Haskenhoff v. Homeland Energy Solutions, LLC

• Decision Date: 23 June 2017
• Docket Number: No. 15-0574,15-0574
• Citation: 897 N.W.2d 553
• Parties: Tina HASKENHOFF, Appellee, v. HOMELAND ENERGY SOLUTIONS, LLC, Appellant.
• Court: Iowa Supreme Court

897 N.W.2d 553

Tina HASKENHOFF, Appellee,

v.HOMELAND ENERGY SOLUTIONS, LLC, Appellant.

No. 15-0574

Supreme Court of Iowa.

Filed June 23, 2017

Kevin J. Visser and Lisa A. Stephenson of Simmons Perrine ≠ Moyer Bergman PLC, Cedar Rapids, for appellant.

Roxanne Barton Conlin of Roxanne Conlin & Associates, P.C., Des Moines, and Brooke Timmer and Paige Fiedler of Fiedler & Timmer, P.L.L.C., Johnston, for appellee.

WATERMAN, Justice.

In this appeal, we must decide whether the district court correctly denied an employer's motion for new trial following a $1.4 million jury verdict for the plaintiff on claims under the Iowa Civil Rights Act (ICRA) for employment discrimination based on sexual harassment by a direct supervisor and coemployees. The employer argues the district court erred by submitting a direct negligence claim instead of vicarious liability for supervisor harassment and misinstructed the jury on the elements of proof, the causation standard for retaliation, the definition of adverse employment action, and constructive discharge. The employer also argues a new trial is required for attorney misconduct, errors in allowing expert testimony on legal standards, and excessive damages, which included $1 million for future emotional distress. Finally, the employer argues the district court erred by awarding excessive attorney fees of $846,364, the full amount claimed.

For the reasons explained below, we hold that workers may bring a direct-liability negligence claim under the ICRA against the employer for supervisor harassment, but the plaintiff must prove the employer knew or should have known of the harassment and failed to take prompt and appropriate remedial action to end it. We conclude that prejudicial errors in four jury instructions require a new trial. We find no abuse of discretion in the admission of the expert testimony. We need not decide the remaining issues raised in the appeal.

I. Background Facts and Proceedings.

The jury could find the following facts based on the record developed at trial. Homeland Energy Solutions, LLC (HES) operated an ethanol plant with forty-five employees in Lawler, Iowa. On February 16, 2009, HES hired Tina Haskenhoff as a lab manager at the plant. That day, she was provided with a copy of the HES employee handbook, which included its policy on sexual harassment. The policy stated sexual harassment was prohibited and provided that "[a]n employee who believes he or she has been subject to harassment prohibited by this policy should report the incident immediately to their supervisor or a member of the Management Team." The policy stated any complaint of sexual harassment would be investigated and any employee may bring a complaint "without fear of reprisal."

Haskenhoff was repeatedly harassed by her immediate supervisor, Kevin Howes, HES's operations manager. Howes repeatedly made inappropriate comments in Haskenhoff's presence. For example, Howes talked about Haskenhoff's breasts on at least three occasions, referring to them as "them puppies" or "the twins." Howes discussed Haskenhoff's body and attire with other employees and speculated out loud about what it would be like to have sex with her. He insinuated to other male employees that they could get Tina into bed. He commented on the attractiveness or unattractiveness of female job applicants and employees. He spoke at work about strippers. On multiple occasions, he used objects or engaged in body motions in front of Haskenhoff to simulate sexual behavior.

Haskenhoff's coemployees also engaged in inappropriate conduct in her presence. One displayed a screen saver on his computer of two young girls touching tongues. Another photographed Haskenhoff's cleavage at a company outing and showed that photo to others. Haskenhoff received an unwanted pornographic video from yet another employee. The atmosphere Haskenhoff experienced at the HES plant was unseemly and unprofessional.

In November 2010, Haskenhoff told Howes she needed to leave work early for a mammogram

. She remembered Howes responding, "[W]ell, you know, if you sat out in the parking lot you could probably make some money." She interpreted this to mean, "[I]f I sat in my car and put a sign up guys would pay to grope me." Howes's recollection differed; he recalled he told Haskenhoff she "could go around the corner and use the copying machine and save herself some money." He stated that he meant Haskenhoff could "[u]se the copying machine, make a photocopy [of her breast] versus going to the doctor." Howes acknowledged that his comment was inappropriate. Haskenhoff reported the incident to the plant manager, Chad Kuhlers. Kuhlers forwarded Haskenhoff's report to the head of human resources, Sarah Frein. The next day, Howes came to Haskenhoff's office and spoke with her. He apologized for his comment and expressed concern that Kuhlers wanted him fired because of it. Haskenhoff said Howes made her feel "very intimidated." Shortly after her interaction with Howes, Walter Wendland, the chief executive officer (CEO) of HES, asked Haskenhoff to come to his office. She recalled at this meeting,

[Wendland] said—he was kind of, like, well, what's going on here, and he said you know Chad [Kuhlers] really wants me to fire Kevin over this, and I said I never asked Chad to fire him. And then Walt went on to say, well, come [on]. I thought we were like a family. You don't want to do this to your family.

On December 7, Frein called Haskenhoff into her office to discuss her complaint. Jeff Grober, the chief financial officer (CFO), was also present in Frein's office. At that meeting, Frein's notes indicate that she had planned "further discussion" about the complaint, but Haskenhoff stated she did not want the investigation to go further because she did not want Howes to be fired. Haskenhoff later testified about that meeting:

Q. And what happened in that meeting? A. They asked me about it. She said that Chad had notified her of something Kevin had said to me that I reported as making me uncomfortable, and I said he did. And I think I broke down at that point, and I said I don't want him to get fired over this, you know. I said to her I'm sure now that he knows, now that it has been pointed out to him, surely he will stop. Anybody would stop.

Q. Is that what you believed would happen? A. Yes.

Q. Did you tell 'em you wanted it dropped? A. I said if it were going to come to the point of Kevin getting fired, I didn't want to go—I didn't want to officially go further at all because I did not want him fired over that.

Q. Did you want them to do something about it? A. Yes.

At Haskenhoff's request, Frein took no further disciplinary action against Howes at that time.

Wendland later removed Kuhlers as plant manager and promoted Howes to that position. For the next nine months, Haskenhoff made no complaints to management about Howes. Her performance review in January 2011 noted that she met or exceeded requirements in all areas. However, the review also noted that Haskenhoff had areas to work on and referenced an email dispute in which Haskenhoff had become argumentative with a subordinate over lab procedures. In May, she began seeking a position at John Deere.

On August 8, Haskenhoff walked by Howes's office and overheard him talking on his cell phone. Haskenhoff recently had told Howes she intended to marry her long-time boyfriend. Haskenhoff overheard Howes say, "Yep, she's getting married. And for a good reason (pause) for money." This comment upset Haskenhoff. She walked into the control room and told another employee, "Okay. Kevin is a [f%!@"g] asshole. I am leaving. I will be back tomorrow." Haskenhoff left work at 11:15 that morning.

Haskenhoff sent an email to Howes expressing her disgust at his comment. Howes replied that he had not meant to offend her and asked her to meet the next day in his office to discuss the issue. Later that night, Howes sent an email to the CEO, Wendland; the CFO, then David Finke; and the commodities manager, Steve Wubbena. In the email, Howes said he wanted to discipline Haskenhoff for calling him expletives in front of subordinate employees, for leaving the lab a mess, and for leaving work without permission for the day. He pointed out Haskenhoff had been the only lab person scheduled, lab samples had not been completed, they were in the middle of a lab trial, and she "blew off" a conference call by leaving. Howes also expressed frustration at Haskenhoff's attitude, her frequent smoke breaks, and her failure to arrange coverage for her shifts on her days off. Finke responded, "We claim that she does a lot of things poorly, do we have any of this documented and on file?"

The next day, Haskenhoff met with Howes and Wubbena in Howes's office. They discussed the conduct from the day before, and Howes apologized. Howes also used the term "insubordination" to refer to Haskenhoff's reaction to his comment. Haskenhoff replied using terms such as "sexual harassment" and "hostile work environment" to refer to Howes's conduct. She then told Howes about other conduct in the office, including about a coemployee having an inappropriate screen saver and inappropriate nicknames being used in the office. Howes responded after their meeting by directing the employees to cease using the nicknames and to remove the screen saver.

The following week, Frein emailed Haskenhoff asking for "facts, examples, and concerns [of inappropriate conduct] in writing so we can get them addressed appropriately." Haskenhoff responded by email to Frein the same day, listing multiple incidents of inappropriate conduct and stating the list was long "but not all encompassing." Haskenhoff said the only reason she brought the issues up was that Howes had threatened to write her up for insubordination. Frein immediately forwarded this email to Finke, who responded, "I don't think we can discount anything that is mentioned below. Some of it may be embellished a bit, but we still cannot just take it with a grain...