VECO, Inc. v. Rosebrock
| Decision Date | 19 February 1999 |
| Docket Number | Nos. S-7080,S-7120,s. S-7080 |
| Citation | 970 P.2d 906 |
| Parties | VECO, INC., Appellant and Cross-Appellee, v. Constance I. ROSEBROCK, Appellee and Cross-Appellant. |
| Court | Alaska Supreme Court |
Donna C. Willard, Law Offices of Donna C. Willard, Anchorage, for Appellant and Cross-Appellee.
Robert P. Owens, Copeland, Landye, Bennett and Wolf, Anchorage, and Timothy D. Dooley, Anchorage, for Appellee and Cross-Appellant.
Before MATTHEWS, J., EASTAUGH, FABE, Justices, and RABINOWITZ, Justice Pro Tem. *
Many issues are presented in this sexual harassment and wrongful termination case. The two most important are:
(1) Can an employer be liable for acts of a supervisor which create a hostile work environment even though the supervisor is acting outside the scope of his employment?
(2) Can punitive damages be imposed for a supervisor's acts outside the scope of his employment?
We answer "yes" to the first question because the supervisor is enabled by his position with the employer to impose unwelcome sexual conduct on the employee. We answer "no" to the second question because it is unfair to punish an employer for acts committed by employees who are in no sense pursuing objectives of the employer.
Constance Rosebrock began working for VECO in Anchorage in April 1991. In September she transferred to Arctic Rentals, a VECO subsidiary located on the North Slope. 1 Rosebrock worked for Arctic Rentals on the North Slope for approximately six weeks, from September 11 until September 26, and from October 3 until October 26. On October 30 or 31 she was notified that she had been laid off.
Rosebrock claims that during her employment with VECO on the North Slope, Rick Rorick, the supervisor in charge of Arctic Rentals, subjected her to hostile environment sexual harassment. In addition, she claims that she was sexually assaulted by a VECO employee toward the end of her second tour of duty. She claims that VECO wrongfully terminated her when she complained about the assault.
In December 1991 Rosebrock filed a complaint with the Alaska Human Rights Commission. She also filed suit in superior court against VECO and Bill Dropps, the employee who allegedly sexually assaulted her. After settlement negotiations in which Rosebrock agreed to dismiss Dropps as a party, Rosebrock's claims of hostile environment sexual harassment and wrongful termination proceeded to a jury trial. 2
At trial, Rosebrock testified that Rorick had sexually propositioned her on several occasions. She also testified that Rorick made several explicit comments about the size of her breasts. Furthermore, Rosebrock testified that she, Bobby Clark, and Bill Dropps gathered in Dropps's room on October 23 to watch the World Series game. 3 She testified that when Clark left the room, Dropps grabbed her by her arms and legs and threw her onto the bed. They struggled, and he hit her in the ribs. After more struggling, however, he released her and begged her to not tell anyone.
Rosebrock also testified that early the next morning she reported the assault to Clark, who was her supervisor on duty at that time. She also claimed that she showed her bruises to a co-worker, Peggy Gerhardson, who assured her that she and Clark would take care of the problem.
Rosebrock went on leave two or three days later. She testified that before she left, the administrator, Norm Denison, approved her work schedule for the next five months. On October 30 or 31, however, Denison called her at home to tell her that she had been "laid off." Rosebrock testified that she then called Denison several times to see what VECO was doing about her complaints of sexual assault. Rosebrock claimed that Denison told her VECO had taken care of the problem. Rosebrock stated that when she asked him what had been done, he told her, "you're gone."
The jury found VECO liable for Rosebrock's hostile environment sexual harassment claim and her wrongful termination claim. It awarded her $27,500 for emotional distress damages, $75,000 for lost wages, and $1,500,000 for punitive damages. VECO then moved for a judgment notwithstanding the verdict, for a new trial, and for a remittitur. The superior court granted a partial remittitur, reducing the award for lost wages to $4,000. It denied VECO's other motions.
VECO appeals this judgment. 4 Rosebrock cross-appeals on discovery sanction issues, in the event this court remands for a new trial.
We discuss the following issues in this case:
A. Sexual Harassment
a. Was the evidence sufficient to support a finding that the harassment was severe or pervasive?
b. Was the harassment committed by a supervisor whose actions can be imputed to VECO?
B. Wrongful Termination
could be held liable for the alleged wrongful termination of Rosebrock?
C. Punitive Damages
The parties have also briefed additional issues which do not require discussion for reasons set out in footnote 38, page 925.
A section of Alaska's anti-discrimination statute makes it unlawful for an employer "to discriminate against a person in compensation or in a term, condition, or privilege of employment because of the person's ... sex ... when the reasonable demands of the position do not require distinction on the basis of ... sex...." AS 18.80.220(a)(1). In French v. Jadon, Inc., 911 P.2d 20 (Alaska 1996), we held that this section prohibited sexual harassment. Further, we accepted the customary division of sexual harassment claims into those involving a quid pro quo and those which merely involve a hostile work environment.
Concerning the former, we noted that Id. at 26 (citation omitted) (quoting Canada v. Boyd Group, Inc., 809 F.Supp. 771, 777 (D.Nev.1992)). With respect to the latter we noted that in
hostile work environment cases, ...
... [D]iscriminatory behavior sufficiently severe or pervasive to alter the conditions of the victim's employment and to create a discriminatory hostile work environment violates AS 18.80.220.
Id. at 28 (citations and footnote omitted) (quoting Ellison v. Brady, 924 F.2d 872, 875, 877 (9th Cir.1991)).
Quid pro quo harassment requires proof that "a tangible employment action resulted from a refusal to submit to a supervisor's sexual demand." 5 "Unfulfilled threats" or "offensive conduct in general" may fall within the hostile work environment classification. 6
Often a hostile work environment is created by co-employees or supervisors acting beyond the scope of their employment. They are acting for personal reasons and not, even in part, to serve their employer. 7 However, in the case of supervisors, harassment, though beyond the scope of their employment, may be facilitated by their position with the employer.
An employer is generally vicariously liable only for acts of employees acting within the scope of their employment. However, vicarious liability may also be imposed based on apparent authority or where an employee is aided in accomplishing a tort by the employee's position with the employer. 8 But an employer's vicarious liability for punitive damages is limited by the Restatement (Second) of Agency to acts of (1) managerial employees (2) while acting within the scope of their employment. 9 Alaska case law has eliminated the requirement that the employees be managerial, 10 but not the requirement that their acts be within the scope of their employment.
These principles are dispositive of the present case.
VECO claims that the superior court's instructions on liability were erroneous because they allowed the jury to impose "strict liability" on it if a low-level supervisor subjected Rosebrock to hostile environment sexual harassment, or if a low-level supervisor knew about the harassment, but failed to take remedial action. It argues that it should only be liable for a supervisor's hostile environment sexual harassment if a management-level employee knew or should have known about the harassment and failed to take proper and effective remedial action. 12 Rosebrock, however, argues that an employer should always be liable for hostile environment sexual harassment if it...
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