Case Name: Kay E. BALLINGER, Appellant - Cross-Respondent, v. KLAMATH PACIFIC CORPORATION, an Oregon corporation, Robert Stewart, Respondents - Cross-Appellants, and Michael PEARCE and Kevin Mahoney, Respondents; Margaret A. SUTFIN, Appellant - Cross-Respondent, v. KLAMATH PACIFIC CORPORATION, an Oregon corporation, Robert Stewart, Respondents - Cross-Appellants, and Michael PEARCE and Kevin Mahoney, Respondents
Court: Oregon Court of Appeals
Jurisdiction: Oregon
Decision Date: 1995-07-12
Citations: 135 Or. App. 438
Docket Number: 9002597CV; CA A77171 (Control); 9002598CV; CA A77172
Parties: Kay E. BALLINGER, Appellant - Cross-Respondent, v. KLAMATH PACIFIC CORPORATION, an Oregon corporation, Robert Stewart, Respondents - Cross-Appellants, and Michael PEARCE and Kevin Mahoney, Respondents. Margaret A. SUTFIN, Appellant - Cross-Respondent, v. KLAMATH PACIFIC CORPORATION, an Oregon corporation, Robert Stewart, Respondents - Cross-Appellants, and Michael PEARCE and Kevin Mahoney, Respondents.
Judges: Before Deits, Presiding Judge, and Riggs and Edmonds, Judges.
Reporter: Oregon Reports, Court of Appeals
Volume: 135
Pages: 438–476

Head Matter:
Argued and submitted August 1, 1994,
reversed and remanded on appeal; reversed in part and otherwise affirmed on cross-appeal July 12,
petition for review denied November 21, 1995 (322 Or 360)
Kay E. BALLINGER, Appellant - Cross-Respondent, v. KLAMATH PACIFIC CORPORATION, an Oregon corporation, Robert Stewart, Respondents - Cross-Appellants, and Michael PEARCE and Kevin Mahoney, Respondents. Margaret A. SUTFIN, Appellant - Cross-Respondent, v. KLAMATH PACIFIC CORPORATION, an Oregon corporation, Robert Stewart, Respondents - Cross-Appellants, and Michael PEARCE and Kevin Mahoney, Respondents.
(9002597CV; CA A77171 (Control))
(9002598CV; CA A77172)
(Cases Consolidated)
898 P2d 232
Kim E. Hoyt argued the cause for appellant - cross-respondent Kay E. Ballinger. With her on the briefs were William D. Brandt and Ferder, Ogdahl, Brandt & Casebeer.
Don A. Dickey argued the cause for appellant - cross-respondent Margaret A. Sutfin. With him on the briefs were Con P. Lynch, Marcie R. McMinimee, Kathryn Clarke, Rick T. Haselton and Douglas, Dickey & Lynch.
Jeffrey M. Batchelor argued the cause for respondents - cross-appellants. With him on the briefs were Paula A. Barran, Scott J. Fortmann, Lane Powell Spears Lubersky, Alan M. Scott and Galton, Scott & Colett.
Alan M. Scott argued the cause for respondents. With him on the brief were Galton, Scott & Colett, Jeffrey M. Batchelor, Paula A. Barran, Scott J. Fortmann and Lane Powell Spears Lubersky.
Before Deits, Presiding Judge, and Riggs and Edmonds, Judges.
RIGGS, J.
Edmonds, J., concurring in part; dissenting in part.

Opinion:
RIGGS, J.
Following a trial without a jury on plaintiffs' actions to recover for unlawful employment practices (sex discrimination), battery, intentional infliction of emotional distress and common law wrongful discharge, plaintiffs in this consolidated appeal assign error to the trial court's entry of judgment for defendants on the unlawful employment practices claim. That judgment was based on the court's conclusion that, although plaintiffs had been subjected to discrimination in the form of sexual harassment, in violation of ORS 659.030(1)(b), they were not entitled to equitable relief or attorney fees, because they had not made a "reasonable effort" to resolve the problem before leaving their employment. Defendants Stewart, Pierce and Mahoney cross-assign error to the trial court's ruling that they are "employers," for purposes of plaintiffs' unlawful employment practices claim. Plaintiff Ballinger also assigns error to the entry of judgment for defendants on her claim of wrongful discharge. On cross-appeal, defendant Klamath Pacific Corporation (KP) assigns error to the denial of its motion to dismiss plaintiff Sutfin's claim of intentional infliction of emotional distress on the ground of claim preclusion, and to the trial court's ruling that KP is vicariously liable for the intentional torts of its employees, defendants Pearce and Mahoney. Defendant Stewart cross-appeals the denial of his request for attorney fees. We reverse on the appeal. On the cross-appeal, we affirm in part and reverse in part.
The following is a summary of the trial court's factual findings with respect to plaintiffs' claims. KP is a corporation that is engaged in the business of road construction. During 1988 and 1989, it employed the two female plaintiffs as flaggers. Stewart is the president of KP and owns 52 percent of its shares. Pearce is one of KP's foremen; he directs certain employees in their daily tasks and has the authority to fire employees. However, firing decisions must be justified to Stewart, who retains veto power. Plaintiffs were directly supervised by Pearce and occasionally by defendant Mahoney, a male coworker who acted as supervisor in Pearce's absence. Pearce, Mahoney, Sutfin, Ballinger and another individual formed a work group that was referred to as the "dirt crew."
Plaintiffs' work environment was sexually hostile. Pearce and Mahoney occasionally touched or rubbed plaintiffs' breasts and buttocks, repeatedly referred to sexual intercourse as "boinging" or "boinking," and asked plaintiffs if they wanted to "boing" or "boink." When Sutfin's children were on the job site, Pearce told her that he was going to tell her children how to "boing," and both Pearce and Mahoney made remarks suggesting that Sutfin's children were "boing-ing" each other. Mahoney told Sutfin that her two aunts, who are Catholic nuns, "were probably boinging the priests." Pearce told Sutfin that she was not a woman until she "did it" until it hurt. In front of others, Mahoney showed Sutfin a magazine centerfold of a nude woman posed with a finger in her mouth and a finger in her vagina. Mahoney made gestures to Sutfin with his mouth and fingers, referencing cunnilingus. Mahoney also grabbed his crotch, thrust his hips and made gestures with his hands indicating the size of his penis, asking Sutfin if she "liked something like this." He rubbed his throat with his hand and spit a fluid from his mouth, simulating masturbation and ejaculation. Sutfin neither welcomed nor consented to the sexually offensive and hostile conduct. Although Ballinger joined in some of the ribald conduct of Pearce and Mahoney and joined in the telling of adult or sexual jokes, some of the sexually hostile conduct directed toward Ballinger was unwelcomed by her. Pearce was aware of Mahoney's conduct, and during all of these events, Pearce was the foreman of the dirt crew.
As flaggers, plaintiffs' work duties included setting up, knocking down and moving signs. In 1989, they became dissatisfied about their level of compensation for moving signs. In August 1989, Pearce was absent from the job site for a few days because of a family emergency. In his absence, plaintiffs were supervised by Mahoney, who noticed that they were recording an extra 30 minutes on their time cards for moving signs, regardless of the amount of time actually spent on that activity. Mahoney reported this to Pearce upon his return and Pearce advised plaintiffs that the practice must stop. Considerable friction developed between members of the dirt crew.
On August 10, 1989, Sutfin radioed the office and asked to meet with Stewart or his wife, who worked in the office. On that same day, an argument broke out between Pearce and Sutfin regarding Sutfin's comments to a county inspector about the placement of signs. They both became angry and argued with raised voices. Ballinger joined in and, at one point, plaintiffs called Pearce a liar. Ballinger encouraged Sutfin to leave the area, because they had an appointment to meet with Stewart. Pearce cautioned them not to leave or they "wouldn't be back." Both plaintiffs left, believing that they had been fired. By the time plaintiffs reached the KP office, Pearce had already spoken with Stewart and told him that he, Pearce, did not want plaintiffs on his crew because they complained, were insubordinate, and did not want to move signs.
Before August 10th, Stewart had never heard of any problems or friction among the dirt crew members, and plaintiffs had consistently reported to the management at KP that their job conditions were fine. Stewart listened to Pearce's report and decided to affirm Pearce's recommendation to fire plaintiffs. When plaintiffs arrived at Stewart's office, they were agitated and complained about their compensation for moving signs. After several minutes, they began to complain about Mahoney's sexual misconduct toward them. Stewart believed that plaintiffs were angry about losing their jobs and that they were making the allegations merely to harm Mahoney. In the course of their conversation, Sutfin informed Stewart that Mahoney had told a county employee, Whitlatch, that Mahoney wanted to have sex with Whitlatch's 14-year-old daughter. Stewart became angry. He sent plaintiffs home to pick up and return radio chargers that belonged to KP, and while they were gone he telephoned Whitlatch, who confirmed that Mahoney had made the offensive comment. After speaking with Whitlatch, Stewart decided that he would fire Mahoney and reinstate both plaintiffs, if they would accept reinstatement. He contacted Pearce to notify him that Mahoney was to be fired. When plaintiffs returned to the office about 45 minutes later, Stewart asked if they would return to work with Pearce. On the basis of Stewart's promise that Mahoney would not be there when they returned to work, plaintiffs accepted their jobs back. Stewart told Pearce that plaintiffs had been reinstated and directed Pearce to stay away from them on the job.
The following day, Pearce threatened Sutfin that if she maintained her allegations, the situation would get "ugly and messy." The trial court found that Pearce's statement was intended to frighten Sutfin into withdrawing her allegations of sexual harassment, and that it was made (1) to protect his job; (2) to help his friend, Mahoney, regain his job; and (3) to help KP avoid any claims that Sutfin might bring against it. Following Pearce's threat, Sutfin became physically ill and vomited. The next day, August 12, Mahoney telephoned Sutfin and threatened to commit suicide. Sutfin again became physically ill and vomited. The following week, plaintiffs were supervised by Mike Voight, who observed no problems with their job performance or attitude.
On August 15, 1989, Mahoney met with Stewart. Stewart was angry with Mahoney and told him that he should make amends to anyone he had offended. Later that day, Stewart learned that Mahoney had apologized to Whitlatch. He confirmed the apology and asked if Whitlatch would have any problems working with Mahoney if he returned. Whit-latch said that he would not.
Stewart decided to reinstate Mahoney. However, in order to keep the situation under control "until tempers cooled and he could investigate further," Stewart assigned Mahoney to work with Pearce on a part of the road project that was five or six miles away from the site where plaintiffs were flagging for Voight. Stewart did not believe that there would be any contact between the plaintiffs and Mahoney, due to the topography and the distance that would be between them. A separate set of flaggers was assigned to work with Pearce and Mahoney, and Stewart told Pearce that he was to see that Mahoney "kept his nose clean."
On August 16, 1989, Ballinger arrived at her work site and saw Pearce and Mahoney drive by in a truck. No words or gestures were exchanged. Ballinger correctly assumed that Mahoney had been rehired. She told Sutfin, and the two walked off the job, believingthat Stewart had reneged on his promise. At trial, Sutfin testified that, when she learned that Mahoney was back on the job, she reflected on the fact that she and Ballinger
"had talked to [Stewart] extensively about the situation, what had happened. He told us if we had any problem — more problems on the job, come and talk to him, but next time make sure it was a real problem. I felt that was a major problem when I came and talked to him. He didn't want us in there whining and tattling. Anyway, I sat there, I — and that was it. I mean, [Mahoney] was out there on the job again. [Mahoney] was working there; I wasn't going to work there any more. It was just one more slap in the face."
Pearce and Mahoney were not subjected to any type of disciplinary action by their employer for their conduct toward Sutfin and Ballinger. The trial court found that KP had not adequately addressed their conduct, and concluded that
" [t]he failure of [KP] to take appropriate action was a sign to those two employees, and perhaps others, that the company did not consider the issue of sexual discrimination at [KP] to be a serious problem, or one that the company would take seriously."
Plaintiffs brought these actions alleging violations of ORS 659.030, specifically, sex discrimination in the form of harassment, wrongful discharge and wage discrimination. They also brought claims for intentional infliction of emotional distress, common law wrongful discharge, and battery. All of the claims were brought against Pearce and Mahoney directly, and against Stewart and KP under the doctrine of respondeat superior. The trial court ruled in favor of both plaintiffs on their batteiy claims against all defendants except Stewart, and ruled in favor of Sutfin on her intentional infliction of emotional distress claims against all defendants except Stewart. It ruled in favor of defendants on plaintiffs' common law wrongful discharge claims.
With regard to plaintiffs' claims under ORS 659.030, the trial court concluded that plaintiffs had been sexually harassed and, therefore, subjected to sex discrimination in violation of the statute. See OAR 839-07-550 (sexual harassment is a form of sex discrimination). However, relying on Thorne v. City of El Segundo, 802 F2d 1131 (9th Cir 1986), the court held that plaintiffs were not entitled to equitable relief, because they had not made "a reasonable effort to deal with the discrimination" before leaving their employment. Both plaintiffs assign error to that ruling. We review de novo plaintiffs' statutory claim. ORS 659.121(1); Wincer v. Ind. Paper Stock Co., 48 Or App 859, 618 P2d 15 (1980); ORS 19.125(3).
ORS 659.030 provides, in part:
"(1) [I]t is an unlawful employment practice:
"(a) For an employer, because of an individual's sex, to refuse to hire or employ or to bar or discharge from employment such individual.
"(b) For an employer, because of an individual's sex, to discriminate against such individual in compensation or in terms, conditions or privileges of employment." (Emphasis supplied.)
ORS 659.121(1) provides:
"Any person claiming to be aggrieved by an unlawful employment practice prohibited by ORS 659.030 may file a civil suit in circuit court for injunctive relief and the court may order such other equitable relief as may be appropriate, including but not limited to reinstatement or the hiring of employees with or without back pay.[ ]) In any suit brought under this subsection, the court may allow the prevailing party costs and reasonable attorney fees at trial and on appeal." (Emphasis supplied.)
Neither of the quoted statutes require that, in order to receive equitable relief, costs and attorney fees, victims of sex discrimination in the workplace must establish that they made a "reasonable effort to resolve the conflict" before leaving their jobs. Nor has any Oregon appellate court ever implied the existence of such a standard as a prerequisite to receiving equitable relief for employment discrimination, and we decline to do so now.
Requiring that a victim of sexual harassment make a "reasonable effort to resolve the conflict" suggests that the victim must confront the harasser or complain to a person with authority, or in some other way attempt to cut short or mitigate the damage that is occurring as a result of the hostile work environment. That requirement has obvious appeal in many situations. But requiring attempts at resolution could be inappropriate in a number of circumstances, including but not limited to those cases in which the harassment is so egregious that the victim feels too degraded or embarrassed to complain, or the perpetrator of the harassment is the victim's supervisor, or the victim's supervisors know that harassment is occurring and take no action to stop it. In the universe of circumstances that exist in these cases, it could be a further abuse to require the victim to make an effort to resolve the conflict before leaving the job. The dissent's position — that a harassed employee must take steps to improve her or his situation before quitting and suing for employment discrimination — is an attempt to import into ORS chapter 659 discrimination claims a standard that is analogous to the one that was considered and rejected by the Supreme Court in Bratcher v. Sky Chefs, Inc., 308 Or 501, 783 P2d 4 (1989). There, the issue was whether an employee claiming wrongful discharge "must show that a reasonable person in the employee's position would consider the working conditions so unacceptable as to force a resignation." Id. at 506. The court held that "it is immaterial what some other hypothetical employee would have done[.]" Id. Likewise, there is no Oregon precedent for requiring that a particular employee must establish that her response to the harassment was the same response that some hypothetical, "reasonable employee" would make, before concluding that she is entitled to equitable relief for sex discrimination that took the form of inferior compensation, terms, conditions or privileges, ORS 659.030(1)(b). The dissent's belief that plaintiffs in the present case should have talked to Stewart again, before quitting, is not a proper basis for importing new requirements into claims that are brought under ORS 659.030(1). Plaintiffs either establish discrimination or they do not. Here, they did. Once discrimination is established, plaintiffs are entitled to relief under ORS 659.121.
Even if the legislature had enacted a different ORS chapter 659 — one that included the dissent's additional requirement that a plaintiff must make reasonable efforts to resolve discrimination before she or he is entitled to relief, that requirement would have been met in the present case. Here, plaintiffs attempted to resolve the problem of harassment by notifying Stewart. Although the primary perpetrator of the harassment was fired, that firing was temporary and was not based on the misconduct that he had directed toward plaintiffs, and no action was taken to reprimand the supervisor. The trial court specifically found, and we too find on de novo review, that Stewart did not take plaintiffs' complaints seriously and that his "remedy" was inadequate. Then, in the short period of time between Mahoney's firing and rehiring, plaintiffs' supervisor threatened to retaliate if Sutfin pursued her complaints. Finally, by failing to inform plaintiffs that Mahoney had been rehired to work at a different job site, Stewart himself created a situation in which plaintiffs understandably misconstrued Mahoney's presence as a breach of Stewart's specific promise that they would no longer have to work with Mahoney. Under these circumstances, a reasonable person could have concluded that there was no use in taking further action. Indeed, Ballinger testified that she felt there was nothing more she could do to resolve the situation, and she "figured if [Stewart] had rehired [Mahoney], that he must have condoned what happened."
In summary, the trial court correctly held that plaintiffs have pled and proven a violation of ORS 659.030(1)(b), but erred when it imposed a "reasonable effort" requirement and barred recovery of lost wages on that basis. On remand, plaintiffs may obtain equitable relief under ORS 659.121. See also ORS 20.107 (attorney fees and costs for successful claims of illegal discrimination).
Defendants cross-assign error to the trial court's conclusion that Stewart, Pearce and Mahoney are all "employers," for purposes of the unlawful employment practice statute, ORS 659.030. They argue that KP was the only employer and that, accordingly, only KP can be held liable for sex discrimination under ORS 659.030.
ORS 659.010(6) provides:
" 'Employer' means any person who in this state, directly or through an agent, engages or utilizes the personal service of one or more employees reserving the right to control the means by which such service is or will be performed."
Stewart, as KP's president and 52 percent shareholder, had plenary authority to hire, fire, and direct the activities of his employees. Although as a general rule the corporation alone would be the entity that "reserv[es] the right to control the means by which" employee services will be performed, the trial court decided that Stewart too fell within that definition, apparently because his majority ownership of KP and his principal role in the day-to-day management of the business made him the person who actually had the power to exercise that "right to control."
It is also possible that the trial court based its decision on federal law. Portions of ORS 659.030 are patterned after 42 USC § 2000e ("Title VII"), see Holien v. Sears, Roebuck and Co., 298 Or 76, 99, 689 P2d 1292 (1984) (remedies available under ORS chapter 659 "parallel federal Title VII remedies"), and there can be little doubt that, under Title VII, Stewart is liable as an employer.
"Title VII imposes liability on an 'employer.' The term is defined as an entity employing fifteen or more persons, and also as any 'agent' of the employer. Thus, an individual may be liable under Title VII as an 'employer' if under the circumstances that individual has acted as an 'agent' of an employer.
"
"Nowhere in Title VII is the term 'agent' defined. Courts most commonly define the term as 'a supervisory or managerial employee to whom employment decisions have been delegated by the employer.' Employer 'liability attaches only against individuals who exercise effective control in the workplace — those persons who make or contribute meaningfully to employment decisions.'
"The clearest case for 'employer' status exists where the employer has delegated to a general manager or upper-level supervisor the employer's traditional rights to hire, fire, and direct the work force."
Barbara Lindemann & David D. Kadue, Sexual Harassment in Employment Law 515-16 (1992) (emphasis supplied; footnotes omitted); see also Harvey v. Blake, 913 F2d 226, 227 (5th Cir 1990).
As the quoted passage reveals, the Title VII definition of "employer" differs from the ORS chapter 659 definition in one important particular: the federal definition includes "agents" to whom the highest level of supervisory authority has been delegated by the employer. In contrast, the state definition appears to exclude agents by limiting employer liability to those who "directly or through an agent reserv[e] the right to control" their employees. ORS 659.010(6). (Emphasis supplied.) Under that definition, which implicitly distinguishes between employers and their agents, a corporate employer such as KP may control its employees "through an agent" such as Stewart, but the agent is not an "employer." The trial court erred in holding that Stewart fell within the definition of ' 'employer, ' ' for purposes of the state unlawful employment practice statutes.
As for Pearce and Mahoney, they too are not "employers," under ORS 659.010(6). Although they were authorized to supervise plaintiffs and even authorized to sign timesheets, the authority to "control" those employees was not "reserv[ed]" to them. For example, Pearce and Mahoney did not have the power to hire, did not have the final say on firing, did not have authority to sign or to withhold paychecks, were not authorized to determine which crew plaintiffs would work on, and did not possess the power to either advance or demote them to other positions within the company. The trial court erred in extending the definition of "employer" to include individuals with such limited supervisory authority. On remand, plaintiffs' recovery on their statutory claim of discrimination may not be assessed against Stewart, Mahoney or Pearce.
Next, plaintiff Ballinger assigns error to the trial court's entry of judgment for defendants on her wrongful discharge claims, which were based on both common law and ORS 659.030(1)(a). The court found that neither KP nor Stewart had intended that plaintiffs be discharged on August 16, 1989, and that neither had created working conditions with the intent that plaintiff would be forced to terminate her employment. On de novo review of the statutory claim, we too find that KP and Stewart did not possess the requisite intent. Because the common law claim is an action at law, and there is evidence to support the trial court's findings on that claim, our review is limited to whether the legal conclusion that was reached by the trial court on the basis of those findings was erroneous. Alsea Veneer, Inc. v. State of Oregon, 117 Or App 42, 52, 843 P2d 492 (1992), aff'd in part, rev'd in part on other grounds, 318 Or 33, 862 P2d 95 (1993).
Oregon recognizes the tort of wrongful discharge. It is well established that "a resignation may have the same effect as a discharge if the resignation is, in effect, forced by the employer." Bratcher, 308 Or at 503. Ballinger argues that she was constructively discharged because her employer's conduct was such that her only choices were to submit to the harassment or quit her job. See McGanty v. Staudenraus, 123 Or App 393, 396-97, 859 P2d 1187 (1993), rev allowed 319 Or 211, 876 P2d 784 (1994). Specifically, she contends that her employer's rehiring of Mahoney and its failure to take adequate remedial measures "established that it intended to force plaintiffs to leave its employment."
In Bratcher, the Supreme Court concluded that, in order to establish a claim of constructive discharge due to unacceptable working conditions, a plaintiff must prove that the employer deliberately created or maintained those working conditions with the intention of forcing the employee to leave the employment, and that the employee left his or her employment because of the hostile working conditions. 308 Or at 506; see also Bell v. First Interstate Bank, 103 Or App 165, 168, 796 P2d 1226 (1990) (applying Bratcher to a discrimination claim brought under ORS 659.030(1)(a)). In this case, it is undisputed that Stewart took steps to improve plaintiffs' working conditions by reassigning Mahoney to a work site that would prevent his contact with plaintiffs. The trial court did not err in concluding that, because Stewart did not intend to force plaintiffs to leave their jobs, his conduct provided no basis for a wrongful discharge claim.
However, when it decided this case, the trial court did not have the benefit of our opinion in Mains v. II Morrow, Inc., 128 Or App 625, 877 P2d 88 (1994), which held that employers may be vicariously liable for wrongful discharge if their supervisors intended to force an employee to leave:
"An employer is liable for a constructive discharge if an employee resigns because of intolerable working conditions that a supervisor creates with the intent to force the employee to resign, and the employer is responsible for the conditions under the doctrine of respondeat superior." Id. at 629.
If a supervisor continues to sexually harass or allow harassment, it is reasonable to infer that the supervisor is deliberately maintaining working conditions that will force the employee to either submit to the harassment or quit the job. McGanty, 123 Or App at 396-97. If the employee resigns because of those working conditions, the employer is liable for constructive discharge. Mains, 128 Or App at 629. Here, the trial court found that Pearce, in his role as plaintiffs' supervisor, contributed to the sexually hostile environment in which plaintiffs worked. His responsibility for creating and maintaining that environment, in combination with plaintiffs' belief that Stewart had broken his single "remedial" promise, caused plaintiffs to believe that their only options were to submit to the harassment or quit. In sum, the trial court's wrongful discharge analysis was limited to KP and Stewart. Because it decided the case before we issued our opinion in Mains, it failed to consider KP's responsibility for Pearce's role in plaintiffs' resignation. In the light of Mains, the trial court erred in dismissing Ballinger's wrongful discharge claims.
We turn to defendants' cross-appeal. Stewart assigns error to the denial of his request for attorney fees, contending that fees should have been awarded to him because plaintiffs' sex discrimination claims against him were frivolous, unreasonable, or without foundation. Payne v. American-Strevell, Inc., 65 Or App 265, 670 P2d 1065 (1983). The trial court specifically found that those claims "were not frivolous or brought for harassment purposes." Stewart nonetheless argues that "no rational lawyer would argue seriously that [Stewart]," as distinct from KP, was plaintiffs' "employer." However, given that both KP and Stewart fall within the definition of "employer," as that term is used in Title VII, and given that federal law was the basis of the trial court's conclusion that plaintiffs were not entitled to recover on their sex discrimination claims — a ruling that Stewart urges us to affirm — we find no error in the trial court's refusal to award Stewart attorney fees. We agree with the trial court that it was not "frivolous" or irrational for plaintiffs to argue that Stewart should be considered an "employer" for purposes of the unlawful employment statutes. Although we have concluded that plaintiffs' argument in that regard does not prevail under Oregon law, our determination on that issue of first impression does not affect the correctness of the trial court's findings about the propriety of plaintiffs' motive in bringing their sex discrimination claims against Stewart.
Next, KP assigns error to the trial court's ruling in favor of Sutfin on her emotional distress claim. It contends that that claim is ' 'barred under claim preclusion principles, ' ' because plaintiffs originally filed this case in federal court, alleging battery, intentional infliction of emotional distress (IIED), wrongful discharge and violations of Title VII and the Equal Pay Act, and Sutfin did not appeal when that action was dismissed. KP neglects to mention that, after the court disposed of the federal law claims, it declined to exercise pendent jurisdiction over the state law claims and dismissed those claims without prejudice. Accordingly, the state claims are not precluded and the trial court did not err in its ruling on Sutfin's IIED claim.
KP's final assignment on cross-appeal challenges the trial court's legal conclusion that KP was vicariously liable for the intentional torts of Pearce and Mahoney, specifically, their acts of battery and IIED. KP relies on Chesterman v. Barmon, 305 Or 439, 753 P2d 404 (1988), in which the court explained:
"Under the doctrine of respondeat superior, an employer is liable for an employee's torts when the employee acts within the scope of employment.
"Three requirements must be met to conclude that an employee was acting within the scope of employment. These requirements traditionally have been stated as: (1) whether the act occurred substantially within the time and space limits authorized by the employment; (2) whether the employee was motivated, at least partially, by a purpose to serve the employer; and (3) whether the act is of a kind which the employee was hired to perform." Id. at 442.
It is undisputed that the acts in this case occurred ' 'within the time and space limits authorized by the employment." KP's contention is that the harassment, which resulted in IIED and battery, was not motivated by a desire to serve KP and was not the kind of act which the two defendants were hired to perform.
We have held that work place sexual harassment that results in IIED and battery is motivated by purely ' 'personal ' ' desires that are unrelated to serving one's employer. See, e.g., Carr v. US West Direct Co., 98 Or App 30, 36, 779 P2d 154, rev den 308 Or 608 (1989); but see Mains. Although the trial court in this case specifically found that the threats Pearce directed toward Sutfin on the day after Mahoney's firing were, among other things, made for the purpose of helping KP avoid any claims that Sutfin might bring against it, it did not find that attempting to provide such "protection" for KP was conduct "of a kind which [Pearce] was hired to perform." Chesterman, 305 Or at 442. That is, Pearce's behavior was neither related to a job responsibility nor conduct that KP even tacitly condoned. The third requirement of Chesterman having not been met, the trial court erred in concluding that KP was vicariously liable for the battery and IIED committed by Pearce and Mahoney toward plaintiffs.
Reversed and remanded on appeal; on cross-appeal, judgment against Klamath Pacific Corporation on claims for battery and intentional infliction of emotional distress reversed; otherwise affirmed.
The court found that Ballinger had on one occasion distributed to Sutfin, Pearce and Mahoney pieces of anatomically correct candy in the shape of penises, breasts and buttocks.
Ballinger testified that Pearce encouraged Mahoney to touch her and Sutfin's breasts and tell him which of the women's breasts were firmer. She also testified that Mahoney placed a cattail in his pants to simulate an erection, asked her to find out if a dead cat tasted like "pussy," and asked her to tell him her bra size. Finally, she testified that both Pearce and Mahoney referred to plaintiffs as "dumb women," "whiny baby" and "bitch."
Sutfin testified that she felt she could not complain to upper management. She also testified that, because her immediate supervisor was participating in the harassment, she feared that his status in the company would cause her to be ignored or subjected to retaliation if she did complain.
On the wage discrimination claim, the trial court held that no male flaggers employed by KP were compensated at any higher rate than plaintiffs for moving signs, and that plaintiffs' compensation was based not on their sex, but on the nature of their jobs as flaggers. Accordingly, it ruled in favor of defendants on that claim. On appeal, plaintiffs do not assign error to that ruling.
The dissent goes to great lengths to segregate plaintiffs' subsection (a) claims from their subsection (b) claims, and goes so far as to state, incorrectly, that plaintiffs do not allege that defendants' conduct before August 10th was the basis for their claim for relief under the statute. The dissent's arguments ignore the fact that plaintiffs' subsection (a) claim of wrongful discharge and their subsection (b) claim of hostile environment are alternate theories of recovery. They are also interrelated claims, to the extent that plaintiffs' entitlement to recover for wrongful discharge under subsection (a) required that they establish that the harassment (a violation of subsection (b)) gave rise to their constructive discharge. Appropriately, plaintiffs do not seek a double recovery of lost wages — that is, lost wages for the violation of subsection (a) and additional lost wages for the violation of subsection (b). Their calculation of lost wages begins as of August 16,1989, the date when they left their employment.
By placing undue emphasis on the date that Mahoney was fired and the harassment-free environment that plaintiffs enjoyed thereafter, the dissent is able to say that plaintiffs could not have felt forced to quit on August 16th. However, plaintiffs' sex discrimination complaint rests on the many events that had occurred up to that point: the explicit harassment, the promise to fire Mahoney, the threats made by Pearce, the rehiring of Mahoney and Ballinger's observation of his return to work. Because of the longstanding nature of the harassment and its cumulative effect on plaintiffs, their ultimate decision to leave their jobs cannot be viewed in a vacuum, with reference to only those events that took place between August 10th and August 16th.
We note that the parties in this action use the terms "front pay," "lost wages," and "back pay" interchangeably, and no issue is raised as to whether all of those are a form of equitable relief. Under the facts of this case, "lost wages" is the most apt term.
We also note that Thorne v. City of El Segundo, 802 F2d 1131 (9th Cir 1986), the federal case on which the trial court relied, was not a sexual harassment case, but rather involved a claim of "failure to promote."
Additional support for the holding that there is no "reasonable effort to resolve the conflict" requirement in Oregon is found in the single reference to "Employee Responsibility" in the Oregon Administrative Rules that relate to sex discrimination: "Generally an employee subjected to sexual harassment should report the offense to the employer." OAR 839-07-565. (Emphasis supplied.) That is a substantially lower standard than requiring that the employee attempt to resolve the conflict.
The dissent is seemingly confused when it states that plaintiffs' allegations "demonstrate that their claims could not be under ORS 659.030(1)(b). Consequently, their claims are under ORS 659.030(1)(a) by operation of law ." 135 Or App at 466. That approach ignores that plaintiffs brought their claims under both subsections (b) and (a), in that order; the trial court expressly resolved those claims under those subsections; and the parties argue about the requirements of each subsection on appeal. We resolve the subsection (b) issue by holding that "reasonable effort" need not be pled nor proven to prevail on a subsection (b) claim and to obtain relief under ORS 659.121.
The dissent multiplies the problem when it suggests that plaintiffs' decision to quit could not really have been based on the sexual harassment, or else they would have complained to KP "earlier," 135 Or App at 468, and when they did complain, sexual harassment would have been the first item of business. See 135 Or App at 468. However, there is no necessary relationship between the timing of a complaint and its truth, particularly when matters of sexual harassment and job security are involved. On de novo review, we do not draw the same inference that the dissent does.
See OAR 839-07-555(2) ("An employer is responsible for acts of sexual harassment by an employee unless it can be shown that the employer took immediate and appropriate corrective action."). (Emphasis supplied.)
The dissent cites, as one of five "uncontroverted facts" in this case, that "KP tookremedial action as soon as it found out about plaintiffs' complaints." 135 Or App at 458. That "fact" was anything but uncontroverted and, moreover, it was resolved by the trial court in a manner opposite to the dissent's position. After hearing plaintiffs' complaints, KP affirmed Pearce's decision to fire them. It fired Mahoney only after learning that he had expressed to a male county employee a sexual interest in that employee's under-aged daughter, and, after rehiring Mahoney, no disciplinary action was taken against either him or Pearce for their conduct toward plaintiffs. The trial court found that KP's purported "remedy" of moving Pearce and Mahoney to a different jobsite was inadequate, that KP had
"failed to take appropriate remedial action against defendants Mahoney and Pearce after learning of the misconduct [and that KP had] failed to properly investigate the facts surrounding the allegations of sexual misconduct made against Pearce and Mahoney."
Further, the dissent states that "[t]here is no evidence that plaintiffs were sexually harassed after August 10." 135 Or App at 468. That statement improperly narrows the discussion of sex discrimination to a discussion of overt acts of harassment during a five-day period. See n 5, above. The trial court found that Sutfin had been subjected to threats by Pearce after she complained. When a supervisor threatens a female employee with "messy" repercussions if she does not drop her sexual harassment complaint against him and a male coworker, that is a clear example of gender-based differential treatment in the workplace.
Contrary to the dissent's assertions, there is no requirement in the law that this court award to a prevailing appellant the equitable relief that was unsuccessfully sought below. Indeed, there are cases in which remand is a far more appropriate disposition. In this case, the sexual misconduct occurred in 1989, the trial was held in 1992 and this appeal was argued in August 1994. Now, in 1995, six years after the fact, relief that might have been "equitable" then may no longer be. One example of such relief would be to require that KP hold training sessions for its employees, to educate them about what sexual harassment is and why it will not be tolerated in the workplace. It is possible that KP may have instituted such training sessions more than five years ago. Equitable relief need not take the precise form, amount or duration that a plaintiff might choose to seek; the trial court has discretion to fashion a remedy that is appropriate under the unique circumstances of each case. We remand in this case because that court erred, as a matter of law, when it treated "reasonable effort" as if it were a prerequisite to an award under ORS 659.121.
The dissent grossly overstates the importance of federal law in this case when it opines that ORS 659.030(1)(b) "was intended by the legislature to track Title VII." 135 Or App at 472. Although the remedies section of the Oregon law was, at the time of its enactment, intended to parallel federal remedies for unlawful employment practices, there are also important differences between the two laws.
We note that Pearce and Mahoney would not possess the ability to carry out a court order to rehire and dispense back pay, if such a remedy were awarded plaintiffs under ORS 659.121. In fact, the trial court specifically found that those two defendants "have no control over wages or benefits paid to Plaintiffs[.]"
The dissent again misses the point when it states that Ballinger cannot prevail on her wrongful discharge claim because there "is no evidence that Stewart acted with the intent to force plaintiffs to quit when he reinstated Mahoney. " 135 Or App at 471. (Emphasis in original.) Stewart's actions and intentions are relevant at only our first level of inquiry. The second level, discussed in Mains v. II Morrow but entirely ignored by the dissent, is to analyze the actions of the employer's supervisors, such as Pearce, and to determine whether he intended to force plaintiffs to quit.
The court found that the sexually hostile environment, and the threats made by Pearce and Mahoney between August 10 and August 16, were intended to cause and in fact did cause Sutfin to suffer extreme emotional distress for which she was entitled to recover.