1999 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-15-1999

Durham Life Ins Co v. Evans

Precedential or Non-Precedential:

Docket 97-1683,97-1712

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1999

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 1999 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

Recommended Citation

"Durham Life Ins Co v. Evans" (1999). 1999 Decisions. Paper 9.

http://digitalcommons.law.villanova.edu/thirdcircuit_1999/9
Filed 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 ("Peoples") on 

Evans's Title VII sex discrimination counterclaim; in favor 

of Durham/Peoples on Evans's claim for punitive damages; 

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 comes 

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 Industries, 

Inc. v. Ellerth, 118 S. Ct. 2257 (1998), requires us to 

explicate several of the ways in which employers may be 

held liable under Faragher and Ellerth. In the course of so 

doing, we must also flesh out the notion of tangible adverse 

action. 

Evans was a successful life insurance salesperson 

earning close to six figures with Metropolitan Life Insurance 

 2 
Co. when she was recruited away and began working for 

Durham. She enjoyed even greater success in herfirst 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 evidence, 

essentially credited by the District Court, the new

management resented her for being a successful woman 

and set out to undermine her, humiliating her personally 

with sexist remarks and crude sexual advances, and 

stripping her of the support she needed to do her job, 

support that had been a negotiated condition of her

employment at Durham. Ultimately, when her private office 

was taken away and critical files mysteriously disappeared, 

she resigned and began to work for a competing insurance 

company. Durham thereupon sued Evans, seeking an 

injunction and damages for breach of a noncompetition 

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 had 

suffered a hostile work environment. It entered judgment in 

her favor for $310,156 in lost earnings and fringe benefits 

and $100,000 for intentional infliction of emotional 

distress. It found against Evans on her defamation claim. 

Durham makes numerous claims on appeal. (We will now 

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 were so 

few and far between and their veracity so suspect that we 

should set the verdict aside as clearly erroneous. We 

decline that invitation. Durham also disputes its liability for 

the acts of its supervisory employees under Ellerth and 

Faragher. We conclude that Durham is not entitled to the 

affirmative defense that Evans unreasonably failed to use 

an available effective sexual harassment policy because the 

defense is only available in the absence of tangible adverse 

employment action, and Evans suffered such adverse 

action. The concept of a tangible adverse employment 

action is not limited to changes in compensation, although 

Evans's pay was certainly affected by the actions taken 

 3 
against her. "Tangible adverse employment action" includes 

the loss of significant job benefits or characteristics, such 

as the resources necessary for an employee to do his or her 

job; that Evans suffered such loss is detailed infra. 

Durham also contends that it is not liable for intentional 

infliction of emotional distress because Pennsylvania 

workers' compensation law preempts Evans's claim. 

Ultimately we need not resolve this difficult question, 

because we find that the award may be upheld under Title 

VII. Additionally, Evans challenges the District Court'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 pay 

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 not 

to compete and argues that the collective bargaining 

agreement required her to grieve rather than sue. The 

District Court found that a vice president's statement to 

Evans that the covenant and the collective bargaining 

agreement were no longer in force estops Durham from 

enforcing them against her. This finding is not clearly 

erroneous. In view of all these conclusions, we will 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 trial, see 

Keith v. Truck Stops Corp., 909 F.2d 743, 745 (3d Cir. 

1990), showed the following facts. Evans was an extremely 

successful life insurance salesperson. She worked at Met 

Life for seventeen years, and in her last few years there she 

consistently earned $90,000 per year. Durham recruited 

her in 1991, promising her that she would have her own 

office and secretary, as well as unlimited phone and 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 covered 

 4 
by the collective bargaining agreement in place between 

Durham and its agents while that agreement was in effect. 

Durham was a "home service" or "debit" insurance 

company whose business generally came from door-to-door 

sales. Evans, however, was recruited as an "ordinary life 

agent," which meant that she sold a different type of policy. 

She worked almost exclusively from her office, encouraging 

existing debit customers to upgrade their policies. Evans's 

special skills and support system facilitated her success in 

the new job. She earned $128,000 in 1991 and $119,000 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 Peoples 

managers took over in October. Evans was the only fulltime female life insurance agent at that location; there were 

thirty male agents. The collective bargaining agreement 

between Durham and its agents expired in November 1992. 

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 collective 

bargaining agreement and the non-competition agreement 

were no longer in force. After that time, no new collective 

bargaining agreement was put in place. 

The new managers, particularly William McKaskill and 

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 insurance 

company: Her clothes and shoes were too expensive and 

she dressed too well for the job. McKaskill told her that she 

"made too much money for a goddamn woman." In March

1993, William Owens, the acting agency manager, asked 

Evans to go dancing "into the fields with him" and 

reminded her that he had the power to fire her if she did 

not behave as he wished. The next morning, he placed a 

newspaper article on her desk discussing a large verdict 

_________________________________________________________________ 

1. McKaskill and Sebastionelli were Associate Customer Service Unit 

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

 5 
that Peoples had obtained against another life insurance 

company because of an agent who moved business from

Peoples to the other company. At that time, Owens told her 

that if she reported the previous night's incident or if she 

quit and tried to take her business with her, Peoples would 

sue and "attach her house before she left the courtroom." 

Evans was frightened but did nothing because she wanted 

to succeed in the restructured company. 

Evans suffered repeated slights from the new 

management. At an awards dinner, the top-selling agents 

were honored for selling more than $25,000 in premiums 

during a set period of time. Evans was the top producer, 

but while the exact sales numbers of the male agents were 

announced, Evans was only identified as selling in excess 

of the required minimum. Evans felt that she had been 

humiliated in front of her colleagues and her son, who was 

also present. At a training session in June 1993, she was 

publicly mocked for her walk and her speech by Chuck 

Gardner, an agency sales manager. Evans tried to retain 

the business of an important client, the Mercy Votech 

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 the 

account. Evans testified that male agents routinely received 

legal help when necessary. When she tried to explain to 

McKaskill what had happened, he cut her off and asked, 

"What do you know about annuities, you're only a woman." 

The new managers fired Evans's secretary and attempted 

to get her to leave her private office. McKaskill came into 

her office and began to use it as his own on several 

occasions, disrupting Evans's work and ignoring her

discomfort and embarrassment. In June or July 1993,

McKaskill grabbed Evans's buttocks from behind while she 

was bending over her files and told her that she smelled 

good. She immediately left the office and never entered it 

again when McKaskill was at her desk. She did not report 

the incident because she wanted to avoid further 

humiliation and because she believed that McKaskill's 

position would allow him to decide her fate. 

 6 
Management assigned Evans numerous "lapsed books," 

policies that were no longer active because the policyholders had switched insurance companies. The agent

assigned to a lapsed book was supposed to try to reactivate 

the policies. These were debit policies rather than the 

ordinary policies with which Evans was used to dealing. 

Evans initially responded to the changes by working hard 

on the lapsed books and performing well. However, because 

of the way commissions were calculated, the assignment 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 instructed her 

to clear her furniture out of her office and assemble her 

files for the move. Evans complied, but when she returned 

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 her 

former office was now his conference room. La Grossa 

testified that Owens and McKaskill had pressured him 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 her 

files. Her files were uniquely important to her because, in 

the transition from the Durham computer system to the 

Peoples system, billing problems had developed for certain 

customer accounts. As a result, Evans was authorized to 

open a special bank account in which she would deposit 

pre-paid premiums and then pay the premiums as they

came due using money orders and small amounts of cash, 

which were kept with her files. On the day she was told 

that she had lost her office, she also discovered that her 

files, including the money orders and cash, were gone. At 

that point, Evans concluded that she had been effectively 

fired because it was impossible for her to work without her 

files. A few days later, Evans sent a resignation letter 

stating that she was resigning based on the sex 

discrimination she had suffered and that she would pursue 

her legal remedies. 

 7 
After her resignation letter, Evans three times requested 

a final audit of her accounts. It is industry policy, and also 

the policy of both Durham and Peoples, to allow an agent 

a final exit audit upon request when he or she leaves an 

insurance company's employ. It was Heyman's duty as

agency manager to assume responsibility for Evans'sfiles 

after she left the company until another salesperson was 

assigned her customers and "book of business." Heyman 

refused her audit requests because he believed that she 

was not entitled to an audit and because he was already 

conducting an audit of Evans's debit book of business. 

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 ordinary 

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 Revere. 

At Paul Revere, Evans replaced sixteen Durham/Peoples 

policies with Paul Revere policies. A male agent, Tom 

Burke, had moved to a different insurance company and 

replaced 170 Durham/Peoples policies, and Durham had 

not taken any action against him. Instead, Durham had 

assigned those lapsed policies to Evans. 

If Heyman had conducted a final audit or allowed Evans 

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 there 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 inquiries 

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 application and 

policy, but only Evans was mentioned in the complaint 

letters. 

 8 
Early 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-competition 

agreement). Also in 1994, Heyman sent a letter to the 

Pennsylvania Insurance Department that inaccurately

stated that Evans had filed only two of five replacement 

forms required to replace certain policies. Heyman knew 

that failure to file replacement forms was a serious offense 

that would subject Evans to investigation and probably 

sanctions by the Insurance Department. 

Before the events described above, Evans was in good 

mental health. After Peoples took over, she began to suffer 

from chest pains, severe headaches, nausea, and shortness 

of breath. When she started work at Paul Revere, her health 

improved, and she was in the management program at Paul 

Revere. She was the leading agency producer there until 

the litigation and the complaints to the Insurance 

Department began. After the lawsuit began and she learned 

of the complaints, her performance at Paul Revere declined 

sharply. She became absentminded, unable to concentrate 

on her duties, and obsessed with the litigation. According 

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 but 

for the fact that she is on partial disability. Currently, 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 fact, the 

reviewing court, after examining all the evidence, must be 

left with a definite and firm conviction that a mistake has 

been committed. When there are two permissible views of 

the evidence, the district court's choice between them 

cannot be clearly erroneous. See Ezold v. Wolf, Block, 

Schorr & Solis-Cohen, 983 F.2d 509, 525 (3d Cir. 1992). 

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

credibility contest. Evans says that certain incidents 

occurred and that Durham's managers had discriminatory 

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 resurrect 

its factual claims on appeal are unavailing.2 Although 

testimony on Durham's side contradicts Evans's, her story 

is facially plausible, and the district judge credited it. We 

see no basis for finding clear error here. See Anderson v. 

City of Bessemer City, 470 U.S. 564, 575 (1985) (when a 

district judge credits one of two opposed coherent and 

facially plausible stories and the story is not contradicted 

by extrinsic evidence, "that finding, if not internally 

inconsistent, can virtually never be clear error").

Durham complains that the District Court adopted 

Evans's proposed findings of fact with little alteration. 

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 LansfordCoaldale Water Auth. v. Tonolli Corp., 4 F.3d 1209, 1215 

(3d Cir. 1993). The District Court's discussion following its 

findings of fact demonstrated a keen familiarity with the 

record. Moreover, the court declined to adopt all of Evans's 

proposed findings, which shows that it was exercising 

independent judgment.3 

_________________________________________________________________ 

2. The McKaskill incident is an example. Evans testified that McKaskill 

grabbed her buttocks from behind. No one else witnessed it and she did 

not tell anyone about it until the lawsuit. Durham argues that she is 

therefore not credible. Durham repeats these arguments 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 (3d Cir. 1995); 

Government of Virgin Islands v. Gereau, 502 F.2d 914, 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 complaint" requirement 

in Title VII is the statute of limitations, and Evans'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 was occasionally 

 10 
Durham's main objection to the District Court'sfindings 

appears to be that the court aggregated numerous events to 

support its finding of a hostile work environment. Some of 

these events were apparently triggered by sexual desire, 

some were sexually hostile, some were non-sexual but 

gender-based, and others were facially neutral. Wefind no 

error, because Title VII may be applied to all of these types 

of conduct. 

Title VII prohibits sex discrimination. Although"sex" 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 desire or 

hatred. Likewise, hostile or paternalistic acts based on 

perceptions about womanhood or manhood are sex-based 

or "gender-based." 

"Gender" has often been used to distinguish socially- or 

culturally-based differences between men and women from 

biologically-based sex differences, but we have not

considered "sex" and "gender" to be distinct concepts for 

Title VII purposes. See Price Waterhouse v. Hopkins, 490 

U.S. 228, 250-51 (1989) (plurality opinion) (holding that 

reliance on gendered stereotypes of appropriate female 

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. denied, 

117 S. Ct. 2532 (1997); Wilson v. Susquehanna Township 

_________________________________________________________________ 

confused about when exactly certain incidents occurred, 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 from Evans's 

resignation, the less plausible is her claim that discrimination 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). 

 11 
Police Dep't, 55 F.3d 126 (3d Cir. 1995) (characterizing 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 plus the 

overt sex discrimination, both sexual and non-sexual, in 

sum constituted the hostile work environment. See Aman v. 

Cort Furniture Rental Corp., 85 F.3d 1074, 1083 (3d Cir. 

1996) (acts of harassment, if motivated by sex or race, 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 evaluated 

as a whole when we consider whether Evans proved her 

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 ambiguities. A 

 play cannot be understood on the basis of some of its 

 scenes but only on its entire performance, and 

 similarly, a discrimination analysis must concentrate 

 not on individual incidents, but on the overall scenario. 

Id. at 1484; see also Vicki Schultz, Reconceptualizing 

Sexual Harassment, 107 Yale L.J. 1683 (1998) (arguing that 

non-sexual harassment is often a major part of a hostile 

work environment). In its appeal, Durham attempts to 

disaggregate the various allegedly discriminatory acts and 

endeavors to cast doubt on each one, arguing that the 

overtly sexual acts did not occur and that the non-sexual 

actions taken against Evans have innocent explanations. 

We conclude, however, that the District Court appropriately 

refused to consider each incident in a vacuum and that 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 Durham 

 12 
presents extensive evidence and argument about its antiharassment policies, we find that they are not relevant 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 Court stated that it did 

not 

see this case as a "disparate treatment" case, but as a "hostile work 

environment" case. Thus, Durham suggests, only evidence of sexualized 

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

alone is insufficient. The District Court's characterization lacks 

analytic 

precision. Hostile work environment claims are founded in Title VII's 

prohibition of unequal treatment of men and women; the hostile 

environment here consisted of abuse that a man in Evans's position 

would not have suffered. Perhaps the District Court simply meant that 

there was no other employee who had Evans's abilities and her specially 

negotiated benefits, so that there was no similarly situated person who 

could have been better treated. In any event, the Supreme Court has 

now made clear that labels such as "hostile work environment" 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 reached by Chief Judge 

Becker, he cannot agree that the discussion of when and how the 

affirmative defense provided by the holdings in Burlington 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 attempted clarification 

of that defense, see infra, have a place in the opinion. 

As Judge Garth reads the Supreme Court decisions, their holdings are 

unequivocal and are directly applicable to this appeal without extending 

the analysis beyond the facts of this case. Ms. Evans 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 supervisors' behavior. Here, 

Ms. Evans was the subject of a tangible adverse employment action, the 

District Court found that her supervisors were responsible for her 

constructive discharge and the District Court returned 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 liability to a victimized 

employee for an actionable hostile environment created by a supervisor 

with immediate (or successively higher) authority over the employee." 
 13 
Durham argues that the District Court applied the wrong 

liability standard because the Supreme Court's recent 

sexual harassment liability decisions substantially

reshaped the law. In Ellerth and Faragher, the Supreme 

Court drew a line between (1) discriminatory work-related 

supervisory acts, such as discriminating against women in 

work assignments to placate pervasive male hostility or 

reprimanding women "in harsh or vulgar terms" while

merely bantering with men for identical behavior, and 

(2) expressing sexual interest "in ways having no apparent 

object whatever of serving an interest of the employer." 

Faragher, 118 S. Ct. at 2289. 

_________________________________________________________________ 

Ellerth, 118 S. Ct. at 2270; Faragher, 118 S. Ct. at 2293. Judge Garth 

believes that is all the Court is called upon to review through the lens 

of 

Ellerth and Faragher and he agrees that the District Court properly 

entered judgment in favor of Ms. Evans. 

However, Judge Garth takes no position and disassociates 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 the second holding 

of Ellerth and Faragher. This second holding provides that "[w]hen no 

tangible employment action is taken, a defending employer may raise an 

affirmative defense to liability or damages," Ellerth, 118 S. Ct. at 2270; 

Faragher, 118 S. Ct. at 2293, and specifies the elements that must be 

established for the defense to prevail. (To the extent that Judge Weis in 

his concurring opinion would make an affirmative defense available even 

when a tangible adverse employment action resulted, Judge Garth 

rejects his analysis as being contrary to and in derogation of the 

explicit 

holdings of Ellerth and Faragher). 

In the present case, there is no issue that requires resort to the second 

holding, and Judge Garth fears that unnecessary examples and 

discussion, even in an attempt to enlighten the bar and bench, may only 

lead to confusion when it does not clarify the standards to which this 

Court must adhere. In a case such as this one, where Ms. Evans was 

constructively discharged by her supervisors' action after their own 

actionable behavior, the holdings and instruction of Ellerth and Faragher 

are clear: the employer, Durham Life Insurance Company, 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. 

 14 
The first kind of discrimination, the Court concluded, 

would automatically subject the employer to liability 

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 within the 

scope of employment when they are " `of the kind [a

servant] is employed to perform,' occurring `substantially 

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 willful tort will 

properly be held to be in the course of employment and 

that the liability of the master for such torts will naturally 

be more limited.' " Ellerth, 118 S. Ct. at 2266 (quoting 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 conflicting 

cases on scope of employment, and concluding that sexual 

harassment by a supervisor is generally not within the 

scope of employment, see id. at 2267, went on to parse the 

second category more carefully. In cases of harassment 

falling outside the scope of employment, the Court found, 

the employer could be vicariously liable when the"tortious 

conduct is made possible or facilitated by the existence of 

the actual agency relationship." Faragher, 118 S. Ct. at 

2290. The Ellerth/Faragher "aided by the agency relation" 

test is divided into two categories: 

 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 

 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 elements: 

 (a) that the employer exercised reasonable care to 

 prevent and correct promptly any sexually harassing 

 behavior, and (b) that the plaintiff employee 

 unreasonably failed to take advantage of any preventive 

 15 
 or corrective opportunities provided by the employer or 

 to avoid harm otherwise. . . . No affirmative defense is 

 available, however, when the supervisor's harassment 

 culminates in a tangible employment action, such as 

 discharge, demotion, or undesirable reassignment. 

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

2292-93. 

The aided by the agency relationship test is not, however, 

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 VII 

jurisprudence. In a definitional sense, scope of employment 

plays no role in the Ellerth/Faragher test as such. But a 

sexual harassment plaintiff might still argue, in an attempt 

to avoid the affirmative defense, that the harassment she 

suffered falls within the scope of employment because her 

harassers intended, at least in part, to serve their employer. 

For example, the District Court found that McKaskill 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 could 

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 agents, 

which qualities the harassers apparently regarded as linked 

to her womanhood. 

Although a scope of employment analysis would be 

theoretically possible here, we apply the Ellerth/Faragher 

aided by the agency relation test. We would have great 

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 believe that 

we can better evaluate Evans's claim by asking whether her 

harassers were aided by the harassment by the agency 

relation. More generally, we suggest that harassment that 

could be analyzed as falling within the scope of employment 

because of a supervisor's biased beliefs about a class of 

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

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) 

_________________________________________________________________ 

6. We note that despite the Court's attempt to attain "categorical 

clarity," 

Faragher, 118 S. Ct. at 2290, there is a potential overlap between 

harassment falling within the scope of employment and harassment 

aided by the agency relationship, for "scope of employment" and "aided 

by the agency relation" are not hermetically sealed concepts. Both may 

fit the facts of a case, yet point towards dramatically different 

liability 

standards, since only in an "aided by the agency relation" situation is 

the affirmative defense potentially available. 

An example will elucidate the point. If a male supervisor 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, since the explicit sexual 

misbehavior would suggest an aided by the agency relationship analysis, 

while the disparate treatment with respect to work-related activities 

would put the problem within the scope of employment. Even though 

unwelcome remarks and touching might be done to gratify the harasser's 

own desires, this situation would fall within the scope of employment 

because the harassment would be the supervisor's manner of giving out 

otherwise authorized reprimands to women. Giving reprimands 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 instructs that the act be 

done differently. See Ellerth, 118 S. Ct. at 2266. Although we doubt such 

situations occur with any frequency, the example helps develop the issue 

analytically. 

The Court's conclusion that sexual harassment will ordinarily fall 

outside the scope of employment connotes an expectation that sexual 

harassment is often connected only opportunistically 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 workforce when he deploys 

sexual harassment as a weapon to drive female workers away. See, e.g., 

Steiner v. Showboat Operating Co., 25 F.3d 1459, 1463 (9th Cir. 1994) 

(finding that a supervisor used sexual harassment to reprimand a female 

employee for her perceived failings as a worker rather than to fulfill his 

desires). There are other cases in which sexual harassment seems 

fundamentally connected to the work situation, as when it is part of a 

campaign against women in nontraditional jobs. See, e.g., Annis v. 
 17 
County of Westchester, 36 F.3d 251 (2d Cir. 1994); Bohen v. City of East 

Chicago, 799 F.2d 1180 (7th Cir. 1986); see also Schultz, supra, at 

1755-61 (suggesting that a desire to preserve a masculine image of work 

often motivates sexual harassment). A supervisor who dislikes women for 

personal reasons may be predisposed to believe, however 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 were better workers. Yet 

it will often be difficult to distinguish personal misogyny falling 

outside 

the scope of employment from misogyny directed at female workers. 

Does a supervisor who satisfies his sexual urges by targeting women he 

perceives as worthless to his employer's business act sufficiently within 

the scope of his employment? 

It is therefore difficult to reconcile intent as the touchstone of "scope 

of employment" with Ellerth's blunt statement that "[t]he general rule is 

that sexual harassment by a supervisor is not conduct within the scope 

of employment." Ellerth, 118 S. Ct. at 2267. We could, of course, 

understand this as a factual prediction, particularly 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 cogent explanation that 

"scope of employment" is ultimately a question of law, not fact, 

expressing a court's conclusion that it is appropriate to hold an employer 

liable for its agents' acts in a particular case. See Faragher, 118 S. Ct. 

at 2287-88. 

In Faragher itself, supervisors, in the course of carrying out their 

supervisory duties, repeatedly subjected female lifeguards to uninvited 

and offensive touching and to lewd and discriminatory remarks. See id. 

at 2280. The Court rejected the argument that harassment is a risk that 

employers should fairly be required to bear as a cost of doing business 

and that this kind of harassment should therefore be 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 social policy to apply 

the 

aided by the agency relation test to the facts of that case. See id. at 

2292. In short, "scope of employment" is not a sharply delineated 

concept in law or logic, and that is what makes it so troublesome. We 

 18 
employment remains an elusive concept, while the Supreme 

Court has given us clearer instructions on how to 

determine liability under the aided by the agency relation 

standard. We are also mindful of the Supreme Court's 

stated reason for formulating the affirmative defense, the 

need to give employers incentives to establish antiharassment programs, see Ellerth, 118 S. Ct. at 2270, and 

believe that too broad an interpretation of scope of 

employment might make effective anti-harassment 

programs irrelevant to employer liability in many hostile 

environment cases, undermining the Court's intent. 

However, we need not resolve the almost metaphysical 

questions surrounding scope of employment today, for 

under Ellerth and Faragher's aided by the agency relation 

test, sex-based mistreatment by a supervisor--whether 

overtly sexual or facially neutral and whether motivated by 

lust or by dislike--creates automatic liability when it rises 

to the level of a tangible adverse employment action. 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 the employer 

responsible for harassment. A supervisor can only take a 

tangible adverse employment action because of the 

authority delegated by the employer, see Ellerth, 118 S. Ct. 

at 2269, and thus the employer is properly charged with 

the consequences of that delegation.7 As we will now 

_________________________________________________________________ 

also note our belief that the aided by the agency relation test is 

similarly 

a product of legal and policy considerations, and the Court may yet have 

occasion to revisit the issue to clarify the remaining 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 supervisor, and thus aided by 

the agency relationship. Conversely, if there is no tangible adverse 

employment action and the employer does prove due care and 

unreasonable employee behavior, the employer's anti-harassment efforts 

and the opportunities for redress it offered a harassed employee will 

generally justify the conclusion that the employer should not be required 

to bear the costs of supervisory harassment. That is, the aided by the 

agency relation standard seems to us to reflect a value judgment, not a 

 19 
explain, Evans suffered tangible adverse employment

action. Hence we find that the evidence here easily satisfies 

the Ellerth/Faragher aided by the agency relation test.8 

B. Tangible Adverse Employment Action 

The Supreme Court has defined a tangible employment

action as "a significant change in employment status, such 

as hiring, firing, failing to promote, reassignment with 

significantly different responsibilities, or a decision causing 

a significant change in benefits." Ellerth, 118 S. Ct. at 2268. 

According to Durham, none of the behavior described by 

Evans constitutes a tangible adverse employment action, 

and thus it is entitled to prevail on its affirmative 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 Durham 

does not dispute, that a secretary and a private office were 

specific, negotiated conditions of Evans's move to 

Durham/Peoples. Evans also testified that, given the way 

she dealt with her accounts, a secretary was necessary to 

enable her to work successfully. Durham entirely ignores 

the loss of Evans's secretary, who was paid $20,000 per 

year--hardly a small sum. Given Evans's need for office 

_________________________________________________________________ 

natural category, balancing the employer's right to be free from 

automatic liability against employees' right to a workplace that 

discourages and redresses harassment. See Faragher, 118 S. Ct. at 

2291. Thus, for actionable harassment that occurs without any tangible 

employment action, the aided by the agency relation test may be 

tantamount to the failure of the employer's affirmative defense, which 

forms the contours of the liability test. The affirmative defense remains 

a defense and not an element of the plaintiff's case 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 makes him the 

employer's alter ego; cases in which the employer intended the 

harasser's conduct; cases in which the employee reasonably, but 

wrongly, believes that the harasser is a supervisor; and cases in which 

the employer is negligent. See Ellerth, 118 S. Ct. at 2267. 

 20 
support to sustain her successful way of doing her whole 

life insurance business, depriving her of a secretary and an 

office could constitute a tangible adverse action even if 

none of the other agents had negotiated for those benefits. 

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 extra 

burden on the plaintiff to prove discrimination). Finally, 

Evans resigned when her office was stripped from her 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 if it led 

the affected employee to quit before the demotion took 

effect. This is contrary to Title VII doctrine, which 

recognizes a constructive discharge under such 

circumstances. See Goss v. Exxon Office Sys. Co., 747 F.2d 

885 (3d Cir. 1984). 

Durham also asserts that Evans's missing files cannot be 

an adverse employment action. The District Court, by 

contrast, found that it was impossible for Evans to work 

without her files. If the files were vital to her work, the 

District Court could find that their disappearance under 

suspicious circumstances was a tangible adverse 

employment action.9 Although direct economic harm is an 

important indicator of a tangible adverse employment 

action, it is not the sine qua non. If an employer's act 

substantially decreases an employee's earning potential and 

causes significant disruption in his or her working

conditions, a tangible adverse employment action may be 

found. See Booker v. Budget Rent-a-Car Sys., 17 F. Supp. 

2d 735 (M.D. Tenn. 1998). 

_________________________________________________________________ 

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 thefiles would support the 

conclusion that their disappearance was evidence of discrimination. Cf. 

Aman, 85 F.3d at 1083 (missing time cards, false accusations of 

wrongdoing, and others' refusal to cooperate with the 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). 

 21 
Durham further contends that Evans's alleged harassers 

had no control over giving her lapsed books of business. 

Durham states that male agents also had to take lapsed 

books and that Evans ultimately received "lapse relief," 

which meant that her pay was not decreased as much as 

the normal rules would have mandated based on her large 

number of lapsed policies. In addition, Evans had the 

highest guaranteed salary in the agency. As a result, 

Durham argues, the lapse assignments did not constitute 

tangible adverse action. The record suggests, however, 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 more 

lapsed policies than other (male) agents, so that she 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 enough to 

be a tangible adverse action.10 We conclude that the 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 actions 

under Ellerth and Faragher. 

On its face, this conclusion would appear to preclude 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 against 

her. Durham asserts that, if Evans had reported the

harassment at that point, it would have investigated and 

stopped the problem, and that it should therefore prevail on 

its affirmative defense. However, we decline to investigate 

_________________________________________________________________ 

10. Evans hotly disputed the claim that she was offered lapse relief, and 

the district judge was entitled to credit her testimony. Evans's high 

guaranteed salary is also less relevant than Durham claims. Most of her 

earnings were expected to come from commissions; from 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 management changed 

and those who ultimately harassed her assumed positions of power. 

 22 
whether, if Evans had complained early on, the sexual 

harassment policy at Durham would have prevented the 

tangible adverse actions that occurred afterwards. The 

difficulty of making such a counterfactual inquiry counsels 

against injecting this question into already-complex 

discrimination cases, particularly at the appellate level with 

a closed record. While we need not decide the question 

now, we are fearful that, were we to allow an affirmative 

defense every time an employer could argue that the

plaintiff had some non-tangible notice of discrimination 

before adverse action was taken against her, the 

Ellerth/Faragher distinction between cases with tangible 

adverse action and cases without such action would 

become hopelessly confused. 

We note in this regard that it seems untoward to give 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. This is 

particularly true because the plaintiff's evidence that 

adverse action was sex-based will often include evidence of 

prior discriminatory behavior; Durham's proposed standard 

would have the perverse effect of putting a greater burden 

on plaintiffs who had extensive evidence of discrimination. 

It would also make the affirmative defense applicable in 

quid pro quo cases, since threats generally are made before 

they are acted upon and put their recipients on notice of 

what is coming next. Yet that is exactly the opposite of the 

holding of Ellerth. The Ellerth/Faragher rule is clear: 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)); Ellerth, 118 

S. Ct. at 2270 (same); id. at 2269 ("When a supervisor 

makes a tangible employment decision, there is assurance 

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 employment 

action against a subordinate."). If there is some scenario 

 23 
that will permit such a legal strategem, it does not 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 automatic 

liability. Although we think that the other evidence 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 that 

McKaskill was part of the ruling "triumvirate" in Evans's 

office. As an associate Customer Service Unit Leader, he 

was two levels above Evans according to Durham's own 

chart. He was part of the three-person team that decided to 

get Evans's direct supervisor to strip her office from her 

and to instigate Durham's lawsuit against her. In general, 

complete authority to act on the employer's behalf without 

the agreement of others is not necessary to meet Title VII's 

agency standard for supervisor liability. See Bonenberger v. 

Plymouth Township, 132 F.3d 20, 23 (3d Cir. 1997). That 

McKaskill might not have had the authority to act alone 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 level of 

severity and pervasiveness needed to find a hostile

environment. Durham characterizes the events to which 

Evans testified as "sporadic misbehavior." However, it is 

settled law that courts should not consider each incident of 

harassment in isolation. See Andrews, 895 F.2d at 1484. 

Rather, a court must evaluate the sum total of abuse over 

time. Evans has done more than identify isolated incidents 

of what Durham characterizes as "horseplay." She has 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 environment. 

Durham also claims that most of the conduct of which 

Evans complains occurred after her employment ended and 

 24 
thus cannot sustain a hostile work environment claim. 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 Ins. 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 sexual 

misconduct, sexist remarks, loss of Evans's negotiated 

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 District 

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 also 

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 does 

not leave her employment voluntarily. In this case, Evans 

must establish that she did not quit voluntarily; that 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 itsfindings, 

the disappearance of Evans's files and the deprivation of 

her office right before she left constituted the culmination 

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, the event 

that precipitated her departure. We disagree, for essentially 

the same reasons that we conclude that Evans suffered 

adverse employment action. Constructive discharge exists if 

"the conduct complained of would have the foreseeable 

result that working conditions would be so unpleasant or 

difficult that a reasonable person in the employee's shoes 

 25 
would 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 herself 

and her employer. See id. at 888-89. The facts here are 

quite similar. Although there is no need for a "straw 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 constituted a 

substantial worsening of her working conditions at 

Durham. The District Court found that she could hardly 

have continued work at all without her files and money 

orders. Thus, the facts as determined by the District Court 

support the conclusion that Evans was constructively 

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 Christopher v. 

Stouder Mem'l Hosp., 936 F.2d 870, 880 (6th Cir. 1991). 

The court may estimate what a claimant's earnings would 

have been without discrimination, and uncertainties are 

resolved against a discriminating employer. See Wooldridge 

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 wrong 

base salary for Evans because it used Evans's 1992 salary 

even though she left in 1993. This meant the difference 

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, even 

though the harassment had preceded that last day. 

Durham's precedents are easily distinguishable, because 

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 Cir. 1994). 

If Durham's argument were to be accepted, then it would be 

 26 
to a discriminator's advantage to increase its mistreatment 

from a hostile environment to a decrease in pay, so that 

any ultimate penalty would be minimized. Evans's attempts 

to deal with the discrimination without quitting, despite the 

negative effects on her salary, should not be held against 

her. 

The District Court did not abuse its discretion when it 

used Evans's salary from 1992, the last full year before the 

discrimination began, as the benchmark. Because Evans's 

salary when she left was less than a nondiscriminatory 

salary would have been, it should not be used as the 

benchmark. See EEOC v. Delight Wholesale Co., 973 F.2d 

664, 668, 670 (8th Cir. 1994); cf. Gunby v. Pennsylvania 

Elec. Co., 840 F.2d 1108, 1119 (3d Cir. 1988) (back pay 

should be the difference between actual wages and the 

wages the plaintiff would have earned absent 

discrimination). Evans consistently earned $90,000 per 

year in the last few years before she came to Durham, and 

she was a leading producer at Durham, earning $128,000 

and then $119,000. It was reasonable to conclude that, 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 commissions 

lost through discrimination because the estimates were 

reasonably based on the plaintiff's past performance);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 per 

month, this was more than the $4200 per month she made 

at Durham. Ordinarily, there is no entitlement to back pay 

_________________________________________________________________ 

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, that 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. 

 27 
when the claimant makes more money at another job than 

she could have made at her former job. Durham suggests 

that Evans is therefore not entitled to any back pay. 

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

because we find that the District Court did not abuse its 

discretion when it chose 1992 as the benchmark year, it 

follows that Evans was earning almost $10,000 per month 

in the absence of discrimination, and so she did not get a 

"better-paying" job for back pay purposes. Second, Evans's 

success at Paul Revere was short-lived, and ended in 

February 1994. After that, she made substantially less per 

month, and it would be both unfair and illogical--in the 

absence of a finding that she unreasonably failed to 

mitigate her damages--to reduce her award by the sums 

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 led 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 reduce 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 against 

Evans after her employment ended justify continuing the 

back pay award. In particular, Durham notes that there are 

no findings that it retaliated against Evans for engaging in 

a protected activity. 

The District Court apparently did not discuss retaliation 

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 Passer 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 & Potomac 

Tel. Co., 595 F.2d 711, 719-21 (D.C. Cir. 1978); Daley v. St. 

Agnes Hosp., Inc., 490 F. Supp. 1309, 1313 (E.D. Pa. 1980). 

The lawsuit against Evans and the complaints to the

 28 
Insurance Department had the potential to affect her ability 

to sell insurance, and the District Court found that she was 

powerfully affected because of the anxiety created by the 

investigation. This kind of threat to Evans's livelihood 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 teacher's 

license constituted employment action). The conclusion 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 against 

Evans if she were to quit after the discrimination began. 

Furthermore, Durham's conduct in filing suit against Evans 

for replacing sixteen policies while ignoring the conduct of 

a man who transferred 170 policies could support the 

inference that the lawsuit was filed for discriminatory, not 

simply retaliatory, reasons. 

Evans further argues that the evidence would support 

upholding the District Court on a claim of post-employment 

retaliatory conduct. Title VII prohibits retaliation against 

employees who engage in a protected activity such as 

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, citing Bill 

Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 741 

(1983), responds that filing a lawsuit against Evans for 

breach of her non-competition agreement cannot form the 

basis of a retaliation claim unless the lawsuit lacked a 

reasonable basis because of Durham's First Amendment 

right to take disputes to the courts. Bill Johnson's, however, 

construed a specific, ambiguous provision of the NLRA 

defining unfair labor practices. Its reasoning has not been 

extended to Title VII, in part because the prohibition on 

retaliation is so explicit and the public policy behind the 

retaliation provision so compelling. 

In addition, Durham took other post-employment actions 

besides filing the lawsuit against Evans, and we need not 

rely on the lawsuit to find retaliatory conduct. John 

Heyman, an agency manager, failed to conduct a full audit 

 29 
of Evans's accounts, contrary to industry custom and to 

Durham's own policies. Because Evans's accounts were left 

up in the air, policyholders made inquiries that ultimately 

became complaints when payments that should have been 

prepaid were not made. 

Durham states that the "evidence is clear" that the

complaint letters about Evans came from policyholders and 

were not solicited by Durham. Yet the evidence supports 

the conclusion that it was Durham's unusual inaction that 

set the entire process in motion. Rather than acting in its 

own self-interest and keeping Evans's former clients 

satisfied with their Durham policies, the record shows that 

Durham allowed record-keeping problems to escalate into 

complaints. Durham also sent letters to all of Evans's 

clients that arguably encouraged such complaints. The 

complaints only targeted Evans despite the concurrent 

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

Most importantly, as a result of the complaints, the 

Pennsylvania Insurance Department investigated Evans. 

Durham contends that the investigation occurred without 

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 discriminatory 

failure to audit Evans's accounts properly. In addition, 

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 negative 

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 

_________________________________________________________________ 

12. Heyman and others testified that they refused to return phone calls 

when anyone called to ask about Evans's policies after she left. Durham 

apparently reads this testimony to suggest that its employees did not 

instigate any complaints. After the somewhat disturbing letter they sent 

to Evans's former customers, however, policyholders might well be more 

likely to write out a complaint, and to name the only person whose name 

they knew, at least if no one else at the insurance company would 

answer questions about the policies. 

 30 
government action against a former employee. See Berry v. 

Stevinson Chevrolet, 74 F.3d 980, 985 (10th Cir. 1996) 

(encouraging a person to report the suspected crime of a 

former employee can be retaliation); Beckham v. Grand 

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 instigation 

could constitute a retaliatory adverse employment action 

because government investigation can hurt a person's 

employment prospects. The same reasoning would support 

a finding that post-employment attempts to get a person 

investigated can be employment discrimination. Cf. 

Charlton, 25 F.3d at 198 (suggesting that post-employment 

action might sustain a claim of discrimination as well 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 

_________________________________________________________________ 

13. Evans argues that the District Court erred by miscomputing 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) concernsfindings and their 

effects on the judgment rather than errors in the judgment 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 challenge inclusion of back 

pay award). The miscomputation alleged is a bit confusing, since Evans 

argues that the court attributed too much to her in employer matching 

pension funds and then too little in lost compensation, resulting in a 

figure that was in total too low. It is not clear how she derived this 

calculation, because the District Court's award does 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 discretion. 

 31 
V. The Collective Bargaining Agreement and the 

Covenant Not To Compete 

Durham appeals the dismissal of its claim against Evans 

for breach of her noncompetition agreement, which was 

part of her employment contract under the former collective 

bargaining agreement. Durham also contends that the

agreement required Evans to pursue a grievance rather 

than litigating her harassment complaint as a counterclaim 

in the lawsuit against her. We reject these arguments 

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 regional vice 

president who was handling the negotiations with the 

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 not in 

effect. This finding was not clearly erroneous. The District 

Court further concluded that Biancardi, as a regional vice 

president and an official negotiator with the union, had 

authority to bind Durham by his statement. Evans was 

entitled to rely on his representation that the covenant 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 Durham 

was estopped from enforcing the covenant not to compete 

against Evans. 

B. Grievance Under the Collective Bargaining Agreement 

Durham argues that the CBA remained mostly in effect 

during the new contract negotiations. Even though the CBA 

had formally expired, Durham avers, Evans was required to 

grieve instead of filing suit because both the company and 

the union treated the CBA as if it were still in effect. The 

District Court found that the CBA had been abrogated 

when Durham unilaterally decreased agents' compensation. 

Durham argues that the union acceded to the change and 

suggests that, if the District Court had been correct, the 

union certainly would have filed an unfair labor practice 

 32 
charge.14 There are many reasons the union might not file 

a charge or grievance it was legally entitled tofile; 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 that the 

District Court did not clearly err when it found that the 

compensation was not changed by mutual agreement, even 

though the union ultimately acquiesced. 

We are also satisfied that the District Court did not 

clearly err in finding that Biancardi had the authority to 

bind Durham when he told Evans that the CBA was no 

longer effective. Employer repudiation generally estops an 

_________________________________________________________________ 

14. Paradoxically, this seems to be a concession that the arbitration 

clause was no longer in effect, since only then would an unfair labor 

practice charge be the appropriate remedy for a compensation change. 

Under Litton Financial Printing Div. v. NLRB, 501 U.S. 190 (1991), an 

arbitration clause does not generally continue in effect after a CBA 

expires. If the employer makes a unilateral change in benefits instead of 

bargaining, a union must generally file an unfair labor practice charge 

rather than arbitrating. The issue is complicated by Luden's Inc. v. Local 

Union No. 6, 28 F.3d 347, 355-56 (3d Cir. 1994), not cited by the parties. 

Under Luden's, an arbitration clause in a lapsed CBA will continue in 

effect until one side clearly indicates through words or conduct that it 

no 

longer wishes to be bound. The termination of the CBA does not 

generally signal an intent to abandon arbitration, and discontent with 

other aspects of the CBA (such as compensation provisions) does not 

mean that an arbitration obligation ends when the CBA 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 done 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. Gardner-Denver Co., 415 

U.S. 36 (1974). Alexander has been limited by Gilmer v. 

Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), but that decision did 

not address the situation in which a CBA, negotiated to enforce collective 

rights, requires arbitration; it concerned an agreement 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 an explicit waiver of 

federal statutory rights could be enforced, see Wright v. Universal 

Maritime Serv. Corp., 119 S. Ct. 391 (1998), and, as we resolve the 

arbitration issue on other grounds, we decline to address the issue 

today, especially as the parties have devoted no argument to the law in 

this area. 

 33 
employer 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., 808 F.2d 717, 

722 (10th Cir. 1986) (where, as company ownership was 

changing, the new company did not explicitly repudiate 

arbitration but did indicate that the contract no longer 

existed, an inference of repudiation was justified); Kaylor v. 

Crown Zellerbach, Inc., 643 F.2d 1362, 1366 (9th Cir. 1981) 

(company's lawyer denied that company was bound by 

CBA; company was estopped from demanding that plaintiffs 

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 required). 

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 exclusive 

remedy for injuries arising in the course of a worker's 

employment. See 77 Pa. Cons. Stat. Ann. S 481(a). The 

worker's compensation law excepts from its preemptive 

scope employee injuries caused by the intentional conduct 

of third parties for reasons personal to the tortfeasor 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 allowing IIED 

claims for sexual harassment on the job. Courts have 

allowed such claims where the injury arose from 

harassment "personal in nature and not part of the proper 

employer-employee relationship." Hoy v. Angelone, 691 A.2d 

476, 482 (Pa. Super. Ct. 1997), aff'd on other grounds, 720 

A.2d 745 (Pa. 1998); see also Schweitzer v. Rockwell Int'l, 

586 A.2d 383, 391 (Pa. Super. Ct. 1990) (harassment is 

personal and not part of the legitimate employer/employee 

relationship). 

Other cases, however, have found preemption in similar 

circumstances. See, e.g., Hicks v. Arthur, 843 F. Supp. 949, 

958 (E.D. Pa. 1994) (harassment of a group of black

 34 
employees did not stem from "personal animosity" and any 

black would have been discriminated against, so IIED was 

preempted). In Winterberg v. Transportation Insurance Co., 

72 F.3d 318 (3d Cir. 1995), we concluded that egregious 

misbehavior in handling a worker's compensation claim 

was preempted because the Pennsylvania law has a broad 

intent to preempt common law torts "in matters arguably 

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, that the 

_________________________________________________________________ 

15. We thus suspect that a claim of Evans's sort would be preempted. 

We understand Pennsylvania law to extend worker's compensation 

preemption to personal animosity that develops from work-related 

events. See Hammerstein v. Lindsay, 655 A.2d 597, 601 (Pa. Super. Ct. 

1995) (where animosity develops because of work-related disputes, 

worker's compensation is the exclusive remedy); Shaffer v. Procter & 

Gamble, 604 A.2d 289 (Pa. Super. Ct. 1992) (where an 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 determination that similar 

IIED suits are preempted under Delaware worker's compensation law). 

Sexual harassment is a well-recognized workplace problem, the kind of 

thing employers must be prepared to combat. Because it is like other 

workplace hazards, we suspect that Pennsylvania would find IIED claims 

based on this kind of harassment to be preempted. But we cannot be 

sure, and we express no opinion as to whether an IIED claim for 

harassment more disconnected from the work situation would be 

preempted, for example where a supervisor sexually assaulted an 

employee or stalked her outside of work. Ellerth and Faragher may also 

have an impact on this area of the law, as those cases to some degree 

render the distinction between employment-related and purely personal 

discriminatory motives irrelevant to employer liability. 

16. See Caldwell v. Federal Express Corp., 908 F. Supp. 29, 33 (D. Me. 

1995); Kroger Co. v. Willgruber, 920 S.W.2d 61, 64 (Ky. 1996); Cagle v. 

 35 
post-employment actions in this case, distinguished from 

what went before, are sufficiently egregious on their 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 the 

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, suffering, 

inconvenience, mental anguish, loss of enjoyment of life, 

and other nonpecuniary losses." The District Court's 

findings are adequate to meet the standard for recovery of 

damages for emotional harm under Title VII.17 At oral 

argument, counsel for Durham conceded as much. See 

Murray v. United of Omaha Life Ins. Co., 145 F.3d 143, 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 against 

Appellant/Cross-Appellee Durham. 

_________________________________________________________________ 

Burns & Roe, Inc., 726 P.2d 434, 439 (Wash. 1986). But see Bertrand v. 

Quincy Market Cold Storage & Warehouse Co., 728 F.2d 568, 572 (1st 

Cir. 1984) (where most of the offensive conduct took place before 

employment ended, IIED was preempted under Massachusetts law); Ely 

v. Wal-Mart, Inc., 875 F. Supp. 1422, 1429 (C.D. Cal. 1995) (IIED for 

post-employment acts was preempted). 

17. Although we are skeptical that the facts of this case are sufficiently 

egregious to establish IIED, see Hoy v. Angelone, 720 A.2d 745 (Pa. 

1998), Durham does not contest the adequacy of Evans's claim on 

appeal, only its legal availability. 

18. Evans also appeals the decision not to award punitive damages 

against Durham. This was not an abuse of the District Court's discretion 

and we will not overturn it on appeal. See East Coast Tender Serv. v. 

Robert T. Winzinger, Inc., 759 F.2d 280, 284 (3d Cir. 1985). 

 36 
WEIS, Circuit Judge, concurring. 

Relying on language in Burlington Industries, Inc. v. 

Ellerth, 118 S. Ct. 2257 (1998) and Faragher v. City of Boca 

Raton, 118 S. Ct. 2275 (1998), the majority concludes 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 and 

Faragher opinions distinguish between situations in which 

tangible adverse employment action occurred and those in 

which it has not (i.e., a sexually hostile environment but no 

tangible adverse action). See Ellerth, 118 S. Ct. at 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 adverse 

employment action and may appropriately be termed a

"mixed" one. In these circumstances, it is insufficient 

simply to point to the distinction; Ellerth and Faragher 

compel discussion of other considerations. 

Faragher emphasized that Title VII's primary objective "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 structured 

to recognize the employer's affirmative obligations would 

implement clear statutory policy by rewarding employers 

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 Court 

reiterated that Title VII encourages the creation of antiharassment policies and effective grievance procedures. 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 litigation in 

the Title VII context." Id. Moreover, "[t]o the extent limiting 

 37 
employer liability could encourage employees to report 

harassing conduct before it becomes severe or pervasive, 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 employers. Ellerth 

recognized that "Title VII borrows from tort law the 

avoidable consequences doctrine." Id. (citing Ford Motor Co. 

v. EEOC, 458 U.S. 219, 232 n.15 (1982)). Faragher echoed 

this proposition: "[i]f the plaintiff unreasonably failed to 

avail herself of the employer's preventive or remedial 

apparatus, she should not recover damages that could have 

been avoided if she had done so." 118 S. Ct. at 2292. 

Affording employers an affirmative defense serves two 

purposes. First, it supports the imposition of vicarious 

liability when a supervisor subjects a subordinate to a 

hostile environment. Second, it prevents litigation by 

encouraging the creation of effective grievance procedures 

and the settlement of cases, as well as discouraging wouldbe plaintiffs who have failed to take advantage of preventive 

procedures. 

Allowing the defense in hostile environment cases serves 

both purposes, but denying it in mixed cases defeats 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. In a case 

where tangible adverse actions could have been avoided 

had the plaintiff-victim reported the escalating pattern of 

harassment, preclusion of the defense lacks a logical 

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 March, 

April, May, June and July 1993. The tangible adverse 

employment actions discussed by the majority, however, 

occurred later: plaintiff's secretary was not discharged until 

July 1993 and the plaintiff did not lose her office or her 

files until September 1993. 

 38 
Defendant Durham argues that had the plaintiff reported 

the harassing conduct that took place before July 1993, it 

would have had an opportunity to correct the situation and 

thereby forestall the later adverse actions taken by the 

plaintiff's superiors. Given Ellerth and Faragher's exposition 

of the rationale underlying the defense, that argument has 

some force. Unlike the majority, I do not discount that 

argument but believe that the employer has failed to 

establish a right to the defense on an entirely different 

ground. 

I would affirm the judgment in this case because Durham 

did not show that its grievance procedure was adequate to 

satisfy the standards set out in Ellerth and Faragher. The 

District Court found that "Evans was never given any 

literature or provided any information about the procedure 

to report sexual harassment and had no idea where such 

information could be obtained." An effective employer 

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 grievance 

procedure, Durham was not entitled to its protection. 

Because I join in all other portions of the majority 

opinion, I would affirm. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 39