Syndex Corp. v. Dean

• Decision Date: 06 November 1991
• Docket Number: No. 3-88-090-CV,3-88-090-CV
• Citation: 820 S.W.2d 869
• Parties: 57 Fair Empl.Prac.Cas. (BNA) 547 SYNDEX CORPORATION, Appellant, v. Mary C. DEAN, Appellee.
• Court: Texas Court of Appeals

Page 869

820 S.W.2d 869

57 Fair Empl.Prac.Cas. (BNA) 547

SYNDEX CORPORATION, Appellant, v. Mary C. DEAN, Appellee.

No. 3-88-090-CV.

Court of Appeals of Texas,

Austin.

Nov. 6, 1991.

Rehearing Overruled Jan. 8, 1992.

Bill Malone, Jr., Austin, Tim G. Sralla, Fielding, Barrett & Taylor, Ft. Worth, for appellant.

Malcolm Greenstein, Greenstein & Kolker, Austin, for appellee.

Before CARROLL, C.J., and ABOUSSIE and KIDD, JJ.

ABOUSSIE, Justice.

Mary Dean sued Bill Bushell and Syndex Corporation for damages for assault and intentional infliction of emotional distress, and sued Syndex for sexual harassment under the Texas Commission on Human Rights Act. See Tex.Rev.Civ.Stat.Ann. art. 5221k (1987 & Supp.1991) ("the Human Rights Act"). Judgment was rendered in favor of Dean. This Court held that the trial court had admitted improper character and profile evidence, and reversed that part of the judgment awarding damages and attorney's fees for sexual harassment. The supreme court reversed our judgment and remanded the cause to us for consideration of Syndex's remaining points of error. See Bushell v. Dean, 781 S.W.2d 652 (Tex.App.1989), rev'd, 803 S.W.2d 711 (Tex.1991). We will affirm the judgment of the trial court.

Background ¹

Smith Produce, which Syndex Corporation owns, hired Dean as an order clerk in 1978. Syndex maintains its corporate and principal place of business in Houston; Smith Produce is a branch of Syndex located in Travis County. Over the years, Dean received raises and was promoted to office manager. Bill Bushell is the branch manager of Smith Produce and was Dean's immediate supervisor when she became office manager. As such, Bushell could fire Dean and completely controlled her workload.

Although they initially had a good workplace relationship, by December 1983 the relationship between Bushell and Dean began to change. Dean testified that Bushell suddenly altered his conduct toward her. His conduct toward her ranged from flirtatious to sexually aggressive: he bought her meals and soft drinks, did her favors, and discussed with her his fantasies and dissatisfaction with his wife's sexual performance. He grabbed her in front of other employees, tried to kiss her, and once sneaked up behind her, putting his hands under her armpits, and exclaimed "Gotcha." One day while she was seated at her desk, he approached her from behind, began rubbing her shoulders and then moved his hands down toward her breasts. She became angry and insisted that he stop.

One Saturday in February 1984, Bushell ordered Dean into his office where he had closed the blinds and cleared his desk. He insisted that she lock the door, whereupon he sat next to her and proposed that they have an affair, to begin that very moment in his office. She told him that she was flattered but repeatedly told him that she was not interested. On the following Monday Bushell admitted that he had upset her, but insisted that he was glad that he had said what he did, and continued to pursue her. Finally, in front of other employees, Bushell looked at her and commented that everything has a price and can be bought. Dean responded in anger that she was not for sale.

Thereafter, Bushell again changed his behavior toward Dean, becoming cold and formal, calling her "Mrs. Dean," and increasing her workload. When she tried to inform Bushell that the company's truck drivers were planning to strike in protest over a wage freeze, he became angry and shouted at her. She responded that he was not going to shout at her, and quit her job. She then collected her personal things, left, and never returned.

The Controversy

The Texas Human Rights Act makes it unlawful for an employer "to discriminate against an individual with respect to compensation or the terms, conditions, or privileges of employment because of ... sex...." Tex.Rev.Civ.Stat.Ann. art. 5221k, § 5.01(1) (Supp.1991). Sexual harassment, like racial harassment, is universally recognized as employment discrimination. Meritor Sav. Bank v. Vinson, 477 U.S. 57, 64, 106 S.Ct. 2399, 2403, 91 L.Ed.2d 49 (1986). See also Hicks v. Gates Rubber Co., 833 F.2d 1406, 1413 (10th Cir.1987). Courts have recognized two distinct categories of claims: quid pro quo sexual harassment and hostile work environment sexual harassment. Katz v. Dole, 709 F.2d 251, 254-55 (4th Cir.1983).

This case involves hostile work environment harassment, which "has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment." Vinson, 477 U.S. at 65-66, 106 S.Ct. at 2404-05 (quoting the EEOC Guidelines. See 29 C.F.R. § 1604.11(a)(3) (1986)). The jury found that Dean was subjected to unlawful sexual harassment by Bushell, and made other findings in favor of Dean. Based upon the jury's verdict, the trial court rendered judgment in favor of Dean and against Bushell and Syndex.

The primary issue on remand is embodied in Syndex's first three points of error which complain generally that the trial court erred by submitting to the jury an inaccurate test of employer liability under the Human Rights Act. Also undecided are Syndex's points of error ten and eleven complaining that the trial court erred in admitting certain testimony of witnesses Gilbert, Klein, and Mersky.

Employer Liability

There are no Texas cases establishing a test for employer liability under the Human Rights Act. However, this Act is modeled on federal law and its purpose is to provide for the execution of the policies embodied in Title VII of the federal Civil Rights Act of 1964 in 42 U.S.C. § 2000e, et seq. See Tex.Rev.Civ.Stat.Ann. art. 5221k, § 1.02(1) (Supp.1991). Accordingly, Syndex relies on federal case law.

Syndex originally argued that any corporate liability must be based on the general principles of agency law set forth in sections 219-237 of the Restatement 2nd of Agency as required by the Supreme Court in Vinson, 477 U.S. at 72, 106 S.Ct. at 2408 (1986). Specifically, Syndex urged at trial and on appeal that the test for employer liability is "course and scope." Syndex complains of an erroneous jury charge on the basis that "[t]he proper inquiry would have been whether Bushell was acting in the course and scope of his employment when he allegedly committed the sexual harassment."

Syndex complains in points of error one and two that the trial court erred in granting judgment against Syndex because the trial court failed to submit to the jury the correct test for employer liability and as a result there was no jury finding that Bushell was acting in the course and scope of his employment when he sexually harassed Dean.

The trial court submitted the following questions on employer liability to the jury:

QUESTION 10: Do you find that prior to the date Ms. Dean resigned, that Syndex Corporation failed to take those actions which a reasonable employer would have taken under the same or similar circumstances to make its workplace reasonably safe from unlawful sexual harassment?

ANSWER: Yes.

QUESTION 11: Do you find that Syndex Corporation failed to take immediate appropriate corrective action upon learning that an allegation of unlawful sexual harassment had been made?

ANSWER: Yes.

Syndex's original argument on appeal is consistent with its objections at trial. Syndex objected to question 10 "because that special issue would place a duty upon [Syndex] that does not exist" and requested the court substitute a question on course and scope. ² Syndex objected to question 11 "because it places the burden of proof inappropriately," and requested in its place a special issue inquiring, "Do you find ... that Syndex Corporation took appropriate corrective action as it learned the full extent of Plaintiff's claims and the evidence supporting it?" The trial court overruled these objections and denied the requests.

Proof of Bushell's actions and course of conduct toward Dean over a lengthy period was introduced as evidence that he assaulted her, that he sexually harassed her, and that he intentionally inflicted emotional distress upon her. Upon this evidence, the jury found that Bushell was acting within the course and scope of his employment when he committed the assault (question 3) and when he intentionally inflicted emotional distress upon Dean (question 8). On these questions, the court instructed the jury:

[A] person acts within the course and scope of his employment if the acts ... were done within the scope of the general authority given to Mr. Bushell by Syndex Corporation. Furthermore, the acts ... must have been done in furtherance of Syndex Corporation's business, and the acts must have been done to accomplish the job for which Mr. Bushell was employed.

This Court has already overruled Syndex's challenges to the legal and factual sufficiency of the evidence proving that Bushell's actions were within the course and scope of his employment. See Bushell, 781 S.W.2d at 658-59. The jury further found that by his action Bushell, who was Dean's supervisor and the head of Smith Produce in Austin, had subjected Dean to unlawful sexual harassment (question 9). Syndex does not cite us to any authority holding that an employer cannot be held liable for its branch manager's sexual harassment of a subordinate employee in the absence of an express finding that the branch manager acted in the course and scope of his employment. Indeed, under the circumstances of this case Bushell is deemed to act as the employer. See Hugo, Schmeltzer & Co. v. Paiz, 104 Tex. 563, 141 S.W. 518 (1911); Ramsey v. Coldwater Cattle Co., 403 S.W.2d 196 (Tex.Civ.App.1966, writ dism'd); Phillips Oil Co. v. Linn, 194 F.2d 903 (5th Cir.1952). Thus, under agency principles, even if Syndex did not authorize Bushell's specific conduct, Syndex is directly liable to Dean for Bushell's conduct because Bushell acted under his delegation of authority as branch manager of Smith Produce. See Sparks v....