Court Opinion

ID: 2671647
Source: CourtListenerOpinion
Date Created: 2014-04-30 00:01:21.102151+00
Date Added: 2024-06-11T13:05:20.524765
License: Public Domain

PUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                               No. 13-1481

LORI FREEMAN,

                 Plaintiff – Appellant,

           v.

DAL-TILE    CORPORATION,   d/b/a    Dal-Tile    Distribution,
Incorporated, d/b/a Dal-Tile Services, Incorporated,

                 Defendant – Appellee,

           and

VOSTONE INCORPORATED; TIMOTHY KOESTER,

                 Defendants.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. W. Earl Britt, Senior
District Judge. (5:10-cv-00522-BR)

Argued:   January 29, 2014                   Decided:   April 29, 2014

Before TRAXLER, Chief Judge, and NIEMEYER and SHEDD, Circuit
Judges.

Reversed in part, affirmed in part, and remanded by published
opinion. Judge Shedd wrote the majority opinion, in which Chief
Judge Traxler joined.       Judge Niemeyer wrote an opinion
concurring in part and dissenting in part.
ARGUED: Anne Warren King, GEORGETOWN UNIVERSITY LAW CENTER,
Washington,   D.C.,  for   Appellant.     Kristine  Marie  Sims,
CONSTANGY, BROOKS & SMITH, LLP, Winston-Salem, North Carolina,
for Appellee.    ON BRIEF: Brian Wolfman, Institute for Public
Representation, GEORGETOWN UNIVERSITY LAW CENTER, Washington,
D.C., for Appellant. William J. McMahon, IV, CONSTANGY, BROOKS
& SMITH, LLP, Winston-Salem, North Carolina, for Appellee.

                               2
SHEDD, Circuit Judge:

        Lori Freeman appeals a grant of summary judgment in favor

of her former employer, Dal-Tile Corporation, on her claims of

racial       and      sexual      hostile      work     environment,         constructive

discharge,          and    common    law     obstruction       of    justice.     For     the

reasons      discussed       more    fully     below,   we     reverse      the   grant    of

summary       judgment       on   the   hostile      work     environment      claims     and

remand them for further consideration. We affirm the grant of

summary judgment on the claims of constructive discharge and

common law obstruction of justice.

                                             I.

     Dal–Tile Corporation manufactures, distributes, and markets

ceramic       tile    and    natural       stone    products. 1      It    operates     eight

manufacturing         facilities,       five       regional    distribution       centers,

and over 250 sales service centers, including both stone yards

and tile showrooms.

     In June 2008, Dal–Tile acquired the assets of Marble Point,

Inc., a       stone       yard    located    in    Raleigh,     North      Carolina,    from

owner       Marco    Izzi.        Dal–Tile    incorporated          this   newly-acquired

        1
       All facts discussed in this opinion are presented in the
light most favorable to Freeman, the non-moving party. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)(“The
evidence of the non-movant is to be believed, and all
justifiable inferences are to be drawn in his favor.”); Evans v.
Techs. Applications & Serv. Co., 80 F.3d 954, 958 (4th Cir.
1996).

                                               3
operation        into     a     sale-service          center        organization          (the

“Stoneyard”).       After      this    sale,        Izzi     purchased     an     ownership

interest    in    VoStone,         Inc.,    a   Raleigh-based        kitchen      and     bath

remodeling       center.       A     significant           percentage      of     VoStone's

business involved working with Dal–Tile.

     In August 2006, Freeman began working as a receptionist for

Dal–Tile’s       predecessor,         Marble        Point.    She    was    hired       on   a

temporary basis through a staffing agency, but after six months,

she joined Marble Point as a permanent employee. Throughout her

tenure     at    Marble       Point,       Freeman     reported      to    Izzi     and      to

assistant manager Sara Wrenn. Following Dal–Tile's acquisition

of Marble Point, Freeman became a Dal–Tile employee, 2 and Wrenn

continued to be her supervisor. Freeman’s first position with

Dal–Tile    was    General         Office    Clerk.     Over    time,      Freeman      began

interacting more frequently with Dal–Tile's customers, and she

effectively functioned as a Customer Service Representative. In

     2
       In June 2008, Dal–Tile's Regional Human Resources Manager
visited the Stoneyard and held a group meeting with the
employees to review Dal–Tile's policies and employee benefits
programs. At that time, Freeman received Dal–Tile's employee
handbook, including its policy prohibiting harassment and
discrimination. Dal–Tile's policy against harassment, which was
in place throughout Freeman’s tenure, states that Dal–Tile will
not tolerate harassment based on an individual's sex, race, or
other protected characteristics. It also defines the sort of
conduct prohibited, provides avenues for employees to report
harassment to the company, and prohibits retaliation against
individuals who raise complaints under the policy.

                                                4
May 2009, she was promoted to the role of Sales Consultant. In

November 2009, Freeman’s position was reclassified to Customer

Service Representative.

       The harassment claims at issue are based on the behavior of

Timothy      Koester,       an     independent    sales      representative    for

VoStone. Freeman usually interacted with Koester more than once

a day while he was conducting business with Dal–Tile on behalf

of VoStone.

       About two weeks after Freeman became a temporary employee

with Marble Point in August 2006, she overheard Koester as he

walked into Wrenn's office and, referencing a photograph of two

former employees, asked Wrenn and another employee: “[H]ey, who

are these two black b****es[?]” J.A. 76. After the incident,

Freeman asked Wrenn about Koester, inquiring: “[W]ho was he and

what   was    his       deal[?]”     J.A.   77.   Wrenn   replied:   “[H]e's    an

asshole, but I don't think he'll do it again.” Id. The next day,

Freeman told Koester “how uncomfortable and demeaning that made

[her] feel,” and she asked him not to use that sort of language

anymore. J.A. 75.

       Freeman also recalled Koester making comments about women

he had been with the night before. On one occasion, Koester

showed her a photograph of a naked woman on his cell phone and

remarked: “[T]his is what I left in my bed to come here today.”

J.A.   80.   On     a    different    occasion,    Freeman    overheard   Koester

                                            5
talking    with     one    of     her     co-workers,      Jodi    Scott,       about

photographs of Scott's daughters that were displayed in Scott's

office. According to Freeman, Koester told Scott: “I'm going to

hook up with one your daughters,” or “I'm going to turn one of

your daughters out.” J.A. 136. Scott replied: “[Y]ou better stay

away from my kids,” or “[D]on't talk to me about my kids.” Id.

     In a different instance, Koester passed gas on Freeman’s

phone. Koester was using Freeman’s office phone, and she was

standing    there    waiting     for    him   to   finish    his    conversation.

Before Koester hung up the phone, he held it to his buttocks and

passed gas on it. J.A. 81. Wrenn was present for this incident.

Freeman immediately began crying and had to leave the room to

calm down. J.A. 82.

     In    June    2009,   Koester      called     Freeman   about      covering    a

customer appointment for him because he had been partying the

night before. Koester indicated that he could not come into the

office, saying: “I'm just too f***ed up, don't take offense, but

I'm as f***ed up as a n****r's checkbook.” J.A. 99. Freeman told

Wrenn   about     Koester's     comment    that    same   day,    but   Wrenn    just

“scoffed and shook her head and put her head back down and

continued on with trying to pick the nail polish off of her

nails . . . .” J.A. 102. Freeman also reported Koester's remark

to James Vose, one of the co-owners of VoStone. Vose laughed and

                                          6
said: “[Y]ou got to admit that's kind of funny, just do what I

do and hit him because he's an asshole.” J.A. 107.

      Subsequently, on July 29, 2009, Koester called Dal–Tile's

general office line, and Freeman answered the phone. Koester had

his   six-year-old   daughter,     Angelina,    with   him    at   the   time.

Freeman, who knew Angelina, asked Koester to tell Angelina that

she said “hi.” Instead, Koester put Freeman on speaker phone so

that she and Angelina could talk with one another. Freeman then

heard Angelina ask: “Daddy, who's that[?]” J.A. 111. Koester

replied: “[T]hat's the black b**** over at Marble Point.” Id.

Freeman “immediately became very irate.” Id. She told Koester:

“[D]on't you ever call me a black b**** as long as you live.”

Id. Koester responded: “[O]h, word.” Id. Freeman promptly told

Wrenn about Koester's comment, but Wrenn appeared disinterested

and continued a conversation that she had been having with some

other co-workers.

      In addition to these specific incidents, Freeman and other

co-workers testified more generally that Koester frequently made

inappropriate    sexual   comments.   Freeman    testified     that   Koester

“was always coming in making some sort of lewd comments.” J.A.

78. She also stated that “maybe two or three times a week” she

would have to correct Koester and tell him not to say something

inappropriate.    J.A.    79.   Freeman   explained    that   Koester    would

“come in to discuss what he did the night before with whatever

                                      7
woman he was with and [Freeman] would tell him [she didn’t] want

to hear it.” J.A. 80. Wrenn confirmed this, stating that “he

liked to brag about his, you know, evening excursions, or his

weekend excursions. . . . [T]here were times where he would say

something about what he did the night before that had sexual

content to it.” J.A. 269. According to Wrenn, “[h]e always made

comments       about   women.”     J.A.     274.    Wrenn      also    testified       that

Koester used the word “b****” in the office, such as “You should

have seen these hot b****es I met last night.” J.A. 268. Jodi

Scott testified that Koester used the word “b****” “[u]sually

about    every    time    that    he    came    in.”    J.A.    381–82.       Wrenn    even

referred to Koester as a “pig.” J.A. 253. Koester himself also

admitted he made sexual comments in the office. J.A. 325.

       Freeman and other co-workers also testified generally about

Koester’s      inappropriate       racial      remarks.     For   instance,         Koester

used racial “slang” such as “Yo, b****” and “How’s my b****es?”

when talking to the female employees. J.A. 384–85. Jodi Scott

testified that Koester used racial language every day that he

came    into    the    office.   J.A.     386.     Koester     himself    admitted          to

using    African-American        type     slang.     J.A.    325.     Cathy        Diksa,    a

human    resource      manager,     explained       that     according        to    manager

Wrenn, Koester used racial language in the office. J.A. 217. For

instance,       following    the       election    of    Barack       Obama    in     2008,

Koester said to Freeman, “[Y]ou guys won.” J.A. 355. Koester

                                            8
himself testified that he probably made comments about taking

“beautiful    black       girls”      home     with       him.    J.A.     343.    He    also

admitted    that     he   made       comments       that    were     “[m]aybe       racially

inappropriate.” J.A. 344.

     Following the most recent “black b****” incident in July

2009, Freeman reported Koester’s remarks to Cathy Diksa in human

resources    after    Wrenn         ignored    her      complaint.       Diksa     initially

promised Koester would be permanently banned from the facility.

However,    the    company       lifted       the    ban    and     instead       prohibited

Koester from communicating with Freeman. He was allowed on the

premises    but    had    to    coordinate          all    on-site    meetings       through

Wrenn.

     Freeman was so upset about the prospect of being forced to

interact with Koester that she took a medical leave of absence

beginning    September         2,    2009.     During      this     time    she    received

treatment for depression and anxiety. Freeman returned to work

around November 19, 2009. Wrenn informed Freeman that Koester no

longer   worked     for    VoStone      but       for     another    kitchen       and   bath

fabricator. Wrenn told Freeman that Koester would continue to

call Wrenn’s cell phone and not the general office line if he

needed to conduct business with Dal-Tile.

     On December 7, 2009, Freeman notified Dal–Tile that she was

resigning from her position effective December 11, 2009. Freeman

testified that she resigned because the depression and anxiety

                                              9
became too much for her; she was constantly worried she would

encounter Koester at work. J.A. 179–80.

     In October 2009, while on medical leave, Freeman filed a

charge   with        the     Equal     Employment       Opportunity        Commission

(“EEOC”),      asserting       that     Dal–Tile       had     subjected        her   to

discrimination based on her sex and race.

     After receiving a right to sue letter, Freeman brought this

action   in    the    Eastern   District         of   North    Carolina,       asserting

claims for racial hostile work environment under 42 U.S.C. §

1981; racial and sexual hostile work environment under Title VII

of the Civil Rights Act of 1964; discriminatory discharge under

42   U.S.C.    §     1981;    and    obstruction       of     justice    under    North

Carolina common law. 3 The obstruction of justice claim is based

on the allegation that Dal-Tile failed to issue a litigation

hold on e-mails after it received her October 28, 2009 EEOC

charge   and    thus       destroyed    a    significant        number    of    e-mails

pursuant to its email retention policy.

     Following discovery, in May 2012, Dal-Tile filed                          a motion

for summary judgment. The district court granted this motion.

Freeman v. Dal-Tile Corp., 930 F. Supp. 2d 611 (E.D.N.C. 2013).

     3
        She also asserted retaliatory demotion and discharge
claims under 42 U.S.C. § 1981, but she does not appeal the
dismissal of those claims.

                                            10
       First, the district court held that in regard to the racial

and    sexual    hostile          work      environment          claims,       Freeman       did    not

present    sufficient            evidence        to       create     a   genuine        dispute      of

material      fact         on   the      issue       of    whether       the       harassment       was

objectively      severe         or       pervasive.        However,       the      district        court

noted “that plaintiff subjectively perceived the alleged racial

and sexual harassment to be abusive.” Id. at 628.

       Second,        the       district         court         ruled     that       even     if     the

harassment       was       found       to   be    objectively            severe       or    pervasive

enough to alter Freeman’s work conditions, Dal-Tile would still

be    entitled        to     summary        judgment        because       Freeman          could    not

establish      that        liability        should        be    imputed       to    Dal-Tile.       The

district      court        used      a    negligence           standard,       adopted       from    an

unpublished      opinion          of     this    Court,         in   which      “an    employer      is

liable [for the actions of a third party] ‘if it knew or should

have   known     of     the     harassment           and    failed       to    take    appropriate

actions to halt it.’” Id. at 638 (quoting EEOC v. Cromer Food

Servs., Inc., 414 F. App’x 602, 606 (4th Cir. 2011)).

       Applying this standard, the district court held that Dal-

Tile    did     not    have       actual        or    constructive            knowledge       of    the

harassment       because        “no       reasonable           fact-finder         could     conclude

that plaintiff’s statement[s] to Wrenn constituted a complaint,

either formal or informal.” Id. at 639. Further, the district

court noted that “even if [it] were to assume arguendo that the

                                                     11
. . . remarks that plaintiff made to Wrenn could somehow be

construed as complaints, it is undisputed that plaintiff knew

there were additional avenues that she could have pursued if she

was   unsatisfied       with    Wrenn’s    response.”      Id.    at    640.    In     the

second     inquiry      of     the     negligence      analysis,       whether        the

employer’s response was appropriate, the district court ruled

that Dal-Tile’s response to Koester’s behavior was adequate as a

matter of law.

      Third,     the    district        court   held     that    Freeman       was    not

constructively discharged but, rather, voluntarily resigned. The

district    court      noted    that    Freeman    was    “unable      to    show    that

anyone     at    Dal-Tile       acted     deliberately          with    an     unlawful

discriminatory intent in order to force her to resign either

before or after she returned from medical leave.” Id. at 647.

      Lastly,    the     district       court    ruled    that     Freeman’s         North

Carolina obstruction of justice claim failed as a matter of law.

The district court stated that “the evidence does not support a

finding that anyone at Dal-Tile intentionally destroyed emails

in order to keep plaintiff from proceeding with a legal claim.”

Id. at 648.

                                         II.

      This Court “review[s] the district court’s grant of summary

judgment    de   novo,       applying    the    same   legal     standards      as    the

district court and viewing the facts and inferences drawn from

                                           12
the facts in the light most favorable to . . . the nonmoving

party.” Evans v. Techs. Applications & Serv. Co., 80 F.3d 954,

958 (4th Cir. 1996).

     On    appeal,     Freeman       argues       1)     a    reasonable       jury    could

conclude   that    she      was   subjected        to    a    racially        and   sexually

hostile work environment; 2) a reasonable jury could find that

liability for Koester’s harassment is imputable to Dal-Tile; 3)

a   reasonable     jury      could    find        that       she    was    constructively

discharged;    and     4)    North    Carolina          common       law   requires     only

general intent not specific intent for obstruction of justice

claims, and the destruction of emails here meets this standard.

We address each in turn.

                                      III.

     Freeman first argues the district court erred in granting

summary judgment on her hostile work environment claims. Under

Title VII, “[i]t shall be an unlawful employment practice for an

employer   .   .   .   to    discriminate          against         any    individual    with

respect to his compensation, terms, conditions, or privileges of

employment, because of such individual's race, color, religion,

sex, or national origin . . . .” 42 U.S.C. § 2000e-2. “Since an

employee's     work      environment         is     a        term    or     condition     of

employment,    Title      VII     creates     a    hostile          working    environment

cause of action.” EEOC v. R & R Ventures, 244 F.3d 334, 338 (4th

                                         13
Cir. 2001) (citing Meritor Sav. Bank, FSB v. Vinson, 477 U.S.

57, 73 (1986)).

      For this Court to reverse the district court’s grant of

summary judgment to Dal-Tile on her hostile work environment

claims, Freeman must establish that the evidence, viewed in her

favor,

      would allow a reasonable jury to conclude that the
      harassment was (1) unwelcome, (2) based on [Freeman’s]
      gender or race, (3) sufficiently severe or pervasive
      to alter the conditions of her employment and create
      an abusive atmosphere, and (4) imputable to [Dal-
      Tile].

EEOC v. Cent. Wholesalers, Inc., 573 F.3d 167, 175 (4th Cir.

2009) (citing EEOC v. Sunbelt Rentals, Inc., 521 F.3d 306, 313–

14 (4th Cir. 2008)).

      First, Freeman must establish that a reasonable jury could

conclude that the sex- or race-based harassment was unwelcome.

As   discussed   above,   Freeman   complained   of   her   harassment   to

Wrenn, human resources, and Koester himself. She told Koester

repeatedly to stop making such crude and demeaning comments. She

cried in both Wrenn and Koester’s presence over the harassment.

She eventually was treated for depression and anxiety because of

it. Based on this evidence, we believe that a reasonable jury

could find that both the sex- and race-based harassment were

unwelcome.

                                    14
       Second, Freeman must show that a reasonable jury could find

that the harassment was based on her sex or race. The evidence

shows that Koester used the word b**** in the office almost

every time he came in, often discussed his sexual encounters

with   women,   showed       naked   pictures      of       women     to    Freeman     and

others, frequently made “lewd” comments, discussed having sex

with    a   co-worker’s      daughters,      and    called       Freeman       a     “black

b****,” among other things. Based on this evidence, a reasonable

jury could find that the harassment was based on Freeman’s sex.

See, e.g., Forrest v. Brinker Intern. Payroll Co., 511 F.3d 225,

229    (1st   Cir.    2007)     (stating     that       a     “raft    of     case     law”

“establishes that the use of sexually degrading, gender-specific

epithets, such as . . . ‘b****,’ . . . has been consistently

held to constitute harassment based upon sex”).

       Regarding     race,    Koester   discussed           bringing       “black    girls”

home with him, used racial slang in the office on a daily basis,

said “black b****” at least twice (once directed at Freeman),

told Freeman he was “as f***ed up as a n****r’s checkbook,” and

admitted to maybe using “racially inappropriate” language in the

office. In light of this evidence, a reasonable jury could find

that Koester’s harassment was also based on Freeman’s race. See

Spriggs v. Diamond Auto Glass, 242 F.3d 179, 185 (4th Cir. 2001)

(describing the use of the word “n****r” as an “unambiguously

                                        15
racial epithet” (quoting Rodgers v. Western–Southern Life Ins.

Co., 12 F.3d 668, 675 (7th Cir. 1993))).

       Third, Freeman must show that a reasonable jury could find

that     the   sex-      or    race-based         harassment     was    so    severe      or

pervasive      as   to   alter       the   conditions      of    her    employment     and

create    an   abusive        or   hostile   atmosphere.        “This    element     of    a

hostile work environment claim has both subjective and objective

parts.” Cent. Wholesalers, Inc., 573 F.3d at 175 (citing Harris

v. Forklift Systems, Inc., 510 U.S. 17, 21–23 (1993)). Freeman

thus “must show that [she] did perceive, and a reasonable person

would perceive, the environment to be abusive or hostile.” Id.

       Regarding      the      subjective       component,      the     district    court

stated, and we agree, that the evidence supports a finding that

Freeman subjectively perceived both types of harassment to be

abusive or hostile. As discussed above, Freeman complained about

the harassment to her supervisor, human resources, and Koester

himself. She cried at work in front of co-workers because of the

harassment. The evidence also shows the harassment interfered

with   her     ability        to   work,   as     she   was     often    distracted       by

Koester’s inappropriate behavior and the stress that she felt

from having to interact with him. Freeman ultimately had to take

medical    leave      and     seek   treatment       for   depression        and   anxiety

because of Koester’s harassment. In light of this evidence, we

conclude that a reasonable jury could find that Freeman found

                                             16
the     harassment    subjectively      hostile     or    abusive.       See   Cent.

Wholesalers, Inc., 573 F.3d at 176 (finding a triable issue of

fact    on    subjective     perception      of   hostility      where    plaintiff

“complained about both types of harassment and stated that she

found such harassment objectionable” and “that the harassment

caused her emotional distress”); Harris v. Mayor & City Council

of Baltimore, 429 F. App’x 195, 202 (4th Cir. 2011) (finding a

triable      issue   of   fact   on   subjective    perception      of    hostility

where     plaintiff       presented   evidence     that    she    complained      of

harassment, suffered from a depressive disorder because of her

work experiences, and was seen crying at work by a co-worker).

       Next    we    must     determine      whether      the    harassment      was

objectively severe or pervasive.

       This objective inquiry “is not, and by its nature
       cannot be, a mathematically precise test.” Harris, 510
       U.S. at 22. “Rather, when determining whether the
       harassing conduct was objectively severe or pervasive,
       we must look at all the circumstances, including the
       frequency of the discriminatory conduct; its severity;
       whether it is physically threatening or humiliating,
       or a mere offensive utterance; and whether it
       unreasonably   interferes  with   an   employee's  work
       performance.” Sunbelt, 521 F.3d at 315 (quotation
       marks omitted). “[N]o single factor is” dispositive,
       Harris, 510 U.S. at 23, as “[t]he real social impact
       of workplace behavior often depends on a constellation
       of   surrounding   circumstances,    expectations,  and
       relationships which are not fully captured by a simple
       recitation of the words used or the physical acts
       performed,” Oncale v. Sundowner Offshore Services,
       Inc., 523 U.S. 75, 82 (1998).

Cent. Wholesalers, Inc., 573 F.3d at 176.

                                        17
     Here,    the     record      is    replete     with    evidence        of   frequent

abusive behavior by Koester during Freeman’s tenure with Marble

Point and Dal-Tile. Regarding the sex-based harassment, Koester

repeatedly used the word “b****” in the office, inquired about

two “black b****es” he saw in a picture, called Freeman a “black

b****,” passed gas on Freeman’s phone, and often discussed his

sexual    experiences        with      women,     including       showing    co-workers

naked    pictures     on    his     phone.    He   made    “lewd”       comments    on    a

regular      basis,         and     was      described        by        Wrenn      as     a

“pig.”    Freeman     has    certainly       established      a    triable       issue   on

whether    the   sex-based        harassment        was    objectively       severe      or

pervasive. See, e.g., Cent. Wholesalers, Inc., 573 F.3d at 176

(finding that the frequent use of the word “b****,” coupled with

both displays of scantily clad or naked women in the office and

inappropriate sexual jokes, was sufficient to create a triable

issue of fact on the issue of objective hostility).

     Based on the evidence, a reasonable jury could also find

the race-based harassment was objectively severe or pervasive.

Freeman used racial slang in the office on a daily basis. He

inquired   about      two    “black     b****es”     he    saw     in   a   picture.     He

called Freeman a “black b****” in the presence of his young

daughter. He discussed bringing home black women to have sex

with them. He told Freeman he was “as f***ed up as a n****r’s

checkbook.”

                                             18
       To begin, “the word ‘n****r’ is pure anathema to African-

Americans,”         Spriggs,       242       F.3d    at    185,       as   it   should     be    to

everyone.         Moreover,       as    we    have    stated          before,    “[w]e     cannot

ignore . . . the habitual use of epithets here or view the

conduct without an eye for its cumulative effect. Our precedent

has made this point repeatedly.” Sunbelt Rentals, Inc., 521 F.3d

at 318. Therefore, when viewing the circumstances as a whole, we

find the use of the word “n****r,” coupled with the on-going

offensive racial talk, use of the term “black b****” on more

than       one    occasion    (once      directed          at     a   black     employee),      and

sexual talk regarding black women, is sufficient evidence for a

reasonable          jury     to        find     the       race-based          harassment        was

objectively severe or pervasive.

       Lastly,       Freeman       must       establish         a     “basis     for     imposing

liability” on Dal-Tile for the sex- or race-based harassment.

Gilliam v. S.C. Dep't of Juvenile Justice, 474 F.3d 134, 142

(4th       Cir.    2007).     The       district          court       adopted    a     negligence

standard for analyzing an employer’s liability for third-party

harassment under Title VII. This Court has not yet adopted this

standard in a published opinion, but we do so today. 4 Similar to

       4
       Other circuits to address the issue have also                                    adopted a
similar standard. See Dunn v. Washington Cnty., 429                                     F.3d 689,
691 (7th Cir. 2005)(“[T]he plaintiff bears the burden                                  of showing
that the employer knew of the problem (usually though                                  not always
this requires the employee to show that a complaint                                     was made)
(Continued)
                                                19
the reasoning we set forth for employer liability for co-worker

harassment, “an employer cannot avoid Title VII liability for

[third-party] harassment by adopting a ‘see no evil, hear no

evil’ strategy.’” Ocheltree v. Scollon Prods., Inc., 335 F.3d

325, 334 (4th Cir. 2003) (en banc). Therefore, an employer is

liable under Title VII for third parties creating a hostile work

environment if the employer knew or should have known of the

harassment and failed “to take prompt remedial action reasonably

calculated to end the harassment.” Amirmokri v. Baltimore Gas &

Elec. Co., 60 F.3d 1126, 1131 (4th Cir. 1995) (quoting Katz v.

Dole, 709 F.2d 251, 256 (4th Cir. 1983)) (internal quotation

marks omitted) (applying this standard to co-worker harassment).

and that the employer did not act reasonably to equalize working
conditions once it had knowledge.”); Galdamez v. Potter, 415
F.3d 1015, 1022 (9th Cir. 2005) (“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.”); Watson v. Blue Circle,
Inc., 324 F.3d 1252, 1259 (11th Cir. 2003) (“When, as in this
case, the alleged harassment is committed by co-workers or
customers, a Title VII plaintiff must show that the employer
either knew (actual notice) or should have known (constructive
notice) of the harassment and failed to take immediate and
appropriate corrective action.”); Turnbull v. Topeka State
Hosp., 255 F.3d 1238, 1244 (10th Cir. 2001) (holding that “an
employer may be responsible for sexual harassment based upon the
acts of nonemployees” under a “negligence analysis”).

     This Court has also adopted this negligence standard in a
prior unpublished opinion. See EEOC v. Cromer Food Servs., Inc.,
414 F. App’x 602, 606–07 (4th Cir. 2011), and both parties agree
that a negligence analysis is appropriate.

                               20
       Applying this standard here, we conclude that a reasonable

jury could find that Dal-Tile knew or should have known of the

harassment.         Here,      Freeman     presented      evidence        that    Wrenn,      her

supervisor, knew of all three of the most major incidents: the

two “black b****” comments, and the “f***ed up as a n****r’s

checkbook”          comment.       Wrenn   was       present    for      the    first      “black

b****”       comment,        which     Freeman         complained        about        to   Wrenn

afterward. Freeman also                complained to Wrenn specifically about

the other two comments from Koester almost immediately after

they       occurred. 5      When    Freeman      complained         to   Wrenn    about      the

“f***ed up as a n****r’s checkbook” comment, Wrenn “scoffed and

shook her head and put her head back down and continued on with

trying to pick the nail polish off of her nails.” J.A. 102. When

Freeman complained about the second “black b****” comment, Wrenn

simply rolled her eyes and went on talking to a co-worker. J.A.

112. In addition to these most severe incidents, Wrenn was also

present       the    time      Koester     passed      gas     on   Freeman’s      phone     and

Freeman began crying and had to leave the room.

       Not only did Wrenn know of these specific and more severe

incidents,       but     she    also     knew    the    harassment        was    an    on-going

situation. As discussed above, Wrenn herself testified that she

       5
       Per the company’s harassment policy, Freeman did exactly
what she was supposed to by telling Wrenn, her supervisor, of
the harassment. J.A. 199.

                                                21
knew Koester used the word “b****” in the office frequently,

that   he   made    sexual      comments     in    the    office,    that    he    showed

pictures of naked women on his phone in the office, and that he

“always made comments about women.” J.A. 268–74. Wrenn herself

referred to him as a “pig.” J.A. 253. Cathy Diksa also testified

that Wrenn knew Koester used “racial language” in the office.

J.A. 217.

       This evidence, if proven true, shows that Dal-Tile, through

its agent Wrenn, had actual knowledge of the harassment and that

Freeman     found    it   offensive,        as    shown    by    Freeman’s    frequent

complaints and her negative reaction to his behavior. However,

even if Wrenn did not have actual knowledge that Freeman was

offended by Koester’s behavior, at the very least, she should

have    known       it:   Wrenn       was     aware       of     Koester’s    on-going

inappropriate        behavior     and       comments,      had     received       several

complaints      about     the    harassing        incidents      from   Freeman,      had

witnessed     Freeman        crying     from       the     harassment,       and     knew

incendiary terms like “n****r” and “black b****” had been used

in the presence of a black, female employee. As stated above,

“[a]n employer cannot avoid Title VII liability for coworker

harassment by adopting a ‘see no evil, hear no evil’ strategy.”

Ocheltree, 335 F.3d at 334. Therefore, we conclude a reasonable

jury could find that Dal-Tile knew, or at the very least, should

have known, of Koester’s harassment.

                                            22
      In addition, Freeman has at least created a triable issue

of fact as to whether Dal-Tile’s response to halt the harassment

was   adequate.      Despite    Wrenn’s    notice      of   Koester’s    on-going

behavior, Dal-Tile did not take any effective action to halt the

harassment until Freeman reported up the chain to Cathy Diksa in

human resources after the final “black b****” comment. 6 At that

point, the harassment had been ongoing for three years. Diksa

originally told Freeman that Koester would be permanently banned

from Dal-Tile. J.A. 121–22. However, the company lifted the ban

and instead simply prohibited Koester from communicating with

Freeman   while      still     allowing    him    on    the   premises    if   he

coordinated his meetings through Wrenn.

      As stated above, once an employer has notice of harassment,

it must “take prompt remedial action reasonably calculated to

end the harassment.” Amirmokri, 60 F.3d at 1131 (quoting Katz,

709 F.2d at 256) (internal quotation marks omitted). Not only

did Dal-Tile fail to take any serious action for three years in

spite of the long list of ongoing harassment by Koester, but

particularly shocking to us is the fact Dal-Tile took absolutely

no action when Koester passed gas on Freeman’s phone and made

Freeman   cry   in    Wrenn’s    presence,       nor   when   Freeman    promptly

      6
       Wrenn did tell Koester not to use inappropriate language
after the first “black b****” comment, but that proved
ineffective as the harassment continued for three more years.

                                      23
complained to Wrenn that Koester had used the word “n****r” on

the phone with her. Although the harassment eventually stopped

after the communication ban was put into place, the harassment

had continued unabated for three years prior to that. While a

communication ban may have been an adequate response had it been

put into place sooner, Dal-Tile’s failure was in not responding

promptly to the harassment. Based on this evidence, we believe a

reasonable    jury     could    conclude         that    Dal-Tile       failed      to   take

“prompt   remedial        action     reasonably          calculated          to    end   the

harassment.”

     In   sum,    we    believe      a    reasonable          fact-finder     could      find

there was an objectively hostile work environment based on both

race and sex and that Dal-Tile knew or should have known of the

harassment    and      failed   to       adequately       respond.      We,       therefore,

reverse the district court’s grant of summary judgment in favor

of   Dal-Tile     on     Freeman’s        racial        and    sexual     hostile        work

environment      claims    under     Title       VII,     as    well    as    her     racial

hostile work environment claim under 42 U.S.C. § 1981, and we

remand for further consideration in the district court. 7

     7
       The standard used to evaluate a racial hostile work
environment claim under § 1981 is the same as the standard used
under Title VII. Spriggs, 242 F. 3d at 184. Thus our analysis is
the same for both racial hostile work environment claims here.

                                            24
                                      IV.

       Freeman also appeals the district court’s ruling that she

was not constructively discharged under 42 U.S.C. § 1981. 8 An

employee is considered constructively discharged “if an employer

deliberately        makes   the    working   conditions   intolerable   in   an

effort to induce the employee to quit.” Honor v. Booz-Allen &

Hamilton, Inc., 383 F.3d 180, 186-87 (4th Cir. 2004) (quoting

Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1353-54 (4th Cir.

1995)) (internal quotation marks and citations omitted). Freeman

must prove two elements to demonstrate constructive discharge:

“(1) the deliberateness of [Dal-Tile’s] actions, motivated by

racial bias, and (2) the objective intolerability of the working

conditions.” Id. at 186-87.

       Here, Freeman did not present sufficient evidence to create

a question of fact as to whether Dal-Tile deliberately attempted

to induce her to quit, nor that her working conditions at the

time       she   resigned   were   objectively   intolerable.   Rather,      the

evidence shows that within weeks from returning from a two month

medical leave, Freeman voluntarily resigned from her position.

She had had no contact with Koester for months, nor had he even

been in the building at the same time as her since she had

       8
       Freeman brought her constructive discharge claim solely
under 42 U.S.C. § 1981, and thus it is only based on racial
discrimination.

                                        25
returned      from   leave.        Freeman     presented         no    evidence     that

Koester’s harassment was still creating an objectively hostile

work environment at the time she resigned, nor that Dal-Tile was

allowing him to harass her in a deliberate attempt to force her

to   quit.    Therefore,      we   affirm    the    district         court’s   grant   of

summary      judgment   to     Dal-Tile      on    the    constructive         discharge

claim.

                                        V.

      Finally, Freeman contends that the district court erred in

awarding Dal-Tile summary judgment on the North Carolina common

law obstruction of justice claim. Freeman argues that Dal-Tile

should    have    put   a     litigation       hold      on    all    relevant    emails

beginning no later than when it received Freeman’s complaint in

November 2009, and maybe even as early as when she contacted

human resources about the situation in August 2009.

      In North Carolina, “acts which obstruct, impede or hinder

public or legal justice . . . amount to the common law offense

of obstructing justice.” Blackburn v. Carbone, 703 S.E.2d 788,

794 (N.C. Ct. App. 2010) (quoting Henry v. Deen, 310 S.E.2d 326,

334 (N.C. 1984)). The offense requires proof that the defendant

acted    “willfully     and    with    an    intent       to    defraud.”      State   v.

Eastmen, 438 S.E.2d 460, 464 (N.C. Ct. App. 1994). In other

words, North Carolina law requires that the defendant acted with

the specific intent to obstruct justice, not just the general

                                          26
intent to do the act which resulted in the obstruction. See

Blackburn, 703 S.E.2d at 795 & n.6 (“[A]ny action intentionally

undertaken     by   the   defendant    for   the   purpose   of   obstructing,

impeding,      or   hindering   the   plaintiff’s    ability      to   seek     and

obtain a legal remedy will suffice to support a claim for common

law obstruction of justice. . . . The necessity for showing an

intentional act of misconduct by the defendant is delineated in

a number of criminal obstruction of justice cases.”).

     Here, Freeman presented no evidence that Dal-Tile destroyed

emails with the intent to hinder the litigation. Rather, they

were destroyed pursuant to Dal-Tile’s email retention policy.

Therefore, we affirm the district court’s holding that there is

not a viable obstruction of justice claim under North Carolina

common law.

                                      VI.

     In conclusion, we reverse the district court’s grant of

summary judgment in favor of Dal-Tile on the sexual and racial

hostile work environment claims under Title VII, and the racial

hostile work environment claim under § 1981, and we remand these

claims   for    further    consideration     in    the   district      court.    We

affirm the district court’s grant of summary judgment in favor

of Dal-Tile on the constructive discharge claim and the North

Carolina obstruction of justice claim.

                      REVERSED IN PART, AFFIRMED IN PART, AND REMANDED

                                        27
NIEMEYER, Circuit Judge, concurring in part and dissenting in
part:

      This case involves a workplace allegedly made hostile by

the conduct of a customer of the employer.                     In recognizing that

employers can be liable in cases where the harassing conduct was

that of a third party, the majority extends the scope of Title

VII beyond what the Supreme Court has so far recognized.                         I have

grave   concerns         about    such     an    extension     when    hostile     work

environment claims were themselves an extension of Title VII,

which       was      designed        to     regulate     the     employer-employee

relationship.

      But    even     recognizing         that   there   are   some    adventuresome

cases concluding that an employer can be liable for its failure

to take action to protect its employees from a third party’s

harassment, see, e.g., Dunn v. Wash. Cnty. Hosp., 429 F.3d 689,

691   (7th    Cir.    2005),     I   conclude     that   the   majority’s     opinion

today goes so far that it cannot find support even in them.                          An

employer in this kind of case may be liable at most for its own

negligence in allowing the conduct of its customers to turn its

workplace     into       a   hostile      work   environment    --    i.e.,   a    work

environment that, as a result of the customers’ conduct, becomes

“permeated        with       discriminatory      intimidation,        ridicule,     and

insult that is sufficiently severe or pervasive to alter the

conditions of [an employee’s] employment.”                     Harris v. Forklift
Sys., Inc., 510 U.S. 17, 21 (1993) (internal quotation marks and

citations omitted).           As a negligence case, the analysis must

focus on identifying when the employer knew or should have known

that its employee was being subjected to harassment based on the

employee’s “race, color, religion, sex, or national origin,” 42

U.S.C. § 2000e-2(a)(1), and then on evaluating the adequacy of

the employer’s response at that point.               See Burlington Indus.,

Inc. v. Ellerth, 524 U.S. 742, 759 (1998).

     In this case, the majority concludes that a reasonable jury

could find Dal-Tile liable under Title VII for discriminating

against Lori Freeman, its employee, because it permitted a Dal-

Tile customer, Timothy Koester, to engage in continuous sex-

based and race-based harassment of Freeman for three years.                    I

believe, however, that a closer review of the record does not

support that overly generalized conclusion.

     The    record    only     supports     the   inference   that   Koester’s

conduct rose to the level of actionable harassment in the summer

of 2009.    To be sure, Koester’s conduct in the office prior to

that point had been coarse, crude, and ugly.                   But there is

insufficient evidence in the record to allow a reasonable jury

to conclude that, prior to the summer of 2009, his conduct had

created a hostile or abusive working environment for Freeman at

Dal-Tile.     In     August    2006   (shortly    after   Freeman    began   her

employment at Dal-Tile), Freeman did hear Koester use the phrase

                                       29
“black    bitches”    in   Dal-Tile’s        office    when   referring   to    a

photograph of two former employees.              But she also heard a Dal-

Tile   assistant     manager,    Sara    Wrenn,       immediately   respond    to

Koester, directing him “not to use that language here.”                       J.A.

76.    And for nearly three years thereafter, Freeman “carried on

a working relationship with [Koester],” describing herself as

being “friendly with [him] as long as he wasn’t making . . .

lewd comments.”       J.A. 126.         When Freeman thought Koester was

behaving inappropriately, she would tell him to cut it out, just

as her coworkers did.      As Wrenn explained:

       [T]he minute [Freeman] started with [Dal-Tile], she
       fit right in with us.    And, you know, everybody knew
       that [Koester] ran his mouth, and you know, like I
       said, it was never malice, it was never malicious. He
       was just crude, and everybody knew exactly how to
       handle him and put him in his place, and Lori
       [Freeman] fell right into that, and she had no
       problems calling him out . . . .

J.A. 292.    Similarly, Freeman stated that she had a good working

relationship with all of her coworkers, describing the office as

“very close knit.”         J.A. 58.       Thus, unlike the circumstances

presented in EEOC v. Cent. Wholesalers, Inc., 573 F.3d 167, 170

(4th Cir. 2009), and Mosby-Grant v. City of Hagerstown, 630 F.3d

326, 330 (4th Cir. 2010), where the plaintiff-employees were

surrounded   by    multiple     individuals     who    regularly    referred    to

women as “bitches” and engaged in other demeaning conduct, the

                                        30
record      here     is    clear   that       Koester    was    the     outlier     in    an

otherwise harmonious and harassment-free office environment.

       A    jury    could     find,    however,      that   the      circumstances        for

Freeman did change in the summer of 2009 when she reasonably

began to perceive Koester’s conduct as being so offensive as to

make her work environment abusive.                      This is when Koester told

Freeman that he was as “fucked up as a nigger’s checkbook” and

then, several weeks later, called her a “black bitch.”                             But it

was    also    at    this     point    that    Dal-Tile     intervened        to   protect

Freeman.       The day after Koester made the “black bitch” comment

to Freeman, Dal-Tile told Koester that he was suspended from the

premises.           And    while   Dal-Tile        eventually      agreed     to   conduct

business with Koester again, it was only with restrictions in

place that ensured that Freeman would not have to interact with

him.       Indeed, Koester never made another inappropriate remark in

Freeman’s presence.

       This is not a case where an employer knew that its employee

was    experiencing          actionable       harassment       but    did     nothing      in

response.          Rather, the record shows that Dal-Tile did indeed

intervene      and        intervened    effectively.           I     would    accordingly

affirm the district court’s summary judgment in favor of Dal-

Tile   on     all    of    Freeman’s    claims,      including       her     hostile     work

environment claims.

                                              31