Opinion ID: 160203
Heading Depth: 3
Heading Rank: 1

Heading: Judgment as a matter of law under Faragher and Burlington

Text: 9 As discussed at length by this court in Harrison v. Eddy Potash, Inc., the Supreme Court's recent decisions in Faragher and Burlington 10 provided much-needed clarification [in the Title VII arena] by specifically outlining the various avenues for imposing direct and vicarious liability on an employer for a supervisor's sexual harassment, and by establishing a general standard for imposing vicarious liability on an employer when a supervisor is alleged to have misused his or her delegated authority in sexually harassing a subordinate employee. 11 158 F.3d 1371, 1374 (10th Cir. 1998). In particular, in those cases the Supreme Court held as follows: 12 An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence, see Fed. R. Civ. Proc. 8(c). The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. While proof that an employer had promulgated an antiharassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense. . . . No affirmative defense is available, however, when the supervisor's harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment. 13 Faragher, 118 S. Ct. at 2292-93; Burlington, 118 S. Ct. at 2270. 14 On appeal, ProBank asserts that it is entitled to judgment as a matter of law under the newly-elucidated affirmative defense set out in Faragher and Burlington. 1 Although ProBank does not contest on appeal the Plaintiffs' claims that they suffered sexual harassment at the hands of Pocrnick, it asserts that: (1) the harassment did not rise to the level of a tangible employment action; (2) it took reasonable care, as evidenced by its antiharassment policy, to prevent and correct promptly any sexually harassing behavior; and (3) the Plaintiffs unreasonably failed to utilize the antiharassment policy. For their part, the Plaintiffs do not appear to contest that if the Faragher/Burlington affirmative defense is applicable, ProBank is entitled to judgment as a matter of law. They assert, however, that the defense is not available because they each suffered a tangible employment action. See Faragher, 118 S. Ct. at 2293; Burlington, 118 S. Ct. at 2270. 2 15 ProBank is entitled to judgment as a matter of law under the Faragher/ Burlington affirmative defense only if the evidence points but one way and is susceptible to no reasonable inferences supporting the opposing party. Mason v. Oklahoma Turnpike Auth., 115 F.3d 1442, 1450 (10th Cir. 1997); see also Baty v. Willamette Indus., 172 F.3d 1232, 1241 (10th Cir. 1999) (We must view the evidence and any inferences to be drawn therefrom most favorably to the non-moving party.). This court does not weigh the evidence, pass on the credibility of witnesses, or substitute our conclusions for [those] of the jury. Harolds Stores, Inc. v. Dillard Dep't Stores, 82 F.3d 1533, 1546 (10th Cir. 1996). Nevertheless, this court must enter judgment as a matter of law in favor of the moving party if there is no legally sufficient evidentiary basis . . . with respect to a claim or defense . . . under the controlling law for the jury to find in favor of the non-moving party. Fed. R. Civ. P. 50(a). Accordingly, the sole question is whether, viewing the evidence at trial in the manner most favorable to the Plaintiffs, no reasonable juror could conclude that they had suffered a tangible employment action. 16 The evidence adduced at trial in this case, properly viewed, was sufficient to establish that the Plaintiffs were both subjected to tangible employment actions. At trial, the Plaintiffs testified that they operated under the following compensation structure: (1) each received a base salary that was not pegged to the production of loans; (2) each received a commission of $15 for each loan they originated if that loan closed; and (3) each was entitled to participate in bonus programs if they met their loan-origination goals. Accordingly, a substantial portion of the Plaintiffs' compensation was directly tied to their ability to originate and close loans. 17 In that regard, the evidence at trial demonstrates that shortly after they began working at ProBank, Pocrnick began repeatedly requesting sexual favors from the Plaintiffs. The Plaintiffs testified that Pocrnick indicated that they would meet their goals, and therefore get their commissions and bonuses, if they acceded to Pocrnick's request for sexual favors. 3 They further testified, without contradiction, that Pocrnick had the absolute power to approve or disapprove their loans. For instance, Rotola testified that Mr. Pocrnick always had control on whether we made our goals or not. No one else did. . . . Mr. Pocrnick, bottom line, had the final say on what was approved and what wasn't approved. Mallinson-Montague testified that whatever happened in the loan department was [Pocrnick's] say. Finally, the Plaintiffs testified that after it became clear that they would continue rejecting his sexual advances, Pocrnick no longer provided them with leads and began disapproving their loans, thereby seriously diminishing their commissions and bonuses and placing their jobs in jeopardy. 18 Despite this testimony, ProBank asserts that the adverse employment actions suffered by the Plaintiffs are not sufficiently substantial or tangible under Faragher/Burlington to make ProBank responsible for Pocrnick's actions. See Appellant's Brief at 19-20 (ProBank submits that as a matter of law disapproval of at best a few loan applications does not constitute a 'significant change in employment status' or 'a significant change in benefits . . . .'). In contrast to ProBank's characterization of the testimony at trial, the Plaintiffs did not simply testify that a few of the loans they originated were denied. Instead, they testified that Pocrnick disapproved large numbers of their loans and that their compensation was significantly affected by the disapprovals. 4 Despite ProBank's attempts to marginalize it, this testimony is clearly sufficient to find that Pocrnick's sexual harassment resulted in a significant change in the Plaintiffs' benefits through the reduction of their commissions and bonuses. See Burlington, 118 S. Ct. at 2268 (A tangible employment action constitutes a . . . decision causing a significant change in benefits.). 5 19 ProBank asserts that the testimony of the Plaintiffs should be discounted in favor of the testimony of Pat Webber, an employee of ProBank who preformed an analysis of the loan rejections after ProBank learned of Pocrnick's sexual harassment of the Plaintiffs. Webber stated in a written report and testified at trial that he agreed with ninety to ninety-five percent of Pocrnick's decisions regarding the rejection of loans originated by the Plaintiffs. ProBank's reliance on the testimony of Webber is seriously misplaced. To the extent that Webber's testimony conflicts with the testimony of the Plaintiffs, this court is not entitled to disregard the testimony of the Plaintiffs and grant ProBank judgment as a matter of law based on the contradictory testimony of Webber. See Baty, 172 F.3d at 1241 (We must view the evidence and any inferences to be drawn therefrom most favorably to the non-moving party.); Harolds Stores, 82 F.3d at 1546 (noting that in determining whether a party is entitled to judgment as a matter of law, this court does not weigh the evidence, pass on the credibility of the witnesses, or substitute our conclusions for [those] of the jury). 20 In any event, the testimony of Webber is simply not that helpful to ProBank. Webber disagreed with, or could not explain, five to ten percent of Pocrnick's loan rejections. Even taking Webber's testimony as true, the jury was certainly entitled to infer that the unexplained loan rejections were based on the Plaintiffs' refusals to consent to Pocrnick's advances. Furthermore, on cross-examination, Webber acknowledged that the bulk of the rejection decisions with which he disagreed fell within the later periods of the Plaintiffs' employ at ProBank, that period after which they had each repeatedly rejected Pocrnick's sexual advances. This testimony is entirely consistent with the testimony of the Plaintiffs that Pocrnick began to reject more and more of their loans as they remained steadfast in their rejection of his sexual advances. ProBank is not entitled to judgment as a matter of law based on the testimony of Webber. 21 As a final matter, we reject ProBank's assertion that only those adverse employment actions amounting to a constructive discharge are sufficient to preclude the applicability of the Faragher/Burlington affirmative defense. If the Supreme Court had intended such a rule it could have easily said so. Instead, it used the term tangible employment action, a term, as noted by the Court itself, heavy with judicial gloss. See Burlington, 118 S. Ct. at 2268 (At the outset, we can identify a class of cases where, beyond question, more than the mere existence of the employment relation aids in commission of the harassment: when a supervisor takes a tangible employment action against the subordinate. Every Federal Court of Appeals to have considered the question has found vicarious liability when a discriminatory act results in a tangible employment action.). In so noting, the Supreme Court cited and quoted this court for the following proposition: 'If the plaintiff can show that she suffered an economic injury from her supervisor's actions, the employer becomes strictly liable without any further showing . . . .' Id. (quoting Sauers v. Salt Lake County, 1 F.3d 1122, 1127 (10th Cir. 1993) (further quotation omitted)). Although the Court was careful to note that the resultant economic injury must be tangible, significant, and/or material, id. at 2268-69, it never even hinted that the injury must be of the magnitude necessary to support a constructive discharge claim. See Spulak v. K Mart Corp., 894 F.2d 1150, 1154 (10th Cir. 1990) (noting that question on which constructive discharge cases turn is whether the employer by its illegal discriminatory acts has made working conditions so difficult that a reasonable person in the employee's position would feel compelled to resign). 22 In fact, in elucidating the tangible-employment-action standard, the Supreme Court cited with approval the opinion of the Seventh Circuit in Crady v. Liberty National Bank & Trust Co. of Indiana, 993 F.2d 132, 136 (7th Cir. 1993). See Burlington, 118 S. Ct. at 2268-69. The court in Crady specifically noted that the question of whether the plaintiff was constructively discharged was not at issue in the case. See 993 F.2d at 135 n.1. Instead, the sole question was whether the plaintiff had demonstrated a materially adverse change in the terms and conditions of employment. Id. at 136. As did the Second Circuit in a recent case, we conclude it unwise to merge the Supreme Court's specific language in Faragher and Burlington into the general umbrella concept of constructive discharge. Cf. Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 294 (2d Cir. 1999) (holding that Faragher/Burlington's tangible employment action is not synonymous with constructive discharge and noting that not all constructive discharges will satisfy the Faragher/Burlington standard), cert. denied, 120 S. Ct. 1959 (2000). It is sufficient to note that the evidence adduced in this case Pocrnick disapproved substantial numbers of loans originated by the Plaintiffs because they would not submit to his sexual advances thereby adversely affecting their eligibility for commissions and bonuses is sufficient to demonstrate that the adverse employment action at issue here was significant, material, and tangible. 6