## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 08

- 3203 D AV ID F ARR, P laint if f-A ppell ant, v. S T . F RAN CISH OS PI T AL AND H EALT HC EN TERS, D efend a nt-A pp ellee.

A pp eal from the United S t ates Di strictC our t fo r the S outhernDi stricto f Indian a, Indian apolisDiv isi on. No . 06 C779

— Sarah EvansBarker, Judge .
A RG UE D J UNE 1, 2009

— D ECI DE D J UNE 29, 2009

Befo re E A S T E RB R OO K, Chie f Judg e, a nd B AUERa nd E VANS, C ircu it Judges . E VANS, Cir cu i tJudg e . Davi d Far r conte nd s that he w as fi r ed fr o m hi s empl o y m en t atS t. F r an ci s H o spi ta la nd He a l th C e n t e r s i n I ndi a n a p o l i s b e c a u s e h e i s a ma n . He fi l ed thi s a cti on a l l eging se x dis cri m i nati on in em plo ym ent, 42 U
. S. C. § 2 000e

- 2( a) ( 1) , a n d , a s r el evantto thi s a pp eal, he t acke d on pendent sta te l aw cl ai m s for defa m ati on and b re ach of the cove nant of f air d eal i ng.2 N o. 08

- 3203 T he state law clai m s w ere d ism isse d and , l ater, sum m ary j ud gm ent was g ra nted on the di scr i m i nati on cl aim
. Both d ecisions are su bje c t to our de novo review on Farr’s ap p ea l. Village o

f D eP ue, Ill. v. Ex xo n M o bil C o rp . 53 7 F
. 3d 77 5 (7 th C ir. 20 08 ); Jac ks on v. County of Raci ne, 474 F
. 3d 493 (7th Cir. 2007). I n 20 00, Con nie L ittle , d irector ofRes p iratory Care Se rv i ces f orS t. Fra n c i s, hi re d Far r as a r espi ra tory thera

p ist. Little becam e his sup ervis or. A few years later, Farr tr an sfer r ed to a po si ti o n a s a r es pi r at o r y th erap is t i n the P u lm on ar y R eh ab ilita tio n D ep ar tm en t w h er e B ev er ly Sm ith bec am e his i m m ed iate sup ervisor. A t the tim e Farr’s em p loym en t w as term inated , th e re w er e s ev en res p ira to ry th er ap ist s in h is d ep ar tm en t. A ll b u t F a r r w e r e w o m e n . T h e d e p a r t m e n ta l s o h a d a c o mpu ter, shar ed by al l, a n d that ev entual l y b ecam e a p roblem , certainly i t beca m e a big problem , f or M r. Farr. Al tho ugh a l lo fthe the r a pi s t s i n the de pa r t men tu s e d a sing l e co m p ut er, e ac h h ad ani ndi vi dualus erna m e an d pa s s wo r d. Ho s pi t a lp o l i c y i nd i c a t e d tha tthe the r a pis ts shoul d l og offthe com pu ter w h en t hey fi ni shed usi ng i t, b u t in p ra c tic e, w ith a few ex c ep t i o n s, w h at ord in ar ily h ap p en ed i s that the fi rs t per son to l og on e ach day woul d s ta y l o g g ed o n thr o ug houtthe da y a nd e ve r y o ne us i ngthe c o m p ut er woul d the n b e us i ngi t unde r the or i gin al l og- i n nam e. The co m pu terwas offi ci al l y use d f o r wri tingv ar i o us rep o r ts a nd l et te r s to phy si ci an s an d so m et i m es f o r r es ea r chr eg ar di ngmedi calde vi ce s. Usi ng th e co m put erf o r pe r so na lr eason s was a l l o wed s o l o ng as i t was notexce ssi ve ori napp ro pri ate
.N o. 08

- 3203 3 One day, a re spi ra tory th er api st ask ed M s. S m i th to check out the c om pu ter
. W hat S m i th sa w under “f avo ri tes ” w er e s eve ra l“l uri d” and “obs cene” W eb s i tes
. S m i th det erm i ne d tha t F ar r was the pe r so n l o g g ed o nt o the com pu ter at the ti m e the si tes w er e acces sed. Sh e d el ete d th e na m es of th e W eb s i te s fr o m the “ f av o r i te s” l i sta nd l ogg ed Far r offthe com puter. S m i th i nfo rm ed L i ttl e o f w ha t she h a d fou nd and Little notifi ed her su p ervisor, w ho s ugges ted thatLi ttl e no ti fy s om eon e in hum an resou rces, w ho, i n t u r n , ad vised Little to inform Inform ation Services (I S) an d to confront Farr. Far r w as tol d t h at inappropri ate W eb s i tes had bee n f ound; he as sum ed theywere adult pornog ra phy si tes
. H e denie d know i ng how the s i tes had appeare d und er hi s l og- i n nam e. Lit tl e i nfo rm ed hi m that the H os p i tal w oul d conduct an i nvest i gat i on. I S re m ove d the co m pu ter fro m the departm ent. The har d dri ve w as sent to A l ver no, the c om pu terse rv i ces divi si on o fthe H os p ita l, to be exam i ned. A fterthe ex am i nati on the i nvest i gat orwiped the har d dri ve ofal li nfo rm ati on a nd n o c opy was m ad e, al though there was a pr i ntout ofthe acti vi ty un de r F a r r ’ s p a s s wo r d. I n the m eanti m e, Fa rrwent on unre l ate d m edi cal l eave . The day afterhe l eft o n l eave , K ar en S agar, the dir ecto r ofRecr uit m ent a nd Rete nti on, i nfo rm ed L i ttl e a nd S m i th t h a tI S ’ s r e p o r ts u m m a r i z i n gi t s i n v e s t i g a t i o n w a s c o mple ted. The r eport c oncl ud ed that i napp ro pri ate Inter net si tes had bee n acce sse d, i ncl ud i ng a si gni fi cant num ber of “hacking” si tes
. The l att er w er e of gr eat er conc er n to th e H os p ita l th an th e p or n og ra p h ic m at er ial.4 N o. 08

- 3203 As a r es ul t o fthi s i nf o r m at i o n, S t. F r an ci s co nt i nue d the i nvest i gat i on t o deter m i ne i fany othe r em plo ye es had acces sed i napp rop ria te si tes
. I S f ound no evi dence to th ate ffec t. Li tt l e as k ed th atwork sche dul es , j o b as si g nm en ts , a nd t i m e r ec o r ds be c o m par ed to us ag e o fthe co m put er . The c o m par i so n s ho wed tha t F ar r w as th e onl y e m plo yee wh o w or ked o n a c er ta in S aturday w hen ther e was a substa nti alam ount o fco m pu teract i vi ty in vo lvin g b ot h p or n og ra p h y a n d h ac kin g s ite s. L itt le deci ded to te rm i nate Far r’ s e m plo ym ent. W hen Fa rrr etur ned f ro m m ed icall eave he was i nfo rm ed that th e inve sti gat i on uncove re d evi dence that he ha d i na ppr o pr i at ely us ed th e co m put er . Aga i n h e d en ied vis itin g in ap p r o p ria te sit es . B ec au se of h is d en ial, L ittl e d ecid ed to ask I S to look at th e situat ion one m ore ti m e. Farr was pl ac ed o n a fi ve - days us pen si o n. I S f o und no inapp ro pri ate usag e o n the part o f o therem plo yee s. W hen Fa rrr etur ned he w as acco m panie d by hi s a tto rney s, w hich i ns p ired L ittl e to refer th e m atter to th e H osp ital’ s l ega ldepartm ent. U l ti m ate l y, Fa rrwas fi re d fo r “br each o fg o o d c o nduc t an d i na ppr op ria te us ag e o fthe H os p ita l’s e lec tr on ic c om m u n ica tio n s s ys te m s.” Far r fi l ed a g ri evance and hi re d a co m pu terexp er t t o provi de a r epor t. In the i nfo rm ati on F ar r provi ded to hi s e xpert, he a dm i tte d that he vi si ted at l eas t 17 ofthe 31 W eb s i te s th e H o spi ta lwas c o nc erne d abo ut
. He s ai d he w as u sin g t h e c om p u te r to look fo r a w ay to rein st all W in d ow s o n h is h om e c om p u t e r a n d th at d u rin g h is se ar ch one ofthe W eb s i tes he v i si ted m ust hav e l oadedN o. 08

- 3203 5

“M al ware , ” i n c om put erj ar gon, is a po rt m ant ea u fro m 1 m al ic ious and so ft w are . It refers to softw are ( a w or m , a v iru s, e t c .) t h a tin fi l t r a t e s a c o m p u t e r sy st e m w i th o u tth e o w n e r ’s know le dg e. m alw are onto th e H osp ital co m p u t e r, w hich i n tu rn

1 au tom ati cal l y downloa ded a l i st ofl i nks t o pornog rap h ic W e b s i t e s . He s a i d h e w as unawa r e tha tthi s h a d h a ppened. The expert ’ s r epor t co ncl ud ed that the l i st of pornog ra phic W eb s ite s w as pla ced on the co m pu terby m alw ar e w ith ou t F ar r’s kn ow led ge . Inres p on se to th is re port, A l ver no cr eat ed i ts own r ebutta lr ep ort, wh i ch di ffer ed so m ewha t fr o m i ts o r i g inal repo r t. In the grievanc e proc ee d in gs, Farr did not claim that the term i nati on o fhi s e m plo ym ent was ba sed o n genderdi sc rim in at ion
. T h e griev an c e com m itt ee u n an im ou sly up hel d the Hospit al ’ s a cti ons. Far r then fi l ed the pr ese nt l aw sui t, cl ai m i ng tha t he w as th e v ictim of gen d er discrim ination. In h is charge be fore th e Equa lEm pl o y m en t Oppo r tu ni ti es Co m m i ss i o n h e m ade the f o l l o wi ngc l ai m : “ M y a tt o r ne y a nd o ur com pu terexper t i m m edi ate l y r eco gni zed the listas ha ving be ens ec r et l y puto n my c o m put erb y a v i r us a nd not by any h u m an . I t s eem s t o m e that a ny f ai r- m i nd ed p e r s o n sh ou ld ins ta n tly rea lize I d id n ’t c re at e t h e list .” D u rin g h is d ep os itio n h e w as as ke d h ow h e c ou ld rec on c ile th ats ta te m en t wi thhi s admi ss i o n tha t he v i si te d 1 7 o fthe site s. H e a gain acknow l edged thathe v i si ted the si tes
. N ev er th ele ss , his se x d isc rim in at ion cla im res ts on h is vi ew tha t th e H o spi ta la ss um ed he was g uilty o fl o o k i ng6 N o. 08

- 3203
at the pornogr aphy si tes bec ause he was the onl y m an w or ki ng i n the departm ent. Far r al so al l ege d that the H ospita lbr eached an i m pli ed cov enant o ff ai r deal in g fou nd i n the em plo yee hand boo k. The al leg ed br each was ba sed o n hi s be l i ef that th e H ospi tali m m edi ate l y a ssum ed he down l oaded the pornogr aphy beca use he w as a m al e; h e a l so cl ai m ed that the invest i gat i on was n ot fai r. A s t o the def am ati on cl ai m , he sai d that hi s superi or s tol d e m plo yee s w ho had “n o ne ed to kno w, tha t [ he ] ha d a cc es sed po r no g r aph y o n h i s S t. F r an ci s com p ut er . ” H e co nt en ds th atthe A l ver no r epor t co ntai ned f al se and m isl eadi ng st ate
m en ts reg ar d in g h is u se of th e c om p u te r an d im p ro p er ly concl ud ed that he u se d h acking and spyware too l s t o g a i n a c c e s s t o th e H o s p i t a l ’ s c o mp u t e r s y s t e m. Far r ar gues that he can prove h is s ex- disc ri m i nati on cl ai m thr ough bo th the di re ct a nd the i nd i re ct m et h od s. H e s ays he ha s ci rcum sta nti al ev i dence w hi ch poi nts, un d er th e d ir ect m eth od of p roof, to a discrim inatory re aso n f orthe fi ring. Ou r c a s e s s a y tha ti n thi s s i t ua t i o n, c i r c ums t a nt i al evi dence can b e o fthr ee types. The fi rs t co nsi sts o fsuch thi ngs a s s uspici ous t i m i ng, am bi guous sta te m ents, o r ot h er b its an d p iec es from w h ich an infe re n c e o f d isc rim inatory intent can be drawn. Th e se c ond type i s e vi dence tha tem pl o y e e s s i mi l a r l y s i t ua t e d t o the p l a i nt i ff( e xc e pt f orthe re l eva n t chara cter i sti c, i
. e. , ge nd er ) r ecei ved be tt ert r ea tment thanhe

. Thi r d i s ev i den ce tha t th e pla i nti ff w as quali fi ed f or the j ob but w as passed over i n f a v o r o fa p e r s o n ( i n th i s c a s e a fe ma l e ) , a n d th e e m-N o. 08

- 3203 7 plo yer ’ s s tat ed re aso n for its ac ti on i s unw or thy o f bel i ef

— a p re te x t fo r d isc rim in at ion
. Hos s ac k v. Floo r C overi ng A ss ocs. of Jolie t, Inc. , 492 F.3d 853 ( 7th Cir. 2007); Trou pev. M ay Dep’ tSt ore s Co. , 20 F. 3d 734 (7th C ir. 1994). To pro ve hi s ca se by the ind i re ct m et h od , Fa rrm ust m eet th e te sts eto uti n M cD o nn ell D o ug la s C o rp. v. G reen , 411 U
. S. 79 2 ( 1973 )

— or , b ec au se hi s i s a r eve rs e s ex di scrim ination ca se, a m od ified test

. U nd er M cD onnell

D ougl as , t o e s t ab l i s h a p r i ma f a c i e c a s e a p l a i nt i ffm ust sh o w tha t he i s a m embe r o fa pr o te ct ed cl as s, tha t he w as m eet i ng hi s e m plo yer ’ s l egi ti m ate expect ati ons; that he suffer ed an a dvers e e m plo ym ent a cti on, and that sim il ar l y si tu at ed i nd ivi d ua ls w ere treated m ore fav or ab l y t h a n h e w as . In ad d itio n, w h en a p lain tiff is a m em bero fa “m aj or i ty”

— for instan ce, a m ale plaintiff al l eging g ender disc ri m i nati on

— w e have s ai d he m ust se t o ut“ ba ck g r o und c i r cumst an ces” tha t sh o w tha t th e em plo yerdi scr i m i nates ag ai ns t the m aj or i ty, o r he m ust sh ow th er e is s o m e th in g “ fish y” goin g on . P helan v. City of C hic ago , 3 47F
. 3d 67 9, 6 84 ( 7th Ci r . 2 00 3) ( quo ting Har di ng v. Gr ay, 9 F.3d 15 0 , 1 5 3 (D .C . C ir. 19 93 )); see a lso Gorev. Ind i ana U ni v. , 416 F. 3d 590, 592 ( 7th Ci r. 20 05)

. Once a pri m a f aci e ca se is establ i shed, the em plo yerm ust pr o vi de a no ndi sc r i m i na to r y r ea so n fo r th e empl o y m en t ac ti o n; i fi t do es, the pl aint i ffthe n musts ho w tha t th e re as on is p re te x tu al. The go alo fth es e t est s i s t o deter m i ne wh etherdi sc rim i nati on i s a f oo t. In thi s ca se, nei therte st re veals d iscrim inatio n . I t is not ev en entirely cl ear tha t Farr’s cl ai m al l ege s s ex di scr i m i nati on in the a d verse em plo ymen t a c t i o n; tha t i s , tha t he wa s fi r e d b e c a us e he was a8 N o. 08

- 3203

m al e. H i s pri m ar y c om pla int s eem s t o be that he w as th e first p er so n in ve st iga te d b ec au se th er e w e r e a d u lt p or n og ra p h y s ite s i n v o lve d an d h e w as th e o n ly m an in the departm ent. That com pla i nt w oul d hav e m or e forc e i fi t were not al so tr ue thathe was the per son lo gge d on t o th e c o mp u t e r a t th e t i me th e s i t e s we r e v i s i t e d

. I ts e e ms quit e s ensibl e ( and hardl y di scr i m i natory) to be gi n an i nvest i gat i on with the perso n w ho o ffi ci al l y was l ogged o n t o the c o m put er . Butthe f ac t r emai ns tha t ev en i fthe H os pi t a l ha d, wi tho ut a ny b a s i s , t urne d t o hi m fi r s t, that acti on would notes tabl i sh di scr i m i nati on

— th at he was fi re d beca u se ofhi s g ender. I t i s pre ttycl earthathe was fi re d b ec au se the invest i gat i on co nvi nced the e m plo yer that he was the one acces si ng the i napp ro pri ate W eb si tes
. In f act, he a dm i tted i t. S uch acti vi ti es provi de a non d iscrim inatory ba sis f or the em p loyer’s action

. Farr does n ot show in any way that the em plo yer ’ s be l i efwas p re te x tu al. Oth erf ai l ur es o fpr o o fi nc l ude a l ac ko fs us pi ci o us ti m i ng o r am bi guous sta tem ents. H e f ai l s to sh ow that, f ori nstance , a w om an acc ess i ng i napp ro pri ate W eb s i tes w as not fi re d orthatthe sta ted r eas on f orhi s be i ng fi re d i s p r e t e x t u a l

. He h a s n o ts h o wna n y th i n g“ fi s h y ” abo ut th e f ac ts
. Nei th er di d the Hos pi ta ls i m pl y r ely o n the f act that he w as the perso n l ogg ed on to th e c om pu ter w hen th e W eb si tes were acces sed; r ather, the H ospi tal wento uto fi ts wayt o b e s ure th at, i n f ac t, he was the o ne us i ngi t atthe t i m e. He a l so c o m pl ains tha t th e i nvest i gat i on s topped once the H ospi taldeter m i ned that he had a c c e s s e d the s i t e s . No t o nly wo ul d tha t no tbeN o. 08

- 3203 9 disc rim in at ory, i t i s no t t rue. A t the i ni ti alm eet i ng with Far r, w hen he denie d a cces si ng the si tes , the Hospit al proce eded to in vesti gat e furtherand ul ti m ate l y l oo ked to see w hether anyo ne el se had a cces sed inapp ro pri ate si te s. Ev enha d the i nv es ti g at i o n s to pped o nce th e H ospi talbel i eve d i t had f ound the cul pri t, that w oul d not have i nd i cate d that Far r w as fi re d because he was a m al e. T h e b o t t o m l i n e i s th a tF a r r a d mi t s th a th e v i s i t e d s o me of th e in ap p ro p ria te W eb sit es . Th e H os p it a l s a y s th at is w hy he w as fi re d, and he ha s done nothi ng to sho w othe rwis e. Inad d itio n, Far r’s st at e la w cla im s w er e p ro p er ly di smi ss ed. He c l ai m s th e empl o y ee ha ndbo o kg av e hi m the right to be treated f airl y, bu t tha t he w asn ’t

— i n br each o f the cove nant offai r deal i ng. Ind i ana, however, adhere s t o th e e m p loy m en t-a t-w ill d oc tr in e, an d Fa rr w as an at -w i ll em p loyee. Ev aluat ed un d er Ind iana law , the H osp ital’ s em plo yee handbookdoes notchange the nature of F ar r ’ s empl o y m en t. As we r ec o g ni zed i n Pet e rs v. Gi l e ad Scie nces, Inc. , 5 33 F
. 3d 59 4 ( 7th Ci r . 2 00 8) , the Indi an a Su p re m e C ou rth as en te rt ain ed a ch alle n ge to th e a t-w ill doctr i ne bas ed on a n em plo yee handbook, but rej ecte d the c ha l l e ng e a nd c o nc l ud e d: W e re -aff irm th e v ita lity of th e e m p loy m en t-a t-w ill doctr i ne i n I nd i ana a nd the gener alr ule thatadequate i nd ependent consi derat i on i s nec ess ary t o conve rtan at -w ill rela tio n sh ip int o a n em p loy m en t re lat ion sh ip re quirin g an em plo yerto di schar ge an em plo yee f orgo od cause

. W e decl i ne pl ai nti ff s’ i nvi tat i on t o const rue em plo yee handbook s a s uni l ate ra lco ntra cts10 N o. 08

- 3203

an d to a d op t a br oa d n ew ex c ep tio n to th e a t-w ill doctr i ne f orsuch handbook s. O rr v. Wes tm ins te r Vill. North, Inc. , 68 9 N
. E. 2 d 7 1 2 , 7 2 2 ( I nd

. 19 97 )

. As we no te d i n Workm an v. U n it ed Parcel Se rv. , Inc. , 23 4 F .3d 99 8, 10 01 (7t h C ir. 20 00 ), “E m p loy m en t a t w ill is th e n or m in t h e U n ite d Sta te s.” The c o ur t i n O rra l so made cl ea r tha t ev enwer e i t to fi nd an exc ep t io n t o the at-w il l d octrine (an d i t d id n ot), there woul d, ne ve r th el ess, be no i m pl i ed co nt r ac t when th e ha ndbo o ki ts el fst ate s i t i s no t a co nt r ac t. In O rr, the hand boo k c ontained a “prom i nent d i scl ai m er . ” In the case bef or e us, the H os pit alhandbookal so conta i ns a disclaim er: [ The handbook] i s pre sente d as a m att ero fi nfo rm ati on o nl y . Thi s han d book i s no t par t o fa c o nt r ac t, a nd empl o y ee s o f th e ho spi ta l ha ve no co nt r ac tu al r i g ht to matt er s se t f o r th

. Far r’ s cl ai m bas ed on the handboo k w as proper l y di smi s s e d. Lastl y, Fa rrcla i m s that the A l ver no repor t is def am ato ry . The pr o bl em i s, ho wev er, th at th e r epo r t was us ed dur i ng th e g rie va n c e p ro c ee d in gs t h at Fa rr in itia te d an d in r es po ns e to a r epo r t F ar r s ubmi tt ed. In s ucha s i tu at i o n, st at ement s m ade b y the c o m pan y t o e xpl ain i ts a ct i o ns ar e pr i vi l eged . In fact, the em plo yerhas a duty t o ex p lain its ac tio n s. See E rnstv. Indi ana Bel l Te l

. Co. , 475 N
. E. 2d 35 1 ( I nd. Ct. A pp. 1 98 5)

. Re l y i ngo n B als v. Verduzco , 600 N
. E.2 d 1353 ( I nd

. 19 92) , Fa rr ar gues that the pr i vi l ege is qua li fi ed , not ab solute. W e nee d not d ecid e w h a t sortN o. 08

- 3203 11

o fpr i vi l eg e appl i es . I n th i s ca se , the na tu r e o fthe pri vi l ege i s no t d i sposi ti ve; Fa rr ’ s cl ai m i s pro perl y di smi s s e d u nd e r e i the r s t a nd a r d. The j ud gm ent o fthe dist ri ct c ourti s A FFI RMED .

6- 29- 09