Opinion ID: 160203
Heading Depth: 3
Heading Rank: 2

Heading: Alter ego instruction

Text: 23 In instructing the jury on the Plaintiffs' claims of quid pro quo sexual harassment, the district court provided the following instruction: 24 Defendant [ProBank] is a corporation. A corporation may only act through natural persons as its agents or employees and, in general, any employee of a corporation may bind the corporation by his or her actions done and statements made while acting within the scope of his or her employment. Where an employee such as Mr. Pocrnick serves in a supervisory position and exercises significant control over an employee's hiring, firing or conditions of employment, that individual operates as the alter ego of the employer, and the employer is liable for any unlawful employment practices of the individual even though what the supervisor is said to have done violates company policy. 25 ProBank asserts on appeal that the district court erred in giving the alter ego instruction, noting that Pocrnick's mere status as Plaintiffs' supervisor is not enough to render Pocrnick ProBank's alter ego. In fact, ProBank asserts that Pocrnick's position as [P]laintiffs' supervisor, even with his authority to hire and fire them, does not make him ProBank's alter ego, and this Court should so rule as a matter of law. Appellant's Brief. at 30. 26 ProBank is certainly correct, as set out above in this court's discussion of Faragher and Burlington, that an employer is not automatically responsible for all sexual harassment perpetrated by its supervisory employees. See Burlington, 118 S. Ct. at 2267 (noting general rule is that sexual harassment by a supervisor is not conduct within the scope of employment, but recognizing that [s]cope of employment does not define the only basis for employer liability under agency principles). What ProBank refuses to recognize, however, is that Pocrnick is more than simply one of ProBank's supervisory employees. 27 As the Supreme Court recognized in Burlington, an alter ego instruction is appropriate in those situations where the agent's high rank in the company makes him or her the employer's alter ego. Id. Despite the absolute scarcity of case law development of this alternate avenue of employer liability, a review of the record reveals that this is one of those rare cases in which an alter ego instruction was appropriate based on Pocrnick's high rank at ProBank. 7 In that regard, the evidence at trial demonstrates that during all relevant time periods, Pocrnick was employed by ProBank as Senior Vice-President of Consumer Lending. In that capacity, Pocrnick had the authority to hire and fire employees in the consumer lending department, was the ultimate supervisor of all employees in the department, and had the ultimate authority to disapprove all consumer loans. 8 Pocrnick answered only to Drummond, ProBank's president 9 ; Drummond in turn answered directly to ProBank's Board of Directors. Drummond testified at trial that a senior level title was very important and a really big deal. 10 In addition to his very important position as senior vice president, Pocrnick's status at ProBank was heightened by his service on both the Loan and Bank Management Committees, committees exercising policy-making functions. 11 28 Although the district court erred in concluding that the alter ego instruction was appropriate simply because Pocrnick was the Plaintiffs' supervisor and exercised a high degree of control over them, see Harrison, 158 F.3d at 1376, this court can affirm the district court for any reason that finds support in the record. See Smith v. Ingersoll-Rand Co., 214 F.3d 1235, 1248 (10th Cir. 2000) (We are free to affirm the rulings of a district court on any ground that finds support in the record, even where the lower court reached its conclusions from a different or even erroneous course of reasoning. (quotation omitted)). The record evidence in this case, particularly the undisputed testimony of Drummond, leads this court to conclude that the alter ego instruction was appropriate under the particular, narrow facts of this case establishing Pocrnick's high managerial rank at ProBank.