Seventh Circuit Court of Appeals Commentary : In Their Opinion : Lawyer & Attorney Michael E. Rigney : Kelley Drye & Warren Law Firm

YANCICK v. HANNA STEEL CORPORATION (AUGUST 3, 2011)

Hanna Steel Corporation employed Matthew Yancick, a white man, for a few years in the mid-2000s. Hanna has a policy prohibiting all forms of harassment and instructs employees to report any harassment to the Human Resource Manager or the General Manager. Yancick signed an acknowledgment of the policy and pledged to follow it. Smith worked with Brad Johnson, an African-American man, while at Hanna. Originally, their relationship was good. It began to deteriorate in early 2005. The two had several confrontations, some of which had racial overtones and some of which did not. Johnson also had confrontations with other employees. Yancick complained at times to his immediate supervisor but never to the Human Resources Manager or the General Manager. In December of that year, Yancick suffered severe and permanent injuries when a steel coil fell on him from a machine operated by Johnson. Yancick asserts that the action was intentional and brought a hostile work environment claim under § 1981. Hanna moved for summary judgment. Yancick moved for and was granted additional time under Rule 56 but was warned by the district court that no additional time would be allowed. With four minutes left in his extension, Yancick filed an oversized brief with a motion for leave to file. He did not file any of the referenced exhibits. A short time later, Yancick filed a substitute response that met all of the page and word limits, again accompanied by a motion for leave to file but again unaccompanied by any exhibits. He finally filed the exhibits a few days later. Judge McDade (C.D. Ill.) denied the motion's, did not consider his response or his disputed facts, and granted summary judgment to Hanna. Yancick appeals.

In their opinion, Seventh Circuit Judges Wood, Williams, and Tinder affirmed. The Court first addressed the procedural issue and noted that it routinely endorses district courts' strict compliance with local rules. The Court rejected Yancick's argument that he had good cause or that his failure was simply a "requirement of form" under Rule 83. The Court found no abuse of discretion in the district court's ruling. On the merits, Yancick must prove that: a) he endured a subjectively and subjectively offensive environment, b) race was the cause, c) the conduct was severe or pervasive, and d) there must be a basis for employer liability. The Court conceded that the record before the coil incident showed that Johnson's conduct was immature and boorish and that he exhibited hostility toward Yancick, but concluded that it did not amount to the severe and pervasive work environment required. In fact, most of Johnson's hostility was not race based. With respect to the coil incident itself, Yancick relied in large part on lay opinion testimony that Johnson was racist to support his assertion that the act was intentional. The Court concluded that the testimony was unsupported by facts and merely reflected the witnesses’ beliefs. In addition, the record supports the conclusion that the incident was an accident and not intentional. Finally, the Court noted that Yancick failed to establish employer liability. Hanna had a formal procedure in place. Yancick was aware of it. Yancick did not take advantage of the remedies provided.

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VANCE v. BALL STATE UNIVERSITY (June 3, 2011)

Ball State University's Dining Services department has employed Maetta Vance for over 20 years. She was a substitute server from 1989-91, a part-time catering assistant from 1991-2007, and now is a full-time catering assistant. She filed a lawsuit against the University in 2006 alleging Title VII claims of hostile work environment and retaliation. She included several specific allegations of hostile work environment, including: a) co-worker Davis hit her, b) supervisor Kimes made her feel unwelcome, c) co-worker Davis threatened her, d) co-worker McVicker used a racial epithet, e) co-worker McVicker called her a "porch monkey," and f) supervisor Adkins made faces at her. The University responded each time she filed a complaint. It disciplined McVicker for using the epithet. On other occasions, it found no basis for discipline. Her retaliation allegations related to diminished work duties and denial of overtime, and a reassignment to menial tasks in connection with her promotion. Judge Barker (S.D. Ind.) granted summary judgment to the University. Vance appeals.

In their opinion, Judges Bauer, Wood, and Sykes affirmed. The Court first addressed Vance's hostile work environment claim. The elements of that claim are that the work environment is objectively and subjectively offensive, that the conduct was based on race, that it was either severe or pervasive, and that there was employer liability. With respect to employer liability, a plaintiff must either show that the harassment came from supervisors or that the employer was negligent in discovering or fixing the situation. The Court rejected supervisor liability. First, Davis was not her supervisor. Although other circuits have expanded the supervisor term to include persons with authority to direct daily activity, the Seventh Circuit has limited the term to those who have the authority to directly affect the terms and conditions of employment. Second, Adkins was her supervisor but did nothing more than make ugly faces at her. Third, Kimes was her supervisor and may have engaged in sufficient harassment to create employer liability but there was no evidence that his harassment was based on Vance's race. In the absence of supervisor harassment, the Court turned to co-worker harassment. It concluded that Vance could not establish that the University failed to take reasonable steps to discover and correct the harassment. Every time she made a complaint, the University investigated and responded appropriately. The Court turned to the retaliation claim. Ironically, Vance's retaliation claim is based on her promotion. She admitted that she received more pay and benefits but alleged that her responsibilities were diminished. The Court concluded that the promotion was not a materially adverse employment action. Although she may have enjoyed it less, she sought it out knowing that the responsibilities would be different from her prior position. The only other employee occupying the position had similar responsibilities. Finally, the Court rejected her claim that the University retaliated against her by giving her fewer overtime hours. Although she did work fewer overtime hours than her co-worker, the two were not similarly situated. Her co-worker worked more regular hours, was available more often, and took fewer sick days and leaves of absence.

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SUTHERLAND v. WALMART STORES (January 21, 2011)

Arturo Aguas and Maria Sutherland worked together in the deli section of a Walmart store in Seymour, Indiana. They had worked together for years without incident -- but that changed on December 11, 2006. On that day, Aguas assaulted Sutherland in the deli cooler. He kissed her and fondled her and gave her an inappropriate Christmas card. Sutherland reported the incident to her supervisor the following day. A Walmart manager interviewed one co-worker on that day and another co-worker the following day. They continued their investigation throughout December, while Aguas was on vacation. When confronted upon his return, Aguas admitted some inappropriate conduct but denied the most serious allegations. The company decided that it could not substantiate all the allegations but disciplined Aguas severely for those that they could substantiate. The company also adjusted both employees' time schedules so that they rarely worked at the same time and also assigned them to workstations almost 80 feet apart when they did work together. Not satisfied with the company's response, Sutherland filed a police report. The police investigation was more successful than the company's. Aguas ultimately admitted the allegations and pled guilty to a sexual battery charge. Walmart revisited its investigation and terminated Aguas' employment. Sutherland took medical leave shortly thereafter for stress. Walmart terminated her employment when she failed to return to work, even after her leave expired. Sutherland brought suit against Walmart, alleging a hostile work environment and negligent infliction of emotional distress. Judge Lawrence (S.D. Ind.) granted summary judgment to Walmart. Sutherland appeals.

In their opinion, Seventh Circuit Judges Cudahy, Flaum, and Kanne affirmed. The Court assumed that the harassment was severe enough to create a hostile work environment and addressed only the issue of employer liability. Sutherland presented two theories -- a failure to prevent the assault theory based on an incident two or three years earlier in which Aguas was accused of harassment and a failure to investigate theory. The Court rejected the first theory based on its opinion in Longstreet in which it found no employer liability on very similar facts (one prior incident, probably not rising to the level of actionable harassment, properly investigated). On the second theory, the Court conceded that employer liability can arise when its investigation is not prompt and adequate. Here, the Court found that Walmart's investigation was prompt and adequate and that its corrective actions were reasonably likely to end the harassment. There is, therefore, no basis for employer liability and summary judgment was proper. The Court also rejected Sutherland's "underdeveloped" negligent infliction of emotional distress claim. To the extent the claim is based on pre-assault actions, it fails because Walmart was not on notice that Aguas was likely to assault her. To the extent that the claim is based on post-assault actions, it fails because Sutherland has not even alleged a physical impact, a requirement of Indiana law.

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MONTGOMERY v. AMERICAN AIRLINES (November 19, 2010)

Anthony Montgomery has been an American Airlines employee for over 20 years, all but five months of it as a Fleet Service Clerk. It is the events of those five months, however, that matter in this case. Late in 2006, Montgomery asked for and was granted a transfer to a mechanic's position. The collective bargaining agreement required and defined a six-month probationary period, toward the end of which Montgomery would have to pass a tool inspection and qualification test. Montgomery took his test in April of 2007. Two company supervisors and a union representative were present. Montgomery failed the test and was returned to his prior position. Nearly 3 months later, Montgomery complained to American that he was subjected to racial harassment and discrimination during his probationary period. In the initial meeting with a company representative, he never stated that he had complained to his supervisors at the time. The company conducted an investigation and concluded that it could not substantiate the allegations. The results of the investigation were that the test was administered fairly, that the few employees who became mechanics without passing the test fell into different categories, and that any tension in the workplace was not based on race. Montgomery filed suit. He alleged a hostile work environment in violation of § 1981 and Title VII and racial discrimination, also in violation of § 1981 and Title VII, for his return to the clerk position. Judge Der-Yeghiayan (N.D. Ill.) granted summary judgment to American. Montgomery appeals.

In their opinion, Seventh Circuit Chief Judge Easterbrook and Judges Bauer and Kanne affirmed. The Court first addressed the hostile work environment claim, noting that the analysis under the two statutes is the same. The Court found triable issues of fact with respect to three of the four elements of the claim. In order to recover against an employer, however, Montgomery had to establish that American either participated in the harassment or was negligent in finding and correcting it. His only allegation of participation referred to a coworker and thus does not satisfy the participation prong. In order to satisfy the second prong, Montgomery had to establish either that he informed his supervisors of the harassment or that it was so obvious that it amounted to constructive notice. The record does not support either conclusion. The only person he reported his concerns to was his crew chief, a non-management coworker. America cannot be liable for the harassment without clear and direct reporting from the employee. Even if the harassment had been reported, the Court stated that American would have avoided liability because of its prompt and appropriate investigation. The Court turned to the discrimination claim, which Montgomery pursued under both the direct and indirect method of proof. Again, the analysis is the same under both statutes. Under the direct method, Montgomery asserted that non-African-Americans were not required to take the test. The Court rejected this as proof. Even if true, it did not allow the inference of discriminatory motive. Under the indirect method, Montgomery had to establish that similarly situated employees were treated more favorably. He alleged that three individuals became mechanics without passing the test. But the Court concluded that none of the three was similarly situated to Montgomery -- one became a mechanic before the test rule was enforced, one became a mechanic when a recalculation of his probationary time put him past the time limit for taking the test, and Montgomery presented no admissible evidence with respect to the third individual. The Court concluded that Montgomery cannot prevail on his claim that the test requirement was discriminatory. Montgomery also claimed that the test itself was discriminatory. On that claim, the Court concluded that Montgomery simply presented no evidence. Finally, although Montgomery failed to make out a prima facie case, the Court also addressed pretext. It found that American had a legitimate reason for its actions and that Montgomery provided no evidence otherwise.

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CHANEY v. PLAINFIELD HEALTHCARE CENTER (July 20, 2010)

Brenda Chaney, an African-American female, worked at the Plainfield Healthcare Center as a nursing assistant for three months in the summer of 2006. Plainfield's policy (possibly undertaken in a good faith belief that it was required by law to do so) was to acquiesce in its residents' racial preferences. Accordingly, every daily assignment sheet noted that particular residents preferred no African-American nursing assistants. Chaney also was the target of a number of derogatory racial comments during her employment. Plainfield did take corrective action when instances of racial remarks were reported. In September of 2006, Chaney and a coworker both refused to come to the aid of a resident. A nurse reported the incident and also reported that Chaney used profanity when she ultimately did respond. Although the unit supervisor's investigation and knowledge of Chaney led her to be skeptical of that charge, the director of nursing decided to fire Chaney. She was informed that the reason for her termination of employment was her use of profanity. Chaney brought an action under Title VII alleging a hostile work environment and an unlawful termination. Judge Barker (S.D. Ind.) granted summary judgment to Plainfield. Chaney appeals.

In their opinion, Judges Rovner, Williams, and Sykes reversed and remanded. The Court had "no trouble" concluding that Chaney's work environment was objectively offensive. It relied not only on the overt derogatory comments and the more subtle remarks supported by the record, but also the fact that the daily assignment sheet contained the racial restrictions. The Court rejected Plainfield's argument that its policy was reasonable and necessary to comply with law. Although recognizing that gender discrimination may sometimes be allowed to accommodate privacy interests, the Court stated that the same is not true for racial discrimination. The Court also concluded that Indiana law did not require the policy and, even if it did, federal law would trump the requirement. On a practical level, the Court recited a number of options an employer has when faced with racial hostilities. With respect to the discharge claim, the Court concluded that a reasonable jury could find that Plainfield's decision to fire Chaney was motivated by race. It relied on Plainfield's shifting justification for its action, the unusual way in which the incident investigation was conducted and concluded, and the absence of any disciplinary action with respect to the other nursing assistant involved in the incident.

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