Opinion ID: 516050
Heading Depth: 1
Heading Rank: 4

Heading: Corporate Liability

Text: 31 As additional grounds for granting JNOV, the district court found that Southern Bell could not be liable to Vance for damages even assuming that the alleged harassment constituted a violation of Sec. 1981. The court held that because the evidence clearly showed that Vance failed to report the noose incidents to any management personnel despite the existence of adequate procedures for reporting grievances, Southern Bell could not be liable as a matter of law. We disagree. 32 Assuming that the plaintiff is able to show harassment sufficient to sustain a claim under Title VII or Sec. 1981, there are two theories under which a corporate defendant can be held liable for hostile environment harassment at the workplace. First, where the hostile environment is created by one who is not the plaintiff's employer (i.e., a co-worker) the employer may be held liable through respondeat superior if the plaintiff can establish that the employer knew or should have known of the harassment and failed to take remedial action. Henson, 682 F.2d at 910. 6 The plaintiff can prove that the employer knew of the harassment by showing either that she complained to higher management or that the harassment was pervasive enough to charge the employer with constructive knowledge. 33 Second, where the harasser is himself the plaintiff's employer, or an agent of the employer, the employer is directly, rather than indirectly liable for the harassment. Sparks, 830 F.2d at 1558. Under this scenario respondeat superior theory does not apply and plaintiff need not establish that she gave anyone notice of the harassment. Id.; Horn v. Duke Homes, Div. of Windsor Mobile Homes, Inc., 755 F.2d 599, 604 (7th Cir.1985). Thus, a jury could properly hold the company liable for damages under Sec. 1981 by finding that the illegal acts were committed by someone deemed to be the plaintiff's employer. In such a case, [w]hether his superiors know or should have known what he did is irrelevant.... Hunter v. Allis-Chalmers Corp., Engine Div., 797 F.2d 1417, 1422 (7th Cir.1986) (emphasis in original). 34 In order for this court to uphold the district court's ruling that the plaintiff failed to prove Southern Bell's liability for the acts committed by Wagner and others, the evidence must show that no reasonable jury could have found Southern Bell liable under either of the two theories outlined above. We must therefore determine whether the evidence in this case is sufficient to create a jury question under either the theory of respondeat superior, or direct liability through an agent of Southern Bell.
35 In its order granting JNOV, the district court ruled that even if the plaintiff had proved a violation of Sec. 1981, Southern Bell could not be held liable for damages for hostile environment harassment. The court gave two reasons. First, assuming that the jury could have accepted the plaintiff's inference that Wagner hung the noose over her work station, she failed to introduce any evidence that the Company knew of this, and thus it could not be liable under Henson. Vance, 672 F.Supp. at 1413. However, as previously noted, this court has held that an employer may be liable for the discriminatory acts of a non-management employee if the harassment was so pervasive that an inference of constructive knowledge arises. Huddleston v. Roger Dean Chevrolet, Inc., 845 F.2d 900, 904 (11th Cir.1988); Henson, 682 F.2d at 910. 36 We believe that given all the evidence, a reasonable jury could have found that higher management should have known that the plaintiff was subjected to racial harassment. The jury must be permitted to consider all the evidence before it when making the factual determination of whether higher management should have been aware of the alleged harassment. By examining only the noose incidents, and finding that it was unreasonable for the jury to charge the company with constructive knowledge of them, the district court failed to consider that the jury may properly have based a finding regarding the company's constructive knowledge on evidence other than that concerning the nooses. Just as the determination of whether conduct is sufficiently severe and pervasive to constitute actionable harassment requires evaluation of the totality of the circumstances, the factfinder here must examine the evidence in the same manner. Again the egregiousness, as well as the number of the incidents, is plainly relevant. 37 Second, the district court held that the failure of the plaintiff to give the company timely notice and the provision by Southern Bell of adequate grievance procedures insulated the company from liability. 7 However, we conclude that in this case, the question was more properly one for the trier of fact. In Meritor, a sexual harassment case, the Supreme Court addressed the defendant's argument that its grievance procedures, along with the plaintiff's failure to provide the company with notice, protected the defendant from liability. The Court held first, that absence of notice to an employer does not necessarily insulate that employer from liability. Meritor, 477 U.S. at 72, 106 S.Ct. at 2408. Next, the Court ruled that the availability of avenues for redress of an employee's grievances does not necessarily leave the employer free of liability: 38 [W]e reject petitioner's view that the mere existence of a grievance procedure and a policy against discrimination, coupled with respondent's failure to invoke that procedure, must insulate petitioner from liability. While those facts are plainly relevant, the situation before us demonstrates why they are not necessarily dispositive. Petitioner's general nondiscrimination policy did not address sexual harassment in particular, and thus did not alert employees to their employer's interest in correcting that form of discrimination. App. 25. Moreover, the bank's grievance procedure apparently required an employee to complain first to her supervisor, in this case Taylor. Since Taylor was the alleged perpetrator, it is not altogether surprising that respondent failed to invoke the procedure and report her grievance to him. Petitioner's contention that respondent's failure should insulate it from liability might be substantially stronger if its procedures were better calculated to encourage victims of harassment to come forward. 39 Id. at 72-73, 106 S.Ct. at 2408-09. 40 In several respects, the facts concerning notice and grievance procedures in this case are similar to those in Meritor. Vance testified that she did not report the noose incident because she was scared. Referring to the first noose incident, Vance testified: 41 I didn't know who had [hung the noose]. I didn't know anyone in that warehouse. I may have been talking to the person actually that did this thing. So that is why I didn't say anything. (R.7-283). 42 When asked to explain why she did not bring the noose to the attention of Wagner or Sellars after the second time it was hung at her workbench, the plaintiff testified: 43 I felt that something was terribly wrong at Western Way. I didn't know Mr. Sellars, I didn't know Mr. Wagner. But for something like this to be allowed, someone had to know something, but I was too afraid to ask. (R.7-286). 44 We believe that a jury reasonably could have found that the plaintiff's testimony was credible, and that Southern Bell's grievance procedures did not rise to the level necessary to insulate the company from liability under Meritor. 8 Thus we find that the district court erred in ruling that Southern Bell's grievance procedures insulated the company from liability as a matter of law.
45 In Meritor, the Supreme Court addressed the issue of when a corporate defendant will be liable under Title VII for the acts of specific employees. The Court declined to issue a definitive rule, but held that courts should look to common law agency principles for guidance in this area. Id. at 72, 106 S.Ct. at 2408. We have held that where a plaintiff's alleged harasser acts as an agent of the employer, the harasser is the employer for purposes of Title VII. Huddleston, 845 F.2d at 904; Sparks, 830 F.2d at 1557-59. 9 This liability is direct; the employer cannot find shelter in the claim that it neither had notice of, or approved of, the unlawful conduct. Sparks, 830 F.2d at 1559; 29 C.F.R. Sec. 1606.8(c) (1988). 46 In Sparks we reversed a grant of summary judgment for the defendant in a sexual harassment action brought against the plaintiff's employer under Title VII. The district court had ruled that under Henson the plaintiff could not prevail because she had failed to allege that higher management knew or should have known that she was being harassed by her manager. We ruled that the district court had misconstrued Henson: 47 In applying the respondeat superior requirement of Henson, ... the district court overlooked the fact that the Henson court's decision to employ respondeat superior theory rested on its assumption that the plaintiff's alleged harasser was her supervisor but not her employer. Henson, 682 F.2d at 905, n. 9. Here, in contrast, Sparks alleges that Long was both her supervisor and her employer, as that term is defined under Title VII. 48 830 F.2d at 1557 (emphasis in original). 49 Similarly, the plaintiff in this case alleges that Wagner was an agent of the company for direct employer liability purposes. We must therefore ascertain whether the plaintiff produced substantial evidence at trial upon which the jury reasonably could have predicated a finding of direct liability through an agent of the company. 10 Specifically, we must determine whether the individual parties alleged to have committed acts of harassment against the plaintiff could be considered agents of Southern Bell. 50 Several courts, including ours, have held that in so called tangible job detriment harassment cases, a supervisory employee acts as an agent of his employer under Title VII when that employee uses the authority delegated to him by the employer to harass the plaintiff. In Sparks, a tangible job detriment case, we adopted the liability standard proposed by the EEOC in its amicus brief in Meritor 11 which would hold an employer directly liable for the actions of a supervisor where [the] supervisor exercises the authority actually delegated to him by his employer, by making or threatening to make decisions affecting the employment status of his subordinates. Sparks, 830 F.2d at 1559 (quoting Meritor, 477 U.S. at 70, 106 S.Ct. at 2407). 12 However, in that case, we found that the standard for determining an agency relationship in tangible job detriment cases was not necessarily applicable in other types of harassment cases: 51 [W]e need not address the issue raised by the EEOC, and not resolved by the Supreme Court, in Vinson: what rule should govern the employer's liability for sexual harassment by its supervisors where the sexual harassment claim rests exclusively on a hostile environment theory, in that the supervisor neither explicitly nor implicitly threatened to use his authority against the victim. 52 Id. at 1560 n. 9 (citation omitted). 53 We believe that an agency standard which looks solely to the degree of authority the harasser wields over the plaintiff is not particularly useful in a hostile environment case such as this one. As we stated in Henson, [t]he capacity of any person to create a hostile or offensive environment is not necessarily enhanced or diminished by any degree of authority which the employer confers upon that individual. Henson, 682 F.2d at 910. While the supervisor's direct authority over the plaintiff must be considered as a relevant factor, we believe that courts should also examine any evidence bearing on the overall structure of the workplace, including the relative positions of the parties involved. We agree with the EEOC Guidelines, which state that it is necessary to examine 54 the circumstances of the particular employment relationship and the job functions performed by the individual in determining whether an individual acts in either a supervisory or agency capacity. 55 29 C.F.R. Sec. 1606.8(c) (1988). 56 In Hamilton v. Rodgers, 791 F.2d 439 (5th Cir.1986), the court found two supervisors to be agents of the fire department despite their intermediate standing within the Department's hierarchy, based partly on their authority over matters such as car assignments and the staffing of shifts.... Id. at 442. Similarly, the plaintiff in the present case presented evidence that as her supervisor, Wagner had the authority to suspend employees, place discipline reports in employee personnel files, handle union grievance proceedings, and make personnel changes in his department. 57 Thus we believe that the plaintiff produced evidence from which a reasonable jury could conclude that in creating a hostile work environment, Wagner acted as an agent of Southern Bell under the standard outlined above. The district court therefore erred by ruling otherwise.