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Adams v. O'Reilly Automotive, Inc.: EMPLOYMENT - Ellerth-Faragher affirmative defense regarding supervisor harassment; employer need not accept all allegations; constructive notice Question

1The Honorable Gary A. Fenner, United States District Judge for the Western
District of Missouri.
United States Court of Appeals
No. 07-3599
Rebecca Adams, *
Appellant, **
Appeal from the United States
v. * District Court for the
* Western District of Missouri.
O'Reilly Automotive, Inc. *
Appellee. *
Submitted: June 11, 2008
Filed: August 15, 2008
Before MELLOY, ARNOLD, and BENTON, Circuit Judges.
ARNOLD, Circuit Judge.
Rebecca Adams sued her employer, O'Reilly Automotive, Inc., because of the
sexual harassment that she suffered at the hands of Harold Schroeder, a store manager
who was her supervisor. See 42 U.S.C. 2000e-2(a)(1). The district court1 granted
summary judgment in favor of O'Reilly, holding that O'Reilly had made out the socalled
Ellerth-Faragher affirmative defense as a matter of law. Ms. Adams appeals
from that order and we affirm.
Ms. Adams's cause of action arises under Title VII of the Civil Rights Act of
1964, which does not prohibit sexual harassment as such, but makes it unlawful for
an employer "to discriminate against any individual with respect to his compensation,
terms, conditions, or privileges of employment, because of such individual's race,
color, religion, sex, or national origin." 42 U.S.C. 2000e-2(a)(1). The Supreme
Court has determined, however, that sexual harassment "sufficiently severe or
pervasive to alter the conditions of the victim's employment and create an abusive
working environment" qualifies as sex discrimination under Title VII. Meritor
Savings Bank v. Vinson, 477 U.S. 57, 67 (1986) (internal quotations marks and
citation omitted).
Ms. Adams maintains that Mr. Schroeder sexually harassed her for over two
and a half years. She admits that she never reported his actions to company officials
during this time, and that O'Reilly fired Mr. Schroeder two days after she eventually
made a complaint through O'Reilly's sexual harassment hotline. Ms. Adams continues
to work for O'Reilly, and is suing the company for the sexual harassment that she
suffered before her report.
O'Reilly moved for summary judgment, arguing that the evidence established
an affirmative defense to Ms. Adam's claim as a matter of law. "[A]n employer is not
'automatically' liable for harassment by a supervisor who creates the requisite degree
of discrimination." Faragher v. City of Boca Raton, 524 U.S. 775, 804 (1998)
(quoting Meritor, 477 U.S. at 72). An employer may "show as an affirmative defense
to liability that the employer had exercised reasonable care to avoid harassment and
to eliminate it when it might occur, and that the complaining employee had failed to
act with like reasonable care to take advantage of the employer's safeguards and
otherwise to prevent harm that could have been avoided." Faragher, 524 U.S. at 805.
This defense is commonly known as the Ellerth-Faragher defense after the pair of
Supreme Court cases that elaborated it. See id. at 807; Burlington Indus., Inc. v.
Ellerth, 524 U.S. 742 (1998).
To establish the first part of the Ellerth-Faragher defense, O'Reilly must
demonstrate that it "exercised reasonable care to prevent and correct promptly any
sexually harassing behavior." Faragher, 524 U.S. at 807. "[P]roof that an employer
had promulgated an antiharassment policy with complaint procedure is not necessary
in every instance," id., but "distribution of a valid antiharassment policy provides
compelling proof that [an employer] exercised reasonable care in preventing and
promptly correcting sexual harassment." Weger v. City of Ladue, 500 F.3d 710, 719
(8th Cir. 2007) (internal quotation marks and citations omitted). There is no dispute
that O'Reilly had promulgated and disseminated an anti-harassment policy; rather, the
parties dispute whether the policy was reasonable and properly enforced. If the policy
was unreasonable or unenforced then it cannot be used to demonstrate that O'Reilly
exercised reasonable care in preventing and correcting sexual harassment.
We believe in fact that O'Reilly's stated anti-harassment policy was more than
reasonable for purposes of the Ellerth-Faragher defense: The uncontested record
indicates that O'Reilly has a stated policy of "zero tolerance," requiring investigation
and documentation of every report of sexual harassment. The stated anti-harassment
policy includes a complaint procedure with multiple channels for reporting sexual
harassment: Employees may complain, at their election, to their supervisor, a special
anonymous sexual harassment hotline, or the corporate human resources department.
Complaints are treated as strictly confidential and employees are reassured that no
action will be taken against them. The policy is widely disseminated through training
videos and handbooks for all new employees as well as posters that are permanently
displayed in all stores. As the district court noted, this policy is distinctly similar to
the policy that we held sufficient to establish the first part of the Ellerth-Faragher
defense in Williams v. Missouri Dep't of Mental Health, 407 F.3d 972, 977 (8th Cir.
2005), cert. denied, 546 U.S. 1091 (2006).
Ms. Adams contends that the stated policy was not reasonably enforced because
in practice O'Reilly required a witness to corroborate the alleged sexual harassment
before it would take action against an alleged harasser. She argues that this essentially
inoculates the vast majority of sexual harassment against correction because sexual
harassment normally occurs surreptitiously. Ms. Adams bases her contention on the
testimony of Stephen Pope, O'Reilly's vice president of human resources, who was in
charge of sexual harassment issues. He attested that O'Reilly requires some evidence
confirming that harassment occurred before it takes action against alleged harassers,
but he conspicuously did not say that a corroborating witness was required. To the
contrary, Mr. Pope attested that O'Reilly would in an appropriate case infer that
harassment occurred from an accumulation of uncorroborated allegations; it would in
other words conclude that there was sufficient smoke to imply a fire that required
We note also that there is nothing objectionable in O'Reilly requiring some kind
of confirmation of sexual harassment before taking action against alleged harassers:
This rightly honors the vaunted principle that the burden of proof is on the accuser,
and it prevents discrimination against those accused of sexual harassment. We agree
with the Eleventh Circuit that, there is no "requirement that the employer credit
uncorroborated statements the complainant makes if they are disputed by the alleged
harasser. Nothing in the [Ellerth-Faragher] defense puts a thumb on either side of the
scale in a he-said, she-said situation. The employer is not required to credit the
statements on the she-said side absent circumstances indicating that it would be
unreasonable not to do so." Baldwin v. Blue Cross/Blue Shield of Ala., 480 F.3d 1287,
1303-04 (11th Cir. 2007), cert. denied, 128 S. Ct. 499 (2007). We conclude therefore
that Ms. Adams's argument fails.
Ms. Adams also maintains that a history of ignoring complaints and failing to
discipline sexual harassers shows that O'Reilly did not implement its anti-harassment
policy. Of course, if O'Reilly routinely ignored its stated anti-harassment policy, then
no matter how good the policy is in theory, O'Reilly cannot establish the first part of
the Ellerth-Faragher defense. Ms. Adams points to the experiences of four female
employees as evidence for her contention.
The first such employee is Jodi Woods. After Ms. Woods reported being
sexually harassed, O'Reilly responded with a full-scale investigation, the
documentation of which is contained in the record. Ms. Adams would have us
construe this incident as evidence of O'Reilly's failure to implement its stated policy
because the conclusion of the investigation did not credit Ms. Woods's accusations.
Federal courts, however, are not in the business of micromanaging or second-guessing
companies' internal investigations. See Hutson v. McDonnell Douglas Corp., 63 F.3d
771, 781 (8th Cir. 1995); Baldwin, 480 F.3d at 1304-05. We must afford an
appropriate degree of deference to business judgment in such a situation, which means
that when presented with evidence of a reasonable investigation conducted in good
faith we will not condemn the result. See Cronquist v. City of Minneapolis, 237 F.3d
920, 927-28 (8th Cir. 2001). There is nothing in the record to indicate that O'Reilly
did not conduct a reasonable investigation in good faith.
A second employee to whose experience Ms. Adams adverts is Kelly Nelson,
who failed to report sexual harassment through proper channels. Her general
allegations of sexual harassment, moreover, came to light only after she had quit her
job and become embroiled in a dispute with O'Reilly about unemployment insurance.
She never stated the identity of her putative harasser or any details of the supposed
harassment. Therefore any failure of O'Reilly to respond to this situation provides no
evidence that O'Reilly did not implement its stated anti-harassment policy.
The third employee to whom Ms. Adams directs our attention is Trina Louallen,
who attested that she complained about sexual harassment to assistant store manager
Tim Reaka and that he instructed her to contact district manager Bruce Dowell. Ms.
Louallen never took any further action regarding the alleged harassment. O'Reilly's
sexual harassment policy calls for employees who have complaints to report them to
their "supervisor/manager" or the Human Resources Department. It is not at all clear
that Mr. Reaka was Ms. Louallen's supervisor or manager; when Ms. Louallen was
asked whether she complained to "any management people," she answered, "No." But
even if Mr. Reaka was Ms. Adams's manager within the meaning of O'Reilly's sexual
harassment policy, his advice to her to speak to the district manager about her
difficulty is not necessarily a failure on the part of O'Reilly to follow its policy:
Correctly construed, it may well have been merely a direction as to how best to have
that policy implemented. The inference that this evidence gives rise to, if any, is
extremely weak, and in any case, Mr. Reaka's actions cannot serve by themselves to
create an inference that O'Reilly was insouciant about enforcing its sexual harassment
The final employee of relevance is Donna Reynolds, who attested that she
complained of sexual harassment to Mr. Dowell, according to O'Reilly's complaint
procedure, but O'Reilly did not respond. Assuming for purposes of summary
judgment that Ms. Reynolds told the truth, as we must, her story constitutes evidence
of a single failure by O'Reilly to implement its anti-harassment policy. But in light
of the other evidence in the record that O'Reilly did enforce its policy, not the least of
which is O'Reilly's extremely swift action in discharging Ms. Adams's harasser, we
believe that a reasonable jury could not conclude on this record that O'Reilly did not
implement its stated anti-harassment policy in an effective way.
Ms. Adams also argues that irrespective of O'Reilly's general anti-harassment
policy, it failed to exercise reasonable care because O'Reilly had what she rather
confusingly calls constructive notice of Mr. Schroeder's sexual harassment before her
official complaint, but failed to take appropriate action: She argues that
Mr. Schroeder's harassment was so severe and pervasive that O'Reilly must have
known of it. We note that this is really an argument that there was sufficient
circumstantial and other evidence that came to O'Reilly's attention that Mr. Schroeder
was a sexual harasser, and thus they had actual notice of his activities. But
Ms. Adams points to no evidence in the record that would link evidence of
Mr. Schroeder's alleged proclivities to his interactions with her and thus O'Reilly
would have no notice that she was being sexually harassed. We agree, moreover, with
the district court that the record will not support a finding that Mr. Schroeder's
objectionable activities were so frequent as to make them pervasive.
Though we are not exactly sure, in arguing that O'Reilly was on constructive
notice Ms. Adams may also be saying something different, namely, that in the exercise
of reasonable diligence O'Reilly would have discovered that Mr. Schroeder was
harassing her. This, we believe, is the sense in which the phrase "constructive notice"
is sometimes used in the cases. Cf. Weger v. City of Ladue, 500 F.3d 710, 721 n.6 (8th
Cir. 2007). We conclude that where, as here, an effective policy against sexual
harassment is in place, the employer as a matter of law has satisfied its duty to inform
itself about its employees' behavior. In other words, we agree with the Eleventh
Circuit that "once a company has developed and promulgated an effective and
comprehensive anti-sexual harassment policy, aggressively and thoroughly
disseminated the information and procedures contained in the policy to its staff, and
demonstrated a commitment to adhering to this policy, it has fulfilled its obligation
to make reasonably diligent efforts to 'know what is going on' within the company."
Farley v. American Cast Iron Pipe Co., 115 F.3d 1548, 1554 (11th Cir. 1997).
O'Reilly's constructive notice, if any, in the second sense in which Ms. Adams uses
it, is thus irrelevant.
In conclusion, because O'Reilly had a reasonable anti-harassment policy that
it properly communicated to its employees and enforced, we hold that no genuine
issue of material fact exists as to whether O'Reilly exercised reasonable care to
prevent and correct sexual harassment. O'Reilly has thus established the first part of
the Ellerth-Faragher defense.
To establish the second element of the defense, O'Reilly must show that
Ms. Adams "unreasonably failed to take advantage of any preventive or corrective
opportunities provided by the employer or to avoid harm otherwise." Faragher,
524 U.S. at 807. Whereas the first part of the defense discourages violations by
crediting employers who implement effective anti-harassment policies, the
"requirement to show that the employee has failed in a coordinate duty to avoid or
mitigate harm reflects an equally obvious policy imported from the general theory of
damages, that a victim has a duty to use such means as are reasonable under the
circumstances to avoid or minimize the damages that result from violations of the
statute." Id. at 806 (internal quotation marks and citations omitted). A showing that
an employee failed to avail him-or herself of a proper complaint procedure "will
normally suffice to satisfy the employer's burden under the second element of the
defense." Id. at 807-08.
It is undisputed that Ms. Adams failed to avail herself of the established
complaint procedure for over two and one half years, but that as soon as she did,
O'Reilly took action resulting in the discharge of her harasser two days later. This
creates a strong inference that Ms. Adams was unreasonable in refusing to use the
established complaint procedure sooner. Ms. Adams argues that her delay was
reasonable because she was waiting to report Mr. Schroeder's behavior until she had
a corroborating witness. Ms. Adams reported the harassment on the day that a friend
of hers, who was later hired by O'Reilly, witnessed the final incident of sexual
harassment. But as the Fourth Circuit put it, "Faragher and Ellerth command that a
victim of sexual harassment report the misconduct, not investigate, gather evidence,
and then approach company officials. Sexual harassment cases often involve the word
of the harasser versus the word of the harassed employee, but this is no different from
any other case where the outcome depends on the credibility of the parties' testimony.
Though we understand why [an employee] would want tangible evidence to buttress
her version of events, this cannot excuse her failure to report ... unwelcome conduct."
Matvia v. Bald Head Island Mgmt., Inc., 259 F.3d 261, 269 (4th Cir. 2001).
Ms. Adams also argues that her delay in reporting was reasonable in light of her
fear of retaliation. But she offers no evidence to show that the fear was either genuine
or reasonable. We do not believe that a fear of retaliation is generally a proper excuse
for failing to report sexual harassment. Cf. Barrett v. Applied Radiant Energy Corp.,
240 F.3d 262, 267 (4th Cir. 2001). Only when sexual harassment is exposed to
scrutiny can it be eliminated; thus it makes sense to encourage victims of sexual
harassment to come forward because, as Ms. Adams herself argues, they are often the
only ones, besides the perpetrators, who are aware of sexual harassment. To excuse
a victim from the duty to alert the proper authorities through proper channels
specifically discourages the best hope of exposing and eliminating sexual harassment.
Normally bringing a retaliation claim, rather than failing to report sexual harassment,
is the appropriate response to the possibility of retaliation. Cf. Matvia, 259 F.3d at
270. We conclude therefore that O'Reilly has demonstrated the unreasonableness of
Ms. Adam's failure to report Mr. Schroeder's harassment sooner, and that O'Reilly has
thus established the second element of the Ellerth-Faragher defense.
Having successfully established both elements of the Ellerth-Faragher defense
as a matter of law, we hold that O'Reilly was entitled to summary judgment.


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