Equal Employment Opportunity Commission v. PVNF, L.L.C.

F I L E D
United States Court of Appeals
Tenth Circuit
PU BL ISH
May 14, 2007
UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT

EQ U A L EM PLO Y ME N T
O PPO RTU N ITY CO M M ISSIO N,

Plaintiff - Appellant,
No. 06-2011
v.

PVNF, L.L.C., d/b/a B ig Valley Auto
and Chuck D aggett M otors,

Defendant - Appellee.

A PPE AL FR OM T HE UNITED STATES DISTRICT COURT
FOR T HE D ISTRICT OF NEW M EXICO
(D. Ct. No. CIV-03-991 JC/W DS)

Daniel Travis Vail, Attorney (Ronald S. Cooper, General Counsel, James L. Lee,
Deputy General Counsel, Lorraine C. Davis, Assistant General Counsel, and
Carolyn L. W heeler, Acting Associate G eneral Counsel, with him on the briefs),
United States Equal Employment Opportunity Commission, W ashington, DC,
appearing for Plaintiff-Appellant.

Linda G. Hemphill, Attorney (Stephanie A. Fuchs, Attorney, with her on the
brief), Linda G. Hemphill, P.C., Santa Fe, New M exico, appearing for D efendant-
Appellee.

Before TA CH A, Chief Circuit Judge, M cW ILLIAM S, and LUCERO, Circuit
Judges.

TA CH A, Chief Circuit Judge.
 The Equal Employment Opportunity Commission (“EEOC”) seeks reversal

of the District Court’s entry of judgment as a matter of law in favor of Defendant-

Appellee PVNF, LLC d/b/a “Chuck Daggett M otors” (“CDM ”) on its claims of

sex discrimination and retaliation under Title VII of the Civil Rights Act of 1964,

42 U.S.C. § 2000e et seq., as well as the District Court’s award of attorney’s fees

to CDM . W e take jurisdiction under 28 U.S.C. § 1291 and AFFIRM in part,

REVERSE in part, and REM AND for a new trial.

I. BACKGROUND

M arla Segovia was hired in 1996 as a salesperson at Teague-Strebeck

M otors, a car dealership. When she was hired, she received a form entitled “No

Harassment Policy/Procedure” indicating that Teague-Strebeck M otors prohibited

“slurs, jokes and other verbal, graphic, or physical conduct relating to an

individual’s . . . sex” and instructed those who felt they were being harassed to

“make your feelings known to your supervisor immediately.” The policy

provided that any matter brought to the attention of a supervisor would be

“thoroughly investigated, and where appropriate, disciplinary action [would] be

taken.” Teague-Strebeck M otors sold the dealership in 2000 to Alva Carter and

Chuck Daggett. M r. Carter owned fifty-one percent of the company; M r. Daggett

owned the remaining forty-nine percent. They operated the dealership under the

name Chuck Daggett M otors (“CDM ”) and M r. Daggett served as the general

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manager. The “no harassment” policy continued in full force and effect after the

change in ownership.

In January 2000, M r. Daggett promoted M s. Segovia from salesperson to

Finance M anager. The following year, in June 2001, he promoted her to New Car

Sales M anager, a position she held until she resigned in October of that year. At

that time, Roger Ennis was the Used Car Sales M anager. Each sales manager had

supervisory authority over employees in their respective departments. M s.

Segovia could hire and fire new car salespeople and M r. Ennis could hire and fire

used car salespeople. Each manager could also issue disciplinary notices to any

subordinate employee, regardless of which department that employee worked in.

Both managers’ pay was commission-based— M s. Segovia earned

comm ission based on the sale of new cars; M r. Ennis earned commission based on

the sale of used cars. W hen a prospective customer had a trade-in, the managers

had conflicting incentives in assessing the value of the trade-in: M s. Segovia had

an incentive to value the trade-in at a high price to entice the customer to buy a

new car, and M r. Ennis had an incentive to value the trade-in at a low price

because he could then sell the trade-in at a greater profit. This dichotomy created

tension between M s. Segovia and M r. Ennis. M s. Segovia routinely made more

money in commissions than M r. Ennis. Indeed, in her role as New Car Sales

M anager, she was the highest paid employee at Chuck Daggett M otors, aside from

M r. D aggett himself.

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 Evidence at trial established that M r. Carter made numerous gender-based

remarks to M s. Segovia and to other female employees. 1 For example, M andi

W ood, who worked for CDM as a cashier, testified that when she sought a

promotion from M r. Carter he responded that “as . . . a woman . . . [she] should

sit behind the computer and that would be more fitting for [her]; and that “as a

woman, [she] should sit and count money.” Another employee, M ichelle Reid,

testified that M r. Carter commented that he could pay farmhands to work in the

office for less than he paid the women. And M r. Carter told M s. Reid, who was

pregnant at the time, that “[w]omen take too much time off of work for medical

reasons. They belong at home barefoot and pregnant.” Another time, after M s.

Reid rubbed her belly, M r. Carter said, “W hat are our customers going to think

with you standing there rubbing your belly?” M s. Reid complained about the

latter comment to Joanne Richmond, the office manager and systems

administrator at CDM , but nothing was done because “people fear[ed] for their

job[s].” M s. Richmond testified that she heard M r. Carter mention that women

did not belong in the w orkplace because of their childcare issues; she also

testified that M r. Carter told her he wanted to know when female applicants had

children “because of the child care issues.”

1
Because this is an appeal from the entry of judgment as a matter of law,
we recite and consider the facts in the light most favorable to the nonmoving
party— in this case, the EEOC. See Riske v. King Soopers, 366 F.3d 1085, 1087
(10th Cir. 2004).

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 From June to September 2001, M r. Carter subjected M s. Segovia to similar

sex-based remarks. Soon after she was promoted to New Car Sales M anager, she

hired a w oman salesperson for the department. M r. Carter reprimanded her,

saying, “I don’t want a whole bunch of damn women working here. M en don’t

like to work with women. M en like to dicker with men.” And, “women [bring]

their emotional baggage and problems to the dealership.” She complained to M r.

Daggett about M r. Carter’s comments and told him that she was thinking of

reporting his behavior to the EEOC. M r. Daggett advised her to “start

documenting things” but then said, “[w ]e never had this conversation,” which M s.

Segovia understood to mean that M r. Daggett would not support her in reporting

M r. Carter. Following this conversation, M s. Segovia continued to be subjected

to sex-based remarks by M r. Carter.

During a sales managers’ meeting, where M s. Segovia was the only woman,

M r. Carter told her that he was going to buy her a book on “women in

management” and later explained to her that “[t]he difference between men and

women is that the women have to take more of a bitch approach.” Another time

M r. Carter commented to M s. Segovia and two other women that “M exican

women’s nipples turn black-brown after they had babies,” w hich M s. Segovia

found offensive because her daughter is half-Spanish. Finally, when M s.

Segovia’s husband came into the dealership to buy a car, M r. Carter told him that

he “was getting a good deal . . . because he was sleeping with [M s. Segovia].”

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 M s. Segovia was also subjected to arguably sex-based remarks by other

CDM employees. In April 2001, during an argument with a male salesperson, he

reacted “w ildly,” stood up and “cleared his desk [of papers] and . . . called [her] a

bitch.” He threw a plate against the wall, and then left the dealership, quitting.

M s. Segovia felt threatened and scared; she complained about the episode to M r.

Ennis (the salesperson’s supervisor) and to M r. Daggett. Rather than discipline

the salesperson, M r. Ennis went to see him at the request of M r. Daggett in an

effort to get him to return to the dealership because “[he] sold a lot of cars.” The

salesperson returned to work the following day. He was not disciplined.

On another occasion, M s. Segovia required a used car salesperson to split

the commission on a loan with a new car salesperson because both salespeople

played roles in brokering the deal. W hen the used car salesperson learned of the

split commission, he came into M s. Segovia’s office and “violently called [her] a

bitch.” In response, M s. Segovia exercised her managerial authority and

explained that because of his behavior he would not be receiving any of the

commission. M r. Daggett or M r. Ennis (it is unclear who) overrode M s.

Segovia’s decision, however, and awarded the entire commission to the used car

salesperson. M s. Segovia testified that she was unaware of any time a male

manager’s decision was overridden by another manager.

In September 2001, M r. Carter summoned M s. Segovia into a conversation

he was having with M r. Ennis about the wholesaling of a particular trade-in.

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During the conversation, M r. Ennis commented that he was tired. M s. Segovia

sarcastically suggested that he go take a nap. In response, M r. Ennis “flipped

[her] off” and said “fuck you, bitch.” M s. Segovia responded by saying “I’m

done with [this] conversation,” and tried to walk away, but M r. Carter stopped her

and said, “[i]f you want to keep your job, you will get your butt back here and

finish this conversation.” She briefly returned, but then left again. She did not

lose her job.

Later that day M s. Segovia accessed M r. Daggett’s work e-mail account

without his permission. 2 W hile doing so, she noticed that M r. Ennis had

forwarded an e-mail conversation to M r. Daggett that included a discussion

betw een M r. Ennis and Jim Smith, one of M s. Segovia’s subordinates in the new -

car sales group. In the e-mail exchange M r. Ennis had asked M r. Smith why he

could not leave work to go buy beer. M r. Ennis’s e-mail questioned M r. Smith,

“M arla [Segovia] got you by the balls?” M r. Smith responded:

I w ouldn’t let that bitch hold my balls if she was the last known
woman on earth. If she had balls they would be hanging lower that
[sic] that nasty fucking skirt she is wearing. At least she wore
panties today. And I know that for a fact and I wasn’t looking just
walking in the front door . . . I got to thinking about that today, every
costomer [sic] that walked in this place today saw her nasty crotch.
Gotta go fucking throw-up now.

2
After the exchange with M r. Ennis, M s. Segovia composed and sent an e-
mail to M r. Daggett expressing frustration about the tension between her and M r.
Ennis. She later thought better of it and accessed M r. Daggett’s e-mail account in
order to erase the message she had already sent.

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(ellipsis in original). M s. Segovia then composed an e-mail to M r. Daggett

acknowledging that she saw the e-mail from M r. Ennis and indicated she was

offended by the exchange. M s. Segovia did not go to work the next day. W hen

she next spoke w ith M r. Daggett, he said that he verbally reprimanded both M r.

Ennis and M r. Smith. M r. Smith wrote M s. Segovia an e-mail stating that he was

told that he had to apologize to her but that he did not understand why she “can’t

take a joke.” Several days later M s. Segovia tried to complain to M r. Carter

about the e-mail. He indicated that he already knew about it and that she should

not let it interfere with her work: “You need to go— just go back to work. That

can’t stop production.”

Approximately one month later, on October 4, 2001, M r. Daggett delivered

to M s. Segovia an envelope containing an “Employee Warning Notice” and a

“New Pay Plan.” The warning advised her that she had been late to work too

often. It also reported that the salespeople under her supervision had registered

complaints about her unavailability, even when she was at the dealership, because

she was often out of her office or conducting personal matters. No other sales

managers had ever been written-up for tardiness despite evidence that other

managers were often late to w ork. Furthermore, in the three years prior to M s.

Segovia’s warning, no other sales managers had been written-up for conducting

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personal business at work despite evidence that many of them did. 3 The warning

also indicated her work was “unsatisfactory,” although M r. Daggett testified that

“when she was there, she did fine” as the New Car Sales M anager.

The new pay plan required M s. Segovia and M r. Ennis to start sharing sixty

percent of their combined commissions. M ore specifically, sixty percent of the

gross obtained from new -car sales would be committed to a pool of funds;

similarly, sixty percent of the gross obtained from used-car sales would be

comm itted to the pool. M r. Ennis and M s. Segovia would each receive four

percent of the pool, as well as four percent of the remaining forty percent of

sales’ gross not committed to the pool. Prior to the new plan, M s. Segovia and

M r. Ennis did not share commissions on the combined sales of new and used cars.

M s. Segovia understood the new arrangement to be a pay cut for her and a pay

raise for M r. Ennis because she routinely made more money than M r. Ennis and

she would now be sharing her commissions with him. M r. Daggett testified that

the new pay plan was put into effect because (1) CDM learned that it was paying

its salespeople fifteen to twenty percent over the market rate and the pay plan was

an effort to reduce the managers’ salaries, and (2) the pooling of funds was

intended to eliminate the conflict between M s. Segovia and M r. Ennis over trade-

3
There was evidence that one male m anager left the premises everyday to
pick his children up from school and take them to daycare. Other male managers
would leave w ork to attend sporting events, and some employees, including M r.
Ennis and M r. Daggett, would sometimes drink beer behind the dealership during
business hours.

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in values. The New Car Sales M anager who ultimately replaced M s. Segovia was

subject to the new pay plan.

Finding the warning and the new pay plan unacceptable, M s. Segovia threw

the documents on M r. Daggett’s desk and told him that she felt they were trying

to drive her out of the dealership. She resigned as New Car Sales M anager that

day because she felt she could not “be in [that] target position anymore.” Out of

concern for her family’s financial stability, however, she later inquired as to

whether there was another position she could take at the dealership. The

dealership did not offer her an alternative position.

M s. Segovia filed a charge of discrimination with the EEOC on M ay 30,

2002. The EEOC filed suit against CDM on her behalf, see 42 U.S.C. § 2000e-

5(f)(1), alleging retaliation and discrimination on the basis of sex under Title VII

of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. The EEOC also filed

suit on behalf of M s. Richmond, alleging similar claims. Following discovery,

the EEOC voluntarily dismissed the sexual harassment claims respecting M s.

Richmond. CDM then moved for summary judgment on the EEOC’s remaining

claims. The District Court granted the motion with respect to the remaining

claims brought on behalf of M s. Richmond, 4 but denied the motion with respect to

the claims brought on behalf of M s. Segovia.

The EEOC proceeded to trial on allegations that M s. Segovia w as subject to

4
The EEOC does not appeal this ruling.

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a hostile work environment on the basis of sex, that she was subjected to other

adverse employment actions on the basis of sex, and that she was constructively

discharged and retaliated against for engaging in protected activity. Following

the EEOC’s presentation of evidence, the D istrict Court entered judgm ent as a

matter of law in favor of CDM on all claims. It then aw arded CDM attorney’s

fees, concluding that the EEOC’s case was frivolous. This appeal followed.

II. D ISC USSIO N

A. Title VII

W e review de novo a district court’s grant of judgment as a matter of law ,

applying the same standards as the district court. EEOC. v. Heartway Corp., 466

F.3d 1156, 1160 (10th Cir. 2006). In review ing the record, we draw all

reasonable inferences in favor of the nonmoving party without making credibility

determinations or w eighing the evidence. See Reeves v. Sanderson Plumbing

Prods., Inc., 530 U.S. 133, 150 (2000) (“Credibility determinations, the weighing

of the evidence, and the draw ing of legitimate inferences from the facts are jury

functions, not those of a judge.” (quotation omitted)). That is, we disregard all

evidence favorable to the moving party that the jury is not required to believe. Id.

at 151. A party is entitled to judgment as a matter of law “only if the evidence

points but one way and is susceptible to no reasonable inferences which may

support the opposing party’s position.” Tyler v. RE/M AX M ountain States, Inc.,

232 F.3d 808, 812 (10th Cir. 2000) (quotation omitted); Fed. R. Civ. P. 50(a) (a

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court may enter judgment as a matter of law when “a party has been fully heard

on an issue” and there is no “legally sufficient evidentiary basis to find for the

party on that issue”).

1. Discrimination on the basis of sex

The EEOC appeals from the District Court’s entry of judgment as a matter

of law for CDM on three theories of disparate treatment under Title VII: (1) M s.

Segovia was subjected to a hostile work environment on the basis of sex; (2)

CDM issued the employee warning notice and implemented the new pay plan as a

result of discrimination on the basis of sex; and (3) CDM ’s discriminatory

conduct toward M s. Segovia amounted to constructive discharge. W e conclude

that the EEOC has presented a jury question with respect to whether M s. Segovia

was subjected to a sexually hostile work environment. W e also conclude that

based on the EEOC’s evidence at trial, no reasonable jury could conclude that M s.

Segovia was reprimanded, placed on a new pay plan, or constructively discharged

on the basis of her sex.

a. Hostile work environment

Pursuant to Title VII of the Civil Rights Act of 1964, it is “an unlawful

employment practice for an employer . . . to discriminate against any individual

with respect to [her] compensation, terms, conditions, or privileges of

employment, because of such individual’s . . . sex.” 42 U.S.C. § 2000e-2(a)(1).

If a plaintiff proves that “discrimination based on sex has created a hostile or

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abusive work environment,” she has established a violation of Title VII. M eritor

Sav. Bank, FSB v. Vinson, 477 U.S. 57, 66 (1986). To constitute actionable

sexual harassment, a plaintiff must show that “the workplace is permeated with

discriminatory intimidation, ridicule, and insult, that is sufficiently severe or

pervasive to alter the conditions of the victim’s employment and create an abusive

working environment,” Herrera v. Lufkin Indus., Inc., 474 F.3d 675, 680 (10th

Cir. 2007) (quotation omitted), and that the victim was targeted “because of her

gender,” Chavez v. New M exico, 397 F.3d 826, 833 (10th Cir. 2005) (emphasis

removed). Although a few isolated incidents of gender animus does not establish

a pervasively hostile work environment, see Herrera, 474 F.3d at 680, the

pervasiveness of the hostility “is quintessentially a question of fact” and thus

particularly unsuited for resolution on a motion for judgment as a matter of law,

see O’Shea v. Yellow Tech. Servs., Inc., 185 F.3d 1093, 1098 (10th Cir. 1999)

(quotation omitted) (noting that summary judgment should seldom be used in

employment discrimination cases).

W e conclude that, based on the conduct described above, a reasonable jury

could find that M s. Segovia was subjected to a severe or pervasively hostile work

environment because of her sex. CDM characterizes many of the sex-based

epithets as either “stray remarks” or “innocuous” such that no reasonable jury

could conclude they created a hostile w ork environment. For example, it suggests

that while M r. Carter’s comment about a woman’s nipples is “odd,” it is not

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“severe or humiliating.” It also maintains that a reasonable person would not find

M r. Carter’s comments about women in management and his comment about M s.

Segovia’s intimate relationship with her husband “humiliating.”

In addition, although CDM admits that the e-mail concerning M s. Segovia

was “vulgar and offensive,” it reasons that “it is far from clear” that the

comm ents resulted from gender bias and accuses the EEOC of

“sensational[izing]” it. CDM also contends that the e-mail, even assuming it is

gender-based, is not evidence of discrimination or harassment because M s.

Segovia w as never intended to see it. W ith this last proposition, we heartily

disagree. Such a statement is akin to asserting that a person who overhears her

coworkers using sexually derogatory terms to describe her cannot be subjected to

a hostile w ork environment merely because the coworkers did not intend her to

hear them. This is not the law of this Circuit. W e have never held, nor would

we, that to be subjected to a hostile work environment the discriminatory conduct

must be both directed at the victim and intended to be received by the victim. Cf.

Harsco Corp. v. Renner, 475 F.3d 1179, 1183, 1186–87 (10th Cir. 2007)

(including as part of the totality of the circumstances in a hostile work

environment claim the fact that the plaintiff overheard co-workers making

sexually derogatory remarks about her); Herrera, 474 F.3d at 681 (including

employer’s reference to victim as “fucking M exican” outside victim’s presence,

but relayed to him by a third party, as part of the hostile work environment

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calculus). Thus, the fact that M s. Segovia was not the intended recipient of the e-

mail is of no consequence in our review of the totality of the circumstances.

CDM also maintains w ith respect to the repeated use of the word “bitch”to

describe M s. Segovia that it was “used to vilify overbearing and seemingly unfair

behavior by Segovia and was not intended in a sexual context.” It also notes that

even M s. Segovia admitted to using the word on occasion in a non-sexual context.

But we have characterized the word as a “sexual epithet[]” that courts have

described as “intensely degrading,” Windsor v. Hinckley Dodge, Inc., 79 F.3d

996, 1000 (10th Cir. 1996) (quotation omitted), and “if it reasonably could be

inferred that [seemingly gender-neutral conduct] was [actually] related to gender

or arose out of a context in which admittedly sex and gender-related conduct

occurred, then it is for the fact finder to decide whether such an inference should

be drawn.” O’Shea, 185 F.3d at 1097; see also Windsor, 79 F.3d at 1000 (“It is

beyond dispute that evidence that a woman was subjected to a steady stream of

vulgar and offensive epithets because of her gender would be sufficient to

establish a claim under Title VII . . . .” (quotation omitted)). Here, M r. Carter

frequently made indisputably gender-related remarks, and tolerated the use of the

word “bitch” to describe M s. Segovia. Under these circumstances, we think a

jury should decide w hether these comments were made because of gender animus.

W ith respect to the pervasiveness of the conduct, the bulk of it occurred

during a relatively short period of time— the four month period beginning with

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M s. Segovia’s promotion to New Car Sales M anager. The majority owner of the

dealership repeatedly subjected her (and others) to comments about a woman’s

“appropriate” role in the workplace; her co-workers used sexual epithets to

describe her (on one such occasion she felt physically threatened when a

coworker threw a plate against a wall); and she intercepted a vulgar e-mail

describing her genitalia that was w ritten by one of her subordinates, addressed to

another manager, and forwarded on to her supervisor. M oreover, her supervisor

knew about all this conduct and either chose to ignore it altogether or respond in

only the most minimal of ways (e.g., forcing a half-hearted apology). See Harsco

Corp., 475 F.3d at 1188 (“An employer will not be liable under Title VII if the

employer w as not on actual or constructive notice of the alleged harassment.

Actual knowledge is usually demonstrable where the plaintiff has reported

harassment to management-level employees.” (internal citation omitted)).

By parsing out the various instances of harassment and characterizing them

as gender-neutral, or not pervasive, CDM seeks to eschew the proper “totality of

the circumstances” test, which is the “touchstone” of our analysis of hostile work

environment claims. See Harsco Corp., 475 F.3d at 1186–87; Penry v. Fed.

Home Loan Bank of Topeka, 155 F.3d 1257, 1262 (10th Cir. 1998) (observing that

“the very term ‘environment’ indicates that allegedly discriminatory incidents

should not be examined in isolation” and the fact-finder in a sexual harassment

case should not “examine each alleged incident of harassment in a vacuum[ ]

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[because w]hat may appear to be a legitimate justification for a single incident of

alleged harassment may look pretextual when viewed in the context of several

other related incidents.” (quotation omitted)). The facts, when taken together and

in the light most favorable to the EEOC, could reasonably support a finding that

the work environment was charged with gender-bias and sexual animus. See

Harsco Corp., 475 F.3d at 1187 (factors to consider in evaluating whether the

environment is hostile or abusive include: “the frequency of the conduct; its

severity; whether it is physically threatening or humiliating, or a mere offensive

utterance; and whether it unreasonably interferes w ith an employee’s work

performance.”). It may be that a jury would agree with CDM that M s. Segovia

was not subjected to a severe or pervasively hostile environment based on her sex,

but that is not for this Court to decide.

b. Disparate treatment

Under the burden-shifting framew ork established in M cDonnell Douglas

Corp. v. Green, 411 U.S. 792, 802–04 (1973), the plaintiff bears the initial burden

to establish a prima facie case of sex discrimination, which varies depending on

the type of adverse action the employee alleges was discriminatory. See Plotke v.

White, 405 F.3d 1092, 1099 (10th Cir. 2005) (“[T]he articulation of a plaintiff’s

prima facie case may well vary, depending on the context of the claim and the

nature of the adverse employment action alleged.”) In this context, a prima facie

case of discrimination must consist of evidence that (1) the victim belongs to a

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protected class; (2) the victim suffered an adverse employment action; and (3) the

challenged action took place under circumstances giving rise to an inference of

discrimination. Sorbo v. United Parcel Serv., 432 F.3d 1169, 1173 (10th Cir.

2005). Once the plaintiff establishes a prima facie case of discrimination, the

burden shifts to the employer to articulate a legitimate, nondiscriminatory reason

for the adverse action. M ickelson v. New York Life Ins. Co., 460 F.3d 1304, 1311

(10th Cir. 2006). If the employer does so, the burden shifts back to the plaintiff

to show that there is a genuine issue of material fact as to w hether the employer’s

proffered reasons are pretextual. Id. 5

The Employee Warning Notice

The EEOC contends that M s. Segovia was disciplined more harshly than

others because of her sex. Notably, CDM concedes that the warning notice it

issued to M s. Segovia was an adverse employment action despite this Circuit’s

rule that a written warning is an adverse employment action “only if it effects a

significant change in the plaintiff’s employment status,” Haynes v. Level 3

5
There exists some tension in our case law regarding w hat a plaintiff must
establish as part of his or her prima facie case of discrimination. Some cases treat
circumstances suggestive of discrimination as an element of a prima facie case;
other cases treat the surrounding circumstances as part of the analytically
subsequent inquiry into the employer’s stated reason for the challenged action and
the plaintiff’s opposing demonstration of pretext. Sorbo, 432 F.3d at 1173 & n.5
(listing cases). Regardless of whether w e analyze the plaintiff’s evidence “in
reference to the prima facie case or the business justification versus pretext
inquiry, . . . if the court correctly concludes that the evidence of
discrimination/pretext fails as a matter of law, summary judgment for the
defendant is the proper result.” Id. at 1173.

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Com mc’ns., LLC, 456 F.3d 1215, 1224 (10th Cir. 2006) (emphasis added), by, for

example, “affect[ing] the likelihood that the plaintiff will be terminated,

undermin[ing] the plaintiff’s current position, or affect[ing] the plaintiff’s future

employment opportunities,” M edina v. Income Support Div., 413 F.3d 1131, 1137

(10th Cir. 2005). Although none of these factors appear to be present here,

because CDM concedes this issue, we will not address it.

The EEOC has established a prima facie case, then, if it can show that

CDM issued M s. Segovia a warning notice under circumstances that give rise to

an inference of discrimination. 6 One method by which a plaintiff can meet this

burden, and the method by which the EEOC proceeds, is to show that the

employer treated similarly situated employees more favorably. Sorbo, 432 F.3d at

1173.

Individuals are considered “similarly-situated” when they deal with the

same supervisor, are subjected to the same standards governing performance

evaluation and discipline, and have engaged in conduct of “comparable

seriousness.” M cGowan v. City of Eufala, 472 F.3d 736, 745 (10th Cir. 2006).

The EEOC contends that M r. Ennis is similarly situated and that he was never

written up for any of his workplace infractions, including frequent tardiness,

calling M s. Segovia a “bitch,” and drinking beer behind the dealership with other

6
M s. Segovia is a member of a protected class because she is a woman. 42
U.S.C. § 2000e-2(a)(1) (prohibiting discrimination against any individual with
respect to sex).

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employees during business hours. But the EEOC has failed to establish that M s.

Segovia and M r. Ennis engaged in conduct of comparable seriousness and were

disciplined in a way that gives rise to an inference of discrimination. The tenor

of the warning notice M s. Segovia received was that her conduct rendered her

unavailable to help her sales personnel complete deals. In other words, M s.

Segovia w as disciplined for productivity-related concerns. She was chronically

late to work; she often made personal calls on her company-issued cell phone

during work hours; and she often could not be found in her office when her staff

needed her. As a result, another employee was required to fill-in for her, causing

that employee to fall behind in his own work.

The conduct for which M s. Segovia argues M r. Ennis should have been

punished, with the exception of his tardiness, is not productivity-related.

Although there was evidence that M r. Ennis was often late to work, there is no

evidence that his tardiness prevented him or others from completing their duties.

Furthermore, with respect to evidence that M r. Ennis drank beer behind the

dealership during business hours, the uncontradicted testimony was that it was an

occasional event that only took place late in the evening, right before closing.

Again, there is nothing to suggest that such conduct interfered with his or other

employees’ duties. M r. Ennis’s conduct was not sufficiently similar to M s.

Segovia’s to permit an inference of discrimination on the basis of their disparate

treatment. See McGowan, 472 F.3d at 745 (“[E]ven employees w ho are similarly

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situated must have been disciplined for conduct of ‘comparable seriousness’ in

order for their disparate treatment to be relevant.” (quoting Kendrick v. Penske

Transp. Servs., 220 F.3d 1220, 1230 (10th Cir. 2000)).

Even if we were to conclude, however, that the EEOC met its burden to

establish a prima facie case of discrimination, it has failed to introduce evidence

that demonstrates CDM ’s proferred reason for issuing the w ritten w arning— M s.

Segovia’s unavailability in the workplace, which was causing problems for her

subordinates— was pretextual. The EEOC has not provided evidence of “such

weaknesses, implausibilities, inconsistencies, incoherencies or contradictions” in

CDM ’s proffered reason “that a reasonable factfinder could rationally find [it]

unworthy of credence. Green v. New M exico, 420 F.3d 1189, 1196 (10th Cir.

2005) (quotation omitted) (upholding summary judgment on Title VII claim

where plaintiff failed to provide evidence supporting claims of pretext).

The EEOC suggests that evidence that M r. Ennis and other employees were

not written up for conduct such as using the word “bitch,” sending derogatory e-

mails, leaving work to take children from school to daycare, etcetera, rebuts any

legitimate, non-discriminatory business reason CDM may proffer for the

difference in treatment. First, as noted above, M r. Ennis is not similarly situated

to M s. Segovia under this Circuit’s precedent. See Sorbo, 432 F.3d at 1173–74

(noting that evidence that a similarly situated employee was treated differently

may aid the plaintiff in satisfying its burden to establish a prima facie case of

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discrimination, or, in other circumstances, may raise an inference of pretext in the

third stage of the M cDonnell Douglas burden-shifting method of proof).

Furthermore, there is substantial evidence in the record that M s. Segovia also

engaged in the same type of non-productivity-related misconduct and was not

written-up. For example, she was not disciplined for using profanity in the

workplace although she sometimes did so. She was not disciplined for logging

onto M r. Daggett’s password-protected computer and using his e-mail without his

permission. Nor was she disciplined when she slid magazines to a salesperson

under the bathroom door, in front of customers, telling him to “[h]urry up.”

Finally, despite M s. Segovia’s testimony that she felt the warning was

“unfair” and that the basis for the warning was not “accurate,” she does not deny

the particulars of the allegations contained in the employee warning notice. She

admitted that she was often late to work. She admitted that she made personal

calls during work hours but insisted that they were not excessive. This testimony

was rebutted by her cell phone records, however, which revealed that she logged

nearly 1500 minutes of talk time during the relevant period. She also admitted

that she “wasn’t glued to [her] chair in [her] office” but testified that she was not

unavailable— she was just elsewhere at the dealership, checking on inventory, for

example. She w as unable to dispute that her staff frequently complained to M r.

Daggett about her conduct, although she testified that only one of them ever

complained to her about it.

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 Again, although there was evidence that other employees were sometimes

late to w ork, there is no evidence that their conduct prevented them or others

from completing their duties. Similarly, though M s. Segovia testified that one

manager left the dealership almost everyday to take his children from school to

daycare, he was only gone from approximately 3:00 to 3:30 p.m., and nothing

suggests that he was needed by his coworkers during that period or that his

coworkers did not know how to locate him. Finally, with respect to evidence that

various employees drank beer behind the dealership during business hours, the

uncontradicted testimony was that it was an occasional event that only took place

late in the evening, right before closing. Again, there is nothing to suggest that

such conduct interfered with the employees’ duties. As such, the EEOC fails to

establish a genuine issue of fact as to pretext on this basis.

The New Pay Plan

The EEOC next contends that the new pay plan was an adverse employment

action that C DM implemented because of M s. Segovia’s sex. Again, CDM

concedes that M s. Segovia suffered an adverse employment action in that her

salary was reduced. It contends, however, that the EEOC failed to establish that a

similarly situated male did not also have his salary reduced. It maintains that M r.

Ennis was treated exactly the same as M s. Segovia— that is, he was also placed on

the new pay plan.

The EEOC presented no evidence as to the actual effect the new pay plan

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would have on M r. Ennis’s and M s. Segovia’s salaries. Because M s. Segovia

routinely made more than M r. Ennis before the pooling of commissions, it would

appear that after implementation of the plan’s pooling arrangement M s. Segovia

would earn less than before, while M r. Ennis would have a corresponding

increase in salary. If this w ere the case we would likely conclude that the EEOC

satisfied the third prong of the prima facie case. But the new pay plan also

contains a bonus structure under which each manager is rewarded based on the

absolute number of cars each sells. In this regard, M s. Segovia’s compensation is

more favorable than M r. Ennis’s— she would receive bonuses after the sale of 55,

60, and 70 new cars while M r. Ennis’s bonuses would not kick in until after the

sale of 60, 65, and 75 used cars. The EEOC points to no evidence related to this

bonus structure, including whether it differed from the prior pay plan. In other

words, there is no evidence that M r. Ennis would be making more money than he

did before (or that his salary was reduced by less than M s. Segovia’s) other than

pure conjecture. 7 And while the EEOC is entitled to all reasonable inferences in

its favor, these inferences “must be more than speculation and conjecture.”

Sunward Corp. v. Dun & Bradstreet, Inc., 811 F.2d 511, 521 (10th Cir. 1987).

Furthermore, the uncontradicted evidence revealed that CDM was a

company in financial trouble and the new pay plan was an effort to reduce the

7
In fact, M r. Ennis (the only person who testified on this point) said that
after implementation of the new pay plan, he made less money, which is one
reason he quit CDM to take a job elsewhere.

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managers’ salaries to correspond to the market rate. Finally, a male replaced M s.

Segovia as the New Car Sales M anager when she resigned and he was subject to

the new pay plan, which further undermines the EEOC’s contention that the pay

plan was intentionally sexually discriminatory.

2. Retaliation

Title VII makes it unlawful to retaliate against an employee for opposing

practices made unlaw ful by the statute. 42 U.S.C. § 2000e-3(a). A prima facie

case of retaliation requires a plaintiff to show (1) that she engaged in protected

opposition to discrimination, (2) that a reasonable employee would have found the

challenged action materially adverse— that is, that the action might “dissuade[] a

reasonable worker from making or supporting a charge of discrimination,”

Burlington N. & Santa Fe Ry. Co. v. White, — U.S. — , 126 S.Ct. 2405, 2414–15

(2006) (quotation omitted); and (3) that a causal connection exists between the

protected activity and the materially adverse action. See Argo v. Blue Cross &

Blue Shield of Kan., Inc., 452 F.3d 1193, 1202 (10th Cir. 2006). As noted, CDM

concedes that the disciplinary notice and the new pay plan were both materially

adverse employment actions. 8 It maintains, however, that M s. Segovia never

8
W e note that it is not clear that the w arning notice is a materially adverse
action in the context of a retaliation claim. Although we recently held that “[a]
written w arning may be an adverse employment action only if it effects a
significant change in the plaintiff’s employment status,” Haynes, 456 F.3d at
1224 (emphasis omitted), we have not had occasion to revisit this holding in light
of the Supreme Court’s decision in White. There, the Court clarified that the
(continued...)

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engaged in any protected conduct nor is there a causal link between any such

conduct and the challenged actions. W e disagree.

First, M s. Segovia unquestionably engaged in protected activity when she

complained to M r. Daggett about M r. Carter’s comment that he did not want her

to hire women salespeople. She told M r. Daggett she was thinking of reporting

M r. Carter’s behavior to the EEOC. CDM makes much of the fact that although

she threatened to do so, M s. Segovia did not actually file a formal charge of

discrimination with the EEOC until after she resigned. But the prohibition

against retaliation protects conduct short of filing a formal charge— it prohibits

discrimination against an individual simply for “oppos[ing] any practice made an

unlawful employment practice” by Title VII. See 42 U.S.C. § 2000e-3(a). W e

have noted that “[p]rotected opposition can range from filing formal charges to

voicing informal complaints to superiors.” See Hertz v. Luzenac Am erica, Inc.,

370 F.3d 1014, 1015 (10th Cir. 2004). M s. Segovia’s complaint falls comfortably

within this standard.

M s. Segovia also complained to M r. Daggett about the vulgar e-mail he

received from M r. Ennis, which also amounts to protected activity. Although

8
(...continued)
challenged action in a retaliation claim need not necessarily result in an adverse
effect on the terms or conditions of employment, so long as it would dissuade a
reasonable employee from engaging in protected activity. White, 126 S. Ct. at
2410–15. But because CDM concedes the warning notice here was materially
adverse, we need not decide the issue.

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CDM contends that M r. Daggett “never understood that Segovia was complaining

about discrimination in the workplace”— presumably because she did not

explicitly invoke her rights under by Title VII— the record reveals the opposite.

M r. Daggett testified that he knew the e-mail contained “offensive sexual

language,” “was not appropriate for the workplace,” that it was a violation of

CDM ’s “no harassment policy,” and that M s. Segovia was upset by it. 9

Second, the EEOC has presented sufficient evidence of a causal connection

between M s. Segovia’s protected activity and her receipt of a warning notice and

the implementation of the new pay plan. A causal connection can be inferred

from the fact that the challenged action closely follows the employee’s protected

activity. See Argo, 452 F.3d at 1202. Here, the challenged actions were within a

month of M s. Segovia’s last instance of protected activity. W e have previously

held that such temporal proximity, alone, is sufficient to allow an inference of the

existence of a causal connection betw een the tw o events. See id. (indicating

twenty-four days between protected activity and adverse action gives rise to a

rebuttable inference of a causal connection); Anderson v. Coors Brewing Co., 181

9
The EEOC also suggests that M s. Segovia engaged in protected activity
when she walked away from the conversation that M r. Carter had summoned her
into with M r. Ennis: “I felt like me walking away from that was a complaint to
M r. Carter that I didn’t want . . . to be talked to like that, and I didn’t want to be
treated like that.” AA 538. Although w e have serious reservations that M s.
Segovia’s conduct in w alking away could be construed as protected activity, we
need not decide that issue here since we conclude that she engaged in other
activity protected by the Act.

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F.3d 1171, 1179 (10th Cir. 1999) (indicating that six weeks between protected

activity and adverse action gives rise to an inference of causation).

Having satisfied its burden to establish a prima facie case of retaliation, it

was incumbent upon CDM to proffer a legitimate, nondiscriminatory reason for

the adverse action. See Argo, 452 F.3d at 1202; Cortez v. Wal-M art Stores, Inc.,

460 F.3d 1268, 1273–74 (10th Cir. 2005) (applying the M cDonnell Douglas

burden-shifting analysis in an age discrimination case to review the district

court’s denial of judgment as a matter of law at the close of the trial). As before,

CDM contends that M s. Segovia’s unavailability warranted the warning notice

and that CDM ’s effort to reduce salaries and to ease the tension between M s.

Segovia and M r. Ennis over the value of trade-ins warranted the implementation

of the new pay plan. Both of these are legitimate, nondiscriminatory reasons for

the challenged actions, and the burden therefore shifts back to the EEOC to

demonstrate that the proffered reasons for the actions are pretextual. See Argo,

452 F.3d at 1203.

To show pretext, the EEOC must produce evidence of “such weaknesses,

implausibilities, inconsistencies, incoherencies, or contradictions in the

employer’s proffered legitimate reasons for its action that a reasonable factfinder

could rationally find them unw orthy of credence and hence infer that the

employer did not act for the asserted non-discriminatory reasons.” Id. (quotation

omitted). As with its discrimination claim, the EEOC’s evidence of pretext

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related to the warning notice primarily relies on its contention that similarly

situated individuals who did not engage in protected activity were treated

differently. See Metzler v. Fed. Home Loan Bank of Topeka, 464 F.3d 1164, 1175

(10th Cir. 2006) (“[A] plaintiff may show pretext by providing evidence that he

was treated differently from other similarly-situated employees who violated w ork

rules of comparable seriousness.” (quotation omitted)). As the discussion above

demonstrates, however, it did not establish that a similarly situated individual was

treated differently.

W ith respect to the new pay plan, the EEOC contends that the pooling

arrangement could not have its desired effect of reducing the tension between M s.

Segovia and M r. Ennis over the pricing of trade-ins because the conflict w ould

have persisted with respect to the forty percent of the gross sales not committed

to the pool. The fact that other ways to reduce the conflict may have existed or

that the conflict was not totally eliminated by the new pay structure, however,

does not indicate that the plan was a “subterfuge for discrimination,” see Young v.

Dillon Cos., Inc., 468 F.3d 1243, 1250 (10th Cir. 2006), and we must bear in

mind that neither this Court, nor a jury, may act as a “super personnel department,

second guessing employers’ honestly held (even if erroneous) business

judgments,” id. (quotation omitted); see also Argo, 452 F.3d at 1203. There is no

doubt that the pooling arrangement would reduce the pricing tension, at least w ith

respect to sixty percent of sales, and thus the EEOC has failed to show this

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proffered reason is pretextual.

3. Constructive Discharge

“Constructive discharge occurs when the employer by its illegal

discriminatory acts has made working conditions so difficult that a reasonable

person in the employee’s position would feel compelled to resign.” Sandoval v.

City of Boulder, 388 F.3d 1312, 1325 (10th Cir. 2004) (quotation omitted). In

evaluating whether the employee’s working conditions would cause such a feeling

in a reasonable person, “we apply an objective test under which neither the

employee’s subjective views of the situation, nor her employer’s subjective

intent . . . are relevant.” Tran v. Trs. of State Colls. in Colo., 355 F.3d 1263,

1270 (10th Cir. 2004). The plaintiff’s burden in a constructive discharge case is

substantial and showing that the employer’s conduct meets the definition of

“tangible employment action” or “adverse employment action” is “not necessarily

sufficient to establish a constructive discharge because a constructive discharge

requires a showing that the working conditions imposed by the employer are not

only tangible or adverse, but intolerable.” Id. at 1270–71; see also Penn. State

Police v. Suders, 542 U.S. 129, 147 (2004) (“A hostile-environment constructive

discharge claim entails something more [than conduct that amounts to actionable

harassment]: A plaintiff who advances such a compound claim must show

working conditions so intolerable that a reasonable person would have felt

compelled to resign.”); Garrett v. Hewlett-Packard Co., 305 F.3d 1210, 1221

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(10th Cir. 2002) (stating that “[t]he bar is quite high in such cases”). Importantly,

in constructive discharge cases “[t]he question is not whether the employee’s

resignation resulted from the employer’s actions, but whether the employee had

any other reasonable choice but to resign in light of those actions.” Tran, 355

F.3d at 1270.

In support of its constructive discharge claim, the EEOC refers back to the

aforementioned evidence of discriminatory harassment. It adds to the calculus

M r. D aggett’s delivery to M s. Segovia of the warning notice and new pay plan.

After reviewing the record in light of the standard for constructive discharge

claims discussed above, we conclude that the EEOC has failed to present

sufficient evidence that a reasonable person in M s. Segovia’s position would have

felt compelled to resign. 10 Adding the implementation of the new pay plan to the

equation does not change this result. A constructive discharge requires a showing

that the employer’s actions are not merely adverse, but intolerable, see id. at

10
W e note that the District Court entered judgment as a matter of law in
favor of CDM on the EEOC’s constructive discharge claim, reasoning that “M s.
Segovia’s admitted desire to return to work for [CDM ] eviscerates her contention
that the workplace was intolerable.” In this Circuit, however, the test for
constructive discharge is an objective one. This standard cuts both ways— just as
an employee’s subjective feelings that her w orking conditions w ere intolerable is
not controlling in the constructive discharge analysis, neither is an employee’s
desire to continue working despite conditions so intolerable any reasonable
employee would have long since quit. See Baca v. Sklar, 398 F.3d 1210, 1216
(10th Cir. 2005) (“W hen examining a constructive discharge claim, we disregard
both the employee’s subjective view of the workplace environment and the
employer’s subjective intentions regarding the employee.”).

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1271, and M s. Segovia quit before she knew precisely the effect the new pay plan

would have on her salary, see Garrett, 305 F.3d at 1222 (the plaintiff failed to

establish constructive discharge in part because the plaintiff resigned before he

had complete details as to the position into which the employer was in the process

of transferring him). Furthermore, the EEOC produced no evidence at trial

indicating the precise effect the new pay plan would have on the managers’

salaries. As such, the EEOC has failed to show that M s. Segovia’s working

conditions were intolerable and that she “had no other choice but to quit,” see id.

at 1221. W e therefore affirm the District Court’s entry of judgment as a matter of

law on this issue.

B. Attorney’s Fees

After entering judgment in favor of CDM , CDM moved for attorney’s fees

pursuant to 42 U.S.C. § 2000e-5(k), contending that the EEOC’s claims were

frivolous, unreasonable, or without foundation. The District Court concluded that

it was appropriate to grant certain fees to CDM . W ith respect to the EEOC’s

claims brought on behalf of M s. Segovia, the District Court reasoned that the

“EEOC is charged with evaluating claims prior to filing suit and throughout the

litigation process and the evidence marshaled in this case does not support the

claims asserted.” Thus, although the court denied C DM ’s motion for summary

judgment, finding genuine issues of fact for trial, it nevertheless found an aw ard

of attorney’s fees appropriate. It also awarded CDM attorney’s fees related to

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claims brought on behalf of M s. Richmond. Though it denied those fees

associated with the hostile w ork environment claim the EEOC voluntarily

dismissed at the close of discovery, it granted CDM ’s request for fees associated

with those claims that the EEOC unsuccessfully defended in summary judgment

proceedings.

The relevant statute provides, in pertinent part:

In any action or proceeding under this subchapter the court, in its
discretion, may allow the prevailing party, other than the
Commission or the United States, a reasonable attorney’s fee
(including expert fees) as part of the costs, and the Commission and
the United States shall be liable for costs the same as a private
person.

42 U.S.C. § 2000e-5(k). W e review the district court’s award of attorney’s fees

under this statute for an abuse of discretion. Carter v. Sedgwick County, 929 F.2d

1501, 1056 (10th Cir. 1991). “A Title VII defendant is not entitled to an award of

fees unless the court finds that the plaintiff’s ‘claim was frivolous, unreasonable,

or groundless, or that the plaintiff continued to litigate after it clearly became

so.’” Simons v. Sw. Petro-Chem, Inc., 28 F.3d 1029, 1033 (10th Cir. 1994)

(quoting Christianburg Garment Co. v. EEOC., 434 U.S. 412, 422 (1978)).

1. M s. Segovia’s claims

Because of our disposition of this case on the merits of M s. Segovia’s

sexual harassment claim, we conclude that the District Court abused its discretion

in awarding CDM attorney’s fees. See EEOC v. St. Louis-San Francisco Ry. Co.,

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743 F.2d 739, 744 (10th Cir. 1984) (reversing judgment in favor of the defendant

and, in light of that disposition, concluding the district court abused its discretion

in awarding attorney’s fees to the defendant); see also Sullivan v. Sch. Bd. of

Pinellas County, 773 F.2d 1182, 1189 (11th Cir. 1985) (“In cases where the

plaintiffs introduced evidence sufficient to support their claims, findings of

frivolity typically do not stand.”). Furthermore, although we conclude that the

District Court appropriately entered judgment in favor of CDM on the remaining

claims related to M s. Segovia, the facts as presented do not warrant a

determination that the case was meritless, which is “to be understood as meaning

groundless or w ithout foundation.” Christianburg Garment Co., 434 U.S. at 421.

As the Supreme Court has warned, the “district court [must] resist the

understandable temptation to engage in post hoc reasoning by concluding that,

because a plaintiff did not ultimately prevail, his action must have been

unreasonable or without foundation.” Id. at 421–22.

2. M s. Richmond’s claims

The EEOC also appeals the aw ard of attorney’s fees related to M s.

Richmond’s disparate treatment claim. Aside from restating the relevant legal

standard, the EEOC’s brief on appeal does not provide this Court a basis on which

to conclude that the D istrict Court abused its discretion in aw arding CDM these

fees. The only part of the record addressing M s. Richmond’s disparate treatment

claim is the EEOC’s response to CDM ’s motion for summary judgment, which

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does not include relevant material from which this Court may adequately review

the District Court’s decision— e.g., supporting affidavits, interrogatories, or

depositions. In other words, the EEOC did not produce a record that would

perm it this C ourt to conclude that its claim was not frivolous. Accordingly, we

affirm the District Court’s award of attorney’s fees on this issue.

III. C ON CLU SIO N

Because a reasonable jury could find that M s. Segovia was subjected to a

hostile work environment on the basis of sex, we reverse the D istrict Court’s

entry of judgment as a matter of law on that issue. Because the EEOC failed to

present sufficient evidence from which a reasonable jury could conclude that

CDM constructively discharged M s. Segovia, issued her an employee warning

notice, or placed her on a new pay plan because of her sex or because she

engaged in activity protected by Title VII, we affirm the District Court’s entry of

judgment as a matter of law on those issues. Finally, because the EEOC’s claims

related to M s. Segovia are clearly not frivolous, the District Court abused its

discretion in awarding CDM attorney’s fees. W e reverse and remand for a new

trial.

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