Page
TABLE OF
AUTHORITIES................................................................................... iii
STATEMENT
OF INTEREST................................................................................ 1
STATEMENT
OF THE ISSUES............................................................................. 1
STATEMENT
OF THE CASE................................................................................ 1
A. Statutory Background....................................................................................... 1
B. Factual Background.......................................................................................... 3
1. AutoZone’s sexual harassment policy....................................................... 3
2. The sexual harassment and AutoZone’s
response................................. 5
C. Procedural Background.................................................................................... 9
ARGUMENT.............................................................................................................. 11
I. The district court committed reversible
error when it granted AutoZone summary judgment on Ward’s constructive
discharge claim............................. 11
A. The district court applied the wrong
standard to Ward’s constructive discharge claim........................................................................................................ 11
B. A reasonable jury could find that Ward’s
working conditions were objectively intolerable............................................................................................ 12
II. The district court was correct to sustain
the jury’s punitive damages award............................................................................................................................. 15
A. The jury reasonably could have concluded
that Geer, Tarkington, or Smith acted in a managerial capacity................................................................... 17
B. The jury reasonably could have concluded
that Geer, Tarkington, or Smith demonstrated a reckless disregard for Ward’s
federal civil rights...... 24
C. The jury reasonably concluded that
AutoZone did not establish the good-faith exception to vicarious liability for
a punitive damages award.... 27
CONCLUSION.......................................................................................................... 30
CERTIFICATE
OF COMPLIANCE........................................................................
CERTIFICATE
OF SERVICE...................................................................................
Page(s)
Cases
Amirmokri v. Baltimore Gas & Electric Co.,
60 F.3d 1126 (4th Cir. 1995).......................................... 12, 13, 14
Anderson v. G.D.C., Inc.,
281 F.3d 452 (4th Cir. 2002)................................................ 25, 26
Bryant v. Aiken Regional Medical Centers, Inc.,
333 F.3d 536 (4th Cir. 2003)....................................................... 29
Burlington
Industries v. Ellerth,
524 U.S. 742 (1998)...................................................................... 15
Deters v. Equifax Credit Information Services,
Inc.,
202 F.3d 1262 (10th Cir. 2000)................................................... 19
Dulaney v. Packaging Corp. of America,
673 F.3d 323 (4th Cir. 2012)....................................................... 13
EEOC v. AutoZone, Inc.,
692 F. App’x 280 (6th Cir. 2017)............................................... 22
EEOC v. AutoZone, Inc.,
707 F.3d 824 (7th Cir. 2013)....................................................... 19
EEOC v. Consol Energy, Inc.,
860 F.3d 131 (4th Cir. 2017)....................................................... 12
EEOC v. Exel, Inc.,
884 F.3d 1326 (11th Cir. 2018)................................................... 24
EEOC v. Federal Express Corp.,
513 F.3d 360 (4th Cir. 2008)................................................. passim
EEOC v. Wal-Mart Stores, Inc.,
187 F.3d 1241 (10th Cir. 1999)................................................... 18
Faragher v. City of Boca Raton,
524 U.S. 775 (1998)...................................................................... 23
Golson v. Green Tree Financial Servicing Corp.,
26 F. App’x 209 (4th Cir. 2002)................................................. 27
Green v. Brennan,
136 S. Ct. 1769 (2016)....................................................... 2, 11, 12
Hertzberg v. SRAM Corp.,
261 F.3d 651 (7th Cir. 2001)................................................ 21, 22
Kolstad v. American Dental Association,
527 U.S. 526 (1999)................................................................. passim
Lowery v. Circuit City Stores, Inc.,
206 F.3d 431 (4th Cir. 2000)................................................. passim
Martin v. Cavalier Hotel Corp.,
48 F.3d 1343 (4th Cir. 1995)............................................ 9, 10,
11
Meritor
Savings Bank, FSB v. Vinson,
477 U.S. 57 (1986)........................................................................... 2
Pennsylvania State Police v. Suders,
542 U.S. 129 (2004)................................................................ 11, 12
Romano v. U-Haul International,
233 F.3d 655 (1st Cir. 2000)........................................................ 27
Swinton v. Potomac Corp.,
270 F.3d 794 (9th Cir. 2001)................................................ 19, 20
Turner v. Saloon, Ltd.,
595 F.3d 679 (7th Cir. 2010)....................................................... 14
Vance v. Ball State University,
570 U.S. 421 (2013)................................................................ 13, 22
White v. BFI Waste Services, LLC,
198 F. App’x 283 (4th Cir. 2006)......................................... 29, 30
Whitten v. Fred’s, Inc.,
601 F.3d 231 (4th Cir. 2010)................................... 11, 13, 14, 15
Statutes
& Rules
42 U.S.C. § 1981.................................................................................. 17
42
U.S.C. § 1981a................................................................................ 17
42 U.S.C. § 1981a(a)(1)......................................................................... 2
42 U.S.C. § 1981a(b)(1)........................................................... 2,
15, 24
42 U.S.C. § 1981a(b)(3)(A)-(D)........................................................ 23
42 U.S.C. § 1981a(b)(3)(D)................................................................ 10
42 U.S.C. § 2000e.................................................................................. 1
42
U.S.C. § 2000e(n) ............................................................................ 2
42
U.S.C. § 2000e-2(a)(1)..................................................................... 2
Fed.
R. App. P. 29(a)(2)....................................................................... 1
Other
Authorities
1 L. Schlueter & K. Redden, Punitive Damages
§ 4.4(B)(2)(a) (3d ed. 1995) ........................................................................................ 17
1
L. Schlueter, Punitive Damages § 4.10(B)(1)(c) (7th ed. 2015) .......................................................................................................... 19
J. Kircher & C.
Wiseman, Punitive Damages: Law and Practice § 24:5 (2d ed. 2018).......................................................................... 21
Restatement (Second) of Agency § 217C (1957)...................... 2,
15
Restatement (Second) of Torts § 909(c) (1979)...................... 17,
21
Restatement
(Third) of Agency § 7.03 (2006)......................... 15, 16
Congress charged the Equal Employment Opportunity
Commission (EEOC or Commission) with administering, interpreting, and enforcing
Title VII of the Civil Rights Act of 1964,
42 U.S.C. §§ 2000e et seq. (Title
VII). This appeal raises important questions regarding the correct standard for
Title VII constructive discharge claims and
the circumstances in which punitive damages are available under Title VII. Because this Court’s resolution of
these issues may have a significant effect on the ability of the EEOC and
private parties to enforce Title VII, the
Commission respectfully offers its views to the Court. See Fed. R. App. P. 29(a)(2).
1. Did the district court err in holding that a
constructive discharge claim fails as a matter of law where, as here, a
plaintiff does not show that his employer deliberately made his working
conditions intolerable in an effort to induce him to quit?
2. Was the district court correct to sustain the
jury’s punitive damages award?
It is “an unlawful employment practice” under Title VII “for an employer . . .
to discharge any individual, or otherwise to discriminate against any
individual with respect to [the] terms, conditions, or privileges of
employment, because of such individual’s . . . sex.” 42 U.S.C. § 2000e-2(a)(1). It is well settled
that a plaintiff may establish a Title VII
violation “by proving that discrimination based on sex has created a hostile or
abusive work environment.” Meritor Sav.
Bank, FSB v. Vinson, 477 U.S. 57, 66 (1986). A plaintiff may also recover
for a separate violation of Title VII—known
as a “constructive discharge”—by proving that his employer subjected him to
“circumstances of discrimination so intolerable that a reasonable person would
resign.” Green v. Brennan, 136 S.
Ct. 1769, 1779 (2016).
In 1991, Congress amended Title VII to authorize an award of punitive
damages against a private-sector employer if the employer engaged in
intentional discrimination “with malice or with reckless indifference to the
federally protected rights of an aggrieved individual.” 42 U.S.C. § 1981a(a)(1), (b)(1); see also
id. § 2000e(n). In Kolstad v. American Dental Association,
527 U.S. 526 (1999), the Supreme Court held that, in addition to showing malice
or reckless indifference, a Title VII
plaintiff also “must impute liability for punitive damages” to the employer. Id. at 539. Kolstad held that punitive damages can be
imputed to an employer for an agent’s act where, inter alia, “the agent
was employed in a managerial capacity and was acting in the scope of
employment.” Id. at 542-43 (quoting
Restatement (Second) of Agency § 217C
(1957)). Kolstad recognized an
exception to this rule, however, concluding that, “in the punitive damages
context, an employer may not be vicariously liable for the discriminatory
employment decisions of managerial agents where these decisions [we]re contrary
to [its] good-faith efforts to comply with Title
VII.” Id. at 545 (citation and
internal quotation marks omitted).
In 2012, plaintiff Keith Ward was hired by defendant
AutoZoners, LLC (AutoZone), to work at AutoZone’s Store 1260 as a part-time
delivery driver. JA 484-86. As explained below, Ward’s coworker Christina
Atkinson sexually harassed him in 2013. This appeal concerns that harassment
and the response to the harassment by three of Ward’s superiors: (1) Wanda
Smith, a “commercial sales manager” who was responsible for the commercial
section of Store 1260 and was the direct supervisor of Ward and Atkinson, JA
1289, 498, 510, 1355-56; (2) Wayne Tarkington, a “store manager” who was
in charge of Store 1260 and hired Ward and Atkinson, JA 488, 1193, 1195; and
(3) Kenneth Geer, a “district manager” who oversaw the operations of Store 1260
and eleven other stores. JA 1612-13, 1644.
Throughout the relevant period, AutoZone
maintained at Store 1260 a written policy against sexual harassment, which defined
sexual harassment and required employees “who receive a complaint or become
aware of any harassment” to “report it immediately to management” or certain
other AutoZone officials. JA 2067. The policy’s related “problem solving
procedure” specified that employees should first report harassment to their
“immediate manager/supervisor,” unless they “do not feel comfortable doing so,
or feel [their] manager/supervisor is not handling the problem appropriately,”
in which case they should report the problem to their store manager followed by
the district manager. JA 2070-71; see also JA 1284-87. The policy
obligated supervisors and managers who received harassment complaints to
“thoroughly investigate[] each reported allegation.” JA 2067, 2071.
Although AutoZone had this sexual harassment
policy, handbooks describing the policy were not available at Store 1260, JA 549-50,
and AutoZone did not provide any “in-person training[s]” on the policy, JA 487,
811. Instead, employees and managers had to verify that they had read and
understood the policy by logging in to a computer system and “hit[ting] ‘yes.’”
JA 1201-02; see also JA 1234. Notwithstanding this requirement,
Tarkington, the store manager, testified that “99 percent of the people [did]
not even read the policy,” and he recounted instances in which he had logged in
under an employee’s name and falsely verified that the employee had read and
understood the policy. JA 1201. Tarkington also explained that, as store
manager, he was responsible for ensuring that employees “acknowledge[d] that
[they] received” the anti-harassment policy, “or at least knew where it was
at,” but “[w]hether [an employee] read [the policy]” was “not [his] job.” JA 1201-02.
Tarkington himself read AutoZone’s
anti-harassment policy only during his first year at AutoZone, and “basically
all [he] knew about it” was that it was “zero tolerance.” JA 1202. Tarkington also
testified that some managers had to take an online “test” that covered sexual
harassment, but, “[a]t the end” of the test, “if you failed, it would give you
the answers.” JA 1217.
Soon after Ward and Atkinson began working
together at AutoZone in March 2013, Atkinson began engaging in “sexually
offensive language” and unwelcome fondling at work. JA 504, 506-08. For
example, she once joked to Ward and Smith that she had performed oral sex on
her husband “for three hours” the night before. JA 506. Around that same time,
Atkinson approached Ward from behind and “dragged her . . . fingers”
across his “butt.” JA 504. A few days later, Atkinson “grabbed [Ward’s] nipple
through [his] shirt and twisted it until [he] had a bruise.” JA 508-09. Ward
reported this nipple-twisting incident to Smith, his direct supervisor, who was
standing nearby when it occurred, but Smith “didn’t say a whole lot”; she just
“snickered about it.” JA 509-11.
Despite serving as both Ward’s and Atkinson’s
immediate manager, Smith failed to respond to Ward’s first complaint of
harassment, which she was obliged to do under AutoZone’s “problem solving
procedure.” JA 2070-71; see also JA 1285, 1288-89. Atkinson’s unwelcome
touching of Ward then intensified. JA 511. Indeed, after Ward first complained
to Smith, Atkinson “grabbed [Ward] in [his] crotch.” JA 512. Ward pleaded with
Atkinson to “please keep [her] hands off” him, and he complained again to Smith
that he was “sick and tired” of Atkinson “putting her hands” on him. JA 512-13.
Smith responded: “Well, maybe if you’ll give her what she wants, she’ll leave
you alone.” JA 514.
In the ensuing weeks, Atkinson touched Ward
“[e]very time she got a chance.” JA 514. For example, Atkinson again touched
Ward’s nipples and remarked, “Oh, you like that because your nipples are hard.”
JA 518. She also approached Ward from behind and placed her hands on his
buttocks, “jiggl[ing] and squeez[ing] them,” and saying, “You’ve got a nice
firm butt”; “[m]ost guys your age don’t have a firm butt like that.” JA 517-18.
Around this period, Atkinson also poked Ward’s nipples with a pencil, JA 529,
and she “shov[ed] [him] into a shelf and press[ed] her head to [his] chest and
rubb[ed his] nipple,” JA 661.
Because Smith had done nothing to address
Atkinson’s harassment, Ward reported it to Tarkington, the store manager, in
June or July 2013. JA 531-32. Specifically, Ward told Tarkington that Atkinson
“had been putting her hands on [him] and that she grabbed [him] in the crotch,
felt [his] penis through [his] pants, that she . . . was
grabbing [his] butt and that she was pinching [his] nipples to the point that
[he] had bruises.” JA 532. Tarkington confronted Atkinson, saying: “If that’s
what’s going on, I want[] it to stop[;] [i]f not, I’m going to take it
somewhere, and I’m going up higher with it.” JA 1211-12. Although nobody had
accused Ward of misconduct, Tarkington also warned Ward to “knock it off.” JA 1244-45.
Tarkington then told Geer, the district manager overseeing Store 1260 (and eleven
other stores), that Ward “said [Atkinson] had grabbed at him and stuff.” JA
1213, 1215-16. Tarkington further told Geer that he (Tarkington) “had talked to
both [Ward and Atkinson] and told them if it was going on, to stop.” JA 1215-16.
For his part, however, Geer failed to “do[] anything about” Atkinson’s
harassment, and Tarkington admitted that “[w]hen[] [he] saw that Mr. Geer
wasn’t doing anything about” the harassment, he “probably should have gone
further up with it.” JA 1216-17; see also JA 1209.
About two weeks after Tarkington reported the
harassment to Geer, Ward complained to Tarkington again that Atkinson “was
still putting her hands on [him] and that . . . it hadn’t
slowed down a bit.” JA 533-34. Tarkington merely shook his head, and Atkinson’s
behavior continued. JA 534. For instance, in July 2013, Atkinson asked Ward to
put his hand in her pocket, saying “I’ve got a hole in my pocket, and I don’t
have any underwear on.” JA 515-16. Atkinson then lunged toward Ward, trying “to
grab [his] hand.” JA 516. Smith heard this exchange and simply “[l]aughed about
it.” JA 516.
Then, in August 2013, Atkinson again “pinched
[Ward’s] nipple[].” JA 552-53. By that point, Lawrence McCall had replaced
Tarkington as store manager, and Ward told McCall that he “had a problem,” that
he had “complained to [Tarkington] and [Smith], and that the problem was not
going away.” JA 554, 563. Smith, who participated in the conversation,
admitted she had seen Atkinson touching Ward and that Ward had reported
Atkinson’s behavior to her. JA 565-67, 2244 (1:55-2:00; 3:35-3:42; 6:14-6:17; 7:22-8:02).
Smith also stated during that conversation that she had the authority to send
Atkinson home if Atkinson engaged in misconduct, and McCall confirmed that
Smith had such authority. JA 2244 (15:45-15:53; 18:05-18:15). McCall assured
Ward that Smith would talk to Atkinson about her behavior the next day, but he
made clear he would not be in the store then because he was in the process of
moving. JA 568, 824-25, 2244 (8:20-8:56).
Ward went to work the next day, but as he
arrived, he saw Atkinson’s car in the parking lot, so he drove away to draft a
resignation letter. JA 570-71. Geer, the district manager, then phoned Ward,
saying that AutoZone “didn’t want to lose” him. JA 571. Ward did not commit to
staying in the job, but he agreed to meet Geer the following week, and he then
went to work to deliver his resignation letter to Smith. JA 571, 573. The
letter announced Ward’s intention to resign but suggested that he might
reconsider if, at the upcoming meeting with Geer, Geer agreed to “move . . . Atkinson
to another store.” JA 2076. As he exited the store, Ward encountered Atkinson,
who said to Ward: “I heard that you were leaving . . . .
Come here and let me get a little sugar before you leave.” JA 574. Atkinson
then “started towards” Ward, who said, “Get away from me”; “[k]eep your hands
off of me”; and “[d]o not touch me.” JA 574. Undeterred, Atkinson “kept right
on coming,” so Ward placed a metal sign between them to “keep [Atkinson] from
grabbing hold of” him. JA 574-75.
Ward met with Geer a few days later, as
planned. JA 576. Although the ostensible purpose of the meeting was to address
Atkinson’s harassment, Geer repeatedly told Ward that “the whole thing [was]
his fault” because he is “a man” and “should have been able to have prevented
this.” JA 578. Ward reacted angrily and abruptly concluded the meeting, thus
ending his tenure with AutoZone. JA 578-79.
All told, Ward reported Atkinson’s “sexual
assaults” to Smith as many as twenty times between March and August 2013. JA 707-08.
And Atkinson “either grabbed [Ward’s] butt or grabbed [him] in the crotch or
twisted [his] nipples, at least [twenty] times, maybe a couple of dozen.” JA 795.
“Atkinson’s harassment caused [Ward] great anxiety,” “stress,” and “chest pains,”
which “forced him to seek emergency medical attention” and led to a “heart
catheterization.” JA 154; see also District Court Docket Entry 35-1 at 53-56.
Ward sued AutoZone in district court, alleging
sexual harassment, constructive discharge, and retaliation under Title VII, as well as intentional infliction
of emotional distress under state law. JA 18-30. The district court granted
AutoZone summary judgment on Ward’s Title
VII constructive discharge claim on the ground that AutoZone had not
“deliberately made [Ward’s] working conditions intolerable in an effort to
induce him to quit.” JA 160-61 (brackets omitted) (quoting Martin v. Cavalier Hotel Corp., 48 F.3d 1343,
1354 (4th Cir. 1995)). Ward’s remaining claims proceeded to trial. JA 165.
A jury rejected Ward’s Title VII retaliation claim, JA 1982, but
awarded him $100,000 in compensatory damages and $600,000 in punitive damages
for the Title VII sexual harassment claim,
JA 1980-81.
The district court subsequently denied AutoZone’s motion for partial judgment
as a matter of law on the Title VII
punitive damages claim. JA 2046-48. The court held that a jury reasonably could
have found that Geer, Tarkington, and Smith acted in a managerial capacity
within the meaning of Kolstad, 527
U.S. at 542-43. JA 2045-47. The court also concluded that Ward “produced
sufficient evidence that [each of these] managerial employee[s] acted in
reckless disregard of [his] federally protected rights.” JA 2047-48.
AutoZone also sought remittitur of the Title VII damages, and the district court
granted that request. JA 2051-52. The court reduced the punitive damages award
to $200,000 to bring the full amount of Title
VII damages within the $300,000 cap established by 42 U.S.C. § 1981a(b)(3)(D). JA 2051-52.
In granting AutoZone summary judgment on Ward’s
constructive discharge claim, see JA 158-61, the district court required
Ward to make a showing that is irrelevant to such claims. Under the correct
standard, the court should have denied summary judgment on the constructive
discharge claim.
The Supreme Court first recognized a claim for
constructive discharge under Title VII in Pennsylvania State Police v. Suders, 542
U.S. 129, 141-43 (2004). The Court said there that the “inquiry is objective:
Did working conditions become so intolerable that a reasonable person in the
employee’s position would have felt compelled to resign?” Id. at 141. Notwithstanding Suders’s
description of the constructive discharge inquiry, this Court held before and
after Suders that a constructive
discharge plaintiff must show not only objectively intolerable working
conditions, but also that his “employer deliberately ma[de] the . . .
conditions . . . intolerable in an effort to induce [him] to
quit.” Whitten v. Fred’s, Inc., 601 F.3d 231, 248 (4th Cir. 2010) (quoting Martin, 48 F.3d at 1354).
Subsequently, however, in Green, the Supreme Court clarified that a
constructive discharge plaintiff need not demonstrate that “his quitting was
his employer’s plan all along.” 136 S. Ct.
at 1779-80. Based on this intervening Supreme Court authority, this Court held
unambiguously in EEOC v. Consol Energy,
Inc., 860 F.3d 131 (4th Cir. 2017), that an employer’s “subjective intent
to force a resignation” is “no longer relevant” to a constructive discharge
claim. Id. at 144.
The district court here granted AutoZone summary
judgment on Ward’s constructive discharge claim solely because the evidence did
not show that AutoZone “deliberately made [Ward’s] working conditions
intolerable in an effort to induce him to quit.” JA 160-61 (brackets omitted)
(quoting Martin, 48 F.3d at 1354).
Thus, the district court applied an incorrect standard to that claim.
Under the correct standard for assessing Ward’s
constructive discharge claim, summary judgment should have been denied because
a jury could have reasonably concluded that Ward’s working conditions were so
intolerable that his resignation was objectively reasonable. As the Supreme
Court has explained, a constructive discharge “can be regarded as an aggravated
case of[] sexual harassment,” Suders,
542 U.S. at 146, and a jury could find that Ward endured precisely that here.
For instance, in Amirmokri v. Baltimore Gas & Electric Co.,
60 F.3d 1126 (4th Cir. 1995), this Court found a
triable issue of objectively intolerable working conditions where the
plaintiff’s “co-workers subjected him to epithets about his Iranian origin
almost daily and tried to embarrass him in public,” which “caused [the
plaintiff] to get an ulcer and eventually to resign.” Id. at 1132. In Whitten, this Court reached the same
conclusion where, during a two-day period, a store manager twice “pressed his
genitals against [the plaintiff’s] back” and threatened to “make her life a
‘living hell’ if she ever took work matters ‘over [his] head.’” 601 F.3d at 236 (second alteration in
original) (also describing related conduct by the store manager); see also id. at 249. When the plaintiff complained
of these “physical assaults” to the harassing manager’s superior, the superior
“dismiss[ed] the matter out-of-hand, telling” the plaintiff “that she was
over-reacting and that she should go to work that morning as scheduled.” Id. at 236-37, 249. “A reasonable person
could certainly find intolerable a working situation where a corporate official
is utterly unconcerned about sexually-tinged physical assaults,” this Court
reasoned. Id. at 249.
Ward’s case is comparable to Amirmokri and Whitten. Indeed, Atkinson “sexual[ly]
assault[ed]” Ward by “grabb[ing] [him] in the crotch,” “twist[ing] [his]
nipples,” and “grabb[ing] his butt” “at least [twenty] times” over a period of
about six months. JA 707, 794-95. Although Atkinson’s unwelcome touching did
not occur “almost daily,” as did the epithets in Amirmokri, 60 F.3d at 1132, she touched
him frequently and “[e]very time she got a chance,” JA 514. Moreover, it is
well established that inappropriate physical touching is considered more severe
than verbal behavior. See, e.g., Whitten,
601 F.3d at 243 (noting that the plaintiff was “subjected to verbal abuse and, most
importantly, to physical assaults of a highly sexual and offensive nature”
(emphasis added)); Turner v. Saloon,
Ltd., 595 F.3d 679, 685-86 (7th Cir. 2010) (collecting cases for the
proposition that unwanted sexual touching is a more severe form of harassment
than “vulgar banter” or “sexual innuendo”). Further, much as in Amirmokri, where the harassment led the
plaintiff to develop an ulcer, 60 F.3d at
1131, Atkinson’s harassment caused Ward “great anxiety and stress” as well as
“chest pains,” forcing him to “seek emergency medical attention” and “undergo a
heart catheterization,” JA 154.
Moreover, like in Whitten, where the harasser’s superior
“dismiss[ed] the matter out-of-hand,” 601
F.3d at 249, Smith responded to Ward’s complaints by laughing at and mocking
him, and even encouraging him to “give [Atkinson] what she wants,” JA 514; see
also JA 510. When Ward reported Atkinson to Tarkington, Tarkington made one
superficial attempt to curtail Atkinson’s conduct, but he also scolded Ward to
“knock it off,” even though no one had accused Ward of impropriety. JA 1211-17,
1245. This “blame-the-victim” approach was part of a pattern, as was
demonstrated when Geer told Ward that the harassment was “[his] fault.” JA 578.
Like the plaintiff in Whitten, Ward
reasonably deemed his situation intolerable because Geer, Tarkington, and Smith
seemed “utterly unconcerned about” the “sexually-tinged physical assaults.” 601 F.3d at 249.
Under Title
VII, as amended, a plaintiff seeking punitive damages must show that his
employer acted “with malice or with reckless indifference to [his] federally
protected rights.” 42 U.S.C.
§ 1981a(b)(1). In addition, a Title
VII plaintiff must “impute liability for punitive damages” to his employer
under principles drawn from “the general common law of agency.” Kolstad, 527 U.S. at 539, 541-42 (quoting Burlington Indus. v. Ellerth, 524 U.S.
742, 754 (1998)). In Kolstad, the
Supreme Court determined that the Restatement
(Second) of Agency § 217C (1957) (Second Restatement) “provides a useful
starting point for defining this general common law.” 527 U.S. at 542. Applying the Second
Restatement, the Court held that a Title
VII plaintiff may show that punitive damages should be imputed to his employer
for the acts of an agent if, inter alia, “the agent was employed in a
managerial capacity and was acting in the scope of employment.” Id. at 542-43 (quoting Second Restatement
§ 217C).
Kolstad added, however, that, “in
the punitive damages context, an employer may not be vicariously liable for the
discriminatory employment decisions of managerial agents where th[o]se
decisions are contrary to the employer’s ‘good faith efforts to comply with Title VII.’” Id. at 545 (citation omitted) (explaining that
this limitation advanced Title VII’s objective of “promot[ing] prevention”).
The district court correctly denied AutoZone’s
motion for judgment as a matter of law on Ward’s punitive damages claim. JA
2044-48. The jury was instructed that, to award punitive damages, it must find,
inter alia, that “a managerial employee” acted with malice or reckless
indifference to Ward’s federally protected rights. JA 1960. Accordingly, the
question before this Court is whether the jury could have reasonably concluded
that Geer, Tarkington, or Smith was employed in a managerial capacity
and acted with the requisite mental state, not whether the jury could have
reasonably concluded that all three employees satisfied both requirements. See
EEOC v. Fed. Express Corp., 513 F.3d
360, 372-73 (4th Cir. 2008). As explained below, the jury was entitled to
answer the managerial-capacity and mental-state questions posed to it in the
affirmative, and it also could have reasonably concluded that AutoZone did not
make good-faith efforts to comply with Title
VII. Cf. id. at 370-71 (explaining
standard of review).
In Kolstad,
the Supreme Court said that determining whether an employee acted in a
managerial capacity for purposes of the Second Restatement “requires a
fact-intensive inquiry,” whereby courts “should review the type of authority
that the employer has given to the employee, [and] the amount of discretion
that the employee has in what is done and how it is accomplished.” 527 U.S. at 543 (quoting 1 L. Schlueter
& K. Redden, Punitive Damages § 4.4(B)(2)(a),
at 181 (3d ed. 1995)). The Court explained that the pertinent examples in the Restatement (Second) of Torts (1979) “suggest
that an employee must be ‘important,’ but perhaps need not be the employer’s
‘top management, officers, or directors,’ to be acting ‘in a managerial
capacity.’” Id. (quoting 1
Schlueter, supra, § 4.4(B)(2)(a),
at 181).
This Court’s foundational decision elaborating
on the “managerial capacity” standard is Lowery
v. Circuit City Stores, Inc., 206 F.3d 431 (4th Cir. 2000).
In Lowery, this Court held that two Circuit City employees acted in a
managerial capacity where one had “authority to hire persons . . . in
her sole discretion,” and the other “had the authority to make personnel
decisions, including promotional decisions, without guidelines or review.” Id. at 437, 444, 447 (also noting that
each employee managed a department and supervised other employees). In reaching
this conclusion, this Court relied on EEOC
v. Wal-Mart Stores, Inc., 187 F.3d 1241 (10th Cir. 1999). As Lowery explained, Wal-Mart concluded that a “Wal-Mart
assistant store manager occupied [a] managerial position . . .
where [she] had independent authority to suspend her subordinates and could
also make hiring and firing recommendations.” Lowery, 206 F.3d at 444, 447; see
also Wal-Mart, 187 F.3d at
1247.
The district court correctly held that the
jury was entitled to conclude that Geer, Tarkington, or Smith qualified as a
managerial agent under Lowery and Wal-Mart. See JA 2046-47. Geer
oversaw a dozen AutoZone stores, JA 1644, and Tarkington was in charge of
everything within “all four corners of the walls” of Store 1260, JA 1199. There
was evidence at trial that, much like the managers in Lowery, 206 F.3d at 444, 447, Tarkington
could hire, fire, and discipline employees, JA 1193, 1195, 1199, 1230, and Geer
could transfer and promote employees, JA 1277, 1622, 1649-50. And, much like
the assistant manager in Wal-Mart, 187
F.3d at 1247, Smith could make recommendations about personnel actions such as
promotions, and she could impose discipline on subordinates, at least under
certain circumstances, JA 1649-50, 2244 (15:45-15:53; 18:05-18:15) (Smith
stating that she could send Atkinson home if Atkinson engaged in misconduct).
The jury also reasonably could have deemed
Geer, Tarkington, or Smith a managerial agent because AutoZone empowered and
obligated each to prevent and remediate harassment. See JA 1221, 1285,
1615, 1637, 2244 (15:45-15:53; 18:05-18:15). The Third Restatement explains
that the determination whether an agent acts in a managerial capacity “for
purposes of the [Second Restatement] . . . should focus
on,” inter alia, “the agent’s discretion to make decisions that would
have prevented the injury to the plaintiff or that determine policies of the
organization relevant to the risk that resulted in the injury.” Third
Restatement § 7.03 cmt. e. Similarly,
the most recent edition of a treatise Kolstad
relied upon states that the “managerial capacity” inquiry turns in part on
whether the employee in question has the “responsibility to execute
the employer’s policies to ensure a safe, productive, and discrimination-free
workplace.” 1 L. Schlueter, Punitive Damages § 4.10(B)(1)(c)
(7th ed. 2015); cf. Kolstad, 527
U.S. at 543.
Consistent with these authorities, in Swinton v. Potomac Corp., 270 F.3d 794
(9th Cir. 2001), the Ninth Circuit held that if an agent is “made responsible,
pursuant to company policy, for receiving and acting on complaints of
harassment,” the employer cannot then say that the employee “was too
‘low-level’ to warrant imputation of” punitive damages for harassment. Id. at 810-11; see also Deters v. Equifax Credit Info. Servs., Inc.,
202 F.3d 1262, 1271 (10th Cir. 2000) (similar); cf. EEOC v. AutoZone, Inc., 707 F.3d 824, 837
(7th Cir. 2013) (punitive damages could be imposed based on the denial of
requested accommodations by a “lead disability coordinator” because she had “authority
and discretion to make decisions about employees’ accommodations”).
Under these standards, the jury reasonably could
have found that Geer, Tarkington, or Smith acted in a managerial capacity, as
each was designated under company policy to receive complaints of harassment,
knew of Ward’s harassment, and could have prevented the injury once they had
knowledge of the harassment. For instance, Smith had the authority to send
Atkinson home for harassing Ward, JA 2244 (15:45-15:53; 18:05-18:15), but
instead recommended promoting her to a full-time position, JA 1649-50. Geer and
Tarkington could have ensured that Ward and Atkinson would not work together,
JA 1622, 1637, but both failed to do so, thus worsening the harassment. Having
endowed Geer, Tarkington, and Smith with such powers and obligations, AutoZone
cannot now claim that they were “too ‘low-level’ to warrant imputation of”
punitive damages. Swinton, 270 F.3d
at 811.
AutoZone asserts that “Ward failed to
establish that any of the allegedly discriminating employees served in a higher
managerial capacity.” AutoZone Br. 42
(emphasis added). But Kolstad characterizes
the governing standard as a “managerial capacity” standard, not a “higher
managerial capacity” standard, and Kolstad
emphasized that an employee “perhaps need not be the employer’s
‘top management, officers or directors,’ to be acting ‘in a managerial capacity.’”
527 U.S. at 542-43. As Lowery reiterated, an agent does not have
to be “top management, nor an officer or director of the corporation,” to act
in a managerial capacity. 206 F.3d at 444;
see also Third Restatement § 7.03
cmt. e (describing “managerial capacity” standard under the Second Restatement
and emphasizing that “[t]he title that an agent holds is not dispositive, nor
is the fact that the agent is not among the highest in an organization’s
hierarchy”). As the current version of a treatise that Kolstad relied upon explains, the purpose
of the common-law managerial capacity rule “is to deter the employment of unfit
persons in important positions,” which “indicate[s] that the rule applies to a
class of agents below top management.” J.
Kircher & C. Wiseman, Punitive Damages: Law and Practice § 24:5 (2d ed. 2018) (relying on Restatement (Second) of Torts § 909(c)); cf.
Kolstad, 527 U.S. at 542-43.
AutoZone cites no record evidence to support
its contention that Geer, Tarkington, and Smith were not managerial agents.
Instead, AutoZone relies on Hertzberg
v. SRAM Corp., 261 F.3d 651 (7th Cir. 2001), which held that an employee
who “had little discretion in hiring, disciplining or terminating employees” was
not a managerial agent, whereas another employee who “hired . . . staff”
and “had the authority to discipline and terminate” was. Id. at 663; AutoZone Br. 42. But Geer, Tarkington, and
Smith had more than a “little discretion” to hire, fire, and discipline
employees. Geer oversaw a dozen AutoZone stores, JA 1644, and could make final
decisions on transfers and promotions. JA 1277, 1622, 1639, 1650. Tarkington
was empowered to hire, fire, and discipline employees. JA 1193, 1195, 1199,
1230. And Smith could impose discipline on her subordinates, at least under
certain circumstances. See JA 2244 (15:45-15:53; 18:05-18:15). Therefore,
Geer, Tarkington, and Smith are equivalent to the agent in Hertzberg whom the court deemed
“managerial.” 261 F.3d at 663. In any
event, Hertzberg is not binding on
this Court, and it did not consider whether an individual can qualify as a
“managerial agent” by virtue of his or her authority and obligation to respond
to harassment complaints. See supra pp. 19-20.
AutoZone also relies on EEOC v. AutoZone, Inc., 692 F. App’x 280
(6th Cir. 2017). See AutoZone Br.
42. But that unpublished decision concerned the test for determining whether an
employer is vicariously liable for harassment by an employee, which depends, in
part, on whether the employee was the victim’s “supervisor.” AutoZone, 692 F. App’x at 282-83
(citing Vance v. Ball State University,
570 U.S. 421 (2013), the key Supreme Court decision on point). Although the
panel majority in AutoZone held
that the store manager there was not a “supervisor” of his victims for purposes
of that distinct doctrine, id. at
284, 286, AutoZone did not
address—much less decide—whether the store manager was a “managerial agent” for
purposes of awarding punitive damages under Kolstad.
Because the Vance and Kolstad standards serve distinct purposes,
this Court should decline AutoZone’s invitation to be the first court of
appeals to conflate these two standards.
Accepting AutoZone’s argument would largely
insulate big companies from exposure to punitive damages. As this case
illustrates, in a large chain like AutoZone, unlawful discrimination often
occurs within a single facility and never comes to the attention of corporate
officials beyond those overseeing the individual store or a geographical
region. Yet Congress did not intend to shield big employers from punitive
damages awards. To the contrary, Congress established a graduated set of caps
on damages awards, under which the largest employers would potentially pay the highest
awards. See 42 U.S.C. § 1981a(b)(3)(A)-(D)
(capping damages awards at $300,000 for employers with more than 500 employees;
$200,000 for employers with 201-500 employees; $100,000 for employers with
101-200 employees; and $50,000 for employers with 15-100 employees).
Furthermore, the Supreme Court has repeatedly
emphasized that Title VII’s primary purpose is to encourage employers to avoid
harm by adopting and implementing effective anti-discrimination policies. See,
e.g., Faragher v. City of Boca
Raton, 524 U.S. 775, 805-06 (1998). A critical
way to prevent harm is for employers to maintain strong oversight over
employees responsible for making employment decisions or acting on harassment
complaints. The “higher management” rule AutoZone advances, however,
would reward employers who minimize oversight because employers who are
ignorant of their agents’ conduct would not be liable for punitive damages. Again,
this case is illustrative: under AutoZone’s “higher management” approach, in
which even a district manager like Geer is insufficiently high up the corporate
ladder to act in a managerial capacity, it is difficult to imagine how
harassment of the type at issue here could ever result in punitive damages, no
matter how egregious the underlying conduct.
In addition to concluding that Geer,
Tarkington, or Smith was a managerial agent, the jury was entitled to find that
at least one acted “with malice or with reckless indifference to [Ward’s]
federally protected rights.” 42 U.S.C. § 1981a(b)(1).
It is well established that “proof of ‘actual malice’ is unnecessary for a
finding of punitive damages liability if, at a minimum, the plaintiff is able
to prove ‘recklessness in its subjective form.’” Fed. Express, 513 F.3d at 371 (quoting Kolstad, 527 U.S. at 536). “[T]o prove
such recklessness, a plaintiff must establish that” a managerial agent
“discriminate[d] in the face of a perceived risk that doing so [would] violate
federal law.” Id. (last two alterations
in original) (quoting Kolstad, 527
U.S. at 536).
Here, the district court correctly held that
there was “sufficient evidence that a managerial employee acted in reckless
disregard.” JA 2047. This Court has “heretofore found evidence sufficient to
support a jury finding of a perceived risk in cases where the employer’s
managerial agent had ‘at least a rudimentary knowledge’ of the import of a
federal anti-discrimination statute.” Fed.
Express, 513 F.3d at 372-73 (citing decisions). In this case, Geer and
Smith each knew throughout their tenures with AutoZone that “sexual harassment
in the workplace was against the law.” JA 1541, 1643-44. Similarly, Tarkington
was aware that AutoZone maintained a “zero tolerance” policy against sexual
harassment. JA 1202. In addition, all three received some training on sexual
harassment, either online or by reading AutoZone’s handbook. JA 1233-34, 1236-37,
1541-42, 1615-17. This evidence provided a reasonable basis for concluding that
at least one of these employees acted in reckless disregard of Ward’s federal
rights, particularly because it is undisputed here that the “the underlying
theory of discrimination [is not] novel or otherwise poorly recognized.” Kolstad, 527 U.S. at 537; see also Lowery, 206 F.3d at 443 (concluding that a
jury could infer that a managerial agent knew “of the existence of federal
anti-discrimination laws” from evidence that the employer required management
to attend training “that included education on [those] laws”); Anderson v. G.D.C., Inc., 281 F.3d 452,
460 (4th Cir. 2002) (holding that jury was entitled to find that supervisor who
saw an EEOC poster warning against sexual harassment perceived a risk of
violating Title VII, even though he denied
reading it).
In addition, the AutoZone officials’ responses
to Ward’s complaints of Atkinson’s conduct were wholly inadequate. Smith, for
her part, not only failed to report or remedy Atkinson’s conduct, but also
mocked Ward over the harassment and encouraged him to “give [Atkinson] what she
wants.” JA 514, 516. These facts, coupled with Smith’s awareness that sexual
harassment can violate federal law, were more than enough to support the jury’s
finding of reckless indifference. See, e.g., Anderson, 281 F.3d at 460 (conscious
disregard for the plaintiff’s rights may be inferred from the “rank
offensiveness” of manager’s misconduct).
The jury also could have found Tarkington
recklessly indifferent based on his response to a question regarding whether he
believed that he handled Ward’s complaint appropriately. Tarkington
acknowledged that “[w]hen[] [he] saw that . . . Geer wasn’t
doing anything about” the harassment, he “probably should have gone further up
with it.” JA 1216; see also JA 1209. And Geer’s attempt to shift blame
for the harassment onto Ward, see JA 578, could have reasonably been
deemed by the jury to be particularly egregious or offensive under the
circumstances, further supporting a finding of reckless indifference. See Kolstad, 527 U.S. at 546 (clarifying that
a showing of egregious misconduct provides evidence of the requisite mental
state).
AutoZone does not take issue with any of the
foregoing legal principles, nor does it point to any evidence that would have
compelled a reasonable jury to find that Geer, Tarkington, and Smith were not
reckless under those principles. Instead, AutoZone challenges the district court’s
recklessness ruling on the sole ground that AutoZone did not act with the
requisite intent for a constructive discharge claim. AutoZone Br. 43-46. Setting aside AutoZone’s
misunderstanding of the law regarding constructive discharge, see supra pp.
11-15, the question whether a manager acts with malice or reckless indifference
for punitive damages purposes is quite plainly distinct from the question
whether an employer intended to force an employee to resign, and none of the
decisions AutoZone cites held otherwise.
Finally, the jury reasonably determined that
AutoZone did not engage in “good faith efforts to comply with Title VII.” Kolstad, 527 U.S. at 545. As AutoZone
appears to concede, see AutoZone
Br. 4, AutoZone, not Ward, bore the burden of proof on this issue, see Golson v. Green Tree Fin. Servicing Corp.,
26 F. App’x 209, 214 (4th Cir. 2002) (collecting cases); see also, e.g.,
Romano v. U-Haul Int’l, 233 F.3d 655, 670
(1st Cir. 2000). Thus, this Court may not reverse the jury’s damages award on
this basis unless the only reasonable conclusion to be drawn from the evidence is
that AutoZone made good-faith efforts to comply with Title VII. See Lowery, 206 F.3d at 445.
To be sure, AutoZone had an anti-harassment
policy that included a procedure for addressing harassment complaints, but the
“mere existence” of such a policy “will not alone insulate an employer from
punitive damages liability.” Fed.
Express, 513 F.3d at 374; see also Lowery, 206 F.3d at 446. “Rather,” to establish
good faith, “an employer maintaining such a . . . policy
must also take affirmative steps to ensure its implementation.” Fed. Express, 513 F.3d at 374. As this
Court has elaborated, “a jury is not obliged to find that an employer has
engaged in good-faith efforts to comply with the law if ‘the sincerity of the
employer’s commitment to a company-wide policy against discrimination in the
workplace is called into question’ by other evidence.” Id. (alterations in original omitted)
(quoting Lowery, 206 F.3d at 446).
Here, AutoZone failed to demonstrate that it
took “affirmative steps” to “ensure” its policy was “implement[ed].” Fed. Express, 513 F.3d at 374. For instance,
AutoZone provided no “in-person training” on the policy at Store 1260. JA 487, 811;
cf. Lowery, 206 F.3d at 445-46
(holding that a jury could reject employer’s good-faith defense even though it had
conducted some “individual employee training sessions” and “required every
managerial and supervisory employee” to attend a training seminar that covered
federal anti-discrimination laws). Instead of in-person training, AutoZone
required employees to verify electronically that they had read and understood
the policy. JA 1201, 1234. But, as Tarkington testified, “99 percent of the
people [did not] even read” the policy, and there were instances in which
managers logged in under an employee’s name and verified falsely that the
employee had read and understood the policy. JA 1201.
Also, Tarkington, who as the store manager should
have been a critical enforcer of AutoZone’s anti-harassment policy, could not
even articulate the policy’s substance, other than saying it was “zero
tolerance.” JA 1202. This might have been because the “test” AutoZone gave
Tarkington on the policy revealed to him the correct answers after he failed two
or three times. JA 1217. Or the jury could have reasoned that Tarkington had a
dim understanding of the policy because copies of it were not available in the
store. JA 549-50. Furthermore, the various failures of Geer, Tarkington, and Smith
to follow the policy reinforce the conclusion that AutoZone was not fully committed
to implementing it. See, e.g., Fed.
Express, 513 F.3d at 375 (reasoning that managers’ non-compliance with a policy
supported jury’s finding of lack of good faith).
AutoZone nevertheless insists, AutoZone Br. 46-47, based on Bryant v. Aiken Regional Medical Centers, Inc.,
333 F.3d 536 (4th Cir. 2003), that its attempts at Title VII compliance preclude punitive damages.
But Bryant vacated a punitive
damages award because it was undisputed there that the employer “had an extensively
implemented organization-wide Equal Employment Opportunity Policy.” 333 F.3d at 548-49 (emphasis added). The Court
noted, for example, that the employer implemented a “carefully developed
diversity training program that included formal training classes and group
exercises” and “voluntarily monitored departmental demographics” to ensure
diversity. Id. at 548. AutoZone
engaged in no such “widespread anti-discrimination efforts.” Id. at 549.
Similarly, in White v. BFI Waste Services, LLC, 198 F.
App’x 283 (4th Cir. 2006), upon which AutoZone also relies, AutoZone Br. 47, the employer had, inter
alia, conducted “training seminars” on its anti-discrimination policy, and
the only evidence that the employer lacked good faith was that “its policy
proved ineffective with respect to” just the plaintiffs. White, 198 F. App’x at 287. Even if White were precedential, it would not
counsel in favor of reversal here, where there is no evidence that AutoZone
conducted any “training seminars,” id.,
and Ward’s claim for punitive damages is predicated on much more than the fact
that AutoZone’s policy proved ineffective just as to him. See supra pp. 26-28.
The EEOC urges this Court to
reverse the district court’s judgment with respect to the constructive
discharge claim and affirm with respect to the punitive damages award.
Respectfully submitted,
JAMES L. LEE
Deputy General Counsel
JENNIFER S. GOLDSTEIN
Associate General Counsel
SYDNEY A.R. FOSTER
Assistant General Counsel
s/Philip M. Kovnat
PHILIP M. KOVNAT
Attorney
Equal
Employment
Opportunity
Commission
Office of General Counsel
131 M St., N.E., 5th
Floor
Washington, D.C. 20507
(202) 663-4769
philip.kovnat@eeoc.gov
This brief complies with the type-volume
limitation of Fed. R. App. P. 28.1(e)(2)(B) and 29(a)(5) because it contains 7,524
words, excluding the parts of the brief exempted by Fed. R. App. P. 32(f).
This brief complies with the typeface
requirements of Fed. R. App. P. 32(a)(5) and the type-style requirements of
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spaced typeface, 14-point Garamond, using Microsoft Word 2016.
s/Philip M. Kovnat
PHILIP M. KOVNAT
Attorney
Equal
Employment
Opportunity
Commission
Office of General Counsel
131 M St. N.E., 5th Floor
Washington, D.C. 20507
(202) 663-4769
philip.kovnat@eeoc.gov
Dated:
March 20, 2019
