Hill v. American General, 99-2682

• Decision Date: 27 July 2000
• Docket Number: No. 99-2682,99-2682
• Citation: 218 F.3d 639
• Parties: (7th Cir. 2000) LOUISE HILL, Plaintiff-Appellant, v. AMERICAN GENERAL FINANCE, INCORPORATED, a corporation, Defendant-Appellee
• Court: U.S. Court of Appeals — Seventh Circuit

Page 639

218 F.3d 639 (7th Cir. 2000)

LOUISE HILL, Plaintiff-Appellant, v. AMERICAN GENERAL FINANCE, INCORPORATED, a corporation, Defendant-Appellee No. 99-2682

In the United States Court of Appeals For the Seventh Circuit

Argued January 21, 2000

Decided May 4, 2000

Rehearing and Rehearing En Banc

Denied July 27, 2000

Appeal from the United States District Court for the Southern District of Illinois. No. 96 C 242--William D. Stiehl, Judge. [Copyrighted Material Omitted] Before POSNER, Chief Judge, and DIANE P. WOOD and EVANS, Circuit Judges.

EVANS, Circuit Judge.

Allegedly fed up with her boss making highly offensive remarks, Louise Hill complained and ultimately sued her employer American General Finance, Incorporated for sexual and racial harassment and for retaliating against her for complaining about it, all under Title VII (42 U.S.C. sec. 2000e et seq.). Prior to the recent establishment of a standard for company liability based on the conduct of supervisors under Title VII, the district court granted summary judgment dismissing Hill's case. Our task is to determine whether the grant of summary judgment is consistent with the standard as it was set out in Faragher v. City of Boca Raton, 524 U.S. 775, 118 S. Ct. 2275 (1998), and Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 118 S. Ct. 2257 (1998).

Hill went to work in the defendant's Alton, Illinois, office in September 1994. She became a lending/collection administrator. Her job was to extend loans and credit, close on loans, and collect past-due accounts. She worked in a one- room office with up to eight other people, including her supervisor Darin Brandt. At the time, Hill was the only African-American working in the tiny office.

Hill alleges that within a month of her arrival in the office, Brandt began to act in a way which amounted to sexual and racial harassment. He made reference to the size of his penis. He said, "I like a woman with a big ass, like Louise's." He asked her if a doctor's appointment was for her breasts or between her legs. He talked about the ways he liked sex, the frequency of sex, and about pornographic movies. He once, according to Hill, rubbed his pelvis against her buttocks and said, "Boy that feels good." He said, "Once you go black, you never go back"; "Don't come into this office talking black, because this ain't no Aunt Jemima office"; he was "sick of black people getting food stamps and having all those black babies." In moving for summary judgment, AGF had to accept Hill's allegations as true. The company also does not contest that Brandt's conduct was harassment.

On February 2, 1995, Hill wrote a letter to AGF's chief executive officer complaining of Brandt's behavior to customers and of his vulgar language. She signed the letter "Lillie Rogers," representing herself as a customer. She wrote another letter on February 6 which she signed "a very worried and frighten[ed] employee." On February 23 the Human Resources Department conducted an investigation; Hill was interviewed, and although the director of operations, Gary English, suspected that Hill had written the letters, Hill did not acknowledge that she had. No other employees confirmed any of the harassment, but some admitted they had conversations of a sexual nature in the office. On March 9 English issued Brandt a warning for allowing such conversations to take place. About the same time, English mentioned that AGF would be opening additional offices and suggested the possibility that Hill might be interested in training in what seems to have been a self- directed, computerized, instructional program, called the BEST program, to be an assistant manager. English considered Hill to be an outstanding salesperson and that her talent for dealing with people was the best he'd ever seen.

On April 14 Hill wrote a letter to English in which she set out instances of harassment. This time she signed her own name. Two days later, Carleen Thompson, the company's human resources attorney, and Larry Bauer, outside counsel for the company, went to Alton to investigate. They conducted a follow-up investigation on April 26, 1995. Thompson concluded that she should issue a written warning to Brandt, provide him with additional training, transfer and demote him, and transfer Hill to prevent retaliation from her co- workers. On May 2, 1995, Brandt was transferred to the Belleville branch office with a $10,000 reduction in pay. He received a written warning for failing to cooperate with the investigation and for inappropriate conduct. At the end of April, Thompson informed Hill that she was being transferred to the Kingshighway office in St. Louis. Hill says it was a transfer to a dangerous high-crime area in which she was required to make door-to-door collection calls; AGF says evening calls were extremely rare. Hill also claims that the manager at Kingshighway was openly hostile to her; she says he recommended that she be fired for allegedly providing competitors with names of prospective loan applicants, but she was exonerated. Nevertheless, she resigned on July 6, 1995.

We review grants of summary judgment de novo, drawing all reasonable inferences from the facts in favor of the nonmovant. Parkins v. Civil Constructors of Illinois, Inc., 163 F.3d 1027 (7th Cir. 1999). Summary judgment is appropriate only if "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Federal Rule of Civil Procedure 56(c). We may affirm on any ground on which there is support in the record. Parkins. We evaluate this case, then, to see if the record is sufficiently developed for us to fairly apply the Faragher-Ellerth standard or whether a remand to the district court is required for an expansion of the record.

Whether a remand is necessary is a fact-based call. Some cases have been remanded for necessary development of the record. In fact, the Ellerth case itself was remanded so that the "District Court will have the opportunity to decide whether it would be appropriate to allow Ellerth to amend her pleading or supplement her discovery." Ellerth, at 2271. Other cases have done pretty much the same thing. See Rubidoux v. Colorado Mental Health Inst. Pueble, 173 F.3d 1291 (10th Cir. 1999); Burrell v. Star Nursery, Inc., 170 F.3d 951 (9th Cir. 1999); Wilson v. City of Plano, Texas, 164 F.3d 900 (5th Cir. 1999). On the other hand, of course, the Court found the record in Faragher sufficient to order reinstatement of the judgment for Faragher. Similarly, although with a judgment for the defendant, we found in Shaw v. Autozone, Inc., 180 F.3d 806, 814 (7th Cir. 1999), cert. denied, 120 S. Ct. 790 (2000), that "while the standard for liability has changed, the record and arguments were fully developed for application of the new standard."

The new standard is: An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence . . . . The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. While proof that an employer had promulgated an anti-harassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense. . . .

No affirmative defense is available, however, when the supervisor's harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment.

Ellerth, at 2270; see also Faragher at 2292-2293.

Although Hill claims that she suffered an adverse employment action as part of the retaliation against her, she does not argue that she suffered a tangible employment action as part of her harassment claims. In fact, in her deposition she states on several occasions that in her mind the adverse employment action was not based on either racial or sexual harassment, but rather was in retaliation for her lodging her complaint. Therefore, under Ellerth and Faragher the company has a possible defense to the harassment claims, and our review of the record convinces us that AGF has established the defense as a matter of law.

One element of the defense involves whether the employee took advantage of opportunities to prevent harassment. On the basis of the record we must conclude that Hill did not notify the company of the harassment until her letter of April 14. The February letters were not a reasonable effort at notification. They were not signed and she did not acknowledge that she had written those letters when the company investigated the complaints set out in the letters. In fact, Hill began her April 14 letter by apologizing: "Please accept my apology for not being completely honest during the interview with you and the attorneys for the company." She then proceeded to lay out some of her complaints about Mr. Brandt and his treatment of her. So, starting with her letter of April 14 Hill took reasonable steps to correct the situation which existed in the Alton office. But the same cannot be said for her actions before April 14.

The other element of the defense is whether the company "exercised reasonable care to prevent and correct promptly any sexually harassing behavior." It is not disputed that after the April 14 letter the company took immediate corrective action. In a flash, after the receipt of the letter,...