EQUAL EMPLOYMENT OPPORTUNITY COMMISSION v. U.S. DRY CLEANING SERVICES CORPORATION
Filing
68
ORDER - For the reasons explained herein, the Court DENIES USDC's Motion for Partial Summary Judgment. [Filing No. 54 .]. Signed by Judge Jane Magnus-Stinson on 6/4/2014. (JKS)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION,
Plaintiff,
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v.
U.S. DRY CLEANING SERVICES
CORPORATION d/b/a TUCHMAN
CLEANERS,
Defendant.
1:12-cv-1376-JMS-TAB
ORDER
Plaintiff Equal Employment Opportunity Commission (“EEOC”) brings this race
discrimination suit against Defendant U.S. Dry Cleaning Services Corporation d/b/a Tuchman
Cleaners (“USDC”), alleging violations of Title VII of the Civil Rights Act of 1964 as amended,
42 U.S.C. §§ 2000e et seq. (“Title VII”) and Title I of the Civil Rights Act of 1991. [Filing No.
1.] Currently pending before the Court is USDC’s Motion for Partial Summary Judgment which
seeks an entry of judgment in favor of USDC on the EEOC’s punitive damage claim. [Filing
No. 54.] For the reasons that follow, the Court DENIES USDC’s Motion for Partial Summary
Judgment.
I.
SUMMARY JUDGMENT STANDARD OF REVIEW
A motion for summary judgment asks the Court to find that a trial is unnecessary because
there is no genuine dispute as to any material fact and, instead, the movant is entitled to
judgment as a matter of law. See Fed. R. Civ. P. 56(a). As the current version of Rule 56 makes
clear, whether a party asserts that a fact is undisputed or genuinely disputed, the party must
1
support the asserted fact by citing to particular parts of the record, including depositions,
documents, or affidavits. Fed. R. Civ. P. 56(c)(1)(A). A party can also support a fact by
showing that the materials cited do not establish the absence or presence of a genuine dispute or
that the adverse party cannot produce admissible evidence to support the fact. Fed. R. Civ. P.
56(c)(1)(B). Affidavits or declarations must be made on personal knowledge, set out facts that
would be admissible in evidence, and show that the affiant is competent to testify on matters
stated. Fed. R. Civ. P. 56(c)(4). Failure to properly support a fact in opposition to a movant’s
factual assertion can result in the movant’s fact being considered undisputed, and potentially in
the grant of summary judgment. Fed. R. Civ. P. 56(e).
In deciding a motion for summary judgment, the Court need only consider disputed facts
that are material to the decision. A disputed fact is material if it might affect the outcome of the
suit under the governing law. Hampton v. Ford Motor Co., 561 F.3d 709, 713 (7th Cir. 2009).
In other words, while there may be facts that are in dispute, summary judgment is appropriate if
those facts are not outcome determinative. Harper v. Vigilant Ins. Co., 433 F.3d 521, 525 (7th
Cir. 2005).
Fact disputes that are irrelevant to the legal question will not be considered.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
On summary judgment, a party must show the Court what evidence it has that would
convince a trier of fact to accept its version of the events. Johnson v. Cambridge Indus., 325
F.3d 892, 901 (7th Cir. 2003).
The moving party is entitled to summary judgment if no
reasonable fact-finder could return a verdict for the non-moving party. Nelson v. Miller, 570
F.3d 868, 875 (7th Cir. 2009). The Court views the record in the light most favorable to the nonmoving party and draws all reasonable inferences in that party’s favor. Darst v. Interstate
Brands Corp., 512 F.3d 903, 907 (7th Cir. 2008). It cannot weigh evidence or make credibility
2
determinations on summary judgment because those tasks are left to the fact-finder. O’Leary v.
Accretive Health, Inc., 657 F.3d 625, 630 (7th Cir. 2011). The Court need only consider the
cited materials, Fed. R. Civ. P. 56(c)(3), and the Seventh Circuit Court of Appeals has
“repeatedly assured the district courts that they are not required to scour every inch of the record
for evidence that is potentially relevant to the summary judgment motion before them,” Johnson,
325 F.3d at 898. Any doubt as to the existence of a genuine issue for trial is resolved against the
moving party. Ponsetti v. GE Pension Plan, 614 F.3d 684, 691 (7th Cir. 2010).
II.
BACKGROUND
The following facts are stated consistent with the foregoing standard, that is, with all
reasonable inferences in favor of the EEOC. Mr. Brisco Palmer (“Palmer”) was hired at the
Tuchman Dry Cleaners Zionsville Location (“Tuchman Zionsville”) in 2006. [Filing No. 57-7 at
3.] In 2008, USDC purchased Tuchman Dry Cleaners (“Tuchman”) and became Mr. Palmer’s
employer. [Filing No. 56-3 at 7.] From August 28, 2006, until June 14, 2011, Mr. Palmer was
officially hired as a dry cleaning presser. [Filing No. 57-3 at 3; Filing No. 57-7 at 3-8.] On May
19, 2011, Mr. Palmer filed a charge of race discrimination with the EEOC alleging that USDC
failed to promote him to the position of assistant manager at Tuchman Zionsville because of his
race- African American. [Filing No. 56-6 at 7.]
Ms. Tonya Wentzel (“Wentzel”) was the store manager at Tuchman Zionsville during all
relevant times. [Filing No. 57-6 at 4.] Mr. Alex Cvetkovich (“Cvetkovich”) was the district
manager covering Tuchman Zionsville during all relevant times and was Ms. Wentzel’s
immediate supervisor. [Filing No. 57-5 at 3; Filing No. 57-6 at 7.] Mr. James Dunn (“Dunn”)
was the regional manager at USDC from October 2008-June 2011, [Filing No. 56-3 at 7], and
was Mr. Cvetkovich’s immediate supervisor during that time, [Filing No. 57-5 at 4].
3
A. The Failure to Promote—June 2010 – May 2011
USDC protocol usually requires that an applicant for an assistant manager position be
interviewed first by the store manager, then by the district manager, and finally by the regional
manager. [Filing No. 56-4 at 3.] Mr. Dunn, as regional manager, had the final say on who was
promoted to assistant manager at Tuchman Zionsville. [Filing No. 56-5 at 2.] Although USDC
filed for bankruptcy in March 2010, [Filing No. 57-2 at 16], Mr. Dunn was still allowed “to hire
and promote as needed . . . to preserve the assets” during bankruptcy, [Filing No. 57-4 at 5].
Mr. Palmer was hired as a dry cleaning presser at Tuchman Zionsville in 2006, [Filing
No. 57-7 at 3; Filing No. 57-7 at 7], but, in July 2010, Ms. Wentzel began training Mr. Palmer
for the assistant manager position, [Filing No. 57-7 at 10-14]. The previous assistant manager
had quit a few weeks prior, and Ms. Wentzel agreed with Mr. Palmer that he would be a good
replacement. [Filing No. 57-7 at 11-12.] Ms. Wentzel discussed Mr. Palmer’s promotion with
Mr. Cvetkovich, and Mr. Cvetkovich said that Mr. Palmer would get promoted to assistant
manager “as soon as we could.” [Filing No. 57-5 at 11.] He allowed Ms. Wentzel to begin
training Mr. Palmer. [Filing No. 57-6 at 9.]
Mr. Cvetkovich asked Mr. Dunn about Mr. Palmer’s promotion on a monthly basis
beginning in summer 2010, which was roughly five or six times.1 [Filing No. 57-5 at 9-10.]
1
There are issues of fact concerning Mr. Palmer’s training, but of course at this juncture they
must be resolved in the EEOC’s favor. While Mr. Cvetkovich asserted that Mr. Dunn was aware
of the training, [Filing No. 57-5 at 12-13], Mr. Dunn claimed to have had no idea that Mr.
Palmer began training in July 2010, [Filing No. 56-3 at 4]. Mr. Dunn said he did not have any
conversations with Mr. Cvetkovich about Mr. Palmer’s promotion to assistant manager before
January 2011. [Filing No. 56-3 at 6.] In January 2011, Mr. Dunn asked Mr. Cvetkovich about
Mr. Palmer’s qualifications. [Filing No. 56-3 at 5-6.] After Mr. Cvetkovich responded, Mr.
Dunn said: “[B]ased on that . . . I can’t allow you to promote him to assistant manager at this
time. He did not give me enough information that would indicate that [Mr.] Palmer was in a
position at that point in time to be named, and it was not asked to be put in training, it was asked
4
Each time, Mr. Dunn told him that they had to wait until USDC was cleared out of bankruptcy.2
[Filing No. 57-5 at 9-10.] Mr. Palmer was not informed that Mr. Dunn needed to approve his
promotion. [Filing No. 57-7 at 13.] Instead, Mr. Cvetkovich explained to Mr. Palmer that “I
was offering him the position, but I couldn’t move him to that position until I got the okay. And
that was going to be when we came out of bankruptcy.” [Filing No. 57-5 at 16-17.]
Meanwhile, Ms. Wentzel taught Mr. Palmer how to perform most of the assistant
manager duties, including the dry cleaning tasks and managerial paperwork, after two pressers
were hired to fill Mr. Palmer’s previous position as presser. [Filing No. 57-6 at 10; Filing No.
57-7 at 13-14]. She did not train Mr. Palmer in customer service, however, because she wanted
him to receive an assistant manager’s wage first.3 [Filing No. 57-7 at 14-15.] For nearly two
weeks throughout the summer Mr. Palmer ran Tuchman Zionsville while Ms. Wentzel was away
on vacation or otherwise out of the store. [Filing No. 57-6 at 10-11; Filing No. 57-7 at 59-61.]
He performed all assistant manager duties alone during those times except for the duties at the
counter, which was handled by the cashier.4 [Filing No. 56-6 at 12.]
Although Mr. Palmer originally agreed to perform assistant manager duties without an
official promotion or a pay-raise upfront, he voiced his skepticism to Ms. Wentzel a month after
his training began: “I just didn’t understand why would they hire two people to do my job at $9
apiece. Figured that was $18, and the only thing I just needed was a dollar for me to start my
to be promoted to that and receive the pay increase. I said based on that, I have to deny the
request at this time.” [Filing No. 56-3 at 6.]
2
Mr. Dunn denied telling Mr. Cvetkovich in January 2011 that he could not promote Mr. Palmer
to assistant manager at Tuchman Zionsville because of bankruptcy or other financial concerns.
[Filing No. 57-2 at 13.]
3
An assistant manager earns one dollar an hour more than a dry cleaning presser. [Filing No.
57-7 at 18; Filing No. 57-8 at 7.]
4
Ms. Wentzel gave Mr. Palmer a thirty-day review for his work as assistant manager but forgot
to give him a sixty and ninety-day review. [Filing No. 57-6 at 13-14.] Mr. Palmer continued to
perform assistant manager duties after ninety days of training. [Filing No. 57-6 at 14.]
5
tasks and duties.”
[Filing No. 57-7 at 18.]
In September 2010, Mr. Palmer asked Mr.
Cvetkovich when he would receive a pay raise for his work as assistant manager, and Mr.
Cvetkovich replied that he was still waiting on paperwork and that the process was delayed due
to USDC’s bankruptcy. [Filing No. 57-7 at 19-20.]
In November 2010, Ms. Cynthia Elkins (“Elkins”) was transferred to Tuchman Zionsville
from another Tuchman location to fill the assistant manager position. [Filing No. 56-6 at 2;
Filing No. 57-6 at 18-19.] Mr. Palmer continued to perform assistant manager duties after she
arrived, [Filing No. 57-7 at 25], and did not realize that Ms. Elkins was the assistant manager
until he saw her rate of pay while completing paperwork, [Filing No. 57-7 at 28-30]. Mr. Palmer
first felt that he was being discriminated against on the basis of race when he saw this pay
difference, but he did not notify anyone at USDC of these feelings.5 [Filing No. 56-6 at 5.] A
month after Ms. Elkins was hired, the pressers quit, and Mr. Palmer went back to pressing full
time.6 [Filing No. 56-6 at 3-4.]
Mr. Palmer talked first with Ms. Wentzel about Ms. Elkins’ transfer and his demotion,
and she promised to talk with Mr. Cvetkovich. [Filing No. 57-7 at 31.] After Ms. Wentzel
discussed the matter with Mr. Cvetkovich, she told Mr. Palmer that he would receive a raise at
the beginning of 2011. [Filing No. 57-7 at 32.]
5
Mr. Palmer explained his silence: “I didn’t want to just jump to conclusions. I’m the type of
person that will hold stuff in until I have the facts.” [Filing No. 56-6 at 5.]
6
Mr. Cvetkovich said he transferred Ms. Elkins to replace Mr. Palmer as assistant manager at
Tuchman Zionsville. [Filing No. 56-4 at 5.] “[W]e had intentions of him going to the assistant
manager position. And we hired a presser to start pressing and to take [Mr. Palmer’s] position so
we would be able to get him going to assistant manager as soon as we got the okay. And we
were doing that at the time, and then the presser that we hired for [Mr. Palmer] quit . . . I told
[Mr. Palmer] he needed to keep doing what his job was, which was presser. And I had [Ms.
Elkins] at Plainfield and didn’t really need her there because it wasn’t that busy at the time. And
I moved her over there to help [Ms. Wentzel] at [Tuchman Zionsville].” [Filing No. 56-4 at 5.]
He claimed that the transfer was not intended to be permanent but only “until we got [Mr.
Palmer] going.” [Filing No. 56-4 at 5.]
6
Ms. Elkins quit her job as assistant manager in April 2011. [Filing No. 57-5 at 23.]
When Mr. Cvetkovich visited Tuchman Zionsville, Mr. Palmer asked him to explain why he had
not gotten a raise, and “he always had a excuse far as money. First it was money. Then it went
to he had to talk to [Mr.] Dunn.” [Filing No. 56-6 at 5.] This was the first time that Mr. Palmer
heard about Mr. Dunn’s involvement in his promotion. [Filing No. 56-6 at 5.] After the
assistant manager position had been vacant for two weeks, Mr. Palmer asked Ms. Wentzel what
was the real reason he was not getting promoted to assistant manager. [Filing No. 56-6 at 6.]
Visibly upset, Ms. Wentzel told Mr. Palmer that “she talked to [Mr. Cvetkovich], and [Mr.
Cvetkovich] told her that [Mr.] Dunn don’t believe that I’m the face for this store.”7 [Filing No.
56-6 at 7; see also Filing No. 57-8 at 6-7.] Mr. Palmer asked her what she meant, and she
responded: “What do you think I mean by face for this store? Your skin color is not the right for
this store, for this community.” [Filing No. 56-6 at 7.] Without discussing the comment with
anyone at USDC or asking again about his promotion and pay raise, Mr. Palmer filed a charge
with the EEOC a couple weeks later. [Filing No. 56-6 at 7.]
B. Post-EEOC Charge
Shortly after USDC found out about Mr. Palmer’s EEOC charge, Mr. Michael
Washington (“Washington”), who had replaced Mr. Dunn as regional manager, Mr. Jeff Garrison
(“Garrison”), another district manager, and Mr. Cvetkovich met with Mr. Palmer to discuss his
discrimination charge.
[Filing No. 56-7 at 2.]
7
Shortly thereafter, Mr. Riaz Chauthani
Mr. Dunn denied making this statement. [Filing No. 56-3 at 6; Filing No. 56-3 at 9-10.]
Pursuant to the standard for summary judgment review, the Court will consider this admissible
evidence in its determination. USDC acknowledges this is proper course. (“By referencing the
remark regarding the ‘face’ of Tuchman Zionsville, USDC is not conceding that the comment is
admissible, accurate, or that it was in fact made. But for the purposes of Summary Judgment,
USDC understands that the Court must accept the remark as true.” [Filing No. 55 at 2, fn 1.] )
7
(“Chauthani”), Mr. Washington’s immediate supervisor, asked Mr. Palmer to drop the charges,
offered him the assistant manager position, [Filing No. 57-7 at 48], and told him that he would
receive a $525 check as back pay for the time he was performing assistant manager duties in
2010, [Filing No. 56-7 at 5]. Mr. Palmer was officially promoted to assistant manager on June
15, 2011. [Filing No. 57-3 at 3.]
III.
DISCUSSION
Title VII allows an award of punitive damages when the plaintiff “demonstrates that the
defendant engaged in intentional discrimination ‘with malice or with reckless indifference to the
federally protected rights of an aggrieved individual.’” Bruso v. United Airlines, Inc., 239 F.3d
848, 857 (7th Cir. 2001) (quoting 42 U.S.C. § 1981a(b)(1)). In Kolstad v. American Dental
Association, the Supreme Court established a three-part framework for determining whether an
award of punitive damages is proper under Title VII’s standard. Id. First, the plaintiff must
show that the employer acted with knowledge that its actions may have violated federal law.
Kolstad v. American Dental Association, 527 U.S. 526, 535 (1999). Second, the plaintiff must
impute liability to the employer. Id. at 539. Finally, even if the first two requirements are met,
the employer may not be vicariously liable for the discriminatory actions of its managerial agents
if the employer can show that those actions are contrary to the employer’s “good-faith efforts to
comply with Title VII.” Id. at 545 (quoting Kolstad v. American Dental Ass’n, 139 F.3d 958,
974 (D.C. Cir. 1998) (Tatel, J., dissenting) (vacated, 527 U.S. 526).
A.
USDC acted with knowledge that its actions may have violated federal law.
To survive the first step of the Kolstad framework, the EEOC must demonstrate that
USDC acted with ‘malice’ or ‘reckless indifference,’ or, in other words, with knowledge that its
failure to promote Mr. Palmer may have violated federal law. See Kolstad, 527 U.S. at 535. The
8
required mental state refers to the employer’s awareness that its actions are in violation of federal
law, not that it is engaging in discrimination.
Id.
A plaintiff can satisfy this prong by
“demonstrating that the relevant individuals knew of or were familiar with the antidiscrimination
laws and the employer’s policies for implementing those laws.”
Bruso, 239 F.3d at 858.
Alternatively, a plaintiff may show that the employer acted with reckless disregard for the
plaintiff’s federally protected rights by “showing that the defendant’s employees lied, either to
the plaintiff or to the jury, in order to cover up their discriminatory actions.” Id. The plaintiff
has the burden of proof and must prove this element by a preponderance of the evidence.
E.E.O.C. v. AutoZone, Inc., 707 F.3d 824, 835 (7th Cir. 2013).
The evidence viewed in light most favorable to the EEOC shows that USDC acted with
knowledge that its actions may have violated Title VII. Mr. Dunn was familiar with USDC’s
antidiscrimination policies and with Title VII. [Filing No. 56-3 at 7-8.] In 2008, Mr. Dunn
attended an employment discrimination training session for “managers and above.” [Filing No.
56-3 at 7.] Because his office was outside of the conference room where new employees
underwent training, he attended almost all of the new employee orientation programs, which he
claimed cover “all types of discrimination, sexual harassment, everything employees need to
know.”
[Filing No. 56-3 at 7.]
He considered himself “well grounded” in employment
discrimination laws and USDC’s employment discrimination policy. [Filing No. 56-3 at 7.] In
Bruso v. United Airlines, Inc., the Seventh Circuit found that the plaintiff satisfied this element
when he demonstrated that the managers involved in the lawsuit were familiar with the
antidiscrimination principles of Title VII and with the company’s antidiscrimination policy. 239
F.3d at 859. One of the managers discussed the antidiscrimination policy with the supervisors
several times, attended three training sessions on discrimination, and read the company’s policy
9
and informational materials. Id. at 860; see also E.E.O.C. v. Caterpillar Inc., 503 F.Supp.2d
995, 1048 (N.D. Ill. 2007) (“There is ample evidence that managerial employees were aware of
the risk that they might violate federal law, as reflected in Defendant’s repeated and substantial
efforts to train all employees on and publicize its harassment policies.”); Ciesielski v. Hooter
Management Corp. 2004 WL 2997648, *2 (N.D. Ind. 2004) (finding that the first element was
satisfied when managers testified at trial that they attended sexual harassment seminars and
annual training programs concerning sexual harassment and that they read the manual containing
the company’s policy).8 Similarly, the EEOC has proven that Mr. Dunn was familiar with Title
VII and USDC’s antidiscrimination policy. Mr. Palmer was not required to make a formal
complaint against Mr. Dunn to satisfy this first element because only Mr. Dunn’s awareness that
8
USDC relies on AutoZone to prove that because Mr. Palmer never complained to anyone at
USDC that he was being discriminated against on the basis of his race, there is no evidence that
it acted with malice or reckless disregard. [Filing No. 55 at 8-12.] In AutoZone, the court
concluded that the employer had the required mental state to satisfy the first prong: “Because
[the employee] repeatedly asked [the employer’s lead disability coordinator] for an
accommodation, and asked for an accommodation so often that [the coordinator] became
frustrated by his persistence, a rational jury could have decided that AutoZone’s response was
not mere negligence, but reckless indifference.” 707 F.3d at 837. AutoZone is an American with
Disabilities (“ADA”) case, however, which is distinguishable from a Title VII racial
discrimination case. A claim for race discrimination under Title VII does not require proof that
the employer complained of racial discrimination, while a claim for failure to accommodate
under ADA does require proof that the employer was aware of the employee’s need for
accommodation. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973) (explaining
that to establish a prima facie case of racial discrimination, the plaintiff must show: “(i) that he
belongs to a racial minority; (ii) that he applied and was qualified for a job for which the
employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and (iv)
that, after his rejection, the position remained open and the employer continued to seek
applicants from persons of [plaintiff’s] qualifications.”; Hoffman v. Caterpillar, Inc., 256 F.3d
568, 572 (7th Cir. 2001) (“[I]n addition to showing that she is a qualified individual with a
disability, [the employee] must show that the employer was aware of her disability and still
failed to reasonably accommodate it.”).
10
he is acting in violation of federal law, not his awareness that he is engaging in discrimination, is
relevant. 9 See Kolstad, 527 U.S. at 535.
B.
Mr. Dunn was in a managerial capacity, and USDC was vicariously liable for
his actions.
Once the first element of the Kolstad framework is satisfied, the EEOC must impute
liability for punitive damages to USDC. See Kolstad, 527 U.S. at 539. To impute liability, a
plaintiff must show: “(a) the principal authorized the doing and the manner of the act, or (b) the
agent was unfit and the principal was reckless in employing him, or (c) the agent was employed
in a managerial capacity and was acting in the scope of employment, or (d) the principal or a
managerial agent of the principal ratified or approved the act.”
Id. at 542-43 (quoting
Restatement (Second) of Agency § 217C). Whether an employee is in a managerial capacity “is
necessarily a fact-intensive inquiry, and the fact finder ought to consider the kind of authority the
employer has given the employee, the amount of discretion given to the employee in executing
his job duties, and the manner in which those duties are carried out.” Bruso, 239 F.3d at 858.
The employee should be important but does not need to be the top management or top company
official. Kolstad, 527 U.S. at 543. USDC does not dispute that Mr. Dunn was a managerial
agent acting within the scope of his employment when he did not promote Mr. Palmer.
Accordingly, the EEOC has met is burden to establish that USDC was vicariously liable for Mr.
Dunn’s actions.
C.
USDC did not engage in good faith efforts to implement an antidiscrimination policy.
9
The EEOC also argues that USDC’s actions satisfy the first factor because they were egregious.
[Filing No. 57 at 14-16.] The Court is satisfied that Mr. Dunn, and in turn USDC, acted with
knowledge that its actions may violate federal law thus meeting the first factor of the Kolstad
framework. Because this test is more developed in case law and the egregiousness standard is
merely an alternative test to prove mental state, the Court will rely on it here. See Bruso, 239
F.3d at 858.
11
Even if the EEOC can satisfy the first two elements of the Kolstad framework, USDC
“may not be vicariously liable for the discriminatory employment decisions of managerial agents
where these decisions are contrary to the employer’s ‘good faith efforts to comply with Title
VII.’” Kolstad, 527 U.S. at 545 (quoting Kolstad v. American Dental Ass’n, 139 F.3d 958, 974
(D.C. Cir. 1998) (Tatel, J., dissenting) (vacated, 527 U.S. 526)). The implementation of a
written or formal antidiscrimination policy is relevant to this inquiry, but “it is not sufficient in
and of itself to insulate an employer from a punitive damages award. Otherwise, employers
would have an incentive to adopt formal policies in order to escape liability for punitive
damages, but they would have no incentive to enforce those policies.” Bruso, 239 F.3d at 858-59
(citation omitted); see also May v. Chrysler Group, LLC, 716 F.3d 963, 975 (7th Cir. 2012)
(finding that a written anti-harassment policy is relevant to the analysis of good-faith efforts but
not alone sufficient); E.E.O.C. v. Management Hospitality of Racine, Inc., 666 F.3d 422, 438
(7th Cir. 2012) (same); Hall v. Consolidated Freightways Corp. of Del., 337 F.3d 669, 675-76
(6th Cir. 2003) (explaining that the employer must actually implement its policy to engage in
good faith); Romano v. U-Haul Intern., 233 F.3d 655, 670 (1st Cir. 2000) (concluding that a
written non-discrimination policy alone is not sufficient to insulate an employer from punitive
damages liability); Passantino v. Johnson & Johnson Consumer Products, Inc., 212 F.3d 493,
517 (9th Cir. 2000) (“[A]n employer must show not only that it has adopted an antidiscrimination policy, but that it has implemented that policy in good faith.”). USDC bear the
burden to show that it has engaged in good faith efforts to implement an anti-discrimination
policy. AutoZone, 707 F.3d at 835; Management Hospitality, 666 F.3d at 438; May, 716 F.3d at
974; Lampley v. Onyx Acceptance Corp., 340 F.3d 478, 482 (7th Cir. 2003).
12
The evidence viewed in light most favorable to the EEOC shows that USDC did not
engage in good faith efforts to implement an anti-discrimination policy. The only undisputed
evidence in the record of USDC’s good faith efforts is the existence of a Title VII policy in
USDC’s Employee Handbook (“Handbook”).
See [Filing No. 56-1 at 7.]
The “Equal
Employment Opportunity” clause states:
It is the policy of [USDC] to grant equal employment opportunities to all
qualified persons without regard to race, color, religion, age, sex, national origin,
ancestry, physical disability, mental disability, medical condition, family care
status, veteran status, marital status, or any other basis protected by state or
federal law. To deny a qualified person the chance to contribute to our effort is
unfair to everyone. It is our intent and desire to provide equal opportunities in
employment, training, promotions, wages, benefits, and all other privileges, and
terms and conditions of employment. This policy has the support of the highest
levels of our management team.10
[Filing No. 56-1 at 7.] On April 9, 2011, Mr. Palmer signed an acknowledgment that he received
the Handbook, [Filing No. 56-2 at 2,] and he testified during deposition that he received a copy
of the Handbook in 2006 when he was first hired and another copy in 2008 when USDC bought
Tuchman, [Filing No. 56-6 at 13]. While USDC’s policy is relevant to determine whether it
engaged in good faith efforts to implement an anti-discrimination policy, it alone is not
sufficient. Bruso, 239 F.3d at 858-59.
USDC did not introduce additional evidence to meet its burden to show that, beyond
having an anti-discrimination policy, it actually enforced its anti-discrimination policy. Mr.
Dunn reported that all USDC employees have to undergo some sort of employment
discrimination training prior to their first day of work. [Filing No. 56-3 at 7.] He explained:
“We have a very comprehensive orientation program with all new employees before they are, or
10
The Handbook also contains a “Policy Against Harassment” clause, which explains that USDC
prohibits harassment on the basis of “race, color, religion, age, sex, national origin, ancestry,
physical disability, mental disability, medical condition, family care status, veteran status,
marital status, or any other basis protected by state or federal law.” [Filing No. 56-1 at 8.]
13
right after they are hired that covers all types of discrimination, sexual harassment, everything
employees need to know if they are going to work at Tuchman Cleaners . . . .” [Filing No. 56-3
at 7.] Mr. Dunn attended an employment discrimination training session for “managers and
above” in 2008 after USDC purchased Tuchman. [Filing No. 56-3 at 7.] Mr. Cvetkovich, Ms.
Wentzel, and Mr. Palmer, however, denied receiving any race discrimination training. [Filing
No. 57-5 at 5; Filing No. 57-6 at 6; Filing No. 56-6 at 12.] Mr. Cvetkovich speculated that he
had probably received materials on employment discrimination matters at some point during his
employment with USDC but did not remember what materials specifically. [Filing No. 57-5 at
5.]
When asked what type of materials Mr. Cvetkovich has read, he responded:
“Just
information about how, like, different remarks or different - - you know, saying something could
be offensive and discriminative to somebody.” [Filing No. 57-5 at 5.] Mr. Cvetkovich was
unfamiliar with Title VII of the 1964 Civil Rights Act. [Filing No. 57-5 at 5.] Mr. Palmer stated
that Tuchman Zionsville posted notices about employees’ Title VII rights in the bathroom.
[Filing No. 56-6 at 12.]
Courts have often considered whether an employer offered anti-discrimination training to
its employees when determining whether it has engaged in good faith efforts to implement an
anti-discrimination policy. In E.E.O.C. v. Management Hospitality of Racine, Inc., the Seventh
Circuit found that a rational juror could have concluded that the employer did not engage in good
faith to educate its employees about sexual harassment in the workplace. 666 F.3d at 438. The
assistant manager testified that she received training on sexual harassment when she was hired as
a server and that she was not given any additional training after she was promoted to assistant
14
manager.11 Id. at 438-39. The assistant manager and several other employees failed to report
claims of sexual harassment, and the court said that their “consistent failure to comply with the
sexual harassment policy evinced a lack of understanding of what constituted sexual harassment .
. . and what their responsibilities were as managerial staff under the policy.” Id. at 439; see also
Bruso, 239 F.3d at 852, 860-61 (noting that the managers had received “extensive training” from
the company’s senior litigation counsel on its anti-discrimination policy when deciding whether
the company engaged in good faith efforts to implement an anti-discrimination policy);
Ciesielski, 2004 WL 2997648, *4 (considering the fact that managers attended annual training
programs addressing sexual harassment in its “good faith” determination); Ash v. Tyson Foods,
Inc., 664 F.3d 883, 905 (11th Cir. 2011) (considering the undisputed evidence that all employees
were sufficiently trained on the company’s anti-discrimination policy and that management
personnel attended yearly training sessions on the company’s anti-discrimination policy in its
factor three analysis); Lowery v. Circuit City Stores, Inc., 206 F.3d 431, 445-46 (4th Cir. 2000)
(taking into account that the company required every manager to attend a week long training
seminar that included education in anti-discrimination laws in its factor three analysis). Without
evidence of employee training in federal anti-discrimination laws or in the employer’s antidiscrimination policy, courts are reluctant to grant summary judgment precluding the issue of
punitive damages from reaching the jury. See E.E.O.C. v. RMG Communications, LLC, 2009
WL 3569277, *6 (S.D. Ind. 2009) (denying employer’s motion for summary judgment, in part,
because the employer did not train its employees on race discrimination issues); Thompson v.
Altheimer & Gray, 2001 WL 1618717, *5 (N.D. Ind. 2001) (same).
11
The court commented: “As [the assistant manager] was in charge of training all new
employees on [the employer’s] sexual harassment policy, her lack of training is troublesome.”
Management Hospitality, 666 F.3d at 439.
15
Unlike the assistant manager in Management Hospitality who had received at least some
training on Title VII, Mr. Cvetkovich, Ms. Wentzel, and Mr. Palmer consistently testified that
they have received no training in federal anti-discrimination laws or in USDC’s antidiscrimination policy. [Filing No. 57-5 at 5; Filing No. 57-6 at 6; Filing No. 56-6 at 12.] The
fact that Ms. Wentzel, as Mr. Palmer’s manager, did not take appropriate measures to address the
“face of Zionsville” comment indicates that she, like the employees in Management Hospitality,
did not understand race discrimination laws and her role in ensuring USDC was in compliance
with anti-discrimination laws. See [Filing No. 56-1 at 7-9.]
The court in Management Hospitality additionally considered whether the employer had
procedures through which employees can report discrimination in its factor three analysis. The
court noted that the employees watched a video on sexual harassment. Management Hospitality,
666 F.3d at 438. The video was inaccessible to the employees without managerial approval,
however, and the complaint mechanism was available only in the video, not in written form. Id.
The employer hung up a crisis management poster with instructions on how to complain about
sexual harassment in the workplace, but the court determined that the poster was an insufficient
attempt to provide employees with a meaningful complaint mechanism. Id.; see also Ciesielski,
2004 WL 2997648, *4 (taking into account the company’s procedures for addressing harassment
complaints as a factor in its good faith efforts analysis). Relatedly, in Lowery v. Circuit City
Stores, Inc., the Fourth Circuit noted that that the employer had several formal avenues for
employees to complain about race discrimination, but these formal procedures were countered by
evidence that employees who did complain felt ignored, intimidated, and feared retaliation. 206
F.3d at 446. It considered this reality when denying the employer’s motion to vacate the award
16
of punitive damages for the employer’s refusal to promote employees on account of their race.
Id. at 445-46.
Similar to the facts in Management Hospitality and Lowery, USDC’s formal complaint
mechanism is contradicted by other evidence in the record. Mr. Dunn asserted that he had an
open door policy, [Filing No. 56-3 at 9], yet Mr. Palmer was not aware of Mr. Dunn’s
involvement in the promotion process until April 2011, let alone his open door policy [Filing No.
56-6 at 6.] Explaining his policy, Mr. Dunn said: “Anybody that wants to come see me anytime
can come to see me. The only thing that I require you to do is discuss the problem with your
manager first. If you cannot resolve it, feel free to come to me directly.” [Filing No. 56-3 at 9.]
No one at USDC, including Ms. Wentzel and Mr. Cvetkovich, told Mr. Palmer that he was able
to go directly to Mr. Dunn to talk about his interest in being promoted to assistant manager. The
“Equal Employment Opportunity” clause in the Handbook contains no complaint mechanism for
employees who wish to complain that they are being discriminated against on the basis of race.12
[Filing No. 56-1 at 7.] Mr. Palmer testified that there is a poster with notices of federal
discrimination laws in the Tuchman Zionsville bathroom, but he did not speak to whether the
poster outlined a complaint mechanism for violations of one’s rights under these laws. [Filing
No. 56-6 at 12.]
The Court acknowledges that this case is distinguishable from several cases that have
either awarded or denied an award of punitive damages for Title VII because Mr. Palmer did not
specifically complain to USDC that he felt discriminated against on the basis of his race when
12
In the Handbook’s “Policy Against Harassment” clause, it explains that anyone who “in good
faith feels they have been harassed” should report the incident to “Your immediate Manager, or,
Your District Manager, or The Administrative Coordinator, or The District President.” [Filing
No. 56-1 at 8.] It goes on to say that USDC will promptly investigate the incident of harassment
and that the employee will not be retaliated against for reporting the incident of harassment.
[Filing No. 56-1 at 9.]
17
USDC did not promote him to assistant manager, and USDC did not have an opportunity prior to
his EEOC charge to remedy the situation. See Bruso, 239 F.3d at 859-861; May, 716 F.3d at
974-76; Management Hospitality, 666 F.3d at 437-39; but see Lampley, 340 F.3d at 482-83.13 It
is USDC’s burden, however, to prove this factor in the Kolstad framework and to prove that it is
entitled to summary judgment on the issue of punitive damages, and it has not met its burden.
USDC did take action after Mr. Palmer filed his EEOC charge, but the Court can only consider
USDC’s efforts before the charge was filed. David v. Caterpillar, Inc., 324 F.3d 851, 865 (7th
Cir. 2003) (“[The employer] has cited no authority for the proposition that good deeds taken by
the employer after it has made an unlawful employment decision somehow insulate the employer
from an award of punitive damages.”). The only undisputed fact in the record is the existence of
USDC’s anti-discrimination policy, which had been repeatedly held to be insufficient to establish
a good faith effort to comply with Title VII. Therefore, the first two prongs of the Kolstad
framework are met, and USDC has failed to show that it has engaged in good faith efforts to
implement an anti-discrimination policy.
13
In Lampley, the employee felt that he was being discriminated against on the basis of race
when his manager refused to promote him, but he did not go through the employer’s formal
complaint channels. 340 F.3d at 480. Instead, he only confided in a manager from another
branch, who told the employee to work things out with his manager. Id. at 480-81. The
employee filed a charge with the EEOC, and his manager terminated his employment. Id. at 481.
The district court held a trial on the employee’s race discrimination and retaliatory discharge
claims for both compensatory and punitive damages. Id. at 482. The employer appealed the
jury’s award of punitive damages for the retaliatory discharge claim, and after going through the
Kolstad framework, the court concluded that there was sufficient evidence for a reasonably jury
to find the punitive damages award for the retaliatory discharge claim. Id. at 482-83.
18
IV.
CONCLUSION
For the reasons explained, the Court DENIES USDC’s Motion for Partial Summary
Judgment. [Filing No. 54.]
06/04/2014
_______________________________
Hon. Jane Magnus-Stinson, Judge
United States District Court
Southern District of Indiana
Distribution:
Kathleen Ann DeLaney
DELANEY & DELANEY LLC
kathleen@delaneylaw.net
Mark J. Plantan
DELANEY & DELANEY LLC
mplantan@delaneylaw.net
Jo Ann Farnsworth
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
joann.farnsworth@eeoc.gov
Aarika D. Mack-Brown
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
aarika.mack-brown@eeoc.gov
Laurie A. Young
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
legal.station@eeoc.gov
Michelle Eisele
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
michelle.eisele@eeoc.gov
19
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