Craig v. M&O Agencies, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

EILEEN CRAIG, 
Plaintiff-Appellant,
v.
M&O AGENCIES, INC., an Arizona
corporation dba Mahoney Group; No. 05-16427
LEON BYRD, individually and in his
capacity as President of M&O  D.C. No.
CV-04-00232-MLR
Agencies, Incorporated dba The
Mahoney Group; PATRICIA OPINION
ROBERTS, an individual & wife of
Leon Byrd; JOHN/JANE DOES, 1-10;
ABC CORP, 1-10; ABC
PARTNERSHIPS, 1-10,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Arizona
Manuel L. Real, District Judge, Presiding

Argued and Submitted
June 15, 2007—San Francisco, California

Filed August 9, 2007

Before: Alfred T. Goodwin, Jay S. Bybee, and
Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Bybee

9511
 CRAIG v. M&O AGENCIES, INC. 9515

COUNSEL

Ivan K. Mathew & Susan T. Mathew, Mathew & Mathew,
Phoenix, Arizona, for the appellant.

Stephanie J. Quincy & Gregg J. Tucek, Sherman & Howard,
Phoenix, Arizona, for the appellees.
9516 CRAIG v. M&O AGENCIES, INC.
OPINION

BYBEE, Circuit Judge:

Eileen Craig appeals the district court’s grant of summary
judgment in favor of M&O Agencies (dba The Mahoney
Group),1 Leon Byrd and Patricia Roberts (collectively “Ap-
pellees”) in her sexual harassment suit. Craig alleges that the
repeated advances of her direct supervisor, Leon Byrd, and
the company’s cursory investigation constituted an actionable
claim under Title VII of the Civil Rights Act of 1964, 42
U.S.C. §§ 2000e et seq., as well as various Arizona state laws.
We reverse the grant of summary judgment with respect to
The Mahoney Group on the Title VII hostile environment
claim and the assault and battery claim brought under a theory
of respondeat superior, but affirm summary judgment on all
other claims. We affirm the district court’s grant of summary
judgment for defendants on all claims with respect to Patricia
Roberts, and all claims (except assault and battery and inten-
tional infliction of emotional distress) with respect to Leon
Byrd. With respect to the assault and battery claim, we affirm
the district court’s denial of summary judgment with respect
to Leon Byrd, but we reverse the dismissal and reinstate the
claim. We reverse the district court’s grant of summary judg-
ment for Leon Byrd on the intentional infliction of emotional
distress claim and remand to the district court for further pro-
ceedings.

I. BACKGROUND

This suit stems from incidents inappropriate in any work
environment and made all the more egregious here because
they were perpetrated on the plaintiff by her direct supervisor.
1
M&O Agencies is the legal name of the Arizona corporation which
does business as The Mahoney Group. For convenience, we will defer to
the practice of the parties and refer to the corporate defendant as “The
Mahoney Group.”
 CRAIG v. M&O AGENCIES, INC. 9517
The following facts are largely undisputed by the parties.
Craig worked for The Mahoney Group as the branch manager
in Tucson and reported to Byrd who was the interim presi-
dent. Over the course of several months, Byrd made repeated
inappropriate comments to Craig about her legs and how she
should wear shorter skirts. Although Craig thought the com-
ments were obnoxious, she was not particularly offended. The
situation took a turn for the worse on August 8, 2003, when,
at Byrd’s invitation, Craig met him for drinks after work at an
On the Border restaurant. She had previously been to other
happy hours and lunches with Byrd to discuss work related
matters and thought this would be a similar meeting. Craig
and Byrd drank wine and at one point, Byrd asked Craig “if
she had ever thought of making love to him” and told her that
he would like to take off the blue dress she was wearing.
Later Byrd invited her back to his house to drink more wine
in his hot tub and told her that “it’s not a matter of if but
when” something would happen between them. Craig laughed
and shook her head at Byrd’s comments but did not leave the
restaurant.

Around 8:00 p.m., Craig excused herself to go to the rest-
room, and moments later Byrd followed her into the women’s
bathroom. When Craig exited the stall, Byrd approached her,
grabbed her arms, “gave her an open-mouthed kiss and stuck
his tongue in her mouth.” The kiss ended when someone
walked into the restroom. Byrd exited and Craig remained in
the restroom for five minutes to compose herself, after which
she picked up her purse from the table and left the restaurant
alone while Byrd was paying the check. Byrd called Craig’s
phone later that night, but hung up when her husband
answered. Craig’s husband urged her to report the incident,
but she refused.

Approximately one week after the happy-hour incident, the
tenacious Byrd called Craig from the golf course, told her she
was beautiful and asked her out for another drink, which she
declined. Undeterred, Byrd later called Craig from a hotel
9518 CRAIG v. M&O AGENCIES, INC.
room in Wisconsin and upon his return to Tucson went into
Craig’s office and repeatedly asked her if she would like to
make love to him. Craig’s response was consistently an
emphatic “no.” On August 14, 2003, Byrd told Craig that he
“wanted” her and asked her if she remembered telling him
that she “wanted to make love to him.” Craig said “nothing’s
[sic] is going to happen between us” and denied ever telling
him that she “wanted to make love to him.”

Shortly thereafter Byrd apologized to Craig and told her
that he wanted to remain friends and put the whole situation
behind him, but two days later asked Craig why she was cold
and distant toward him. He again asked her why she didn’t
remember saying that she wanted to “make love to him,” and
told her that he still had feelings for her, but said that if she
wanted him to leave her alone, he would do so. At some point
Byrd told Craig that he didn’t think he could work with her
anymore, but never explicitly conditioned her continued
employment or promotion on entering a sexual relationship
with him. On August 27, 2003, Craig finally reported Byrd’s
conduct to Dawn Zimbleman, one of the individuals (in addi-
tion to Byrd) listed on the company’s sexual harassment pol-
icy to whom complaints should be made. Reporting the claim
spurred the company to immediate action. Byrd was
instructed to stay away from Craig and to stop making sexual
comments to her, and Craig began reporting to John McEvoy,
another company executive. Additionally, the company
appointed a senior executive to investigate the complaint, but
replaced him with the Group’s outside corporate counsel,
Denis Fitzgibbons, when it was brought to the company’s
attention that the executive had previously been investigated
for sexual harassment. Craig alleges that she provided Fitz-
gibbons with the names of other people who had been sexu-
ally harassed by Byrd, but Fitzgibbons declined to include any
of this information in his report or follow up on the leads.

After investigating, Fitzgibbons recommended that (1) the
Group offer Craig and her husband counseling sessions at the
 CRAIG v. M&O AGENCIES, INC. 9519
company’s expense; (2) Byrd receive a severe written repri-
mand worded in such a way as to put him on notice that if he
engaged in this type of behavior again, he would be termi-
nated; (3) Byrd attend sexual harassment sensitivity training;
and (4) all of the Group managers and supervisors receive
sexual harassment training in the near future.

In late September 2003, Craig was told that the investiga-
tion was complete, and she began reporting to Byrd again.
Craig claims that Byrd retaliated against her “by ignoring her,
failing to respond to her emails, providing budget information
to her late, and by corresponding with the corporate office
instead of her” about situations she would normally handle.
The company did conduct sexual harassment training for the
executives, but Craig alleges that during one sexual harass-
ment training session, the Company’s chairman came in and
made an inappropriate joke.

Craig claims that due to the ineffective response of The
Mahoney Group and Byrd’s repeated comments, she began to
get sick, experienced panic attacks, and had emotional diffi-
culties and trouble sleeping. The company claimed it was
unable to remove Byrd from the Tucson office or transfer
Craig, and consequently re-assigned some of her job func-
tions. Eventually Craig resigned, citing medical problems and
stress.

Craig filed a complaint, which she later amended, alleging:
(1) sex discrimination under Title VII, (2) intentional inflic-
tion of emotional distress, (3) negligent investigation, (4)
assault and battery, (5) negligent hiring supervision and reten-
tion, (6) an Arizona state law civil rights claim, (7) retaliation
in violation of Title VII, (8) invasion of privacy, (9) defama-
tion and slander, and (10) vicarious liability under a theory of
respondeat superior. She listed The Mahoney Group, Leon
Byrd and Byrd’s wife, Patricia Roberts, as defendants.

Appellees filed a motion for summary judgment on Febru-
ary 8, 2005. After a hearing, the district court granted sum-
9520 CRAIG v. M&O AGENCIES, INC.
mary judgment as to defendants The Mahoney Group and
Patricia Roberts on all claims. The court further granted sum-
mary judgment with respect to Byrd as to all causes of action
except for the assault and battery claim, which he dismissed
without prejudice to allow for filing in state court. We note
that contrary to common court practices, the district court did
not explain its reasoning either orally from the bench or in its
terse order.

II. DISCUSSION

A. Standard of Review

We review a grant of summary judgment de novo to deter-
mine whether there are any genuine issues of material fact at
issue and whether the district court correctly applied the rele-
vant law. Sengupta v. Morrison-Kundsen Co., 804 F.2d 1072,
1074 (9th Cir. 1986). All reasonable inferences must be
drawn in the nonmoving party’s favor, but are limited “to
those upon which a reasonable jury might return a verdict.”
U.S. ex rel. Anderson v. N. Telecom, Inc., 52 F.3d 810, 815
(9th Cir. 1995); see also Celotex Corp. v. Catrett, 477 U.S.
317, 322-23 (1986). We may affirm if the result reached by
the district court was correct even if the district court relied
on an erroneous ground. Lowe v. City of Monrovia, 775 F.2d
998, 1007 (9th Cir. 1985), as amended, 784 F.2d 1407 (9th
Cir. 1986).

B. Craig’s Title VII Claims Against The Mahoney Group

[1] We first address The Mahoney Group’s liability under
Title VII for Byrd’s actions. Title VII of the Civil Rights Act
of 1964 forbids an employer “to fail or refuse to hire or to dis-
charge any individual, or otherwise to discriminate against
any individual with respect to his compensation, terms, condi-
tions, or privileges of employment, because of such individu-
al’s . . . sex.” 42 U.S.C. § 2000e-2(a)(1). Title VII’s
prohibition “is not limited to ‘economic’ or ‘tangible’ dis-
 CRAIG v. M&O AGENCIES, INC. 9521
crimination,” but includes sexual harassment that is so “se-
vere or pervasive” as to “alter the conditions of [the victim’s]
employment and create an abusive working environment.”
Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 67 (1986)
(internal quotation marks and citations omitted, alterations in
original).

[2] The Court outlined the principles governing employer
liability for sexual harassment in Burlington Indus., Inc. v.
Ellerth, 524 U.S. 742 (1998), and Faragher v. City of Boca
Raton, 524 U.S. 775 (1998), both of which involved the
harassment of an employee by her direct supervisor. The
Court divided cases in which a supervisor harassed a subordi-
nate into two categories. The first category involves situations
where “a supervisor exercising his authority to make critical
employment decisions on behalf of his employer takes a suffi-
ciently concrete action with respect to an employee.” Holly D.
v. Cal. Inst. of Tech., 339 F.3d 1158, 1167 (9th Cir. 2002). In
these situations, termed “tangible employment action” or
“quid-pro-quo” harassment, the employer may be held vicari-
ously liable under traditional agency law. Id.; see also Ellerth,
524 U.S. at 760-65. In the second category, which are known
as “hostile environment” claims, the Court tempered the
agency principles by allowing the employer to assert an affir-
mative defense if the employer “is able to establish that it
acted reasonably and that its [ ] employee acted unreason-
ably.” Holly D., 339 F.3d at 1167; see also Ellerth, 524 U.S.
at 760-65. We consider both theories.

1. Liability under a quid pro quo theory

To prove actionable harassment under a quid pro quo or
“tangible employment action” theory, Craig must show that
Byrd “explicitly or implicitly condition[ed] a job, a job bene-
fit, or the absence of a job detriment, upon an employee’s
acceptance of sexual conduct.” Nichols v. Frank, 42 F.3d 503,
511 (9th Cir. 1994). If a plaintiff is able to make such a show-
ing, the employer is strictly liable for the supervisor’s con-
9522 CRAIG v. M&O AGENCIES, INC.
duct. Id. at 510 (“employers are held strictly accountable if
they place in positions of authority persons who extract sexual
favors from those over whom they exercise power.”).

[3] Craig does not allege that Byrd explicitly conditioned
her continued employment with The Mahoney Group on her
acquiescing to sexual relations with him. She did testify that
she felt she had to consent if she wanted to keep her job, yet
she offers little else to support her contention. Byrd’s com-
ment “I just don’t think I can work with you anymore” is
merely a “vague and unsupported allegation,” which we have
held is insufficient to cause a reasonable woman to believe
that retaining her job was conditioned on having sex with her
supervisor. See Holly D., 339 F.3d at 1176. Additionally, sev-
eral other senior executives approached Craig after she
reported the harassment and reassured her that her job was not
in jeopardy. Because Craig, who did not acquiesce to Byrd’s
demands, was neither demoted nor fired, nor did she suffer
any other “tangible employment action,” id. at 1173, we agree
with the district court that Craig has not made out a prima
facie case for liability under Title VII on a theory of quid pro
quo harassment.

2. Liability under a hostile environment theory

Craig alternatively could sustain her Title VII action under
a hostile work environment theory of liability. To make a
prima facie case of a hostile work environment, a person must
show “that: (1) she was subjected to verbal or physical con-
duct of a sexual nature, (2) this conduct was unwelcome, and
(3) the conduct was sufficiently severe or pervasive to alter
the conditions of the victim’s employment and create an abu-
sive working environment.” Fuller v. City of Oakland, 47
F.3d 1522, 1527 (9th Cir. 1995) (internal quotations omitted).
Additionally, “[t]he working environment must both subjec-
tively and objectively be perceived as abusive.” Id. (citing
Harris v. Forklift Sys., Inc., 510 U.S. 17, 20-21 (1993)).
Objective hostility is determined by examining the totality of
 CRAIG v. M&O AGENCIES, INC. 9523
the circumstances and whether a reasonable person with the
same characteristics as the victim would perceive the work-
place as hostile. Id. Finally, to find a violation of Title VII,
“conduct must be extreme to amount to a change in the terms
and conditions of employment.” Faragher, 524 U.S. at 788;
see also Fuller, 47 F.3d at 1527.

[4] An employer may be vicariously liable under a hostile
environment theory when the harassment is perpetrated by a
supervisor “with immediate (or successively higher) authority
over the employee.” Faragher, 524 U.S. at 807. When no
“tangible employment action” (such as firing or demotion) is
taken, an employer may avoid liability by asserting a “reason-
able care” defense. An employer can sustain the affirmative
defense if it shows by the preponderance of the evidence “(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.” Id.; see also Holly D.,
339 F.3d at 1177. Reviewing the record de novo to determine
whether summary judgment was proper, we conclude that
there are sufficient triable issues of fact to overcome summary
judgment with respect to Craig’s prima facie case, and that
The Mahoney Group did not successfully assert the “reason-
able care” affirmative defense.

a. Craig’s prima facie case

Byrd’s conduct clearly satisfies the first two prongs of the
Fuller test. Byrd’s behavior was explicitly sexual in nature,
and unwelcome, as Craig repeatedly rebuffed his advances
and eventually reported his conduct to the company. We also
find that Byrd’s conduct meets the requirement of being both
subjectively and objectively abusive. Craig testified that she
felt Byrd’s comments and actions—particularly the incident
in the bathroom—were abusive and made her feel uncomfort-
able. The conduct also met the objective standard: A reason-
9524 CRAIG v. M&O AGENCIES, INC.
able woman in Craig’s position could feel that Byrd’s
comments and actions were hostile, demeaning and abusive.

[5] Craig’s prima facie showing turns on whether or not
Byrd’s actions were pervasive and serious enough to amount
to “a change in the terms and conditions of employment.”
Faragher, 524 U.S. at 788. The Supreme Court has cautioned
that “simple teasing, offhand comments, and isolated inci-
dents (unless extremely serious) will not amount to discrimi-
natory changes in the terms and conditions of employment.”2
Id. (internal citation and quotation marks omitted); see also
Candelore v. Clark County Sanitation Dist., 975 F.2d 588,
590 (9th Cir. 1992) (per curiam) (finding “isolated incidents
of sexual horseplay” insufficient to make a working environ-
ment “hostile”). Appellees draw our attention to some of our
prior cases to suggest that conduct must be more egregious
than Byrd’s in order to sustain an action under Title VII. See,
e.g., Little v. Windermere Relocation, Inc., 301 F.3d 958, 967-
68 (9th Cir. 2002) (involving a plaintiff who was raped three
times in one night by a business associate whose actions were
essentially condoned by the employer); Draper v. Coeur
Rochester, Inc., 147 F.3d 1104, 1105-06 (9th Cir. 1998)
(involving an employee who made sexual remarks to a female
co-worker over the loudspeakers at work and commented
about her body to male co-workers). Although these shocking
examples amply illustrate a level of conduct that is sufficient,
they do not establish minimum behavior. We are not per-
suaded that Title VII requires proof of such severe or shock-
ing behavior.

[6] We have repeatedly held that sexual-based conduct that
is abusive, humiliating or threatening is sufficient to make a
prima facie claim under Title VII and have found liability in
2
Factors a court may consider are “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.” Harris, 510 U.S. at 23.
 CRAIG v. M&O AGENCIES, INC. 9525
situations where the conduct was much less onerous than
Byrd’s propositions. See, e.g., Ellison v. Brady, 924 F.2d 872,
873, 880 (9th Cir. 1991) (reversing a summary judgment
grant for the employer, finding that a reasonable woman could
find a colleague’s misguided “love letter” hostile and abusive,
and holding that “[w]ell-intentioned compliments by co-
workers or supervisors can form the basis of a sexual harass-
ment cause of action”); Steiner v. Showboat Operating Co.,
25 F.3d 1459, 1461-63 (9th Cir. 1994) (reversing a grant of
summary judgment where a plaintiff’s supervisor called her
“offensive names based on her gender,” confronted her in
front of other employees and customers and criticized her
using derogatory, gender-based language); Fuller, 47 F.3d at
1522, 1527-28 (reversing a grant of summary judgment for
the defendant city, finding that the behavior of plaintiff’s ex-
boyfriend—repeatedly calling her house and hanging up,
threatening to kill himself, running her off the road and get-
ting her unlisted number—constituted an actionable claim
under Title VII).

[7] Byrd’s conduct falls somewhere between mere isolated
incidents or offhand comments, which do not amount to a
Title VII claim, see, e.g., Brooks v. City of San Mateo, 229
F.3d 917 (9th Cir. 2000); Kortan v. Cal. Youth Auth., 217
F.3d 1104, 1106 (9th Cir. 2000), and serious and pervasive
harassment, that clearly comes within Title VII, see, e.g.,
Draper, 147 F.3d at 1105-06. Although Byrd’s actions were
physically less threatening than those at issue in Fuller,
Byrd’s position as Craig’s immediate boss made his actions
emotionally and psychologically threatening; repeated pres-
sure to perform sexual favors for one’s boss is certainly more
coercive than the misguided “love letter” at issue in Ellison.
Craig was not subjected to Byrd’s comments and propositions
for a period of years, however, the time period over which it
occurred was not de minimis. The harassing behavior
included repeated comments several months before the bath-
room encounter and included at least four significant incidents
after. Byrd’s actions, when viewed from his perspective,
9526 CRAIG v. M&O AGENCIES, INC.
might seem innocuous enough, but when viewed from the
perspective of a “reasonable woman,” his behavior could be
understood to be so obnoxious that it “unreasonably interferes
with work performance” and, consequently, “can alter a con-
dition of employment and create an abusive working environ-
ment.” Ellison, 924 F.2d at 877; see also Steiner, 25 F.3d at
1463.

[8] Craig alleges that Byrd’s actions resulted in a concrete
change in her working environment. Specifically, she alleges
she was removed from many of her duties, received budgets
late, had some of her duties reassigned, and was forced to
interact with Byrd despite his continued propositions. She
claims that these additional stresses in the workplace made
her nervous, spawned anxiety attacks and affected her health.
Each of her complaints standing alone might not satisfy the
standard, but in the aggregate, they are sufficiently serious to
amount to an alteration in her condition of employment. We
do not know if Craig’s claim will ultimately persuade the trier
of fact. However, when viewing the facts in the record in the
light most favorable to the non-moving party, we conclude
that Craig has alleged sufficient facts to state a prima facie
case for a violation of Title VII.

b. The Mahoney Group’s affirmative defense

[9] The Mahoney Group argues that even if Craig has
alleged sufficient facts to support her Title VII claim, because
Craig did not suffer “tangible employment action,” it is enti-
tled to assert an affirmative defense. See Pa. State Police v.
Suders, 542 U.S. 129, 148-49 (2004); Holly D., 339 F.3d at
1168-69. As we previously pointed out, there are two steps to
proving a “reasonable care” affirmative defense. First, the
employer must show that it exercised reasonable care to pre-
vent and correct any sexually harassing behavior. Second, the
employer must show that the employee unreasonably failed to
take advantage of the preventative or corrective opportunities
provided by the employer. See Faragher, 524 U.S. at 807.
 CRAIG v. M&O AGENCIES, INC. 9527
After examining the record, we hold that The Mahoney Group
satisfied the first prong of the affirmative defense—that the
company “exercised reasonable care to prevent and correct
promptly any sexually harassing behavior.” Id. Specifically,
the company had a mechanism in place for filing complaints
about sexual harassment. When Craig finally did complain,
The Mahoney Group addressed the situation promptly: It told
Byrd to stay away from Craig, hired outside counsel to inves-
tigate and make recommendations, had Craig report to
another individual other than Byrd and conducted sexual
harassment training.3 These responsible and prompt actions
satisfy the first prong of the test.

[10] The company’s affirmative defense fails on the second
prong, however, because The Mahoney Group cannot show
that Craig “unreasonably failed to take advantage of any pre-
ventive or corrective opportunities provided by the employ-
er.” Id. at 807. The Mahoney Group argues that Craig
unreasonably delayed reporting the harassment because she
waited until August 27, 2003 to file a complaint with the com-
pany, some 19 days after the incident at the restaurant; it sug-
gests that if Craig had reported the behavior earlier, it is quite
possible that Byrd would not have made the subsequent phone
calls or repeatedly propositioned her at work. However, we do
not think that in this situation a 19-day delay is unreasonable;
an employee in Craig’s position may have hoped the situation
would resolve itself without the need of filing a formal com-
plaint, and she justifiably may have delayed reporting in
hopes of avoiding what she perceived could be adverse—or
at least unpleasant—employment consequences. Additionally,
Craig’s behavior is even more reasonable when one considers
that Byrd’s behavior continued until at least August 20, 2003.
3
Craig alleges that the investigation the company undertook was a
“sham” and alleges that outside counsel failed to interview several individ-
uals Craig claimed had also been harassed by Byrd. Because The
Mahoney Group’s affirmative defense fails on the second prong, we need
not address this issue, although it may be a relevant inquiry on remand.
9528 CRAIG v. M&O AGENCIES, INC.
We cannot see how a delay of a mere seven days (including
the weekend) rises to the level of being “unreasonable.”
Craig’s delay is markedly different from cases where victims
have allowed the harassment to continue for a period of
months or years before finally reporting it to the appropriate
authority. See, e.g., Holly D., 339 F.3d at 1178 (noting that
the plaintiff waited a full two years from the first sexual inci-
dent and a full year after she testified the sexual activity was
unwelcome before reporting the behavior); Montero v. AGCO
Corp., 192 F.3d 856, 863 (9th Cir. 1999) (finding a two-year
delay in reporting the conduct to be unreasonable); see also
Kohler v. Inter-Tel Techs., 244 F.3d 1167, 1180-82 (9th Cir.
2001) (holding that failure to report the behavior to the com-
pany was unreasonable).

[11] We hold that The Mahoney Group’s affirmative
defense fails, as Craig’s minor delay in reporting the behavior
did not meet the stringent standard outlined in Faragher. Con-
sequently, we reverse the district court’s grant of summary
judgment for The Mahoney Group and remand for further
proceedings. We express no opinion as to whether Craig
should prevail on this claim upon remand.

C. Craig’s Title VII Claim Against Roberts and Byrd

[12] We have long held that Title VII does not provide a
separate cause of action against supervisors or co-workers.
See Holly D., 339 F.3d at 1179; Pink v. Modoc Indian Health
Project, Inc., 157 F.3d 1185, 1189 (9th Cir. 1998); Miller v.
Maxwell’s Int’l Inc., 991 F.2d 583, 587-88 (9th Cir. 1993).
Consequently, we affirm the district court’s grant of summary
judgment for Patricia Roberts and Leon Byrd on Craig’s Title
VII claim.

D. Craig’s State Law Claims

Finally, we address Craig’s various state law claims.
 CRAIG v. M&O AGENCIES, INC. 9529
1. Intentional infliction of emotional distress

[13] Craig first claims damages for intentional infliction of
emotional distress. To establish a prima facie case, Craig must
demonstrate (1) Appellees engaged in “extreme and outra-
geous conduct;” (2) Appellees either intended to cause “emo-
tional distress or reckless disregard of the near certainty that
such distress will result from [Appellees’] conduct;” and (3)
Craig suffered “severe emotional distress” as a result of
Appellees’ conduct. Wallace v. Casa Grande Union High
Sch. Dist. No. 82 Bd. of Governors, 909 P.2d 486, 495 (Ariz.
Ct. App. 1995). To satisfy the first prong, the conduct must
be “so outrageous in character, and so extreme in degree, as
to go beyond all possible bounds of decency, and to be
regarded as atrocious and utterly intolerable in a civilized
community.” Cluff v. Farmers Ins. Exch., 460 P.2d 666, 668
(Ariz. Ct. App. 1969), overruled on other grounds by Godbe-
here v. Phoenix Newspapers, Inc., 783 P.2d 781 (Ariz. 1989).

Drawing all inferences in Craig’s favor, U.S. ex rel. Ander-
son, 52 F.3d at 815, Craig has made a prima facie showing
with respect to the second and third prongs; the relevant ques-
tions is whether Byrd’s conduct was so “outrageous” to sat-
isfy the standard articulated in Wallace and Cluff. We
conclude that it was and reverse the district court’s grant of
summary judgment. Appellees argue that Craig’s claim is
“similar to the many other sets of facts courts have rejected
as ‘outrageous.’ ” However, the cases they cite are instances
involving behavior that a reasonable finder of fact could find
less “outrageous” than Byrd’s actions. See, e.g., Cluff, 460
P.2d at 668 (finding no IIED claim in “the act of an insurance
adjuster in simply contacting a person to whom his company
may be liable in order to obtain a settlement of that claim,
even after retention of counsel”); Wallace, 909 P.2d at 495
(affirming a grant of summary judgment on an IIED claim
because “recommendations and decisions on nonrenewal of
[plaintiff’s] administrator contract, the changing of her duties
and the reduction of her salary” were lawful and not “outra-
9530 CRAIG v. M&O AGENCIES, INC.
geous”); Nelson v. Phoenix Resort Corp., 888 P.2d 1375,
1386-87 (Ariz. Ct. App. 1994) (finding that the dismissal of
an employee in front of the news media was not conduct that
would sustain an IIED claim); Mintz v. Bell Atl. Sys. Leasing
Int’l, Inc., 905 P.2d 559, 562-64 (Ariz. Ct. App. 1995) (find-
ing that termination decisions are generally insufficient to
directly raise an IIED claim and holding that defendant’s
“failing to promote Plaintiff, forcing her to return to work,
and hand delivering a letter to her while in the hospital” was
not “extreme” or “outrageous” conduct).

[14] The Restatement of Torts, cited with approval by the
Cluff, Mintz, and Nelson courts suggests that a reasonable trier
of fact could find that Byrd’s conduct rises to the level of out-
rageousness:

The liability clearly does not extend to mere insults,
indignities, threats, annoyances, petty oppressions,
or other trivialities. The rough edges of our society
are still in need of a good deal of filing down, and
in the meantime plaintiffs must necessarily be
expected and required to be hardened to a certain
amount of rough language, and to occasional acts
that are definitely inconsiderate and unkind. There is
no occasion for the law to intervene in every case
where someone’s feelings are hurt. There must still
be freedom to express an unflattering opinion, and
some safety valve must be left through which irasci-
ble tempers may blow off relatively harmless steam.

Restatement 2d of Torts, § 46, comment (d). Byrd’s behavior
did not comprise “mere insults, indignities, threats, annoy-
ances, petty oppressions, or other trivialities.” Despite soci-
ety’s “rough edges,” Craig should not be required to become
“hardened to” her supervisor repeatedly propositioning inside
and outside of the office, following her into the bathroom,
standing outside the toilet stall and then grabbing her and
sticking his tongue in her mouth. While this conduct is
 CRAIG v. M&O AGENCIES, INC. 9531
deplorable in any setting, a reasonable observer or trier of fact
could find it to be “outrageous” and “extreme,” particularly in
an employment context. Consequently, we reverse the district
court’s grant of summary judgment with respect to Byrd on
Craig’s claim of intentional infliction of emotional distress.

[15] Arizona law is clear, however, that an employer is
rarely liable for intentional infliction of emotional distress
when one employee sexually harasses another. Liability for
the employer typically attaches only when a company utterly
fails to investigate or remedy the situation. See, e.g., Ford v.
Revlon, Inc., 734 P.2d 580, 585-86 (Ariz. 1987); Smith v. Am.
Express Travel Related Servs. Co., Inc., 876 P.2d 1166, 1173-
74 (Ariz. Ct. App. 1994). The Mahoney Group did not abdi-
cate its duty to investigate and take remedial measures once
Craig reported Byrd’s conduct. We conclude that Craig has
not met the high standard under Arizona law and we affirm
the district court’s grant of summary judgment in favor of The
Mahoney Group and Patricia Roberts on this claim.

2. Negligent investigation, hiring, supervision and reten-
tion

[16] Craig next asserts two related claims: negligent inves-
tigation and negligent hiring, supervision and retention of
Byrd. With the exception of “willful misconduct” on the part
of the employer, these claims are barred under Arizona law by
the remedy of workers compensation. Ford, 734 P.2d at 586;
Irvin Investors, Inc. v. Superior Court, 800 P.2d 979, 980-82
(Ariz. Ct. App. 1990); see also Mosakowski v. PSS World
Med., Inc., 329 F. Supp. 2d 1112, 1129-31 (D. Ariz. 2003)
(interpreting Arizona law). Craig has made no showing that
The Mahoney Group’s actions amounted to “willful miscon-
duct” and we consequently affirm the grant of summary judg-
ment for all Appellees on these two claims.

3. Assault and battery
9532 CRAIG v. M&O AGENCIES, INC.
[17] Craig further alleges that Byrd’s kiss in the bathroom
constitutes assault and battery. The district court granted sum-
mary judgment with respect to Roberts and The Mahoney
Group, but denied summary judgment and dismissed the
claim with respect to Byrd on this claim.4 Craig has made a
prima facie case under Arizona law that the kiss was an
unwelcome “offensive touching.” Johnson v. Pankratz, 2 P.3d
1266, 1268-69 (Ariz. Ct. App. 2000). We affirm the district
court’s denial of summary judgment with respect to Byrd, but
reverse its dismissal and reinstate Craig’s assault and battery
claim.5 We affirm the grant of summary judgment in favor of
Roberts.

[18] With respect to The Mahoney Group, under Arizona
law, Craig would be entitled to recover from the company for
any of Byrd’s tortious acts as long as he was acting within the
scope of his employment. See State v. Schallock, 941 P.2d
1275, 1279-81 (Ariz. 1997); Baker ex rel. Hall Brake Supply,
Inc. v. Stewart Title & Trust of Phoenix, Inc., 5 P.3d 249, 254
(Ariz. Ct. App. 2000); see also Wiper v. Downtown Dev.
Corp., 732 P.2d 200, 201 (Ariz. 1987). The district court did
not explain why no triable issue exists with regard to whether
Byrd could be considered to have been acting within the
scope of his employment when he took Craig to the On the
Border restaurant. We reverse the district court’s grant of
summary judgment in favor of The Mahoney Group with
respect to liability for Byrd’s alleged assault and battery and
remand to the district court for further proceedings.

4. Invasion of privacy
4
Craig has since re-filed this claim against Byrd in state court.
5
We assume that the district court dismissed the state assault and battery
claim because it dismissed her Title VII claims, which were the basis for
the district court’s jurisdiction. See 28 U.S.C. §§ 1331, 1367(a). Because
we hold that at least one of Craig’s federal claims survives summary judg-
ment, we reverse the dismissal of her surviving state claim as well. See 28
U.S.C. § 1367(c)(3).
 CRAIG v. M&O AGENCIES, INC. 9533
[19] Craig also alleges invasion of privacy under Arizona
law. Although Byrd’s conduct was inappropriate, we con-
clude that it does not meet the stringent standard required by
Arizona law. See Hart v. Seven Resorts, Inc., 947 P.2d 846,
853 (Ariz. Ct. App. 1997) (holding that an individual is only
liable for an invasion of privacy only if he “intentionally
intrudes, physically or otherwise, upon the solitude or seclu-
sion of another or his private affairs or concerns . . . if the
intrusion would be highly offensive to a reasonable person”);
Med. Lab. Mgmt. Consultants v. Am. Broad. Cos. Inc., 30 F.
Supp. 2d 1182, 1189 (D. Ariz. 1998) (holding that a plaintiff
can only recover if she has an “objectively reasonable expec-
tation of seclusion or solitude in the place” (emphasis omit-
ted)). Craig had no reasonable expectation of privacy in the
common area of the restroom, where she would expect her
conduct to be observed by other individuals in the restroom.
See, e.g., United States v. Billings, 858 F.2d 617, 618 (10th
Cir. 1988) (per curiam) (holding that no reasonable expecta-
tion of privacy exists as to what “can be observed by any ordi-
nary patron of a public restroom”). Byrd only entered the
common area of the restroom; consequently, we affirm the
grant of summary judgment in favor of all Appellees on this
claim.

5. Defamation

[20] Craig takes issue with some of the statements Byrd
made to the investigator, and alleges that his mischaracteriza-
tions are defamatory and constitute slander. Under Arizona
law, Craig must show that Byrd’s statements were false and
brought her into “disrepute, contempt or ridicule, or . . .
impeach[ed her] honesty, integrity, virtue, or reputation.” Tur-
ner v. Devlin, 848 P.2d 286, 289 (Ariz. 1993). She cannot
make such a showing because statements made during sexual
harassment investigations are generally conditionally privi-
leged. Miller v. Servicemaster by Rees, 851 P.2d 143, 145-46
(Ariz. Ct. App. 1992); Rest. Torts § 596. We affirm the grant
9534 CRAIG v. M&O AGENCIES, INC.
of summary judgment for all Appellees with respect to this
claim.6

III. CONCLUSION

With respect to The Mahoney Group, we reverse the dis-
trict court’s grant of summary judgment in favor of The
Mahoney Group on Craig’s Title VII hostile environment
claim and her claim for respondeat superior liability on the
assault and battery claim; we affirm the grant of summary
judgment in favor of The Mahoney Group on all other claims.
We affirm the district court’s denial of summary judgment for
Leon Byrd on assault and battery, but reverse its dismissal
and reinstate Craig’s claim; we reverse the grant of summary
judgment for Leon Byrd on the intentional infliction of emo-
tional distress claim, but affirm the grant of summary judg-
ment in favor of Byrd with regard to all other claims. We
affirm the district court’s grant of summary judgment in favor
of Patricia Roberts on all claims. Without expressing any
views on the ultimate strength of Craig’s claims, we remand
to the district court for further proceedings consistent with
this opinion. Each party will bear its own costs.

AFFIRMED in part, REVERSED in part, and
REMANDED.

6
Craig appears to have abandoned her civil rights claim under Arizona
Revised Statutes §§ 41-1461-1465, and her claim for retaliation in viola-
tion of Title VII. These claims are not properly before us, so we will not
address them.