Opinion ID: 3032627
Heading Depth: 2
Heading Rank: 3

Heading: Employer Liability for Customer Harassment

Text: [6] Galdamez claims that the district court erroneously refused to instruct the jury on the Postal Service’s duty to investigate and remedy actionable harassment by customers and community members. “A party is entitled to an instruction about his or her theory of the case if it is supported by law and has foundation in the evidence.” Jones v. Williams, 297 F.3d 930, 934 (9th Cir. 2002). The district court variously cited three rationales for its decision: 1) that Title VII does not provide a “stand-alone” claim for failure to investigate and remedy racial or national origin harassment by third parties unless that failure itself is motivated by discriminatory animus; 2) that Galdamez, as a management-level employee, was responsible for remedying any such harassment herself; and 3) that the evidence did not support the requested instruction. We view the first two rationales as conclusions going to the legal requirements of the claim, and thus review them de novo, Fireman’s Fund Insurance Companies v. Alaskan Pride Partnership, 106 F.3d 1465, 1469 (9th Cir. 1997), while we review the third, evidentiary conclusion for abuse of discretion. See Jones, 297 F.3d at 934. [7] The district court erred as a matter of both law and fact in refusing the instruction. An employer may be held liable for the actionable third-party harassment of its employees where it ratifies or condones the conduct by failing to investigate and remedy it after learning of it. See, e.g., Little v. Windermere Relocation, Inc., 301 F.3d 958, 968 (9th Cir. 2002) GALDAMEZ v. POTTER 8265 (holding employer liable where, by “failing to take immediate and effective corrective action,” it “ratified” rape of employee by potential client); Folkerson v. Circus Circus Enters., Inc., 107 F.3d 754, 756 (9th Cir. 1997) (“We now hold that an employer may be held liable for sexual harassment on the part of a private individual . . . where the employer either ratifies or acquiesces in the harassment by not taking immediate and/ or corrective actions when it knew or should have known of the conduct.”).5 This hostile environment theory of employer liability is grounded in negligence and ratification rather than intentional discrimination. See Swenson v. Potter, 271 F.3d 1184, 1191-92 (9th Cir. 2001) (citing Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 759 (1998)). Therefore, the district court applied incorrect law in refusing the instruction based on its belief that Galdamez had to prove that discriminatory animus motivated the Postal Service’s failure to act. [8] The district court also erred in concluding that Galdamez’s position as postmaster relieved the Postal Service of responsibility to investigate and prevent harassment. Title VII prohibits racial and national origin discrimination by an employer “against any individual with respect to [her] compensation, terms, conditions, or privileges of employment,” 42 U.S.C. § 2000e-2(a)(1) (emphasis added), and makes no relevant distinctions between managerial and other employees. See 42 U.S.C. § 2000e(f) (defining “employee” as “an individual employed by an employer,” subject to certain exceptions inapplicable here); see also Little, 301 F.3d at 964 (holding employer liable for failing to address rape of management-level employee). Galdamez is as entitled as any other employee to the protections of Title VII. The district court erred to the extent that it concluded otherwise. 5 Although these cases involved hostile work environments created by third-party sexual harassment, the same analysis applies to instances of racial or national origin harassment. See Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 116 n.10 (2002); see also 29 C.F.R. § 1606.8(e). 8266 GALDAMEZ v. POTTER Finally, the evidence was sufficient to support jury instructions on both a hostile work environment and employer liability. To make out a hostile work environment claim, Galdamez must show (1) that she was subjected to verbal or physical conduct based on her race or national origin; (2) that the conduct was unwelcome; and (3) that the conduct was “sufficiently severe or pervasive to alter the conditions of [her] employment and create an abusive work environment.” Vasquez v. County of Los Angeles, 349 F.3d 634, 642 (9th Cir. 2003). In order to satisfy the third element of this test, she must show that her work environment was both subjectively and objectively hostile. See McGinest v. GTE Serv. Corp., 360 F.3d 1103, 1113 (9th Cir. 2004). In making the objective determination, we look to all of the circumstances, including the frequency, severity, and nature (i.e., physically threatening or humiliating as opposed to merely verbally offensive) of the conduct. See Vasquez, 349 F.3d at 642. The required severity of the conduct varies inversely with its pervasiveness and frequency. McGinest, 360 F.3d at 1113. Finally, the objective hostility of the environment must be considered “from the perspective of a reasonable person belonging to the racial or ethnic group of the plaintiff.” Id. at 1115. [9] Properly instructed as to these requirements, a reasonable jury could have found that Galdamez experienced a hostile work environment based on her national origin. Galdamez began to receive hostile comments from customers and other residents based on her race, accent, and national origin almost immediately upon taking the job in Willamina. Several customers, including the mayor, expressed displeasure with having a Hispanic postmaster or criticized her accented English. One local newspaper referred to Galdamez’s “thick accent from her native Honduras” in explaining that she had not “made friends in some quarters” and was the object of an ouster campaign. Supervisor John Fusco made notes of a conversation with the mayor in which he referred to “culture” and “prejudice,” but could not recall why at the time of trial. GALDAMEZ v. POTTER 8267 [10] A reasonable jury also could have found that the community’s treatment of Galdamez was both subjectively and objectively severe or pervasive. Galdamez received threats to her life and safety, including an anonymous letter promising to “get rid of you foreigner.” A customer warned Galdamez that Willamina was a “redneck town,” and that “[e]veryone” would get together and “come and kill [her]” if she persisted in trying to enforce postal regulations. Galdamez’s subordinates also recalled hearing of at least two other similar threats, and one postal worker gave Galdamez a list of townspeople who would “not think twice” about “get[ting] together and kill[ing]” her. Greenhill, one of the primary organizers of the mass meeting, told a local newspaper that he did not want Galdamez to be present because he “didn’t want her tarred and feathered on the spot [and] didn’t want this to turn into a public lynching.” Finally, Galdamez’s car was vandalized in the post office lot, an act that Ron Gates thought may have been racially motivated. Other Postal Service employees confirmed at trial that they thought Galdamez’s difficulties stemmed from community prejudice. [11] These comments and acts took place over the course of three years, and included not only offensive remarks, but also racially charged references to potential mob violence, indirect threats to physical safety, and property damage. In context, it is somewhat difficult to disentangle the acts explicitly based on Galdamez’s national origin from those that may have had some other motivation.6 Nonetheless, considering all 6 We recently followed the Third Circuit in concluding that there are no “talismanic expressions” of racial animus necessary to sustain a harassment claim, and recognized that racially charged “code words” may provide evidence of discriminatory intent by “send[ing] a clear message and carry[ing] the distinct tone of racial motivations and implications.” McGinest, 360 F.3d at 1117 (quoting Aman v. Cort Furniture Rental Group, 85 F.3d 1074, 1083 (3d Cir. 1996)). The word “redneck,” a term that appears several times in the record of this case, can suggest racial hostility. See, e.g., Jackson v. Quanex Corp., 191 F.3d 647, 666 (6th Cir. 1999) (“The evidence demonstrates that Quanex management adopted the 8268 GALDAMEZ v. POTTER of the circumstances, a jury reasonably could have found that Galdamez was subjected to unwelcome, severe, and pervasive national origin harassment that affected the terms and conditions of her employment, see Vasquez, 349 F.3d at 642, and that the environment was both subjectively and objectively abusive when considered from the perspective of a reasonable person of her race and national origin. Cf. McGinest, 360 F.3d at 1115-19 (reversing summary judgment against plaintiff subjected to numerous offensive racial comments and one potentially injurious situation over the course of several years). The evidence thus supported a hostile work environment instruction. [12] The evidence also supported an instruction on the Postal Service’s potential liability for failing to investigate and remedy the harassment. Once the Postal Service actually knew (or reasonably should have known) about what Galdamez was experiencing, it was required to “undertak[e] remedial measures ‘reasonably calculated to end the harassment.’ ” McGinest, 360 F.3d at 1120 (quoting Ellison v. Brady, 924 F.2d 872, 882 (9th Cir. 1991)). The “reasonableattitude that everyone knew the plant was a ‘redneck’ environment, and that therefore, racially offensive conduct taking place there was not harassment, but conduct African-American employees had to accept as part of life at Quanex.”); United States v. Pasadena Indep. Sch. Dist., No. H-83-5107, 1987 WL 9919, at  (S.D. Tex. Apr. 18, 1987) (finding that city’s reputation as “a white ‘redneck’ or racist community” had discouraged minority applicants from seeking jobs in school district); but see Sypniewski v. Warren Hills Reg’l Bd. of Educ., 307 F.3d 243, 257-58 (3d Cir. 2002) (noting that in certain contexts “redneck” may “imply . . . racial intolerance and bigotry,” but concluding that a t-shirt bearing the word was unrelated to the specific racial harassment at issue). The repeated references in the record here to Willamina being a “redneck” town, in combination with Greenhill’s public statements evoking a potential lynching, convey an atmosphere of racial hostility, and thus could support a reasonable inference that some community members’ actions were based on Galdamez’s race or national origin, notwithstanding the absence in some instances of “talismanic” language to that effect. GALDAMEZ v. POTTER 8269 ness” of such remedial measures would depend on the Postal Service’s ability to stop the harassment and to deter potential harassers, as well as the promptness of the response. Id. [13] Galdamez testified that she informed her superiors almost immediately after taking office in 1994 of customer harassment based on her accent and national origin.7 When Galdamez first complained of the harassment, Bogroff told her Willamina was a “redneck town” and that she was “tough” enough to deal with the treatment. Jackson testified that postmasters were expected to “grin and bear” racist remarks and harassment, at least up to the point where law enforcement involvement became necessary. These same supervisors also testified that they did not know whether they had any specific obligation to look into racial harassment, or special procedures for confronting it, as they did in the context of sexual harassment. This evidence suggests that the Postal Service’s response to Galdamez’s difficulties was limited at best. [14] On the other hand, there was some evidence that Galdamez’s superiors did respond, specifically by offering Galdamez a position in a town with a larger Hispanic community and by arranging for a diversity specialist to inquire into the situation. They did so, however, only in conjunction with imposing formal discipline against Galdamez. Weighing all the evidence, a reasonable jury could have found that the harassment was actionable, that management-level Postal Service employees knew or should have known about it while it was happening, and that they nonetheless failed to take steps reasonably calculated to end and deter it, at least to the extent 7 Other testimony suggested that management-level Postal Service personnel first became aware of the harassment in 1997. An employer’s liability runs only from the time it knew or should have known of the conduct. Swenson v. Potter, 271 F.3d 1184, 1192 (9th Cir. 2001). Given the conflicting testimony in the record, this should be a factual question for the jury. 8270 GALDAMEZ v. POTTER such steps were within their power. See McGinest, 360 F.3d at 1120; Ellison v. Brady, 924 F.2d 872, 882 (9th Cir. 1991). The conflicting testimony as to the timing and extent of the Service’s response clearly presents issues of fact that could be resolved either way. In this light, it was an abuse of discretion to deny Galdamez an instruction on this theory of her case. [15] These errors were not harmless. In this circuit we presume prejudice where civil trial error is concerned, and the burden shifts to the Postal Service to demonstrate “that it is more probable than not that the jury would have reached the same verdict” had it been properly instructed. Obrey v. Johnson, 400 F.3d 691, 701 (9th Cir. 2005). The jury was instructed to determine only whether Galdamez’s superiors acted with discriminatory intent in disciplining her. The jurors never were told that the Postal Service also could be liable for actionable harassment by third parties if it failed to take reasonable steps within its power to address the problem. Moreover, the jury might have felt that there was some discriminatory aspect of the case it could not reach, as evidenced by its handwritten addendum to the special verdict form emphasizing that the Postal Service had subjected Galdamez to some adverse employment action. Properly instructed, the jury may well have held the Postal Service liable. Accordingly, we reverse and remand for a new trial on this claim.8 8 We do not suggest that a new trial be held on all issues raised in the previous trial, but only on the harassment claim and the theory of employer liability that did not go to the jury. In appropriate situations, we may confine a new trial to particular issues. See, e.g., Ward v. City of San Jose, 967 F.2d 280, 284-85 (9th Cir. 1992); see also 11 Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice & Procedure § 2814, at 158 (2d ed. 1995). Here the issues relating to whether Galdamez was subjected to customer harassment and whether her employer is liable for failing to investigate her allegations are “so distinct and separable from others that a trial of [those] alone may be had without injustice.” Gasoline Prods. Co., Inc. v. Champlin Refining Co., 283 U.S. 494, 500 (1931). GALDAMEZ v. POTTER 8271 D. The Verdict Form’s Emphasis on Named Supervisors [16] Galdamez raised several objections to the special verdict form, which required jurors to specify which of three named supervisors intentionally discriminated against her. “As long as the questions are adequate to obtain a jury determination of all the factual issues essential to judgment, the trial court has complete discretion as to the form of the special verdict.” Saman v. Robbins, 173 F.3d 1150, 1155 (9th Cir. 1999). [17] Question 1 on the special verdict form provided: Has Plaintiff Arlene Graves (Galdamez) established by a preponderance of the evidence that her national origin was a motivating factor in any adverse employment action on the part of her supervisors that affected the terms and conditions of her employment while she was the postmaster in Willamina? Yes No X It was only if the answer to that question was “Yes” that the jury was to specify in Question 2 whether particular supervisors had intentionally discriminated against her. Thus, the jury having found that her national origin was not a motivating factor in any adverse employment action, any deficiency in the form of Question 2 was irrelevant here.9 9 We emphasize that our holding is confined to these narrow facts. Although this is not the case here, it is conceivable that a question asking jurors to identify discrimination on the part of individual supervisors could inadvertently limit or otherwise influence the jury’s consideration of other questions, including that of liability on the part of the employer. Moreover, had Galdamez’s harassment claim also gone to the jury, the special verdict form would have been improper with respect to that claim, because it would have precluded a finding in her favor on the Postal Service’s liability for third-party harassment. Finally, such a special verdict form would have been inappropriate had this case involved an allegation that one indi8272 GALDAMEZ v. POTTER E. Changes to the Special Verdict Form After Closing Argument [18] Galdamez contends that the district court erred by changing the verdict form during deliberations, thereby depriving her of the opportunity to address the verdict form in closing arguments. The district court may have abused its discretion by changing the verdict form after submitting the case to the jury. See Ruvalcaba v. City of Los Angeles, 167 F.3d 514, 521-23 (9th Cir. 1999); see also Landes Const. Co., Inc. v. Royal Bank of Can., 833 F.2d 1365, 1374 (9th Cir. 1987). Any such error, however, was harmless. Galdamez does not explain how her closing argument would have been different had the substance of the revised form been disclosed in time for her to make adjustments. The only logical adjustment she could have made would have been to direct her arguments to the actions of the three supervisors named in the special verdict form. In fact, she devoted the bulk of her closing argument to the actions of two of these supervisors, suggesting that the argument she actually made was basically the vidual’s discriminatory animus infected a more complex decision-making process. Title VII may still be violated where the ultimate decision-maker, lacking individual discriminatory intent, takes an adverse employment action in reliance on factors affected by another decision-maker’s discriminatory animus. See, e.g., Price Waterhouse v. Hopkins, 490 U.S. 228, 232-35 (1989) (describing process by which the employer’s “Policy Board,” informed by various comments from partners, some of which demonstrated an illegal bias based on sex, took an adverse employment action); Shager v. Upjohn Co., 913 F.2d 398, 405 (7th Cir. 1990) (holding that company decisionmaker that acts as “the conduit of [a lower-level supervisor’s] prejudice — his cat’s paw” — is liable under Title VII). These are but three examples of cases in which the district court probably would have abused its discretion by focusing the jury on named individuals. Given the various ways employers structure their personnel decisions, a special verdict form such as the one used here is unlikely to be illuminating, and in many cases may mislead or confuse the jury or otherwise lead to error. As a general matter, therefore, we discourage the use of such special verdicts in these cases. GALDAMEZ v. POTTER 8273 same argument she would have made had the district court disclosed the substance of the special verdict in a more timely fashion. See Ruvalcaba, 167 F.3d at 522-23. Therefore, we must conclude that any error in the timing of disclosure was harmless. IV