In the
United States Court of Appeals
For the Seventh Circuit
No. 99-2682
LOUISE HILL,
Plaintiff-Appellant,
v.
AMERICAN GENERAL FINANCE, INCORPORATED,
a corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Illinois.
No. 96 C 242--William D. Stiehl, Judge.
Argued January 21, 2000--Decided May 4, 2000
Before POSNER, Chief Judge, and DIANE P. WOOD and
EVANS, Circuit Judges.
EVANS, Circuit Judge. Allegedly fed up with her
boss making highly offensive remarks, Louise Hill
complained and ultimately sued her employer
American General Finance, Incorporated for sexual
and racial harassment and for retaliating against
her for complaining about it, all under Title VII
(42 U.S.C. sec. 2000e et seq.). Prior to the
recent establishment of a standard for company
liability based on the conduct of supervisors
under Title VII, the district court granted
summary judgment dismissing Hill’s case. Our task
is to determine whether the grant of summary
judgment is consistent with the standard as it
was set out in Faragher v. City of Boca Raton,
524 U.S. 775, 118 S. Ct. 2275 (1998), and
Burlington Indus., Inc. v. Ellerth, 524 U.S. 742,
118 S. Ct. 2257 (1998).
Hill went to work in the defendant’s Alton,
Illinois, office in September 1994. She became a
lending/collection administrator. Her job was to
extend loans and credit, close on loans, and
collect past-due accounts. She worked in a one-
room office with up to eight other people,
including her supervisor Darin Brandt. At the
time, Hill was the only African-American working
in the tiny office.
Hill alleges that within a month of her arrival
in the office, Brandt began to act in a way which
amounted to sexual and racial harassment. He made
reference to the size of his penis. He said, "I
like a woman with a big ass, like Louise’s." He
asked her if a doctor’s appointment was for her
breasts or between her legs. He talked about the
ways he liked sex, the frequency of sex, and
about pornographic movies. He once, according to
Hill, rubbed his pelvis against her buttocks and
said, "Boy that feels good." He said, "Once you
go black, you never go back"; "Don’t come into
this office talking black, because this ain’t no
Aunt Jemima office"; he was "sick of black people
getting food stamps and having all those black
babies." In moving for summary judgment, AGF had
to accept Hill’s allegations as true. The company
also does not contest that Brandt’s conduct was
harassment.
On February 2, 1995, Hill wrote a letter to
AGF’s chief executive officer complaining of
Brandt’s behavior to customers and of his vulgar
language. She signed the letter "Lillie Rogers,"
representing herself as a customer. She wrote
another letter on February 6 which she signed "a
very worried and frighten[ed] employee." On
February 23 the Human Resources Department
conducted an investigation; Hill was interviewed,
and although the director of operations, Gary
English, suspected that Hill had written the
letters, Hill did not acknowledge that she had.
No other employees confirmed any of the
harassment, but some admitted they had
conversations of a sexual nature in the office.
On March 9 English issued Brandt a warning for
allowing such conversations to take place. About
the same time, English mentioned that AGF would
be opening additional offices and suggested the
possibility that Hill might be interested in
training in what seems to have been a self-
directed, computerized, instructional program,
called the BEST program, to be an assistant
manager. English considered Hill to be an
outstanding salesperson and that her talent for
dealing with people was the best he’d ever seen.
On April 14 Hill wrote a letter to English in
which she set out instances of harassment. This
time she signed her own name. Two days later,
Carleen Thompson, the company’s human resources
attorney, and Larry Bauer, outside counsel for
the company, went to Alton to investigate. They
conducted a follow-up investigation on April 26,
1995. Thompson concluded that she should issue a
written warning to Brandt, provide him with
additional training, transfer and demote him, and
transfer Hill to prevent retaliation from her co-
workers. On May 2, 1995, Brandt was transferred
to the Belleville branch office with a $10,000
reduction in pay. He received a written warning
for failing to cooperate with the investigation
and for inappropriate conduct. At the end of
April, Thompson informed Hill that she was being
transferred to the Kingshighway office in St.
Louis. Hill says it was a transfer to a dangerous
high-crime area in which she was required to make
door-to-door collection calls; AGF says evening
calls were extremely rare. Hill also claims that
the manager at Kingshighway was openly hostile to
her; she says he recommended that she be fired
for allegedly providing competitors with names of
prospective loan applicants, but she was
exonerated. Nevertheless, she resigned on July 6,
1995.
We review grants of summary judgment de novo,
drawing all reasonable inferences from the facts
in favor of the nonmovant. Parkins v. Civil
Constructors of Illinois, Inc., 163 F.3d 1027
(7th Cir. 1999). Summary judgment is appropriate
only if "there is no genuine issue as to any
material fact and . . . the moving party is
entitled to a judgment as a matter of law."
Federal Rule of Civil Procedure 56(c). We may
affirm on any ground on which there is support in
the record. Parkins. We evaluate this case, then,
to see if the record is sufficiently developed
for us to fairly apply the Faragher-Ellerth
standard or whether a remand to the district
court is required for an expansion of the record.
Whether a remand is necessary is a fact-based
call. Some cases have been remanded for necessary
development of the record. In fact, the Ellerth
case itself was remanded so that the "District
Court will have the opportunity to decide whether
it would be appropriate to allow Ellerth to amend
her pleading or supplement her discovery."
Ellerth, at 2271. Other cases have done pretty
much the same thing. See Rubidoux v. Colorado
Mental Health Inst. Pueble, 173 F.3d 1291 (10th
Cir. 1999); Burrell v. Star Nursery, Inc., 170
F.3d 951 (9th Cir. 1999); Wilson v. City of
Plano, Texas, 164 F.3d 900 (5th Cir. 1999). On
the other hand, of course, the Court found the
record in Faragher sufficient to order
reinstatement of the judgment for Faragher.
Similarly, although with a judgment for the
defendant, we found in Shaw v. Autozone, Inc.,
180 F.3d 806, 814 (7th Cir. 1999), cert. denied,
120 S. Ct. 790 (2000), that "while the standard
for liability has changed, the record and
arguments were fully developed for application of
the new standard."
The new standard is:
An employer is subject to vicarious liability to
a victimized employee for an actionable hostile
environment created by a supervisor with
immediate (or successively higher) authority over
the employee. When no tangible employment action
is taken, a defending employer may raise an
affirmative defense to liability or damages,
subject to proof by a preponderance of the
evidence . . . . The defense comprises two
necessary elements: (a) that the employer
exercised reasonable care to prevent and correct
promptly any sexually harassing behavior, and (b)
that the plaintiff employee unreasonably failed
to take advantage of any preventive or corrective
opportunities provided by the employer or to
avoid harm otherwise. While proof that an
employer had promulgated an anti-harassment
policy with complaint procedure is not necessary
in every instance as a matter of law, the need
for a stated policy suitable to the employment
circumstances may appropriately be addressed in
any case when litigating the first element of the
defense. . . .
No affirmative defense is available, however,
when the supervisor’s harassment culminates in a
tangible employment action, such as discharge,
demotion, or undesirable reassignment.
Ellerth, at 2270; see also Faragher at 2292-2293.
Although Hill claims that she suffered an
adverse employment action as part of the
retaliation against her, she does not argue that
she suffered a tangible employment action as part
of her harassment claims. In fact, in her
deposition she states on several occasions that
in her mind the adverse employment action was not
based on either racial or sexual harassment, but
rather was in retaliation for her lodging her
complaint. Therefore, under Ellerth and Faragher
the company has a possible defense to the
harassment claims, and our review of the record
convinces us that AGF has established the defense
as a matter of law.
One element of the defense involves whether the
employee took advantage of opportunities to
prevent harassment. On the basis of the record we
must conclude that Hill did not notify the
company of the harassment until her letter of
April 14. The February letters were not a
reasonable effort at notification. They were not
signed and she did not acknowledge that she had
written those letters when the company
investigated the complaints set out in the
letters. In fact, Hill began her April 14 letter
by apologizing: "Please accept my apology for not
being completely honest during the interview with
you and the attorneys for the company." She then
proceeded to lay out some of her complaints about
Mr. Brandt and his treatment of her. So, starting
with her letter of April 14 Hill took reasonable
steps to correct the situation which existed in
the Alton office. But the same cannot be said for
her actions before April 14.
The other element of the defense is whether the
company "exercised reasonable care to prevent and
correct promptly any sexually harassing
behavior." It is not disputed that after the
April 14 letter the company took immediate
corrective action. In a flash, after the receipt
of the letter, the company again investigated
Brandt’s conduct. Hill testified that English
came to Alton on April 16 in response to her
complaint and told her that if she had any
problems she should call him. In fact, by Hill’s
own account, she and Brandt were in the Alton
office together for only 5 or 6 days after the
company received her complaint. Carleen Thompson
and Larry Bauer also conducted an investigation,
and as a result, Thompson concluded that both
Brandt and Hill should be transferred out of the
Alton office. Brandt’s salary was cut by $10,000
in the transfer.
In regard to this element of the defense, we
are also told that we may consider whether the
company had policies or procedures to help
employees deal with problems of harassment. While
an appropriate anti-harassment policy with
complaint procedure is not always necessary to
sustain the defense, it is a relevant
consideration. Ellerth.
AGF had a number of policies in place at the
time of these events./1 While they may leave
room for improvement, the policies get the job
done. One was entitled "Equal Employment
Opportunity; Policy Regarding," dated August 1,
1994. It set out that AGF’s policy was to comply
with laws regarding equal employment without
regard to race. Questions regarding this policy
were to be directed to the group manager of
Employee and Field Relations. Another policy
statement was entitled "Sexual Harassment in the
Workplace; Policy Regarding." It set out AGF’s
goal "to maintain a work environment free of
sexual harassment." The policy prohibited "sexual
advances, requests for sexual favors, and other
verbal or physical conduct of a sexual nature"
when, as relevant here, the "conduct has the
purpose or effect of substantially interfering
with an individual’s work performance or creating
a work environment that is reasonably perceived
by the individual to be intimidating, hostile, or
offensive." A complaint procedure was set out in
another memorandum dated May 16, 1994, and
involved four basic levels. The first is to the
immediate supervisor or manager. If that fails
(as it obviously would here) or if the "employee
does not feel it is a matter that can be
discussed with the supervisor," the employee can
discuss the matter with the appropriate Field
Relations Consultant; the Associate Director,
Employee Relations and Benefits; or the Director
of Human Resources and Systems Management. The
third is a complaint to the Fair Employment
Practices Compliance Officer. A telephone number
for complaints is provided. The fourth level is
the Personnel Administration Committee through
the Director of Human Resources and Systems
Management.
Hill claimed that she did not recall having
received copies of the policies. Perhaps not, but
Carleen Thompson testified at her deposition that
the policies within each branch office were kept
in a set of notebooks in a "public access type
place" where the employees could look at them.
More importantly, Hill testified that she knew
when she began to work for AGF that there was a
human resource group in the company whose job it
was to make sure there was no sexual or racial
harassment of employees. She testified that she
knew she could complain to that group if there
was a problem with harassment. She also
acknowledged knowing that she could talk with
English about complaints. And, of course, that is
precisely what she did. While it is true that her
anonymous letter and the one signed with a
fictitious name might show that she was somewhat
apprehensive about complaining, we have
previously determined that apprehension does not
eliminate the requirement that the employee
report harassment: "an employee’s subjective
fears of confrontation, unpleasantness or
retaliation do not alleviate the employee’s duty
under Ellerth to alert the employer to the
allegedly hostile environment." Shaw v. Autozone,
at 813.
As a matter of law, on the record as it exists,
AGF is entitled to summary judgment. Darin
Brandt’s behavior, as alleged, was ignorant and
loutish. However, when the company was notified
of his behavior, it reacted with commendable
alacrity in almost a textbook example of what is
supposed to happen. Having failed to recover
damages, Hill may not see it quite that way, but,
in fact, the goal of Title VII is prevention, not
damages. When prevention occurs and there is no
adverse employment action, strict liability does
not apply. In Faragher the Court said:
Although Title VII seeks "to make persons whole
for injuries suffered on account of unlawful
employment discrimination," [citation omitted],
its "primary objective" like that of any statute
meant to influence primary conduct, is not to
provide redress but to avoid harm.
At 2292.
Hill also contends that she was retaliated
against in her transfer to Kingshighway and her
treatment once she got there. To prevail on this
claim, Hill must show that she suffered an
adverse job action because of her complaints of
harassment. McKenzie v. Illinois Dep’t of
Transp., 92 F.3d 473 (7th Cir. 1996). Absent
direct evidence of retaliation, she must show
that (1) she engaged in activity protected under
Title VII; (2) she suffered an adverse employment
action; and (3) a causal connection exists
between the adverse action and her participation
in the protected activity. Smart v. Ball State
University, 89 F.3d 437 (7th Cir. 1996). An
adverse action occurs when an employee is fired
or demoted, suffers a decrease in benefits or
pay, or is given a significantly lesser job. Not
every unwelcome employment action qualifies as an
adverse action. Negative reviews, a change in job
title, an increased distance to travel to work,
or a lateral transfer do not, by themselves,
qualify. Id.
After Hill’s April 14 letter, she contends that
she was retaliated against by a transfer to
Kingshighway and then by being forced out of a
training program. The transfer, however, was to
a position which presented better opportunities
for her as Hill herself admitted in her
deposition. The training program was a self-
directed program which she voluntarily started
when she arrived at Kingshighway. She resigned
her position before completing the program. Other
"allegations" of retaliation, such as that her
new supervisor rummaged in her desk drawers and
waste can and listened to her telephone calls,
cannot be considered adverse employment actions.
In fact, at her deposition she acknowledged that
she had no facts to support those claims.
The most serious problem Hill encountered at
Kingshighway occurred when her supervisor
recommended that she be terminated. But he had a
reason; Hill had given a friend at a competing
company information about loans AGF had rejected
(presumably so the friend’s company could make
the loans). For her efforts to help her friend,
she had obtained a one-percent kickback, all of
which, needless to say, was in violation of AGF’s
policies, though Hill claimed she did not know
about any such policies. AGF gave her a second
chance and rejected the recommendation to
terminate her. Given what Hill did, it is a
stretch to think that, in fact, her supervisor
was retaliating against her in this instance for
complaining about harassment at another office by
another supervisor. In short, Hill cannot sustain
a claim of retaliation.
Accordingly, we are convinced that the record
before us supports the grant of summary judgment
and that it would be a wasteful and fruitless
exercise to require the district court to look
again at the matters we just considered. The
judgment is AFFIRMED.
/1 The policies were marked as exhibits at Hill’s
deposition. However, they were not included in
the original appeal record. On January 27, 2000,
we granted AGF’s motion to supplement the record
with the documents.
DIANE P. WOOD, Circuit Judge, dissenting in part.
The recent decisions from the Supreme Court on
the subject of workplace harassment emphasize the
importance of the policy on harassment that a
company adopts and maintains, when liability for
the actions of a supervisor are at issue. See
Faragher v. City of Boca Raton, 524 U.S. 775
(1998); Burlington Industries, Inc. v. Ellerth,
524 U.S. 742 (1998). When an employee who
complains of sexual or other forbidden harassment
from a supervisor can point to a tangible
employment action, the employer is subject to
vicarious liability no matter what policy it has
on the books. If the complaining employee has not
suffered from a tangible employment action,
however, the employer is liable unless it can
establish the two elements of a new affirmative
defense. Those elements are (1) that the employer
exercised reasonable care both to prevent and to
correct promptly any sexually (or, as here,
racially) harassing behavior, and (2) that the
plaintiff employee unreasonably failed to take
advantage of any preventive or corrective
opportunities that were provided by the employer
or otherwise available. Faragher, 524 U.S. at
807; Ellerth, 524 U.S. at 765.
Louise Hill’s case arose before either Faragher
or Ellerth was decided, and so it is hardly
surprising that the district court did not follow
the language of those opinions chapter, book, and
verse. Nevertheless, it is our duty now, on de
novo review from the grant of summary judgment in
favor of defendant American General Finance
(AGF), to decide whether the company is entitled
to prevail as a matter of law. The majority has
found that the record is sufficiently developed
to permit this court to apply the new legal
standards and to affirm the district court’s
judgment. With respect, I cannot agree.
Significant facts remain to be developed on both
parts of the employer’s affirmative defense--a
defense, it is important to remember, on which
the defendant bears the burden of proof, not the
plaintiff. Looking at the facts in the light most
favorable to Hill, as we must, I cannot find that
AGF has succeeded in meeting that burden.
Like the majority, I find no serious dispute
over the question whether Hill suffered any
tangible employment action, such as discharge.
There is no hint of that in the record. I also
agree that the Faragher/Ellerth approach applies
to cases based on racial harassment in the
workplace, just as it does to sexual harassment.
See Allen v. Michigan Dept. of Corrections, 165
F.3d 405, 411 (6th Cir. 1999); Deffenbaugh-
Williams v. Wal-Mart Stores, Inc., 156 F.3d 581,
593 (5th Cir. 1998); Wright-Simmons v. City of
Oklahoma City, 155 F.3d 1264, 1270 (10th Cir.
1998). The central question is thus whether it is
clear beyond dispute that AGF has, on the basis
of undisputed facts, established its affirmative
defense.
Unlike the majority, I begin with an analysis
of AGF’s policy against workplace harassment--a
policy that the majority concedes left some "room
for improvement." Ante at 6. One document to
which AGF points did no more than to say that it
was AGF’s policy to comply with laws regarding
equal employment without regard to race, and to
mention that questions with respect to this
policy were to be directed to the group manager
of employee and field relations. What kind of
policy is this? Was AGF trying to communicate to
its employees that it had decided not to be a
scofflaw? Employees would have had a right to
assume that their employer was not deliberately
setting out to violate relevant federal and state
statutes. This policy accomplishes nothing,
unless we are giving employers credit for stating
the obvious and for giving a telephone number for
further inquiries. Its unsatisfactory nature is
apparent when we compare it to the careful
policies so many employers have adopted, both
before and since the decisions in Faragher and
Ellerth. Those policies take care to define for
employees what kinds of behavior are forbidden,
to underscore the fact that even supervisory
employees must treat everyone with respect, to
set forth alternate ways to voice complaints (in
case one route is effectively blocked because the
harassing supervisor would get in the way), and
to stress the importance of preventive measures.
Careful policies describe the disciplinary
measures the company might use in a harassment
case, encourage employees to make complaints,
state unequivocally that retaliation will not be
tolerated, and explain that complaints will be
examined in a confidential manner. In addition,
policies should describe the responsibility of
supervisors (and employees) who learn of
harassment through informal channels. See, e.g.,
Montero v. Agco Corp., 192 F.3d 856, 862 (9th
Cir. 1999); Shaw v. Autozone Inc., 180 F.3d 806,
809 (7th Cir. 1999); Fenton v. HiSan Inc., 174
F.3d 827, 833 (6th Cir. 1999); Wilson v. Tulsa
Junior College, 164 F.3d 534, 541 (10th Cir.
1998); Lockard v. Pizza Hut, Inc., 162 F.3d 1062,
1066 (10th Cir. 1998). A second policy on which
AGF relied addressed sexual harassment
specifically. The majority describes it, and so
I will not repeat every detail. Even though it
goes into somewhat greater detail about the kind
of behavior the policy addresses, it too does not
meet the standards that have been found to be
satisfactory. Yet another memorandum outlines a
four-step complaint procedure.
Even if we were to agree that the latter two
policies somehow met the legal requirements that
the Supreme Court had in mind, however, more is
necessary. Critically, the employer has the
burden not only to show that it has enacted an
adequate policy, but also that it has taken
reasonable care (1) to prevent and (2) promptly
to correct any harassing behavior. If the
employees do not know that a policy exists, then
even the most admirable policy will not
accomplish either of those goals. And it is on
this point that AGF is most vulnerable. Hill
claimed that she did not recall ever receiving
those policies. AGF did not try to refute this
testimony by showing, as many employers do, that
Hill signed for receipt of the policies when she
joined the company, nor did it introduce evidence
indicating when the policies were first released
to the workforce. It did not do this because, at
least as the record shows so far, that never
happened. Instead, the best AGF could do was to
assert that the policies were buried in some
notebooks that were themselves located in a
"public access area" and accessible to employees.
If this is all it did (and we must so assume at
this stage of the proceedings), I would find it
to be insufficient to show the required
reasonable care for purposes of the affirmative
defense. Cf. Savino v. C.P. Hall Co., 199 F.3d
925, 932-33 (7th Cir. 1999) (sexual harassment
policy posted, with instructions on how to report
harassment); Montero, 192 F.3d at 862 (handbook
with harassment policy distributed to all
employees as well as a separate memorandum and
two pamphlets describing that policy); Shaw, 180
F.3d at 809 (copy of harassment policy given to
each employee in employee handbook and training
provided periodically to managers on the
company’s sexual harassment policies and
guidelines). Employees cannot be expected to go
around opening up all sorts of unmarked binders,
to see if by any chance they might contain the
company’s harassment policy.
Because AGF in my view fails the first of the
two required showings for the affirmative
defense, it is not entitled to summary judgment.
The Supreme Court indicated in Faragher and
Ellerth that the two factors were independent
criteria, both of which had to be satisfied.
Thus, even if the majority is correct and the
uncontested facts showed that Hill had some idea
how to complain, I would regard the summary
judgment as incorrect. In fact, however, the
uncontested facts do not show that she knew what
to do. Granted, she did not follow the procedures
prescribed in the collection of policies and
memoranda on which AGF is now relying
(undoubtedly because she did not know what they
said). This failure on her part cannot be called
unreasonable as a matter of law, since the
measures the company took to bring the proper
procedures to her attention are subject to
dispute.
I concur in the majority’s rejection of Hill’s
retaliation claim, which does not rest on the
kinds of disputed facts that should allow her to
proceed on the harassment claim. I would,
however, reverse the entry of summary judgment
and remand Hill’s harassment claim for further
proceedings, and to that extent I respectfully
dissent.