evidence here easily satisfies the Ellerth/Faragher aided by the agency relation t est.8

B. Tangible Adverse Employment Action

The Supreme Court has defined a tangible employment action as "a significant change in employment statu s, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a deci sion causing a significant change in benefits." Ellerth, 118 S. Ct. at 2268. According to Durham, none of the behavior described by Evans constitutes a tangible adverse employment act ion, and thus it is entitled to prevail on its affirmati ve defense. Forcing Evans to vacate her office is not tangible, Durham posits, because no other agent had a private office , and because she kept the office until she resigned.

We disagree. First, the District Court found, and D urham does not dispute, that a secretary and a private of fice were specific, negotiated conditions of Evans's move to Durham/Peoples. Evans also testified that, given th e way she dealt with her accounts, a secretary was necess ary to enable her to work successfully. Durham entirely ig nores the loss of Evans's secretary, who was paid $20,000 per year--hardly a small sum. Given Evans's need for of fice

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natural category, balancing the employer's right to be free from automatic liability against employees' right to a w orkplace that discourages and redresses harassment. See Faragher, 118 S. Ct. at 2291. Thus, for actionable harassment that occurs w ithout any tangible employment action, the aided by the agency relation test may be tantamount to the failure of the employer's affirma tive defense, which forms the contours of the liability test. The affir mative defense remains a defense and not an element of the plaintiff's cas e because the burdens of production and proof remain at all times on the employer, but the liability test as a whole is expressly designed to encourage effective

antiharassment policies.

8. There are other bases for liability that are not relevant to our

decision today: cases in which the harasser's high rank make s him the employer's alter ego; cases in which the employer i ntended the harasser's conduct; cases in which the employee rea sonably, but wrongly, believes that the harasser is a supervisor ; and cases in which the employer is negligent. See Ellerth, 118 S. Ct. at 2267.

20support to sustain her successful way of doing her whole

life insurance business, depriving her of a secreta ry and an office could constitute a tangible adverse action e ven if none of the other agents had negotiated for those b enefits. Cf. Marzano v. Computer Science Corp., 91 F.3d 497, 510-11 (3d Cir. 1996) (rejecting the claim that the uniqueness of an employee's position created an ext ra burden on the plaintiff to prove discrimination). F inally, Evans resigned when her office was stripped from he r and her files went missing. The fact that she kept the office until she quit does not make the deprivation of the office meaningless. Under Durham's theory, any substantial adverse action, such as a demotion in authority and pay, would not be a tangible adverse employment action i f it led the affected employee to quit before the demotion t ook effect. This is contrary to Title VII doctrine, whi ch recognizes a constructive discharge under such circumstances. See Goss v. Exxon Office Sys. Co., 7 47 F.2d 885 (3d Cir. 1984).

Durham also asserts that Evans's missing files cann ot be an adverse employment action. The District Court, b y contrast, found that it was impossible for Evans to work

without her files. If the files were vital to her w ork, the District Court could find that their disappearance under suspicious circumstances was a tangible adverse employment action.9 Although direct economic harm i s an important indicator of a tangible adverse employmen t action, it is not the sine qua non. If an employer' s act substantially decreases an employee's earning poten tial and causes significant disruption in his or her working conditions, a tangible adverse employment action ma y be found. See Booker v. Budget Rent-a-Car Sys., 17 F. Supp. 2d 735 (M.D. Tenn. 1998).

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9. After Evans left, Heyman had possession of money orders and cash that he could only have gotten from Evans's files. In view of the other evidence in the case, Durham's control over thefile s would support the conclusion that their disappearance was evidence of discrimination. Cf. Aman, 85 F.3d at 1083 (missing time cards, false ac cusations of wrongdoing, and others' refusal to cooperate with t he plaintiff in doing her job helped prove discrimination); Andrews, 895 F.2d at 1473 (unexplained loss of files was an important element of the plaintiffs' harassment claims).

21Durham further contends that Evans's alleged harass ers

had no control over giving her lapsed books of busi ness. Durham states that male agents also had to take lap sed books and that Evans ultimately received "lapse rel ief," which meant that her pay was not decreased as much as the normal rules would have mandated based on her l arge number of lapsed policies. In addition, Evans had t he highest guaranteed salary in the agency. As a resul t, Durham argues, the lapse assignments did not consti tute tangible adverse action. The record suggests, howev er, that lapse assignments came from one or two levels above Evans --that is, precisely the levels at which she argues the managerial staff was biased against her. The record also supports Evans's contention that she was assigned m ore lapsed policies than other (male) agents, so that s he was treated less favorably than others. As a result of the lapse assignments, her earnings were cut almost in half. A decrease of that magnitude is surely significant en ough to be a tangible adverse action.10 We conclude that th e loss of Evans's office, the dismissal of her secretary, the missing files, and the lapse assignments that led to afifty percent pay decrease are tangible adverse employment action s under Ellerth and Faragher.

On its face, this conclusion would appear to preclu de any

affirmative defense for Durham. Yet Durham makes an interesting claim: It contends that the first time someone made a discriminatory remark to Evans, she ought to have reported it, using the sexual harassment policy. At that time, there was as yet no tangible adverse action a gainst her. Durham asserts that, if Evans had reported the harassment at that point, it would have investigate d and stopped the problem, and that it should therefore p revail on its affirmative defense. However, we decline to inv estigate

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10. Evans hotly disputed the claim that she was off ered lapse relief, and the district judge was entitled to credit her testi mony. Evans's high guaranteed salary is also less relevant than Durham claims. Most of her earnings were expected to come from commissions; fr om the testimony, it seems that no one expected agents to subsist on the salary guarantee. Moreover, the guarantee seems to have been a result of the negotiations that brought her to Durham/Peoples, before the mana gement changed and those who ultimately harassed her assumed posit ions of power.

22whether, if Evans had complained early on, the sexu al

harassment policy at Durham would have prevented th e tangible adverse actions that occurred afterwards. The difficulty of making such a counterfactual inquiry counsels against injecting this question into already-comple x discrimination cases, particularly at the appellate level with a closed record. While we need not decide the quest ion now, we are fearful that, were we to allow an affir mative defense every time an employer could argue that the plaintiff had some non-tangible notice of discrimin ation before adverse action was taken against her, the Ellerth/Faragher distinction between cases with tan gible

adverse action and cases without such action would become hopelessly confused.

We note in this regard that it seems untoward to gi ve an employer whose supervisors first signal their bias and then act on it more protection than an employer whose supervisors begin with tangible adverse action. Thi s is particularly true because the plaintiff's evidence that

adverse action was sex-based will often include evi dence of prior discriminatory behavior; Durham's proposed st andard would have the perverse effect of putting a greater burden on plaintiffs who had extensive evidence of discrim ination. It would also make the affirmative defense applicab le in quid pro quo cases, since threats generally are mad e before they are acted upon and put their recipients on not ice of what is coming next. Yet that is exactly the opposi te of the holding of Ellerth. The Ellerth/Faragher rule is cl ear: When harassment becomes adverse employment action, the employer loses the affirmative defense, even if it might have been available before. See Faragher, 118 S. Ct. at 2293 ("No affirmative defense is available, however, when the supervisor's harassment culminates in a tangible employment action . . . ." (emphasis added)); Eller th, 118 S. Ct. at 2270 (same); id. at 2269 ("When a supervi sor makes a tangible employment decision, there is assu rance the injury could not have been inflicted absent the agency relation. . . . Whatever the exact contours of the aided in the agency relation standard, its requirements will always be met when a supervisor takes a tangible employmen t action against a subordinate."). If there is some s cenario

23that will permit such a legal strategem, it does no t appear

in this case.

1. Supervisory Authority

Durham contests the District Court's finding that McKaskill was Evans's supervisor. If he was not a supervisor, his acts cannot subject Durham to autom atic liability. Although we think that the other evidenc e of harassment is sufficient to hold Durham liable, we reject Durham's interpretation of McKaskill's supervisory authority. The District Court could reasonably have relied on witnesses, including McKaskill, who testified th at McKaskill was part of the ruling "triumvirate" in E vans's

office. As an associate Customer Service Unit Leade r, he was two levels above Evans according to Durham's ow n chart. He was part of the three-person team that de cided to get Evans's direct supervisor to strip her office f rom her and to instigate Durham's lawsuit against her. In g eneral, complete authority to act on the employer's behalf without the agreement of others is not necessary to meet Ti tle VII's agency standard for supervisor liability. See Bonen berger v. Plymouth Township, 132 F.3d 20, 23 (3d Cir. 1997). That McKaskill might not have had the authority to act a lone did not mean that he was without supervisory authority over

Evans.

C. Pervasiveness and Severity of the Harassment

Durham next claims that, as a matter of law, the incidents described by Evans do not rise to the lev el of severity and pervasiveness needed to find a hostile

environment. Durham characterizes the events to whi ch Evans testified as "sporadic misbehavior." However, it is

settled law that courts should not consider each in cident of harassment in isolation. See Andrews, 895 F.2d at 1 484. Rather, a court must evaluate the sum total of abus e over time. Evans has done more than identify isolated in cidents of what Durham characterizes as "horseplay." She ha s also testified to discriminatory statements and actions that the court found to be sex-based. As a whole, the facts support the District Court's finding of a hostile work envi ronment.

Durham also claims that most of the conduct of whic h Evans complains occurred after her employment ended and

24thus cannot sustain a hostile work environment clai m. We

understand the District Court to have found that harassment took place on the basis of Evans's sex, both

before and after she left Durham. See Durham Life I ns. Co. v. Evans, Nos. 94-801 & 95-2681, slip. op. at 16 (E .D. Pa. Aug. 4, 1997) ("The intimidation and harassment did not end with her resignation."). At all events, the sex ual misconduct, sexist remarks, loss of Evans's negotia ted privileges, and other events that took place before Evans

left Durham are themselves sufficient to sustain a hostile work environment claim. Taken as a whole, the Distr ict Court's findings indicate an environment that rises to the level of pervasiveness and severity required tofind a hostile work environment. The post-employment actions are a lso significant; we address them infra Subsection IV.A. 3.

IV. Back Pay

A. Evans's Entitlement to Back Pay

Title VII allows back pay awards when an employee d oes not leave her employment voluntarily. In this case, Evans must establish that she did not quit voluntarily; t hat is, that she was constructively discharged because a reasonable person would have found her working conditions intolerable. Durham contends that any

actionable harassment occurred five to seven months before Evans left and thus that Evans deserves no back pay . The District Court found otherwise. According to itsfin dings, the disappearance of Evans's files and the deprivat ion of her office right before she left constituted the cu lmination of a series of harassing events, making a formerly unpleasant job unbearable.

Durham argues that Evans was not constructively discharged when she was forced to follow an office policy forbidding agents from having their own offices, th e event that precipitated her departure. We disagree, for e ssentially

the same reasons that we conclude that Evans suffer ed adverse employment action. Constructive discharge e xists if "the conduct complained of would have the foreseeab le result that working conditions would be so unpleasa nt or difficult that a reasonable person in the employee' s shoes

25would resign." Goss, 747 F.2d at 887-88. Goss found that

a reassignment to a less lucrative territory could constitute a constructive discharge, based on the substantial pay cut involved and the employee's loss of confidence in h erself and her employer. See id. at 888-89. The facts here are quite similar. Although there is no need for a "str aw that

broke the camel's back" when the discrimination has continued over an extended time, see Aman, 85 F.3d at 1084, the loss of Evans's office and files constitu ted a substantial worsening of her working conditions at

Durham. The District Court found that she could har dly

have continued work at all without her files and mo ney orders. Thus, the facts as determined by the Distri ct Court support the conclusion that Evans was constructivel y discharged.

B. The Back Pay Calculation

Back pay calculations are reviewed for abuse of discretion. See Booker v. Taylor Milk Co., Inc., 64 F.3d 860, 867 (3d Cir. 1995). Back pay may be awarded even if an exact dollar calculation is impossible. See Christo pher v. Stouder Mem'l Hosp., 936 F.2d 870, 880 (6th Cir. 19 91). The court may estimate what a claimant's earnings w ould have been without discrimination, and uncertainties are resolved against a discriminating employer. See Woo ldridge v. Marlene Indus. Corp., 875 F.2d 540, 549 (6th Cir . 1989); Taylor v. Central Penn. Drug & Alcohol Servs. Corp. , 890 F. Supp. 360, 370 (M.D. Pa. 1995).

1. Evans's Base Salary

Durham argues that the District Court used the wron g base salary for Evans because it used Evans's 1992 salary even though she left in 1993. This meant the differ ence between $119,000 and $66,000, or $53,000 per year. Durham cites to other cases that used a plaintiff's salary on the last day of employment to calculate back pay, e ven though the harassment had preceded that last day. Durham's precedents are easily distinguishable, bec ause they concern cases of harassment that did not have a tangible impact on plaintiffs' compensation. See, e .g., Virgo v. Riviera Beach Assoc., Ltd., 30 F.3d 1350 (11th C ir. 1994). If Durham's argument were to be accepted, then it w ould be

26to a discriminator's advantage to increase its mist reatment

from a hostile environment to a decrease in pay, so that any ultimate penalty would be minimized. Evans's at tempts to deal with the discrimination without quitting, d espite the negative effects on her salary, should not be held against

her.

The District Court did not abuse its discretion whe n it used Evans's salary from 1992, the last full year b efore the discrimination began, as the benchmark. Because Eva ns's salary when she left was less than a nondiscriminat ory salary would have been, it should not be used as th e benchmark. See EEOC v. Delight Wholesale Co., 973 F .2d 664, 668, 670 (8th Cir. 1994); cf. Gunby v. Pennsyl vania Elec. Co., 840 F.2d 1108, 1119 (3d Cir. 1988) (back pay should be the difference between actual wages and t he wages the plaintiff would have earned absent discrimination). Evans consistently earned $90,000 per year in the last few years before she came to Durha m, and she was a leading producer at Durham, earning $128, 000 and then $119,000. It was reasonable to conclude th at, but for the discrimination, Evans would have continued her outstanding performance. Cf. Goss, 747 F.2d at 889 (upholding the District Court's calculation of comm issions lost through discrimination because the estimates w ere reasonably based on the plaintiff's past performanc e);11 Gallo, 779 F. Supp. at 808 (calculating back pay on a commission basis and taking into account plaintiff' s demonstrated ability to get commissions).

2. Evans's Earnings at Paul Revere

According to Durham, Evans made $65,955 in 1993, of which she earned $15,000 at Paul Revere. At $5000 p er month, this was more than the $4200 per month she m ade at Durham. Ordinarily, there is no entitlement to b ack pay

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11. Goss is particularly apposite, because in that case, as here, the employer was undergoing some turmoil that arguably exerted downward pressure on everyone's commissions. Exxon objected to the District Court's choice of a base year because, it argued, t hat year was not representative of the new order. See Goss, 747 F.2d at 889. The court rejected Exxon's claim because the wrongdoer should bear the risk of uncertainty, not the victim. See id.

27when the claimant makes more money at another job t han

she could have made at her former job. Durham sugge sts that Evans is therefore not entitled to any back pa y.

There are two reasons that Durham's claim fails. Fi rst,

because we find that the District Court did not abu se its discretion when it chose 1992 as the benchmark year , it follows that Evans was earning almost $10,000 per m onth in the absence of discrimination, and so she did no t get a "better-paying" job for back pay purposes. Second, Evans's success at Paul Revere was short-lived, and ended i n February 1994. After that, she made substantially l ess per month, and it would be both unfair and illogical--i n the absence of a finding that she unreasonably failed t o mitigate her damages--to reduce her award by the su ms that Durham projects that she could have earned. Significantly, the court found that her decline was caused by Durham's actions against her, which ultimately l ed her to take disability leave from Paul Revere. Because Durham's conduct affirmatively impaired her ability to mitigate her damages, it would be inequitable to re duce her back pay award in this case.

3. Durham's Post-employment Actions Against Evans

Anticipating this response to Durham's back pay argument, Durham contends that there is no support in the record for the proposition that adverse actions aga inst Evans after her employment ended justify continuing the back pay award. In particular, Durham notes that th ere are no findings that it retaliated against Evans for en gaging in a protected activity.

The District Court apparently did not discuss retal iation because it treated the post-employment actions as continuing discrimination. Post-employment actions by an employer can constitute discrimination under Title VII if they hurt a plaintiff's employment prospects. See P asser v. American Chem. Soc'y, 935 F.2d 322, 331 (D.C. Cir. 1991) (ADEA case); London v. Coopers & Lybrand, 644 F.2d 811, 816 (9th Cir. 1981); Shehadeh v. Chesapeake & Potom ac Tel. Co., 595 F.2d 711, 719-21 (D.C. Cir. 1978); Da ley v. St. Agnes Hosp., Inc., 490 F. Supp. 1309, 1313 (E.D. Pa . 1980). The lawsuit against Evans and the complaints to the

28Insurance Department had the potential to affect he r ability

to sell insurance, and the District Court found tha t she was powerfully affected because of the anxiety created by the investigation. This kind of threat to Evans's livel ihood is sufficiently employment-related to be an employment action. See Charlton v. Paramus Bd. of Educ., 25 F. 3d 194, 198 (3rd Cir. 1994) (post-employment threat to a te acher's license constituted employment action). The conclus ion that the post-employment actions were a continuation of the initial discrimination seems plausible in light of the finding that, during her employment with Durham, her agency manager impliedly threatened to file a lawsuit agai nst Evans if she were to quit after the discrimination began. Furthermore, Durham's conduct in filing suit agains t Evans for replacing sixteen policies while ignoring the c onduct of a man who transferred 170 policies could support th e inference that the lawsuit was filed for discrimina tory, not simply retaliatory, reasons.

Evans further argues that the evidence would suppor t upholding the District Court on a claim of post-emp loyment retaliatory conduct. Title VII prohibits retaliatio n against employees who engage in a protected activity such a s stating a claim of discrimination (as Evans did in her resignation letter) and filing suit. See 42 U.S.C. S 2000e-3(a). We agree that the facts found by the District Court would support a retaliation claim. Durham, ci ting Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 741 (1983), responds that filing a lawsuit against Evan s for breach of her non-competition agreement cannot form the

basis of a retaliation claim unless the lawsuit lac ked a

reasonable basis because of Durham's First Amendmen t right to take disputes to the courts. Bill Johnson' s, however, construed a specific, ambiguous provision of the NL RA defining unfair labor practices. Its reasoning has not been extended to Title VII, in part because the prohibit ion on retaliation is so explicit and the public policy be hind the retaliation provision so compelling.

In addition, Durham took other post-employment acti ons besides filing the lawsuit against Evans, and we ne ed not rely on the lawsuit to find retaliatory conduct. Jo hn Heyman, an agency manager, failed to conduct a full audit

29of Evans's accounts, contrary to industry custom an d to

Durham's own policies. Because Evans's accounts wer e left up in the air, policyholders made inquiries that ul timately became complaints when payments that should have be en prepaid were not made.

Durham states that the "evidence is clear" that the complaint letters about Evans came from policyholde rs and were not solicited by Durham. Yet the evidence supp orts

the conclusion that it was Durham's unusual inactio n that set the entire process in motion. Rather than actin g in its own self-interest and keeping Evans's former client s satisfied with their Durham policies, the record sh ows that Durham allowed record-keeping problems to escalate into complaints. Durham also sent letters to all of Evan s's clients that arguably encouraged such complaints. T he complaints only targeted Evans despite the concurre nt

involvement of a man in 75% of the relevant cases. 12

Most importantly, as a result of the complaints, th e Pennsylvania Insurance Department investigated Evan s. Durham contends that the investigation occurred wit hout Durham's urging. But that is a disputed issue and, at all events, it could be inferred that the investigation would not have happened but for Durham's arguably discriminat ory failure to audit Evans's accounts properly. In addi tion, unprompted by the Insurance Department, Heyman sent it information mistakenly indicating that Evans had

committed a serious offense. Evans testified to the seriousness of the resulting charges and the negati ve effects this series of events had on her ability to continue

her insurance work.

These facts resemble those in other cases in which courts have found retaliation when an employer instigates

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12. Heyman and others testified that they refused t o return phone calls when anyone called to ask about Evans's policies af ter she left. Durham apparently reads this testimony to suggest that its employees did not instigate any complaints. After the somewhat distur bing letter they sent to Evans's former customers, however, policyholders might well be more likely to write out a complaint, and to name the on ly person whose name they knew, at least if no one else at the insurance company would answer questions about the policies.

30government action against a former employee. See Be rry v.

Stevinson Chevrolet, 74 F.3d 980, 985 (10th Cir. 19 96) (encouraging a person to report the suspected crime of a former employee can be retaliation); Beckham v. Gra nd Affair, Inc., 671 F. Supp. 415, 419 (W.D.N.C. 1987) (reporting a former employee for criminal trespass can be actionable retaliation); see also EEOC v. Virginia Carolina Veneer Corp., 495 F. Supp. 775, 777 (W.D. Va. 1980) (filing a state law defamation claim against an ex-employee is impermissible retaliation), appeal dismissed, 652 F .2d 380 (4th Cir. 1981). These cases reasoned that such ins tigation could constitute a retaliatory adverse employment a ction because government investigation can hurt a person' s employment prospects. The same reasoning would supp ort a finding that post-employment attempts to get a pe rson investigated can be employment discrimination. Cf. Charlton, 25 F.3d at 198 (suggesting that post-empl oyment action might sustain a claim of discrimination as w ell as of retaliation).

In sum, we conclude that Durham's post-employment acts against Evans at the very least prevent Durham from arguing that Evans unreasonably failed to mitigate her damages, which is the only way Durham could avoid a back pay award under these circumstances.13

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13. Evans argues that the District Court erred by m iscomputing her back pay. Durham responds that she should have made a post-trial motion to correct the judgment under Fed. R. Civ. P . 52(b). Rule 59(e) would be more appropriate, as Rule 52(b) concernsfi ndings and their effects on the judgment rather than errors in the j udgment alone, but the general point is well taken. See Perez v. Cucci , 932 F.2d 1058, 1059 (3d Cir. 1991) (Rule 59(e) should be used to challe nge inclusion of back pay award). The miscomputation alleged is a bit con fusing, since Evans argues that the court attributed too much to her in employer matching pension funds and then too little in lost compensat ion, resulting in a figure that was in total too low. It is not clear h ow she derived this calculation, because the District Court's award doe s not set forth amounts for specific categories of loss. This does not seem to be a clerical mistake, which would be correctable under Rule 60(a). Back pay is within the discretion of the District Court, and we do not have reason

to conclude that the District Court abused its disc retion.

31V. The Collective Bargaining Agreement and the

Covenant Not To Compete

Durham appeals the dismissal of its claim against E vans for breach of her noncompetition agreement, which w as part of her employment contract under the former co llective bargaining agreement. Durham also contends that the agreement required Evans to pursue a grievance rath er than litigating her harassment complaint as a count erclaim in the lawsuit against her. We reject these argumen ts because they are contradicted by the District Court 's fact findings, which are not clearly erroneous.

A. The Covenant Not To Compete

The District Court found that Biancardi, the region al vice president who was handling the negotiations with th e union, told Evans and others that the covenant not to compete was abrogated and that the union contract, which had incorporated the noncompetition covenant, was n ot in effect. This finding was not clearly erroneous. The District Court further concluded that Biancardi, as a region al vice president and an official negotiator with the union , had authority to bind Durham by his statement. Evans wa s entitled to rely on his representation that the cov enant no longer bound her. Although Durham argues that the collective bargaining agreement (CBA) was in effect , it does not contest this latter finding. Given Biancardi's position of authority, we agree with the District Court that Du rham was estopped from enforcing the covenant not to com pete against Evans.

B. Grievance Under the Collective Bargaining Agreem ent

Durham argues that the CBA remained mostly in effec t during the new contract negotiations. Even though t he CBA had formally expired, Durham avers, Evans was requi red to grieve instead of filing suit because both the comp any and

the union treated the CBA as if it were still in ef fect. The District Court found that the CBA had been abrogate d when Durham unilaterally decreased agents' compensa tion. Durham argues that the union acceded to the change and suggests that, if the District Court had been corre ct, the union certainly would have filed an unfair labor pr actice

32charge.14 There are many reasons the union might no t file

a charge or grievance it was legally entitled tofil e; in the midst of the upheaval caused by Durham's management changes, the union might have preferred to attempt to resolve disputes amicably. The important point is t hat the District Court did not clearly err when it found th at the compensation was not changed by mutual agreement, e ven though the union ultimately acquiesced.

We are also satisfied that the District Court did n ot clearly err in finding that Biancardi had the autho rity to

bind Durham when he told Evans that the CBA was no longer effective. Employer repudiation generally es tops an

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14. Paradoxically, this seems to be a concession th at the arbitration clause was no longer in effect, since only then wou ld an unfair labor practice charge be the appropriate remedy for a com pensation change. Under Litton Financial Printing Div. v. NLRB, 501 U .S. 190 (1991), an arbitration clause does not generally continue in e ffect after a CBA expires. If the employer makes a unilateral change in benefits instead of bargaining, a union must generally file an unfair l abor practice charge rather than arbitrating. The issue is complicated b y Luden's Inc. v. Local Union No. 6, 28 F.3d 347, 355-56 (3d Cir. 1994), no t cited by the parties. Under Luden's, an arbitration clause in a lapsed CB A will continue in effect until one side clearly indicates through wor ds or conduct that it

no longer wishes to be bound. The termination of the C BA does not generally signal an intent to abandon arbitration, and discontent with other aspects of the CBA (such as compensation prov isions) does not mean that an arbitration obligation ends when the C BA terminates. See

id. at 356. Biancardi's acts take this case out of the ambit of Luden's. We also point out, although the parties have not do ne so, that it is not clear that the CBA, even if it remained in effect, would require Evans to grieve instead of filing suit. See Alexander v. Gar dner-Denver Co., 415 U.S. 36 (1974). Alexander has been limited by Gilme r v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), but that decision did not address the situation in which a CBA, negotiate d to enforce collective rights, requires arbitration; it concerned an agree ment directly between employer and employee limiting individual statutory rights. See Nieves v. Individualized Shirts, 961 F. Supp. 782, 790-92 (D. N.J. 1997). The Supreme Court recently declined to decide whether a n explicit waiver of federal statutory rights could be enforced, see Wri ght v. Universal Maritime Serv. Corp., 119 S. Ct. 391 (1998), and, a s we resolve the arbitration issue on other grounds, we decline to a ddress the issue today, especially as the parties have devoted no ar gument to the law in

this area.

33employer from claiming that a plaintiff should have grieved

first. See Hendricks v. Edgewater Steel Co., 898 F. 2d 385, 388 (3d Cir. 1990); Garcia v. Eidal Int'l Corp., 80 8 F.2d 717, 722 (10th Cir. 1986) (where, as company ownership w as changing, the new company did not explicitly repudi ate

arbitration but did indicate that the contract no l onger existed, an inference of repudiation was justified) ; Kaylor v. Crown Zellerbach, Inc., 643 F.2d 1362, 1366 (9th Ci r. 1981) (company's lawyer denied that company was bound by CBA; company was estopped from demanding that plain tiffs grieve before litigating); Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870, 975-76 (3d Cir. 1972) (when the employer first stated that it was working under the old contract and then said no contract existed, it had repudiated the contract and grievance was not requi red).

VI. Intentional Infliction of Emotional Distress

Durham argues that the $100,000 awarded for intentional infliction of emotional distress ("IIED ") is preempted by Pennsylvania worker's compensation law

, which provides that worker's compensation is the ex clusive remedy for injuries arising in the course of a work er's employment. See 77 Pa. Cons. Stat. Ann. S 481(a). T he worker's compensation law excepts from its preempti ve scope employee injuries caused by the intentional c onduct of third parties for reasons personal to the tortfe asor and not directed against him as an employee or because of his employment. See id. S 411(1). Cases interpreting Pennsylvania law are split on the propriety of allo wing IIED claims for sexual harassment on the job. Courts hav e allowed such claims where the injury arose from harassment "personal in nature and not part of the proper employer-employee relationship." Hoy v. Angelone, 6 91 A.2d 476, 482 (Pa. Super. Ct. 1997), aff'd on other grou nds, 720 A.2d 745 (Pa. 1998); see also Schweitzer v. Rockwel l Int'l, 586 A.2d 383, 391 (Pa. Super. Ct. 1990) (harassment is personal and not part of the legitimate employer/em ployee relationship).

Other cases, however, have found preemption in simi lar circumstances. See, e.g., Hicks v. Arthur, 843 F. S upp. 949, 958 (E.D. Pa. 1994) (harassment of a group of black

34employees did not stem from "personal animosity" an d any

black would have been discriminated against, so IIE D was preempted). In Winterberg v. Transportation Insuran ce Co., 72 F.3d 318 (3d Cir. 1995), we concluded that egreg ious misbehavior in handling a worker's compensation cla im was preempted because the Pennsylvania law has a br oad intent to preempt common law torts "in matters argu ably connected with work-related injuries." Id. at 322. The attempt to harm Evans, a "successful woman," was arguably directed at Evans as an employee, since it

stemmed from Evans's success at Durham.15

Evans responds that her IIED claim is not preempted because many of the acts she found so devastating

occurred after she left Durham. The District Court considered this quite relevant. Claims for damages arising from post-employment conduct have been found not to be preempted by workers' compensation laws in other jurisdictions.16 We are not convinced, however, tha t the

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15. We thus suspect that a claim of Evans's sort wo uld be preempted. We understand Pennsylvania law to extend worker's c ompensation preemption to personal animosity that develops from work-related events. See Hammerstein v. Lindsay, 655 A.2d 597, 6 01 (Pa. Super. Ct. 1995) (where animosity develops because of work-rel ated disputes, worker's compensation is the exclusive remedy); Sha ffer v. Procter & Gamble, 604 A.2d 289 (Pa. Super. Ct. 1992) (where a n employee was injured on the job and wrongfully denied treatment, IIED was preempted because it could have happened to any employee who got injured); cf. Konstantopoulos v. Westvaco Co., 112 F.3d 710, 723 (3d Cir. 1997) (discussing the Delaware Supreme Court's determinat ion that similar IIED suits are preempted under Delaware worker's co mpensation law). Sexual harassment is a well-recognized workplace pr oblem, the kind of thing employers must be prepared to combat. Because it is like other workplace hazards, we suspect that Pennsylvania wou ld find IIED claims based on this kind of harassment to be preempted. B ut we cannot be sure, and we express no opinion as to whether an II ED claim for

harassment more disconnected from the work situatio n would be preempted, for example where a supervisor sexually assaulted an employee or stalked her outside of work. Ellerth a nd Faragher may also have an impact on this area of the law, as those ca ses to some degree render the distinction between employment-related a nd purely personal discriminatory motives irrelevant to employer liabi lity.

16. See Caldwell v. Federal Express Corp., 908 F. S upp. 29, 33 (D. Me. 1995); Kroger Co. v. Willgruber, 920 S.W.2d 61, 64 (Ky. 1996); Cagle v.

35post-employment actions in this case, distinguished from

what went before, are sufficiently egregious on the ir own to rise to the level of IIED, although Durham did not raise this issue in its papers.

We need not rule on the sufficiency of the postemployment conduct, however, because we hold that t he emotional distress award may be sustained under 42 U.S.C. S 1981a(b)(3), which authorizes compensatory damages under Title VII for "emotional pain, suffer ing, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses." The District Court' s findings are adequate to meet the standard for reco very of damages for emotional harm under Title VII.17 At or al argument, counsel for Durham conceded as much. See Murray v. United of Omaha Life Ins. Co., 145 F.3d 1 43, 157 (3d Cir. 1998) (where the jury's implicit findings were consistent with the correct legal standard despite incorrect instruction, its verdict could be upheld on appeal) . 18

Conclusion

For all the foregoing reasons, the judgment of the District Court will be affirmed. Costs shall be taxed agains t Appellant/Cross-Appellee Durham.

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Burns & Roe, Inc., 726 P.2d 434, 439 (Wash. 1986). But see Bertrand v. Quincy Market Cold Storage & Warehouse Co., 728 F.2 d 568, 572 (1st Cir. 1984) (where most of the offensive conduct too k place before employment ended, IIED was preempted under Massachu setts law); Ely v. Wal-Mart, Inc., 875 F. Supp. 1422, 1429 (C.D. Ca l. 1995) (IIED for post-employment acts was preempted).

17. Although we are skeptical that the facts of thi s case are sufficiently egregious to establish IIED, see Hoy v. Angelone, 7 20 A.2d 745 (Pa. 1998), Durham does not contest the adequacy of Evan s's claim on appeal, only its legal availability.

18. Evans also appeals the decision not to award pu nitive damages against Durham. This was not an abuse of the Distri ct Court's discretion and we will not overturn it on appeal. See East Coa st Tender Serv. v. Robert T. Winzinger, Inc., 759 F.2d 280, 284 (3d Ci r. 1985).

36WEIS, Circuit Judge, concurring.

Relying on language in Burlington Industries, Inc. v. Ellerth, 118 S. Ct. 2257 (1998) and Faragher v. Cit y of Boca Raton, 118 S. Ct. 2275 (1998), the majority conclud es that because the harassing supervisors took adverse employment action, defendant Durham may not present a defense based on the plaintiff's failure to utilize the employer's grievance procedure.

The majority correctly observes that the Ellerth a nd Faragher opinions distinguish between situations in which tangible adverse employment action occurred and tho se in which it has not (i.e., a sexually hostile environm ent but no tangible adverse action). See Ellerth, 118 S. Ct. a t 2270; Faragher, 118 S. Ct. at 2292-93. This distinction, used in the context of defining the scope and imposition of vicarious liability, is understandable and readily applied. The case before us, however, has elements of both a hostile environment claim and a claim for discriminatory ad verse employment action and may appropriately be termed a "mixed" one. In these circumstances, it is insuffic ient simply to point to the distinction; Ellerth and Far agher compel discussion of other considerations.

Faragher emphasized that Title VII's primary object ive "is not to provide redress, but to avoid harm." 118 S. Ct. at 2292 (citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 417 (1975)). The Court observed that a defense stru ctured to recognize the employer's affirmative obligations would implement clear statutory policy by rewarding emplo yers who make reasonable efforts to discharge their duty and help prevent sexual harassment. See id. (discussing Title VII, and the regulations and policies of the Equal Employment Opportunity Commission).

Similar language appears in Ellerth. There, the Cou rt reiterated that Title VII encourages the creation o f antiharassment policies and effective grievance procedu res. See Ellerth, 118 S. Ct. at 2270. As the Court observed, "[w]ere employer liability to depend in part on an employer 's effort to create such procedures, it would effect Congress ' intention to promote conciliation rather than litig ation in the Title VII context." Id. Moreover, "[t]o the ext ent limiting

37employer liability could encourage employees to rep ort

harassing conduct before it becomes severe or perva sive, it would also serve Title VII's deterrent purpose." Id

.

Both opinions also expressly endorse, as consistent with Title VII, a framework that places some onus on the victims of sexual harassment to report it to their employer s. Ellerth recognized that "Title VII borrows from tort law th e avoidable consequences doctrine." Id. (citing Ford Motor Co. v. EEOC, 458 U.S. 219, 232 n.15 (1982)). Faragher e choed this proposition: "[i]f the plaintiff unreasonably failed to avail herself of the employer's preventive or remed ial apparatus, she should not recover damages that coul d have

been avoided if she had done so." 118 S. Ct. at 229 2.

Affording employers an affirmative defense serves t wo purposes. First, it supports the imposition of vica rious liability when a supervisor subjects a subordinate to a hostile environment. Second, it prevents litigation by encouraging the creation of effective grievance pro cedures and the settlement of cases, as well as discouragin g wouldbe plaintiffs who have failed to take advantage of preventive procedures.

Allowing the defense in hostile environment cases s erves both purposes, but denying it in mixed cases defeat s the second, arguably where the defense is most needed. Both types of harm could be avoided if employers created effective procedures and employees utilized them. I n a case where tangible adverse actions could have been avoi ded had the plaintiff-victim reported the escalating pa ttern of harassment, preclusion of the defense lacks a logic al

foundation.

In this case, the plaintiff experienced harassment over a period of many months before any adverse employment action occurred. Without belaboring the details, it appears that the various harassing incidents occurred in Ma rch, April, May, June and July 1993. The tangible advers e employment actions discussed by the majority, howev er, occurred later: plaintiff's secretary was not disch arged until July 1993 and the plaintiff did not lose her office or her files until September 1993.

38Defendant Durham argues that had the plaintiff repo rted

the harassing conduct that took place before July 1 993, it would have had an opportunity to correct the situat ion and thereby forestall the later adverse actions taken b y the plaintiff's superiors. Given Ellerth and Faragher's exposition of the rationale underlying the defense, that argum ent has some force. Unlike the majority, I do not discount that argument but believe that the employer has failed t o establish a right to the defense on an entirely dif ferent ground.

I would affirm the judgment in this case because Du rham did not show that its grievance procedure was adequ ate to satisfy the standards set out in Ellerth and Faragh er. The District Court found that "Evans was never given an y literature or provided any information about the pr ocedure to report sexual harassment and had no idea where s uch information could be obtained." An effective employ er policy, however, is one that has been disseminated to all employees and that provides an assurance that the harassing supervisor can be bypassed in registering a complaint. See Faragher, 118 S. Ct. at 2293. Durham 's policy met neither of these requirements. Therefore , having failed to establish the most basic requirement for invocation of the affirmative defense, i.e., an effective grie vance procedure, Durham was not entitled to its protectio n.

Because I join in all other portions of the majorit y opinion, I would affirm.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

39