Lori Freeman v. Dal-Tile Corporation

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 13-1481

LORI FREEMAN,

Plaintiff – Appellant,

v.

DAL-TILE CORPORATION, d/b/a Dal-Tile Distribution,
Incorporated, d/b/a Dal-Tile Services, Incorporated,

Defendant – Appellee,

and

VOSTONE INCORPORATED; TIMOTHY KOESTER,

Defendants.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. W. Earl Britt, Senior
District Judge. (5:10-cv-00522-BR)

Argued: January 29, 2014 Decided: April 29, 2014

Before TRAXLER, Chief Judge, and NIEMEYER and SHEDD, Circuit
Judges.

Reversed in part, affirmed in part, and remanded by published
opinion. Judge Shedd wrote the majority opinion, in which Chief
Judge Traxler joined. Judge Niemeyer wrote an opinion
concurring in part and dissenting in part.
ARGUED: Anne Warren King, GEORGETOWN UNIVERSITY LAW CENTER,
Washington, D.C., for Appellant. Kristine Marie Sims,
CONSTANGY, BROOKS & SMITH, LLP, Winston-Salem, North Carolina,
for Appellee. ON BRIEF: Brian Wolfman, Institute for Public
Representation, GEORGETOWN UNIVERSITY LAW CENTER, Washington,
D.C., for Appellant. William J. McMahon, IV, CONSTANGY, BROOKS
& SMITH, LLP, Winston-Salem, North Carolina, for Appellee.

2
SHEDD, Circuit Judge:

Lori Freeman appeals a grant of summary judgment in favor

of her former employer, Dal-Tile Corporation, on her claims of

racial and sexual hostile work environment, constructive

discharge, and common law obstruction of justice. For the

reasons discussed more fully below, we reverse the grant of

summary judgment on the hostile work environment claims and

remand them for further consideration. We affirm the grant of

summary judgment on the claims of constructive discharge and

common law obstruction of justice.

I.

Dal–Tile Corporation manufactures, distributes, and markets

ceramic tile and natural stone products. 1 It operates eight

manufacturing facilities, five regional distribution centers,

and over 250 sales service centers, including both stone yards

and tile showrooms.

In June 2008, Dal–Tile acquired the assets of Marble Point,

Inc., a stone yard located in Raleigh, North Carolina, from

owner Marco Izzi. Dal–Tile incorporated this newly-acquired

1
All facts discussed in this opinion are presented in the
light most favorable to Freeman, the non-moving party. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)(“The
evidence of the non-movant is to be believed, and all
justifiable inferences are to be drawn in his favor.”); Evans v.
Techs. Applications & Serv. Co., 80 F.3d 954, 958 (4th Cir.
1996).

3
operation into a sale-service center organization (the

“Stoneyard”). After this sale, Izzi purchased an ownership

interest in VoStone, Inc., a Raleigh-based kitchen and bath

remodeling center. A significant percentage of VoStone's

business involved working with Dal–Tile.

In August 2006, Freeman began working as a receptionist for

Dal–Tile’s predecessor, Marble Point. She was hired on a

temporary basis through a staffing agency, but after six months,

she joined Marble Point as a permanent employee. Throughout her

tenure at Marble Point, Freeman reported to Izzi and to

assistant manager Sara Wrenn. Following Dal–Tile's acquisition

of Marble Point, Freeman became a Dal–Tile employee, 2 and Wrenn

continued to be her supervisor. Freeman’s first position with

Dal–Tile was General Office Clerk. Over time, Freeman began

interacting more frequently with Dal–Tile's customers, and she

effectively functioned as a Customer Service Representative. In

2
In June 2008, Dal–Tile's Regional Human Resources Manager
visited the Stoneyard and held a group meeting with the
employees to review Dal–Tile's policies and employee benefits
programs. At that time, Freeman received Dal–Tile's employee
handbook, including its policy prohibiting harassment and
discrimination. Dal–Tile's policy against harassment, which was
in place throughout Freeman’s tenure, states that Dal–Tile will
not tolerate harassment based on an individual's sex, race, or
other protected characteristics. It also defines the sort of
conduct prohibited, provides avenues for employees to report
harassment to the company, and prohibits retaliation against
individuals who raise complaints under the policy.

4
May 2009, she was promoted to the role of Sales Consultant. In

November 2009, Freeman’s position was reclassified to Customer

Service Representative.

The harassment claims at issue are based on the behavior of

Timothy Koester, an independent sales representative for

VoStone. Freeman usually interacted with Koester more than once

a day while he was conducting business with Dal–Tile on behalf

of VoStone.

About two weeks after Freeman became a temporary employee

with Marble Point in August 2006, she overheard Koester as he

walked into Wrenn's office and, referencing a photograph of two

former employees, asked Wrenn and another employee: “[H]ey, who

are these two black b****es[?]” J.A. 76. After the incident,

Freeman asked Wrenn about Koester, inquiring: “[W]ho was he and

what was his deal[?]” J.A. 77. Wrenn replied: “[H]e's an

asshole, but I don't think he'll do it again.” Id. The next day,

Freeman told Koester “how uncomfortable and demeaning that made

[her] feel,” and she asked him not to use that sort of language

anymore. J.A. 75.

Freeman also recalled Koester making comments about women

he had been with the night before. On one occasion, Koester

showed her a photograph of a naked woman on his cell phone and

remarked: “[T]his is what I left in my bed to come here today.”

J.A. 80. On a different occasion, Freeman overheard Koester

5
talking with one of her co-workers, Jodi Scott, about

photographs of Scott's daughters that were displayed in Scott's

office. According to Freeman, Koester told Scott: “I'm going to

hook up with one your daughters,” or “I'm going to turn one of

your daughters out.” J.A. 136. Scott replied: “[Y]ou better stay

away from my kids,” or “[D]on't talk to me about my kids.” Id.

In a different instance, Koester passed gas on Freeman’s

phone. Koester was using Freeman’s office phone, and she was

standing there waiting for him to finish his conversation.

Before Koester hung up the phone, he held it to his buttocks and

passed gas on it. J.A. 81. Wrenn was present for this incident.

Freeman immediately began crying and had to leave the room to

calm down. J.A. 82.

In June 2009, Koester called Freeman about covering a

customer appointment for him because he had been partying the

night before. Koester indicated that he could not come into the

office, saying: “I'm just too f***ed up, don't take offense, but

I'm as f***ed up as a n****r's checkbook.” J.A. 99. Freeman told

Wrenn about Koester's comment that same day, but Wrenn just

“scoffed and shook her head and put her head back down and

continued on with trying to pick the nail polish off of her

nails . . . .” J.A. 102. Freeman also reported Koester's remark

to James Vose, one of the co-owners of VoStone. Vose laughed and

6
said: “[Y]ou got to admit that's kind of funny, just do what I

do and hit him because he's an asshole.” J.A. 107.

Subsequently, on July 29, 2009, Koester called Dal–Tile's

general office line, and Freeman answered the phone. Koester had

his six-year-old daughter, Angelina, with him at the time.

Freeman, who knew Angelina, asked Koester to tell Angelina that

she said “hi.” Instead, Koester put Freeman on speaker phone so

that she and Angelina could talk with one another. Freeman then

heard Angelina ask: “Daddy, who's that[?]” J.A. 111. Koester

replied: “[T]hat's the black b**** over at Marble Point.” Id.

Freeman “immediately became very irate.” Id. She told Koester:

“[D]on't you ever call me a black b**** as long as you live.”

Id. Koester responded: “[O]h, word.” Id. Freeman promptly told

Wrenn about Koester's comment, but Wrenn appeared disinterested

and continued a conversation that she had been having with some

other co-workers.

In addition to these specific incidents, Freeman and other

co-workers testified more generally that Koester frequently made

inappropriate sexual comments. Freeman testified that Koester

“was always coming in making some sort of lewd comments.” J.A.

78. She also stated that “maybe two or three times a week” she

would have to correct Koester and tell him not to say something

inappropriate. J.A. 79. Freeman explained that Koester would

“come in to discuss what he did the night before with whatever

7
woman he was with and [Freeman] would tell him [she didn’t] want

to hear it.” J.A. 80. Wrenn confirmed this, stating that “he

liked to brag about his, you know, evening excursions, or his

weekend excursions. . . . [T]here were times where he would say

something about what he did the night before that had sexual

content to it.” J.A. 269. According to Wrenn, “[h]e always made

comments about women.” J.A. 274. Wrenn also testified that

Koester used the word “b****” in the office, such as “You should

have seen these hot b****es I met last night.” J.A. 268. Jodi

Scott testified that Koester used the word “b****” “[u]sually

about every time that he came in.” J.A. 381–82. Wrenn even

referred to Koester as a “pig.” J.A. 253. Koester himself also

admitted he made sexual comments in the office. J.A. 325.

Freeman and other co-workers also testified generally about

Koester’s inappropriate racial remarks. For instance, Koester

used racial “slang” such as “Yo, b****” and “How’s my b****es?”

when talking to the female employees. J.A. 384–85. Jodi Scott

testified that Koester used racial language every day that he

came into the office. J.A. 386. Koester himself admitted to

using African-American type slang. J.A. 325. Cathy Diksa, a

human resource manager, explained that according to manager

Wrenn, Koester used racial language in the office. J.A. 217. For

instance, following the election of Barack Obama in 2008,

Koester said to Freeman, “[Y]ou guys won.” J.A. 355. Koester

8
himself testified that he probably made comments about taking

“beautiful black girls” home with him. J.A. 343. He also

admitted that he made comments that were “[m]aybe racially

inappropriate.” J.A. 344.

Following the most recent “black b****” incident in July

2009, Freeman reported Koester’s remarks to Cathy Diksa in human

resources after Wrenn ignored her complaint. Diksa initially

promised Koester would be permanently banned from the facility.

However, the company lifted the ban and instead prohibited

Koester from communicating with Freeman. He was allowed on the

premises but had to coordinate all on-site meetings through

Wrenn.

Freeman was so upset about the prospect of being forced to

interact with Koester that she took a medical leave of absence

beginning September 2, 2009. During this time she received

treatment for depression and anxiety. Freeman returned to work

around November 19, 2009. Wrenn informed Freeman that Koester no

longer worked for VoStone but for another kitchen and bath

fabricator. Wrenn told Freeman that Koester would continue to

call Wrenn’s cell phone and not the general office line if he

needed to conduct business with Dal-Tile.

On December 7, 2009, Freeman notified Dal–Tile that she was

resigning from her position effective December 11, 2009. Freeman

testified that she resigned because the depression and anxiety

9
became too much for her; she was constantly worried she would

encounter Koester at work. J.A. 179–80.

In October 2009, while on medical leave, Freeman filed a

charge with the Equal Employment Opportunity Commission

(“EEOC”), asserting that Dal–Tile had subjected her to

discrimination based on her sex and race.

After receiving a right to sue letter, Freeman brought this

action in the Eastern District of North Carolina, asserting

claims for racial hostile work environment under 42 U.S.C. §

1981; racial and sexual hostile work environment under Title VII

of the Civil Rights Act of 1964; discriminatory discharge under

42 U.S.C. § 1981; and obstruction of justice under North

Carolina common law. 3 The obstruction of justice claim is based

on the allegation that Dal-Tile failed to issue a litigation

hold on e-mails after it received her October 28, 2009 EEOC

charge and thus destroyed a significant number of e-mails

pursuant to its email retention policy.

Following discovery, in May 2012, Dal-Tile filed a motion

for summary judgment. The district court granted this motion.

Freeman v. Dal-Tile Corp., 930 F. Supp. 2d 611 (E.D.N.C. 2013).

3
She also asserted retaliatory demotion and discharge
claims under 42 U.S.C. § 1981, but she does not appeal the
dismissal of those claims.

10
 First, the district court held that in regard to the racial

and sexual hostile work environment claims, Freeman did not

present sufficient evidence to create a genuine dispute of

material fact on the issue of whether the harassment was

objectively severe or pervasive. However, the district court

noted “that plaintiff subjectively perceived the alleged racial

and sexual harassment to be abusive.” Id. at 628.

Second, the district court ruled that even if the

harassment was found to be objectively severe or pervasive

enough to alter Freeman’s work conditions, Dal-Tile would still

be entitled to summary judgment because Freeman could not

establish that liability should be imputed to Dal-Tile. The

district court used a negligence standard, adopted from an

unpublished opinion of this Court, in which “an employer is

liable [for the actions of a third party] ‘if it knew or should

have known of the harassment and failed to take appropriate

actions to halt it.’” Id. at 638 (quoting EEOC v. Cromer Food

Servs., Inc., 414 F. App’x 602, 606 (4th Cir. 2011)).

Applying this standard, the district court held that Dal-

Tile did not have actual or constructive knowledge of the

harassment because “no reasonable fact-finder could conclude

that plaintiff’s statement[s] to Wrenn constituted a complaint,

either formal or informal.” Id. at 639. Further, the district

court noted that “even if [it] were to assume arguendo that the

11
. . . remarks that plaintiff made to Wrenn could somehow be

construed as complaints, it is undisputed that plaintiff knew

there were additional avenues that she could have pursued if she

was unsatisfied with Wrenn’s response.” Id. at 640. In the

second inquiry of the negligence analysis, whether the

employer’s response was appropriate, the district court ruled

that Dal-Tile’s response to Koester’s behavior was adequate as a

matter of law.

Third, the district court held that Freeman was not

constructively discharged but, rather, voluntarily resigned. The

district court noted that Freeman was “unable to show that

anyone at Dal-Tile acted deliberately with an unlawful

discriminatory intent in order to force her to resign either

before or after she returned from medical leave.” Id. at 647.

Lastly, the district court ruled that Freeman’s North

Carolina obstruction of justice claim failed as a matter of law.

The district court stated that “the evidence does not support a

finding that anyone at Dal-Tile intentionally destroyed emails

in order to keep plaintiff from proceeding with a legal claim.”

Id. at 648.

II.

This Court “review[s] the district court’s grant of summary

judgment de novo, applying the same legal standards as the

district court and viewing the facts and inferences drawn from

12
the facts in the light most favorable to . . . the nonmoving

party.” Evans v. Techs. Applications & Serv. Co., 80 F.3d 954,

958 (4th Cir. 1996).

On appeal, Freeman argues 1) a reasonable jury could

conclude that she was subjected to a racially and sexually

hostile work environment; 2) a reasonable jury could find that

liability for Koester’s harassment is imputable to Dal-Tile; 3)

a reasonable jury could find that she was constructively

discharged; and 4) North Carolina common law requires only

general intent not specific intent for obstruction of justice

claims, and the destruction of emails here meets this standard.

We address each in turn.

III.

Freeman first argues the district court erred in granting

summary judgment on her hostile work environment claims. Under

Title VII, “[i]t shall be an unlawful employment practice for an

employer . . . to discriminate against any individual with

respect to his compensation, terms, conditions, or privileges of

employment, because of such individual's race, color, religion,

sex, or national origin . . . .” 42 U.S.C. § 2000e-2. “Since an

employee's work environment is a term or condition of

employment, Title VII creates a hostile working environment

cause of action.” EEOC v. R & R Ventures, 244 F.3d 334, 338 (4th

13
Cir. 2001) (citing Meritor Sav. Bank, FSB v. Vinson, 477 U.S.

57, 73 (1986)).

For this Court to reverse the district court’s grant of

summary judgment to Dal-Tile on her hostile work environment

claims, Freeman must establish that the evidence, viewed in her

favor,

would allow a reasonable jury to conclude that the
harassment was (1) unwelcome, (2) based on [Freeman’s]
gender or race, (3) sufficiently severe or pervasive
to alter the conditions of her employment and create
an abusive atmosphere, and (4) imputable to [Dal-
Tile].

EEOC v. Cent. Wholesalers, Inc., 573 F.3d 167, 175 (4th Cir.

2009) (citing EEOC v. Sunbelt Rentals, Inc., 521 F.3d 306, 313–

14 (4th Cir. 2008)).

First, Freeman must establish that a reasonable jury could

conclude that the sex- or race-based harassment was unwelcome.

As discussed above, Freeman complained of her harassment to

Wrenn, human resources, and Koester himself. She told Koester

repeatedly to stop making such crude and demeaning comments. She

cried in both Wrenn and Koester’s presence over the harassment.

She eventually was treated for depression and anxiety because of

it. Based on this evidence, we believe that a reasonable jury

could find that both the sex- and race-based harassment were

unwelcome.

14
 Second, Freeman must show that a reasonable jury could find

that the harassment was based on her sex or race. The evidence

shows that Koester used the word b**** in the office almost

every time he came in, often discussed his sexual encounters

with women, showed naked pictures of women to Freeman and

others, frequently made “lewd” comments, discussed having sex

with a co-worker’s daughters, and called Freeman a “black

b****,” among other things. Based on this evidence, a reasonable

jury could find that the harassment was based on Freeman’s sex.

See, e.g., Forrest v. Brinker Intern. Payroll Co., 511 F.3d 225,

229 (1st Cir. 2007) (stating that a “raft of case law”

“establishes that the use of sexually degrading, gender-specific

epithets, such as . . . ‘b****,’ . . . has been consistently

held to constitute harassment based upon sex”).

Regarding race, Koester discussed bringing “black girls”

home with him, used racial slang in the office on a daily basis,

said “black b****” at least twice (once directed at Freeman),

told Freeman he was “as f***ed up as a n****r’s checkbook,” and

admitted to maybe using “racially inappropriate” language in the

office. In light of this evidence, a reasonable jury could find

that Koester’s harassment was also based on Freeman’s race. See

Spriggs v. Diamond Auto Glass, 242 F.3d 179, 185 (4th Cir. 2001)

(describing the use of the word “n****r” as an “unambiguously

15
racial epithet” (quoting Rodgers v. Western–Southern Life Ins.

Co., 12 F.3d 668, 675 (7th Cir. 1993))).

Third, Freeman must show that a reasonable jury could find

that the sex- or race-based harassment was so severe or

pervasive as to alter the conditions of her employment and

create an abusive or hostile atmosphere. “This element of a

hostile work environment claim has both subjective and objective

parts.” Cent. Wholesalers, Inc., 573 F.3d at 175 (citing Harris

v. Forklift Systems, Inc., 510 U.S. 17, 21–23 (1993)). Freeman

thus “must show that [she] did perceive, and a reasonable person

would perceive, the environment to be abusive or hostile.” Id.

Regarding the subjective component, the district court

stated, and we agree, that the evidence supports a finding that

Freeman subjectively perceived both types of harassment to be

abusive or hostile. As discussed above, Freeman complained about

the harassment to her supervisor, human resources, and Koester

himself. She cried at work in front of co-workers because of the

harassment. The evidence also shows the harassment interfered

with her ability to work, as she was often distracted by

Koester’s inappropriate behavior and the stress that she felt

from having to interact with him. Freeman ultimately had to take

medical leave and seek treatment for depression and anxiety

because of Koester’s harassment. In light of this evidence, we

conclude that a reasonable jury could find that Freeman found

16
the harassment subjectively hostile or abusive. See Cent.

Wholesalers, Inc., 573 F.3d at 176 (finding a triable issue of

fact on subjective perception of hostility where plaintiff

“complained about both types of harassment and stated that she

found such harassment objectionable” and “that the harassment

caused her emotional distress”); Harris v. Mayor & City Council

of Baltimore, 429 F. App’x 195, 202 (4th Cir. 2011) (finding a

triable issue of fact on subjective perception of hostility

where plaintiff presented evidence that she complained of

harassment, suffered from a depressive disorder because of her

work experiences, and was seen crying at work by a co-worker).

Next we must determine whether the harassment was

objectively severe or pervasive.

This objective inquiry “is not, and by its nature
cannot be, a mathematically precise test.” Harris, 510
U.S. at 22. “Rather, when determining whether the
harassing conduct was objectively severe or pervasive,
we must look at all the circumstances, including the
frequency of the discriminatory conduct; its severity;
whether it is physically threatening or humiliating,
or a mere offensive utterance; and whether it
unreasonably interferes with an employee's work
performance.” Sunbelt, 521 F.3d at 315 (quotation
marks omitted). “[N]o single factor is” dispositive,
Harris, 510 U.S. at 23, as “[t]he real social impact
of workplace behavior often depends on a constellation
of surrounding circumstances, expectations, and
relationships which are not fully captured by a simple
recitation of the words used or the physical acts
performed,” Oncale v. Sundowner Offshore Services,
Inc., 523 U.S. 75, 82 (1998).

Cent. Wholesalers, Inc., 573 F.3d at 176.

17
 Here, the record is replete with evidence of frequent

abusive behavior by Koester during Freeman’s tenure with Marble

Point and Dal-Tile. Regarding the sex-based harassment, Koester

repeatedly used the word “b****” in the office, inquired about

two “black b****es” he saw in a picture, called Freeman a “black

b****,” passed gas on Freeman’s phone, and often discussed his

sexual experiences with women, including showing co-workers

naked pictures on his phone. He made “lewd” comments on a

regular basis, and was described by Wrenn as a

“pig.” Freeman has certainly established a triable issue on

whether the sex-based harassment was objectively severe or

pervasive. See, e.g., Cent. Wholesalers, Inc., 573 F.3d at 176

(finding that the frequent use of the word “b****,” coupled with

both displays of scantily clad or naked women in the office and

inappropriate sexual jokes, was sufficient to create a triable

issue of fact on the issue of objective hostility).

Based on the evidence, a reasonable jury could also find

the race-based harassment was objectively severe or pervasive.

Freeman used racial slang in the office on a daily basis. He

inquired about two “black b****es” he saw in a picture. He

called Freeman a “black b****” in the presence of his young

daughter. He discussed bringing home black women to have sex

with them. He told Freeman he was “as f***ed up as a n****r’s

checkbook.”

18
 To begin, “the word ‘n****r’ is pure anathema to African-

Americans,” Spriggs, 242 F.3d at 185, as it should be to

everyone. Moreover, as we have stated before, “[w]e cannot

ignore . . . the habitual use of epithets here or view the

conduct without an eye for its cumulative effect. Our precedent

has made this point repeatedly.” Sunbelt Rentals, Inc., 521 F.3d

at 318. Therefore, when viewing the circumstances as a whole, we

find the use of the word “n****r,” coupled with the on-going

offensive racial talk, use of the term “black b****” on more

than one occasion (once directed at a black employee), and

sexual talk regarding black women, is sufficient evidence for a

reasonable jury to find the race-based harassment was

objectively severe or pervasive.

Lastly, Freeman must establish a “basis for imposing

liability” on Dal-Tile for the sex- or race-based harassment.

Gilliam v. S.C. Dep't of Juvenile Justice, 474 F.3d 134, 142

(4th Cir. 2007). The district court adopted a negligence

standard for analyzing an employer’s liability for third-party

harassment under Title VII. This Court has not yet adopted this

standard in a published opinion, but we do so today. 4 Similar to

4
Other circuits to address the issue have also adopted a
similar standard. See Dunn v. Washington Cnty., 429 F.3d 689,
691 (7th Cir. 2005)(“[T]he plaintiff bears the burden of showing
that the employer knew of the problem (usually though not always
this requires the employee to show that a complaint was made)
(Continued)
19
the reasoning we set forth for employer liability for co-worker

harassment, “an employer cannot avoid Title VII liability for

[third-party] harassment by adopting a ‘see no evil, hear no

evil’ strategy.’” Ocheltree v. Scollon Prods., Inc., 335 F.3d

325, 334 (4th Cir. 2003) (en banc). Therefore, an employer is

liable under Title VII for third parties creating a hostile work

environment if the employer knew or should have known of the

harassment and failed “to take prompt remedial action reasonably

calculated to end the harassment.” Amirmokri v. Baltimore Gas &

Elec. Co., 60 F.3d 1126, 1131 (4th Cir. 1995) (quoting Katz v.

Dole, 709 F.2d 251, 256 (4th Cir. 1983)) (internal quotation

marks omitted) (applying this standard to co-worker harassment).

and that the employer did not act reasonably to equalize working
conditions once it had knowledge.”); Galdamez v. Potter, 415
F.3d 1015, 1022 (9th Cir. 2005) (“An employer may be held liable
for the actionable third-party harassment of its employees where
it ratifies or condones the conduct by failing to investigate
and remedy it after learning of it.”); Watson v. Blue Circle,
Inc., 324 F.3d 1252, 1259 (11th Cir. 2003) (“When, as in this
case, the alleged harassment is committed by co-workers or
customers, a Title VII plaintiff must show that the employer
either knew (actual notice) or should have known (constructive
notice) of the harassment and failed to take immediate and
appropriate corrective action.”); Turnbull v. Topeka State
Hosp., 255 F.3d 1238, 1244 (10th Cir. 2001) (holding that “an
employer may be responsible for sexual harassment based upon the
acts of nonemployees” under a “negligence analysis”).

This Court has also adopted this negligence standard in a
prior unpublished opinion. See EEOC v. Cromer Food Servs., Inc.,
414 F. App’x 602, 606–07 (4th Cir. 2011), and both parties agree
that a negligence analysis is appropriate.

20
 Applying this standard here, we conclude that a reasonable

jury could find that Dal-Tile knew or should have known of the

harassment. Here, Freeman presented evidence that Wrenn, her

supervisor, knew of all three of the most major incidents: the

two “black b****” comments, and the “f***ed up as a n****r’s

checkbook” comment. Wrenn was present for the first “black

b****” comment, which Freeman complained about to Wrenn

afterward. Freeman also complained to Wrenn specifically about

the other two comments from Koester almost immediately after

they occurred. 5 When Freeman complained to Wrenn about the

“f***ed up as a n****r’s checkbook” comment, Wrenn “scoffed and

shook her head and put her head back down and continued on with

trying to pick the nail polish off of her nails.” J.A. 102. When

Freeman complained about the second “black b****” comment, Wrenn

simply rolled her eyes and went on talking to a co-worker. J.A.

112. In addition to these most severe incidents, Wrenn was also

present the time Koester passed gas on Freeman’s phone and

Freeman began crying and had to leave the room.

Not only did Wrenn know of these specific and more severe

incidents, but she also knew the harassment was an on-going

situation. As discussed above, Wrenn herself testified that she

5
Per the company’s harassment policy, Freeman did exactly
what she was supposed to by telling Wrenn, her supervisor, of
the harassment. J.A. 199.

21
knew Koester used the word “b****” in the office frequently,

that he made sexual comments in the office, that he showed

pictures of naked women on his phone in the office, and that he

“always made comments about women.” J.A. 268–74. Wrenn herself

referred to him as a “pig.” J.A. 253. Cathy Diksa also testified

that Wrenn knew Koester used “racial language” in the office.

J.A. 217.

This evidence, if proven true, shows that Dal-Tile, through

its agent Wrenn, had actual knowledge of the harassment and that

Freeman found it offensive, as shown by Freeman’s frequent

complaints and her negative reaction to his behavior. However,

even if Wrenn did not have actual knowledge that Freeman was

offended by Koester’s behavior, at the very least, she should

have known it: Wrenn was aware of Koester’s on-going

inappropriate behavior and comments, had received several

complaints about the harassing incidents from Freeman, had

witnessed Freeman crying from the harassment, and knew

incendiary terms like “n****r” and “black b****” had been used

in the presence of a black, female employee. As stated above,

“[a]n employer cannot avoid Title VII liability for coworker

harassment by adopting a ‘see no evil, hear no evil’ strategy.”

Ocheltree, 335 F.3d at 334. Therefore, we conclude a reasonable

jury could find that Dal-Tile knew, or at the very least, should

have known, of Koester’s harassment.

22
 In addition, Freeman has at least created a triable issue

of fact as to whether Dal-Tile’s response to halt the harassment

was adequate. Despite Wrenn’s notice of Koester’s on-going

behavior, Dal-Tile did not take any effective action to halt the

harassment until Freeman reported up the chain to Cathy Diksa in

human resources after the final “black b****” comment. 6 At that

point, the harassment had been ongoing for three years. Diksa

originally told Freeman that Koester would be permanently banned

from Dal-Tile. J.A. 121–22. However, the company lifted the ban

and instead simply prohibited Koester from communicating with

Freeman while still allowing him on the premises if he

coordinated his meetings through Wrenn.

As stated above, once an employer has notice of harassment,

it must “take prompt remedial action reasonably calculated to

end the harassment.” Amirmokri, 60 F.3d at 1131 (quoting Katz,

709 F.2d at 256) (internal quotation marks omitted). Not only

did Dal-Tile fail to take any serious action for three years in

spite of the long list of ongoing harassment by Koester, but

particularly shocking to us is the fact Dal-Tile took absolutely

no action when Koester passed gas on Freeman’s phone and made

Freeman cry in Wrenn’s presence, nor when Freeman promptly

6
Wrenn did tell Koester not to use inappropriate language
after the first “black b****” comment, but that proved
ineffective as the harassment continued for three more years.

23
complained to Wrenn that Koester had used the word “n****r” on

the phone with her. Although the harassment eventually stopped

after the communication ban was put into place, the harassment

had continued unabated for three years prior to that. While a

communication ban may have been an adequate response had it been

put into place sooner, Dal-Tile’s failure was in not responding

promptly to the harassment. Based on this evidence, we believe a

reasonable jury could conclude that Dal-Tile failed to take

“prompt remedial action reasonably calculated to end the

harassment.”

In sum, we believe a reasonable fact-finder could find

there was an objectively hostile work environment based on both

race and sex and that Dal-Tile knew or should have known of the

harassment and failed to adequately respond. We, therefore,

reverse the district court’s grant of summary judgment in favor

of Dal-Tile on Freeman’s racial and sexual hostile work

environment claims under Title VII, as well as her racial

hostile work environment claim under 42 U.S.C. § 1981, and we

remand for further consideration in the district court. 7

7
The standard used to evaluate a racial hostile work
environment claim under § 1981 is the same as the standard used
under Title VII. Spriggs, 242 F. 3d at 184. Thus our analysis is
the same for both racial hostile work environment claims here.

24
 IV.

Freeman also appeals the district court’s ruling that she

was not constructively discharged under 42 U.S.C. § 1981. 8 An

employee is considered constructively discharged “if an employer

deliberately makes the working conditions intolerable in an

effort to induce the employee to quit.” Honor v. Booz-Allen &

Hamilton, Inc., 383 F.3d 180, 186-87 (4th Cir. 2004) (quoting

Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1353-54 (4th Cir.

1995)) (internal quotation marks and citations omitted). Freeman

must prove two elements to demonstrate constructive discharge:

“(1) the deliberateness of [Dal-Tile’s] actions, motivated by

racial bias, and (2) the objective intolerability of the working

conditions.” Id. at 186-87.

Here, Freeman did not present sufficient evidence to create

a question of fact as to whether Dal-Tile deliberately attempted

to induce her to quit, nor that her working conditions at the

time she resigned were objectively intolerable. Rather, the

evidence shows that within weeks from returning from a two month

medical leave, Freeman voluntarily resigned from her position.

She had had no contact with Koester for months, nor had he even

been in the building at the same time as her since she had

8
Freeman brought her constructive discharge claim solely
under 42 U.S.C. § 1981, and thus it is only based on racial
discrimination.

25
returned from leave. Freeman presented no evidence that

Koester’s harassment was still creating an objectively hostile

work environment at the time she resigned, nor that Dal-Tile was

allowing him to harass her in a deliberate attempt to force her

to quit. Therefore, we affirm the district court’s grant of

summary judgment to Dal-Tile on the constructive discharge

claim.

V.

Finally, Freeman contends that the district court erred in

awarding Dal-Tile summary judgment on the North Carolina common

law obstruction of justice claim. Freeman argues that Dal-Tile

should have put a litigation hold on all relevant emails

beginning no later than when it received Freeman’s complaint in

November 2009, and maybe even as early as when she contacted

human resources about the situation in August 2009.

In North Carolina, “acts which obstruct, impede or hinder

public or legal justice . . . amount to the common law offense

of obstructing justice.” Blackburn v. Carbone, 703 S.E.2d 788,

794 (N.C. Ct. App. 2010) (quoting Henry v. Deen, 310 S.E.2d 326,

334 (N.C. 1984)). The offense requires proof that the defendant

acted “willfully and with an intent to defraud.” State v.

Eastmen, 438 S.E.2d 460, 464 (N.C. Ct. App. 1994). In other

words, North Carolina law requires that the defendant acted with

the specific intent to obstruct justice, not just the general

26
intent to do the act which resulted in the obstruction. See

Blackburn, 703 S.E.2d at 795 & n.6 (“[A]ny action intentionally

undertaken by the defendant for the purpose of obstructing,

impeding, or hindering the plaintiff’s ability to seek and

obtain a legal remedy will suffice to support a claim for common

law obstruction of justice. . . . The necessity for showing an

intentional act of misconduct by the defendant is delineated in

a number of criminal obstruction of justice cases.”).

Here, Freeman presented no evidence that Dal-Tile destroyed

emails with the intent to hinder the litigation. Rather, they

were destroyed pursuant to Dal-Tile’s email retention policy.

Therefore, we affirm the district court’s holding that there is

not a viable obstruction of justice claim under North Carolina

common law.

VI.

In conclusion, we reverse the district court’s grant of

summary judgment in favor of Dal-Tile on the sexual and racial

hostile work environment claims under Title VII, and the racial

hostile work environment claim under § 1981, and we remand these

claims for further consideration in the district court. We

affirm the district court’s grant of summary judgment in favor

of Dal-Tile on the constructive discharge claim and the North

Carolina obstruction of justice claim.

REVERSED IN PART, AFFIRMED IN PART, AND REMANDED

27
NIEMEYER, Circuit Judge, concurring in part and dissenting in
part:

This case involves a workplace allegedly made hostile by

the conduct of a customer of the employer. In recognizing that

employers can be liable in cases where the harassing conduct was

that of a third party, the majority extends the scope of Title

VII beyond what the Supreme Court has so far recognized. I have

grave concerns about such an extension when hostile work

environment claims were themselves an extension of Title VII,

which was designed to regulate the employer-employee

relationship.

But even recognizing that there are some adventuresome

cases concluding that an employer can be liable for its failure

to take action to protect its employees from a third party’s

harassment, see, e.g., Dunn v. Wash. Cnty. Hosp., 429 F.3d 689,

691 (7th Cir. 2005), I conclude that the majority’s opinion

today goes so far that it cannot find support even in them. An

employer in this kind of case may be liable at most for its own

negligence in allowing the conduct of its customers to turn its

workplace into a hostile work environment -- i.e., a work

environment that, as a result of the customers’ conduct, becomes

“permeated with discriminatory intimidation, ridicule, and

insult that is sufficiently severe or pervasive to alter the

conditions of [an employee’s] employment.” Harris v. Forklift
Sys., Inc., 510 U.S. 17, 21 (1993) (internal quotation marks and

citations omitted). As a negligence case, the analysis must

focus on identifying when the employer knew or should have known

that its employee was being subjected to harassment based on the

employee’s “race, color, religion, sex, or national origin,” 42

U.S.C. § 2000e-2(a)(1), and then on evaluating the adequacy of

the employer’s response at that point. See Burlington Indus.,

Inc. v. Ellerth, 524 U.S. 742, 759 (1998).

In this case, the majority concludes that a reasonable jury

could find Dal-Tile liable under Title VII for discriminating

against Lori Freeman, its employee, because it permitted a Dal-

Tile customer, Timothy Koester, to engage in continuous sex-

based and race-based harassment of Freeman for three years. I

believe, however, that a closer review of the record does not

support that overly generalized conclusion.

The record only supports the inference that Koester’s

conduct rose to the level of actionable harassment in the summer

of 2009. To be sure, Koester’s conduct in the office prior to

that point had been coarse, crude, and ugly. But there is

insufficient evidence in the record to allow a reasonable jury

to conclude that, prior to the summer of 2009, his conduct had

created a hostile or abusive working environment for Freeman at

Dal-Tile. In August 2006 (shortly after Freeman began her

employment at Dal-Tile), Freeman did hear Koester use the phrase

29
“black bitches” in Dal-Tile’s office when referring to a

photograph of two former employees. But she also heard a Dal-

Tile assistant manager, Sara Wrenn, immediately respond to

Koester, directing him “not to use that language here.” J.A.

76. And for nearly three years thereafter, Freeman “carried on

a working relationship with [Koester],” describing herself as

being “friendly with [him] as long as he wasn’t making . . .

lewd comments.” J.A. 126. When Freeman thought Koester was

behaving inappropriately, she would tell him to cut it out, just

as her coworkers did. As Wrenn explained:

[T]he minute [Freeman] started with [Dal-Tile], she
fit right in with us. And, you know, everybody knew
that [Koester] ran his mouth, and you know, like I
said, it was never malice, it was never malicious. He
was just crude, and everybody knew exactly how to
handle him and put him in his place, and Lori
[Freeman] fell right into that, and she had no
problems calling him out . . . .

J.A. 292. Similarly, Freeman stated that she had a good working

relationship with all of her coworkers, describing the office as

“very close knit.” J.A. 58. Thus, unlike the circumstances

presented in EEOC v. Cent. Wholesalers, Inc., 573 F.3d 167, 170

(4th Cir. 2009), and Mosby-Grant v. City of Hagerstown, 630 F.3d

326, 330 (4th Cir. 2010), where the plaintiff-employees were

surrounded by multiple individuals who regularly referred to

women as “bitches” and engaged in other demeaning conduct, the

30
record here is clear that Koester was the outlier in an

otherwise harmonious and harassment-free office environment.

A jury could find, however, that the circumstances for

Freeman did change in the summer of 2009 when she reasonably

began to perceive Koester’s conduct as being so offensive as to

make her work environment abusive. This is when Koester told

Freeman that he was as “fucked up as a nigger’s checkbook” and

then, several weeks later, called her a “black bitch.” But it

was also at this point that Dal-Tile intervened to protect

Freeman. The day after Koester made the “black bitch” comment

to Freeman, Dal-Tile told Koester that he was suspended from the

premises. And while Dal-Tile eventually agreed to conduct

business with Koester again, it was only with restrictions in

place that ensured that Freeman would not have to interact with

him. Indeed, Koester never made another inappropriate remark in

Freeman’s presence.

This is not a case where an employer knew that its employee

was experiencing actionable harassment but did nothing in

response. Rather, the record shows that Dal-Tile did indeed

intervene and intervened effectively. I would accordingly

affirm the district court’s summary judgment in favor of Dal-

Tile on all of Freeman’s claims, including her hostile work

environment claims.

31