Davis v. City of Sioux City

• Decision Date: 11 August 1997
• Docket Number: No. 96-2194,96-2194
• Citation: 115 F.3d 1365,1997 WL 329583
• Parties: 74 Fair Empl.Prac.Cas. (BNA) 978, 70 Empl. Prac. Dec. P 44,778 Cheryl A. DAVIS, Appellee, Thomas R. Davis, Plaintiff, v. CITY OF SIOUX CITY, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1365

115 F.3d 1365

74 Fair Empl.Prac.Cas. (BNA) 978,

70 Empl. Prac. Dec. P 44,778

Cheryl A. DAVIS, Appellee Thomas R. Davis, Plaintiff, v. CITY OF SIOUX CITY, Appellant.

No. 96-2194.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 16, 1997.

Decided June 18, 1997.

Rehearing and Suggestion for Rehearing En Banc Denied Aug.

11, 1997. ^*

James Raymond Villone, Sioux City, IA, argued, for appellant.

Robert L. Sikma, argued (Mayer Kanter, Sioux City, IA, on the brief), for appellee.

Before RICHARD S. ARNOLD, Chief Judge, ROSS and BEAM, Circuit Judges.

BEAM, Circuit Judge.

The City of Sioux City appeals from a jury verdict in favor of Cheryl Davis on her claims of retaliation and hostile environment sexual harassment. We affirm in part and reverse in part.

I. BACKGROUND

Cheryl Davis began working for the City of Sioux City (City) in the City Clerk's Office in 1977. In 1984, Davis became a Deputy Clerk. From 1982 to 1992, Bill Gross was the City Clerk and Davis's supervisor. Gross, in turn, reported directly to the City Council, which had sole responsibility for hiring, firing and disciplining him.

During the first nine years that Davis worked under Gross, Davis claims Gross engaged in some inappropriate behavior toward her. However, Davis did not feel that this behavior was sufficiently egregious to report. In January 1991, however, Gross suffered a heart attack. Following his return from medical leave, and especially in late 1991 and early 1992, Gross's inappropriate behavior toward Davis escalated. Such conduct included, but was not limited to: (1) spreading rumors that Davis was having extra-marital affairs; (2) following Davis to the restroom to make sure she was using the restroom and not talking to men instead; (3) calling the head of another department to see whether Davis was on the phone with men from that department; and (4) commenting that Davis's work attire was inappropriate, e.g., that her skirts were too short. Although Davis discussed this behavior with Gross, the situation did not improve and the behavior did not cease.

Pursuant to the City's sexual harassment policy that had been in effect since 1988, Davis made a formal complaint about Gross's behavior on February 12, 1992. In the course of an investigation by city personnel, Gross denied Davis's allegations. Later, the investigators' findings were submitted to the City Council. Davis was neither apprised of the investigation nor of the substance of the report. After discussing the report on March 16, 1992, the City Council voted to suspend Gross for one day and put a letter in his file. Davis was not informed of this action at the time.

On the morning of March 25, 1992, Davis submitted a letter of resignation and left her office. That same day, a letter was prepared by the City Council notifying Davis about Gross's one-day suspension. Later that afternoon, Davis met with an attorney for the City and informed him that she had obtained some of Gross's personal notes which suggested Gross had lied to investigators. On March 30, 1992, these notes were presented to the City Council. On review of this evidence, the City Council negotiated and concluded a severance agreement with Gross, who left city employment on April 3, 1992.

Davis was then asked to withdraw her resignation. Due to reorganization of city offices, however, Davis's prior Deputy Clerk position had been eliminated. Davis was offered a new job as a property officer in the Community Development Department. The beginning annual salary at this new position was slightly more than Davis's previous salary. However, Davis testified that the opportunities for pay increases and job advancement were fewer than in her prior role and that the new position was not a supervisory one, in contrast to her Deputy Clerk responsibilities. Additionally, Davis claims the new position ended within two years unless she successfully completed a civil service exam. Davis accepted the appointment, however, and continues to work in that capacity.

In June 1994, Davis filed sexual harassment and retaliation claims against the City and several of its officers. ¹ Davis claimed that Gross's behavior had created a hostile work environment and that her transfer to a new position was in retaliation for complaining about Gross's behavior. The claims proceeded to trial by jury. The jury rendered a verdict in favor of Davis on both claims. It awarded damages for back pay, front pay, emotional distress and medical expenses. ² The district court then entered final judgment for Davis in the amount of $102,440.00, with interest and costs. The City appeals.

II. DISCUSSION

A. Hostile Environment Jury Instruction

On appeal, the City argues that the district court erred in instructing the jury on the hostile environment sexual harassment claim because the instruction allowed the jury to find for Davis upon a mere finding of agency, without regard to whether Gross's actions were properly imputed to the City. ³ The City argues that the district court should have instructed the jury that liability was only imputed to the City if the City knew or should have known of Gross's harassment and failed to take proper remedial action. In response, Davis argues that by virtue of Gross's supervisory position, liability for the harassment should be imputed to the City, regardless of the City's actual or constructive knowledge of the harassment.

We review the district court's jury instructions for an abuse of discretion. Sherbert v. Alcan Aluminum Corp., 66 F.3d 965, 968 (8th Cir.1995). Our review must consider whether, when taken as a whole, the instructions fairly and adequately submitted the issues to the jury. Id. In this case, we find they did not. ⁴

In the situation of quid pro quo sexual harassment by a supervisor, where the harassment results in a tangible detriment to the subordinate employee, liability is imputed to the employer. Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 76, 106 S.Ct. 2399, 2410, 91 L.Ed.2d 49 (1986) (Marshall, J., concurring in judgment). In situations such as the present case alleging hostile environment sexual harassment by a supervisor, however, the standard for imputed liability is less clear. See, e.g., Meritor, 477 U.S. at 72, 106 S.Ct. at 2408 (declining to issue a definitive rule on employer liability in such cases and instructing courts to look to agency principles for the appropriate standard); see also Gary v. Long, 59 F.3d 1391, 1398 (D.C.Cir.) (if employer has policy in place which prohibits sexual harassment and puts employee on notice that supervisor lacks authority to engage in such conduct, employer is insulated from liability for supervisor's actions), cert. denied, --- U.S. ----, 116 S.Ct. 569, 133 L.Ed.2d 493 (1995); Karibian v. Columbia Univ., 14 F.3d 773, 780 (2d Cir.1994) (employer is liable for supervisor's harassment when supervisor uses his actual or apparent authority to further the harassment and noting differences between high and low supervisors in this regard); Sauers v. Salt Lake County, 1 F.3d 1122, 1125 (10th Cir.1993) (if employer gives supervisor significant control over plaintiff's hiring, firing and employment conditions, employer is liable for supervisor's actions without regard to knowledge or recklessness). In our circuit, we have applied the knew or should have known standard to supervisor-induced hostile environment sexual harassment claims. See, e.g., Smith v. St. Louis Univ., 109 F.3d 1261, 1264 (8th Cir.1997); Kinman v. Omaha Pub. Sch. Dist., 94 F.3d 463, 469 (8th Cir.1996); Callanan v. Runyun, 75 F.3d 1293, 1296 (8th Cir.1996); Burns v. McGregor Elec. Indus., Inc., 955 F.2d 559, 564 (8th Cir.1992). Therefore, we reverse and remand for a new trial on Davis's hostile environment claim.

In Smith v. St. Louis University, we used the knew or should have known standard in a case of supervisor-caused hostile environment sexual harassment. Smith, 109 F.3d at 1264. In Smith, an anesthesiology resident alleged she was harassed by the chairman of the anesthesiology department at the university hospital. In reversing the district court's grant of summary judgment for the university, we recited the prima facie elements of a hostile environment sexual harassment claim. ⁵ One of those elements is that the employer knew or should have known of the harassment yet failed to take proper remedial action. Despite the fact that the plaintiff's supervisor had been the source of the harassment, we did not automatically impute liability to the hospital or alter the knew or should have known language typically used in hostile environment cases.

The Smith case is consistent with our other decisions. See, e.g., Callanan v. Runyun, 75 F.3d at 1296 (using knew or should have known standard where United States Postal Service employee sued the United States Postal Service for hostile environment sexual harassment caused mainly by her supervisors); Burns v. McGregor Elec. Indus., 955 F.2d at 564 (using knew or should have known standard where plant employee sued employer for hostile environment sexual harassment caused by the president/owner of the company).

Finally, we note the case of Kinman v. Omaha Public School District, 94 F.3d at 469. In Kinman, we were asked to determine the appropriate standard for a school district's imputed liability under Title IX for a teacher's hostile environment sexual harassment of a student. Id. at 467. Borrowing what we believed to be the appropriate institutional liability standards from Title VII cases dealing with hostile environment sexual harassment, we used the knew or should have known language. ⁶ We stated:

The Supreme Court in Meritor Savings declined to set out a generally applicable standard of liability for employers under Title VII. Instead, the Court suggested that common law agency principles should guide courts in determining employer liability on a case-by-case basis. For example, when a supervisor uses...