Wright v. Ross Holdings, LLC
| Decision Date | 22 April 2015 |
| Docket Number | No. 14-1106,14-1106 |
| Parties | CARRIE WRIGHT, Plaintiff-Appellant, v. ROSS HOLDINGS, LLC and SHANNON SCHMIDT, Defendants-Appellees. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Black Hawk County, Kellyann M. Lekar, Judge.
A plaintiff appeals the trial court's grant of summary judgment for the defendants in sex discrimination case. AFFIRMED.
Joseph G. Martin of Swisher & Cohrt, P.L.C., Waterloo, for appellant.
Lisa A. Stephenson of Simmons, Perrine, Moyer & Bergman, P.L.C., Cedar Rapids, for appellees.
Heard by Vogel, P.J., and Potterfield and Mullins, JJ.
Carrie Wright filed suit, claiming she was sexually harassed by Mike Day, Shannon Schmidt, and Phil Marlow while she was employed at Ross Marketing, Inc., and its successor Ross Holdings, LLC. The trial court granted summary judgment in favor of Schmidt and Ross Holdings because it found no genuine dispute of material fact regarding Wright's hostile work environment claim or successor liability between Ross Marketing and Ross Holdings.
Wright appeals the trial court's grant of summary judgment of her hostile work environment claim, claiming material facts exist that demonstrate her work environment was so hostile it affected a term or condition of her employment. Wright also appeals the grant of summary judgment of her successor liability claim, arguing substantial continuity existed between Ross Holdings and Ross Marketing, and Ross Holdings was on notice of her claim due to her complaints to her supervisor.
Carrie Wright began working at Ross Marketing's telemarketing site in Cedar Falls in 2000, where she was visited once or twice a month by her supervisor, Mike Day, who was employed in Ross Marketing's Hiawatha office. Day would talk with Wright for five minutes or so about her employment. Approximately half the time Day visited Cedar Falls, he invited Wright and other employees to get drinks after work, which Wright declined. Wright asserts Day often sat next to her and stared at her chest. On one occasion, Day stared at Wright's chest, said, "I like the color of your eyes," started laughing, and walkedaway. Wright told her coworker, Jodi Payne,1 about Day's conduct. Day's employment with Ross Marketing ended in May 2006.
Shannon Schmidt worked as a supervisor in Ross Marketing's Cedar Falls site from December 2004 to April 2006. She began working at the Hiawatha office in 2006, and she only spent a few hours a week at the Cedar Falls site thereafter. Wright complained to Schmidt once about Day's conduct sometime in 2004 or 2005. At approximately the same time, Schmidt and other employees began calling Wright "blue eyes," which Payne told her meant that people did not know the color of her eyes because they were looking at her breasts. Wright complained about the nickname, "blue eyes," to Schmidt and another coworker, Kally Kurth,2 once in 2004 or 2005, but none of the employees stopped using the nickname. Wright never complained about it again.
By 2008, Ross Marketing was financially unstable. When Ross Marketing defaulted on its obligations to the State Bank of Lawler, the bank assigned its notes and security to Ross Holdings. Ross Holdings negotiated with Ross Marketing to accomplish an asset transfer in lieu of foreclosure as a means of satisfying some of Ross Marketing's debt. Ross Holdings was formed in 2008 by Robert Silhacek and Michael Fox. Brian Bunting, the owner of Ross Marketing, has never had an interest in Ross Holdings.
Ross Holdings negotiated and signed new leases for its facilities; renegotiated business agreements with Ross Marketing's clients and affiliates; and changed at least some of Ross Marketing's sales processes, service offerings, employee training systems, product inventory, and licensure requirements for employees. It also sent a letter to all Ross Marketing employees, stating it would be operating Ross Marketing in "new and exciting ways," that their employment with Ross Marketing was now terminated, that Ross Holdings would not assume any employment obligations of Ross Marketing, and that each employee could re-apply for their job with Ross Holdings.
Robert Silhacek affirmed in an affidavit that Ross Holdings inquired into Ross Marketing's potential liabilities, including potential employment claims, and had no knowledge of any complaints pertaining to Wright at the time of the acquisition. Wright disputes this. After the transition, twenty percent of employees were retained by Ross Holdings, Schmidt was promoted to Ross Holdings's director of operations, and Wright remained in the Cedar Falls office.
Wright's coworkers and Schmidt had continued to refer to Wright as "blue eyes" since 2004 or 2005. Ross Holdings then hired Phil Marlow in April 2010 as the Center Manager for the Cedar Falls office. The evening of Friday, August 27, 2010, Marlow and Wright coincidentally met at a bar, their presence was not work-related. Marlow approached Wright and her friends and told Wright she was the "hottest blonde in the bar" and that she should dress up like that for work. He proceeded to buy shots for Wright's table, sit close to Wright, and rubher back. Wright left the table, but later Marlow approached Wright when she was outside with her cousin. He offered to give her a ride home and, while making other sexual comments, suggested they go to his house. At no time did Wright express she was offended by his comments. Marlow became agitated and left upon Wright's cousin's instruction.
Upon arriving at work on Monday, August 30, 2010, Wright reported Friday's incident to her supervisor, Kristina Kennedy. This was her first and only complaint about Marlow. Kennedy contacted Schmidt to report Wright's complaint, and Wright was subsequently offered a leave of absence while the matter was being investigated. Schmidt told Wright she may have an attorney contact her, which Wright interpreted as threatening. Wright ultimately resigned her position.
Ross Holdings conducted an investigation into Friday's events, and Schmidt terminated Marlow on September 1 for violating the Ross Holdings fraternization policy. That same day, Schmidt called Wright, explained Marlow had been terminated, and asked Wright to return to her job. The two corresponded briefly, but Wright ultimately decided not to return. Wright testified in her deposition she would have resigned regardless of whether Marlow was terminated, that she had no desire to resign prior to Friday's incident, and that she did so because of Marlow's conduct.
Wright filed a complaint with both the Cedar Falls Human Rights Commission and the Iowa Civil Rights Commission in October 2010. Upon receiving an administrative release, Wright filed this lawsuit in September 2012,asserting she was sexually harassed by Day, Schmidt, and Marlow. The trial court granted summary judgment in favor of Schmidt and Ross Holdings on all claims in February 2014.3 In doing so, contrary to assertions by Ross Holdings, it found Ross Holdings had notice of Wright's claims given Schmidt's supervisory role with both the Ross Marketing and Ross Holdings. Nonetheless, the court declined to impose successor liability because substantial continuity did not exist between the two companies. Alternatively, the court granted summary judgment in favor of Ross Holdings and Schmidt on the hostile work environment claim because it found the conduct was neither frequent nor severe, nor was it physically intimidating, threatening, or humiliating. Wright filed an Iowa Rule of Civil Procedure 1.904 motion to amend and enlarge, which the trial court subsequently denied. Wright now appeals.
We review grants of summary judgment for correction of errors of law. Frontier Leasing Corp. v. Links Eng'g, LLC, 781 N.W.2d 772, 775 (Iowa 2010). Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to a judgment as a matter of law." Iowa R. Civ. P. 1.981(3). We view the record "in the light most favorable to the nonmoving party." Lloyd v. Drake Univ., 686 N.W.2d 225, 228 (Iowa 2004). "We also indulge in every legitimate inference that the evidence will bear in an effort to ascertain the existence of afact question." Crippen v. City of Cedar Rapids, 618 N.W.2d 562, 565 (Iowa 2000).
To prevail on a claim of a sexually hostile work environment, plaintiff must prove: (1) the person belongs to a protected group; (2) the person was subjected to unwelcome harassment; (3) the harassment was based on a protected characteristic; and (4) the harassment affected a term, condition, or privilege of employment. Boyle v. Alum-Line, Inc., 710 N.W.2d 741, 746 (Iowa 2006). Because both Iowa Civil Rights Act (ICRA) and Title VII sexual harassment claims are analyzed under the same legal framework, Title VII cases are persuasive. See Stoddard v. BE & K, Inc., 993 F. Supp. 2d 991, 999 (S.D. Iowa 2014).
Wright asserts summary judgment was inappropriate because genuine issues of material fact exist as to element four. Ross Holdings contends there is no genuine factual dispute regarding the alleged harassment's effect on the terms or conditions of Wright's employment as the alleged conduct was not severe and pervasive. In the alternative, Ross Holdings asserts Wright voluntarily quit, the circumstances of which do not otherwise create a genuine factual dispute that Wright was constructively discharged.
"Where sexual harassment in the workplace is so pervasive and severe that . . . the plaintiff must endure an unreasonably offensive environment or quit working, the sexual harassment affects a condition of employment." Lynch v. City of Des Moines, 454 N.W.2d 827, 834 (Iowa 1990). "To establish whetherharassment was severe or pervasive, the plaintiff must not only...
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