In the

United States Court of Appeals

For the Seventh Circuit

No. 08-3203

DAVID FARR,

Plaintiff-Appellant,

v.

ST. FRANCIS HOSPITAL AND HEALTH CENTERS,

Defendant-Appellee.

Appeal from the United States District Court

for the Southern District of Indiana, Indianapolis Division.

No. 06 C 779—Sarah Evans Barker, Judge.

ARGUED JUNE 1, 2009—DECIDED JUNE 29, 2009

Before EASTERBROOK, Chief Judge, and BAUER and

EVANS, Circuit Judges.

EVANS, Circuit Judge. David Farr contends that he was

fired from his employment at St. Francis Hospital and

Health Centers in Indianapolis because he is a man. He

filed this action alleging sex discrimination in employment, 42 U.S.C. § 2000e-2(a)(1), and, as relevant to

this appeal, he tacked on pendent state law claims for

defamation and breach of the covenant of fair dealing.
2 No. 08-3203

The state law claims were dismissed and, later, summary

judgment was granted on the discrimination claim. Both

decisions are subject to our de novo review on Farr’s

appeal. Village of DePue, Ill. v. Exxon Mobil Corp. 537 F.3d

775 (7th Cir. 2008); Jackson v. County of Racine, 474 F.3d

493 (7th Cir. 2007).

In 2000, Connie Little, director of Respiratory Care

Services for St. Francis, hired Farr as a respiratory therapist. Little became his supervisor. A few years later, Farr

transferred to a position as a respiratory therapist in the

Pulmonary Rehabilitation Department where Beverly

Smith became his immediate supervisor.

At the time Farr’s employment was terminated, there

were seven respiratory therapists in his department. All

but Farr were women. The department also had a computer, shared by all, and that eventually became a

problem, certainly it became a big problem, for Mr. Farr.

Although all of the therapists in the department used a

single computer, each had an individual user name and

password. Hospital policy indicated that the therapists

should log off the computer when they finished using it,

but in practice, with a few exceptions, what ordinarily

happened is that the first person to log on each day

would stay logged on throughout the day and everyone

using the computer would then be using it under the

original log-in name. The computer was officially used

for writing various reports and letters to physicians and

sometimes for research regarding medical devices. Using

the computer for personal reasons was allowed so long

as it was not excessive or inappropriate.
No. 08-3203 3

One day, a respiratory therapist asked Ms. Smith to

check out the computer. What Smith saw under “favorites”

were several “lurid” and “obscene” Web sites. Smith

determined that Farr was the person logged onto the

computer at the time the sites were accessed. She deleted

the names of the Web sites from the “favorites” list and

logged Farr off the computer. Smith informed Little of

what she had found and Little notified her supervisor,

who suggested that Little notify someone in human

resources, who, in turn, advised Little to inform Information Services (IS) and to confront Farr.

Farr was told that inappropriate Web sites had been

found; he assumed they were adult pornography sites.

He denied knowing how the sites had appeared under

his log-in name. Little informed him that the Hospital

would conduct an investigation. IS removed the computer

from the department. The hard drive was sent to Alverno,

the computer services division of the Hospital, to be

examined. After the examination the investigator wiped

the hard drive of all information and no copy was

made, although there was a printout of the activity

under Farr’s password.

In the meantime, Farr went on unrelated medical leave.

The day after he left on leave, Karen Sagar, the director

of Recruitment and Retention, informed Little and Smith

that IS’s report summarizing its investigation was completed. The report concluded that inappropriate Internet

sites had been accessed, including a significant number

of “hacking” sites. The latter were of greater concern to

the Hospital than the pornographic material.
4 No. 08-3203

As a result of this information, St. Francis continued the

investigation to determine if any other employees had

accessed inappropriate sites. IS found no evidence to

that effect. Little asked that work schedules, job assignments, and time records be compared to usage of the

computer. The comparison showed that Farr was the

only employee who worked on a certain Saturday when

there was a substantial amount of computer activity

involving both pornography and hacking sites. Little

decided to terminate Farr’s employment.

When Farr returned from medical leave he was

informed that the investigation uncovered evidence that

he had inappropriately used the computer. Again he

denied visiting inappropriate sites. Because of his denial,

Little decided to ask IS to look at the situation one more

time. Farr was placed on a five-day suspension. IS found

no inappropriate usage on the part of other employees.

When Farr returned he was accompanied by his attorneys,

which inspired Little to refer the matter to the Hospital’s

legal department. Ultimately, Farr was fired for “breach

of good conduct and inappropriate usage of the

Hospital’s electronic communications systems.”

Farr filed a grievance and hired a computer expert to

provide a report. In the information Farr provided to

his expert, he admitted that he visited at least 17 of the 31

Web sites the Hospital was concerned about. He said he

was using the computer to look for a way to reinstall

Windows on his home computer and that during his

search one of the Web sites he visited must have loaded
No. 08-3203 5

1

“Malware,” in computer jargon, is a portmanteau from

malicious and software. It refers to software (a worm, a virus,

etc.) that infiltrates a computer system without the owner’s

knowledge.

malware onto the Hospital computer, which in turn 1

automatically downloaded a list of links to pornographic

Web sites. He said he was unaware that this had happened. The expert’s report concluded that the list of

pornographic Web sites was placed on the computer by

malware without Farr’s knowledge. In response to this

report, Alverno created its own rebuttal report, which

differed somewhat from its original report. In the

grievance proceedings, Farr did not claim that the termination of his employment was based on gender discrimination. The grievance committee unanimously

upheld the Hospital’s actions.

Farr then filed the present lawsuit, claiming that he was

the victim of gender discrimination. In his charge before

the Equal Employment Opportunities Commission he

made the following claim: “My attorney and our

computer expert immediately recognized the list as

having been secretly put on my computer by a virus and

not by any human. It seems to me that any fair-minded

person should instantly realize I didn’t create the list.”

During his deposition he was asked how he could reconcile

that statement with his admission that he visited 17 of the

sites. He again acknowledged that he visited the sites.

Nevertheless, his sex discrimination claim rests on his

view that the Hospital assumed he was guilty of looking
6 No. 08-3203

at the pornography sites because he was the only man

working in the department.

Farr also alleged that the Hospital breached an

implied covenant of fair dealing found in the employee

handbook. The alleged breach was based on his belief

that the Hospital immediately assumed he downloaded

the pornography because he was a male; he also claimed

that the investigation was not fair. As to the defamation

claim, he said that his superiors told employees who had

“no need to know, that [he] had accessed pornography

on his St. Francis computer.” He contends that the

Alverno report contained false and misleading statements regarding his use of the computer and improperly

concluded that he used hacking and spyware tools to

gain access to the Hospital’s computer system.

Farr argues that he can prove his sex-discrimination

claim through both the direct and the indirect methods.

He says he has circumstantial evidence which points,

under the direct method of proof, to a discriminatory

reason for the firing.

Our cases say that in this situation, circumstantial

evidence can be of three types. The first consists of such

things as suspicious timing, ambiguous statements, or

other bits and pieces from which an inference of discriminatory intent can be drawn. The second type is evidence

that employees similarly situated to the plaintiff (except

for the relevant characteristic, i.e., gender) received

better treatment than he. Third is evidence that the

plaintiff was qualified for the job but was passed over

in favor of a person (in this case a female), and the em-
No. 08-3203 7

ployer’s stated reason for its action is unworthy of

belief—a pretext for discrimination. Hossack v. Floor

Covering Assocs. of Joliet, Inc., 492 F.3d 853 (7th Cir. 2007);

Troupe v. May Dep’t Stores Co., 20 F.3d 734 (7th Cir. 1994).

To prove his case by the indirect method, Farr must

meet the test set out in McDonnell Douglas Corp. v. Green,

411 U.S. 792 (1973)—or, because his is a reverse sex discrimination case, a modified test. Under McDonnellDouglas, to establish a prima facie case a plaintiff must

show that he is a member of a protected class, that he

was meeting his employer’s legitimate expectations; that

he suffered an adverse employment action, and that

similarly situated individuals were treated more

favorably than he was. In addition, when a plaintiff is

a member of a “majority”—for instance, a male plaintiff

alleging gender discrimination—we have said he must

set out “background circumstances” that show that the

employer discriminates against the majority, or he must

show there is something “fishy” going on. Phelan v. City

of Chicago, 347 F.3d 679, 684 (7th Cir. 2003) (quoting

Harding v. Gray, 9 F.3d 150, 153 (D.C. Cir. 1993)); see also

Gore v. Indiana Univ., 416 F.3d 590, 592 (7th Cir. 2005). Once

a prima facie case is established, the employer must

provide a nondiscriminatory reason for the employment

action; if it does, the plaintiff then must show that the

reason is pretextual.

The goal of these tests is to determine whether discrimination is afoot. In this case, neither test reveals

discrimination. It is not even entirely clear that Farr’s

claim alleges sex discrimination in the adverse employment action; that is, that he was fired because he was a
8 No. 08-3203

male. His primary complaint seems to be that he was

the first person investigated because there were adult

pornography sites involved and he was the only man in

the department. That complaint would have more force

if it were not also true that he was the person logged on

to the computer at the time the sites were visited. It seems

quite sensible (and hardly discriminatory) to begin an

investigation with the person who officially was logged

on to the computer. But the fact remains that even if the

Hospital had, without any basis, turned to him first, that

action would not establish discrimination—that he was

fired because of his gender. It is pretty clear that he was

fired because the investigation convinced the employer

that he was the one accessing the inappropriate Web

sites. In fact, he admitted it. Such activities provide a

nondiscriminatory basis for the employer’s action. Farr

does not show in any way that the employer’s belief was

pretextual.

Other failures of proof include a lack of suspicious

timing or ambiguous statements. He fails to show that,

for instance, a woman accessing inappropriate Web sites

was not fired or that the stated reason for his being fired

is pretextual. He has not shown anything “fishy” about

the facts. Neither did the Hospital simply rely on the

fact that he was the person logged on to the computer

when the Web sites were accessed; rather, the Hospital

went out of its way to be sure that, in fact, he was the

one using it at the time. He also complains that the investigation stopped once the Hospital determined that

he had accessed the sites. Not only would that not be
No. 08-3203 9

discriminatory, it is not true. At the initial meeting with

Farr, when he denied accessing the sites, the Hospital

proceeded to investigate further and ultimately looked

to see whether anyone else had accessed inappropriate

sites. Even had the investigation stopped once the

Hospital believed it had found the culprit, that would not

have indicated that Farr was fired because he was a male.

The bottom line is that Farr admits that he visited some

of the inappropriate Web sites. The Hospital says that is

why he was fired, and he has done nothing to show

otherwise.

In addition, Farr’s state law claims were properly

dismissed. He claims the employee handbook gave him the

right to be treated fairly, but that he wasn’t—in breach of

the covenant of fair dealing. Indiana, however, adheres to

the employment-at-will doctrine, and Farr was an at-will

employee. Evaluated under Indiana law, the Hospital’s

employee handbook does not change the nature of

Farr’s employment. As we recognized in Peters v. Gilead

Sciences, Inc., 533 F.3d 594 (7th Cir. 2008), the Indiana

Supreme Court has entertained a challenge to the at-will

doctrine based on an employee handbook, but rejected

the challenge and concluded:

We re-affirm the vitality of the employment-at-will

doctrine in Indiana and the general rule that adequate

independent consideration is necessary to convert an

at-will relationship into an employment relationship

requiring an employer to discharge an employee

for good cause. We decline plaintiffs’ invitation to

construe employee handbooks as unilateral contracts
10 No. 08-3203

and to adopt a broad new exception to the at-will

doctrine for such handbooks.

Orr v. Westminster Vill. North, Inc., 689 N.E.2d 712, 722 (Ind.

1997). As we noted in Workman v. United Parcel Serv., Inc.,

234 F.3d 998, 1001 (7th Cir. 2000), “Employment at will

is the norm in the United States.”

The court in Orr also made clear that even were it to find

an exception to the at-will doctrine (and it did not), there

would, nevertheless, be no implied contract when the

handbook itself states it is not a contract. In Orr, the

handbook contained a “prominent disclaimer.” In the case

before us, the Hospital handbook also contains a disclaimer:

[The handbook] is presented as a matter of information

only. This handbook is not part of a contract, and

employees of the hospital have no contractual right

to matters set forth.

Farr’s claim based on the handbook was properly dismissed.

Lastly, Farr claims that the Alverno report is defamatory.

The problem is, however, that the report was used during

the grievance proceedings that Farr initiated and in

response to a report Farr submitted. In such a situation,

statements made by the company to explain its actions

are privileged. In fact, the employer has a duty to

explain its actions. See Ernst v. Indiana Bell Tel. Co., 475

N.E.2d 351 (Ind. Ct. App. 1985). Relying on Bals v. Verduzco,

600 N.E.2d 1353 (Ind. 1992), Farr argues that the privilege

is qualified, not absolute. We need not decide what sort
No. 08-3203 11

of privilege applies. In this case, the nature of the

privilege is not dispositive; Farr’s claim is properly dismissed under either standard.

The judgment of the district court is AFFIRMED.

6-29-09