Lockard v. Pizza Hut, Inc., s. 97-7027

• Decision Date: 14 December 1998
• Docket Number: Nos. 97-7027,97-7078,s. 97-7027
• Parties: 78 Fair Empl.Prac.Cas. (BNA) 1026, 74 Empl. Prac. Dec. P 45,670, 1999 CJ C.A.R. 224 Rena LOCKARD, Plaintiff-Appellee, v. PIZZA HUT, INC., a corporation, doing business as Pizza Hut; A & M Food Services, Inc., a corporation, doing business as Pizza Hut, Defendants-Appellants
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1062

162 F.3d 1062

78 Fair Empl.Prac.Cas. (BNA) 1026,

74 Empl. Prac. Dec. P 45,670, 1999 CJ C.A.R. 224

Rena LOCKARD, Plaintiff-Appellee, v. PIZZA HUT, INC., a corporation, doing business as Pizza Hut;

A & M Food Services, Inc., a corporation, doing

business as Pizza Hut, Defendants-Appellants

Nos. 97-7027, 97-7078.

United States Court of Appeals, Tenth Circuit.

Dec. 14, 1998.

Richard W. Wassall (Harry A. Parrish with him on the briefs) of Knight, Wilkerson, Parrish & Wassall, Tulsa, Oklahoma, for Defendants-Appellants.

Thomas J. Hadley of Stamper, Hadley & Reasor, Antlers, Oklahoma (David M. Kennedy of Kennedy, Minshew, Campbell & Morris, Sherman, Texas, with him on the briefs), for Plaintiff-Appellee.

Before SEYMOUR, Chief Judge, PORFILIO, and HENRY, Circuit Judges.

SEYMOUR, Chief Judge.

Rena Lockard brought suit against Pizza Hut, Inc. and A & M Food Service, Inc. asserting claims under Title VII for hostile work environment sexual harassment. The jury returned a verdict against defendants, awarding Ms. Lockard $200,000 in compensatory damages. The district court denied defendants' motions for judgment as a matter of law, for a new trial and for remittitur. The district court also awarded Ms. Lockard $1514.21 in costs and $37,088.75 in attorneys' fees. Defendants appeal. We affirm the judgment against A & M and reverse the judgment against Pizza Hut.

I

A & M Food Service, Inc. is a Pizza Hut franchisee that owns and operates the Pizza Hut restaurant in Atoka, Oklahoma. Pizza Hut, Inc. publishes policy bulletins and complaint procedures which are utilized by all Pizza Hut restaurants. Pizza Hut's employee orientation and training handbook, "Your Guide to Success," is distributed to each new employee at the time of hire. All employees are required to sign a document stating that they have received and reviewed the publication. The handbook includes, among other things, Pizza Hut's formal grievance procedure for any work-related concerns as well as a section specifically discussing the problem of sexual harassment. Pizza Hut's formal grievance procedure instructs employees to:

Step 1 Talk to your Manager and clearly state the problem and your desired solution.

Step 2 Not satisfied? Write down your problem with your desired solution and send it to your Area Manager. Send a copy to your Division Human Resource Manager.

Step 3 If you receive a written response and still are not satisfied, feel free to respond, in writing, to your Market Manager.

Aplt.App. at 574. Employees who "are subjected to or have knowledge of sexual harassment or intimidation," however, also have the opportunity to "report [such conduct] immediately to [their] Division Human Resource Manager." Id. at 575. Pizza Hut's grievance procedure and sexual harassment policy are posted in every restaurant. Moreover, if an employee desires "further information" regarding sexual harassment, she is directed to "ask [her] Manager for Policy # 425." Id.

Policy # 425, after defining sexual harassment and providing examples of sexually harassing behavior, provides that "[s]uch conduct whether committed by supervisory or non supervisory personnel, co-workers or customers is specifically prohibited." Id. at 562. With regard to reporting incidents of harassment, Policy # 425 further states that "[a]ny management employee who has knowledge of harassment or intimidation should report the incident to his or her Human Resource Manager, whether or not the victim requests that management become involved." Id. at 562.

Pizza Hut also publishes a pamphlet for management employees entitled "Pizza Hut's Policy on Harassment," which provides instructions on responding to and investigating complaints of sexual harassment. All Pizza Hut management employees are required to receive training on sexual harassment and are expected to review this pamphlet as part of that training. The pamphlet cautions managers against "ignor[ing] allegations or rumors that sexual harassment is occurring," directing them to "[r]espond immediately with concern." Id. at 558. When a manager becomes aware of customers who harass employees, the pamphlet specifically instructs such managers to contact the Human Resource Manager and/or Area Manager and to

take such steps to correct the conduct, such as asking the customer to refrain from the conduct and if the customer persists, asking the customer to leave the restaurant.

Id. at 557.

Ms. Lockard was hired to work as a waitress for $2.35/hour plus tips at the Pizza Hut unit in Atoka in September 1993. Her W-2 form lists A & M as her employer. She was directly supervised by Micky Jack, who was the manager of Ms. Lockard's shift. Mr. Jack reported to Joyce Selby, the Unit Manager of the Atoka Pizza Hut, who was responsible for hiring. Ms. Selby in turn reported to Larry Acklin, the Area Manager for Pizza Hut units located in Eastern Oklahoma. As part of her employee orientation and training, Ms. Lockard signed a document stating that she had received and reviewed Pizza Hut's "Your Guide to Success."

Ms. Lockard's duties included closing the store after the restaurant stopped serving customers at 10 p.m. on weekdays and 11 p.m. on weekends. Upon occasion, she and Mr. Jack were the only Pizza Hut employees at closing time and Mr. Jack would often play one of his favorite songs "Freak Me" on the jukebox. The song contains sexually explicit lyrics. Ms. Lockard testified that she informed both Mr. Jack and Ms. Selby that she found this song offensive and asked Mr. Jack to stop playing it, to no avail. Other than playing offensive music, Mr. Jack never directly acted improperly toward her.

Ms. Lockard's more serious allegation of sexual harassment involved the failure of Mr. Jack to respond properly to the inappropriate conduct of two crude and rowdy male customers on November 6, 1993. Ms. Lockard testified that these two men had eaten at the restaurant several times previous to November 6 and had made sexually offensive comments to her, such as "I would like to get into your pants." After the two men made these remarks, Ms. Lockard informed Mr. Jack that she did not like waiting on them; however, the record contains no evidence that she told Mr. Jack why she did not like waiting on the men or that she ever relayed to him the substance of their remarks. On the evening of November 6, these customers again entered the restaurant. The wait staff, including younger male waiters, argued over who would seat them because no one on the staff wanted to serve them. Mr. Jack then instructed Ms. Lockard to wait on them. After being seated by Ms. Lockard, one of the customers commented that she smelled good and asked what kind of cologne she was wearing. Ms. Lockard responded that it was none of his business, and the customer grabbed her by the hair. She informed Mr. Jack that one of the customers had pulled her hair and that she did not want to continue waiting on them, and asked Mr. Jack if he could find someone else to serve them. Ms. Lockard testified that Mr. Jack denied her request, stating "You wait on them. You were hired to be a waitress. You waitress." Aplt.App., Trial Tr. at 47. Ms. Lockard returned to their table with a pitcher of beer. As she reached to put the beer on the table, the customer pulled her to him by the hair, grabbed her breast, and put his mouth on her breast. At that point, Ms. Lockard told Mr. Jack that she was quitting and wanted to go home. She called her husband who picked her up.

The next day Ms. Selby telephoned Ms. Lockard to question her about the incident. Ms. Lockard related the events of the previous evening and asked Ms. Selby to obtain the names of the two customers. Ms. Selby provided Ms. Lockard with this information. Ms. Selby also asked Ms. Lockard whether she wished to continue working at Pizza Hut as a production person, which would not require her to come into contact with any customers, but Ms. Lockard declined the offer. Ms. Lockard provided Pizza Hut with her notice of termination on November 13, 1993. On the official Pizza Hut Notice of Termination/Resignation form signed by Ms. Selby, the explanation given for the termination stated that Ms. Lockard "was sexual harassed [sic] by a customer-got understandly [sic] upset + quit." Aplee. Supp.App. at 1. For the two months she worked at Pizza Hut, Ms. Lockard earned a total of $1393.19.

Donna Lowrance, an employee of Pizza Hut, Inc., holds the position of Manager of Equal Employment Opportunity and Affirmative Action. Her responsibilities include handling all EEOC complaints filed against Pizza Hut restaurants nationwide. Upon receiving Ms. Lockard's EEOC complaint, Ms. Lowrance instructed Mr. Acklin, the Area Manager, to investigate the complaint and gather employees' statements concerning the alleged incident of harassment. Following this investigation, Ms. Lowrance wrote a letter to the EEOC, dated December 1994, setting out Pizza Hut's position on Ms. Lockard's sexual harassment charge. Pizza Hut denied the charge, asserting that Mr. Jack only became aware of the incident between Ms. Lockard and the male customers after the men had left the restaurant. Aplee. Supp.App. at 31.

At trial, Ms. Lockard testified she had been sexually assaulted by a friend of her father when she was a teenager. Although she had been able to cope with her prior sexual abuse before the November 6 incident, after the incident her emotional condition deteriorated significantly. Ms. Lockard testified she was frightened to be near men, even her father and her husband, and that her condition prevented her from working. Several family members testified to changes in Ms. Lockard's behavior as a result of the incident, including her fear of going out in public. Ms. Lockard sought psychological counseling from Dr. Karen Rasile, who appeared as an expert witness at trial and stated that Ms. Lockard exhibited classic symptoms of post-traumatic stress disorder and major...