WEBB, District Judge.
Wax Works, Inc. (Wax Works) appeals a post-trial order of the United States District Court for the Northern District of Iowa,
On appeal, Wax Works argues there was insufficient evidence to support Ogden's sexual harassment, retaliation, constructive discharge, and punitive damages claims. Alternatively, Wax Works contends the district court abused its discretion by failing to grant a new trial. We affirm.
Predictably, the testimony "varied wildly" according to whose witnesses were testifying. "We, of course, do not resolve these discordant accounts . . . ." Howard v. Burns Bros., Inc., 149 F.3d 835, 838 (8th Cir.1998). Rather, we consider the evidence in the light most favorable to Ogden, assuming all conflicts were resolved in her favor, assuming all facts her evidence tended to prove, and giving her the benefit of all favorable inferences that reasonably may be drawn from the proven facts. See Morse v. Southern Union Co., 174 F.3d 917, 922 (8th Cir.1999).
Wax Works owns and operates a chain of music stores under the name "Disc Jockey," along with a small chain of video stores under the name "Reel Collections." On May 3, 1987, Wax Works hired Ogden
During her tenure, Ogden reported directly to a district manager, who was responsible for supervising several stores in a geographic region. Among the district manager's duties was the performance of yearly evaluations, the completion of which was a prerequisite to a sales manager's annual raise. The district manager, in turn, reported to a regional manager, who was responsible for overseeing several district managers and their respective stores. The regional manager reported to the Wax Works home office.
Ogden developed into an outstanding store manager by all accounts. Sales at her store increased throughout her tenure, and she routinely received bonuses and awards for her efforts.
A. The Harassment
Ogden alleged she was sexually harassed by her district manager, Robert Hudson, from late June-early July, 1994, until she left Wax Works in September, 1995. Hudson, who lived in Omaha, Nebraska, became Ogden's district manager in 1993.
Ogden described three occasions on which Hudson subjected her to unwelcome physical advances. In late June-early July, 1994, an intoxicated Hudson grabbed Ogden by the waist and asked her to his motel room as the two were leaving a restaurant. Ogden refused the invitation, pushed Hudson away, and told him not to touch her. On St. Patrick's Day, 1995, an intoxicated Hudson twice put his arm around Ogden while the two were in a Sioux City bar with a group of employees. Each time Ogden pushed Hudson away and told him to leave her alone. Hudson made a similar advance in April, 1995, which Ogden rebuffed with a physical threat.
In addition to these physical advances, Hudson propositioned Ogden incessantly. He constantly asked her to go for drinks after work. He asked her on several occasions to stay with him at his home in Omaha and "party." He asked her to a motel room during a convention in October, 1994, and on another occasion asked her to attend a concert.
Hudson took an inappropriate interest in Ogden's personal life, as well. He once offered to stay at Ogden's home to "protect" her from her estranged ex-husband. He berated Ogden upon learning she had taken a canoe trip with a male companion. On another occasion, he became angry with Ogden when a male friend visited her in Sioux City.
When Ogden rebuffed these advances and propositions, Hudson responded by mistreating her at work. He constantly criticized her performance and routinely screamed at her over work matters shortly after she refused to go out with him.
Ogden's account was corroborated at trial. Ogden's former employee, Chris Shook, and friend, Holly Longwell, each recalled witnessing Hudson subject Ogden to unwelcome physical advances. Shook testified Hudson often asked whether Ogden had "somebody else in her life," and expressed a desire to stay with Ogden to protect her from her ex-husband. Shook also testified Hudson yelled at Ogden in front of other employees, and treated her differently than others.
Ogden also alleged Hudson conditioned her 1995 evaluation, and thereby her raise, upon her willingness to submit to his advances; and subsequently refused to effectuate her 1995 raise in retaliation for her refusal to submit to him. In April, 1995, Ogden's regional manager, Jeff Klem, ordered Hudson to perform Ogden's evaluation immediately to effectuate her annual raise.
Ogden and others described the impact Hudson's mistreatment had upon her physical and mental health. On several occasions, Hudson's beratings caused Ogden to leave work in tears. Her personality changed completely, from outgoing to withdrawn. She became depressed and lost interest in doing anything outside of work. She was unable to sleep or eat, and lost some 40 pounds between January and August of 1995. She fell ill for days at a time and consequently missed more work. She began drinking and smoking to excess.
B. Wax Works' Response
On August 9, 1995, a confrontation arose between Ogden and Hudson over Hudson's desire to promote Shook to manage a store in Sioux Falls, South Dakota. Ogden initially called Klem to protest the move, but Klem told her to address her concerns directly to Hudson. Ogden balked at first, telling Klem she feared Hudson. When Ogden ultimately confronted Hudson, he "exploded," threatening to block future raises for Ogden's employees and "squish [her] out like a little fly." The confrontation ended with Hudson following Ogden to her car, screaming and smacking his fist.
Two days later, Ogden called Klem and described the confrontation. She also reported to Klem that Hudson yelled at her because she would not go out with him. According to Ogden, Klem responded "I know exactly what you're telling me. I know about [Hudson's affairs with other employees], and [Hudson's] been warned before . . . ."
When the two spoke a few days later, however, Klem told Ogden he had been assured by Hudson that the matter was merely a personality conflict, which had since been resolved. Ogden insisted this was not the case; rather, Hudson had been "treating her like a dog" because she refused to go out with him. She also described more of Hudson's objectionable conduct, including his offers to stay at her home. Klem ultimately agreed to travel to Sioux City to meet with all parties involved. According to Ogden, however, his demeanor had "totally changed" from their prior conversation; he "minimize[d] [Hudson's conduct] just like nothing had happened."
Klem visited Sioux City as promised August 21-24, 1995, but Ogden was unable to meet with him due to illness.
For her part, Ogden called Klem after he left Sioux City and offered to discuss her complaints over the phone. Klem refused, stating "You didn't come in. You missed your chance." Klem told Ogden that Wax Works viewed Hudson as an "asset" to the company and saw no reason to fire him. Ogden then asked whether, in the wake of her allegations, she could continue to work for Hudson. Klem replied, "No, you can't." Ogden left Wax Works on September 9, 1995. She twice called the home office in an attempt to address her complaints to a vice president prior to her departure, but her calls went unreturned.
Ogden was physically and emotionally devastated by Hudson's harassment and the loss of her position. Her psychotherapist testified she suffered from posttraumatic stress disorder and major depression, and attributed these maladies to Hudson's abuse. After spending several months confined to her home, she eventually secured two part-time jobs, one in sales, the other in light janitorial work, at significantly reduced pay and responsibility. Hudson, meanwhile, received no discipline for his behavior, and nothing about the incident was placed in his personnel file. After filing the requisite complaints with state and federal agencies, and receiving notice of her right to sue, Ogden brought this action on December 9, 1996.
During Ogden's tenure, Wax Works distributed to all store managers an employee handbook containing the following summary of its sexual harassment policy:
Additionally, Wax Works posted signs in stores encouraging employees with grievances to call the home office toll-free. Ogden received no training with regard to the sexual harassment policy, however, and Wax Works admittedly provided no such training during her tenure.
Hudson testified to his familiarity with the policy, and stated that he had received "extensive training on sexual harassment issues" in conjunction with his M.B.A.
We review the denial of a motion for judgment as a matter of law de novo, using the same standards as the district court.
Wax Works first argues there was insufficient evidence to support Ogden's quid pro quo
Of course, in "supervisor harassment" cases such as this, the terms "quid pro quo" and "hostile environment" remain relevant only to the extent they illustrate the evidentiary distinction between cases involving threats which are carried out and those featuring offensive conduct in general. Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 751-54, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998). Once a plaintiff proves discrimination under either theory, we turn to the standards announced by the Supreme Court in Ellerth and Faragher to determine whether the employer may be held liable for the supervisor's conduct. In Ellerth and Faragher, the Supreme Court established that under Title VII, employers are vicariously liable for hostile environment sexual harassment perpetrated by a supervisor. Ellerth, 524 U.S. at 764-65, 118 S.Ct. 2257; Faragher v. City of Boca Raton, 524 U.S. 775, 807-08, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998). Where the plaintiff suffers no tangible employment action, however, the employer is entitled to establish by a preponderance of the evidence an affirmative defense consisting of two elements: (a) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm
Here, the district court instructed the jury to consider the defense with respect to Ogden's hostile environment claim, but not her quid pro quo claim. In retrospect, however, the court questioned whether Wax Works was entitled to avail itself of the defense at all. We agree with the district court. The Ellerth/Faragher rule is clear: "No affirmative defense is available . . .  when the supervisor's harassment culminates in a tangible employment action ...." Ellerth, 524 U.S. at 764-65, 118 S.Ct. 2257; Faragher, 524 U.S. at 807-08, 118 S.Ct. 2275.
Even assuming Wax Works was entitled to raise the defense, it was reasonably rejected by the jury. There was substantial evidence indicating that Wax Works neither conducted the "thorough investigation" nor took the "appropriate action" promised by its sexual harassment policy, belying its claim to have exercised reasonable care to "prevent and correct promptly ... sexually harassing behavior." According to the testimony of Ogden and others, Wax Works "minimized" her complaints; performed a cursory investigation which focused upon her performance, rather than Hudson's conduct; and forced her to resign while imposing no discipline upon Hudson for his behavior. See Baty v. Willamette Indus., Inc., 172 F.3d 1232, 1242-43 (10th Cir.1999)(finding the lack of disciplinary action against a harassing employee relevant to an analysis of the employer's response). Moreover, the jury could have reasonably concluded Ogden took advantage of the "opportunities" afforded by Wax Works and/or attempted to "avoid harm otherwise." She complained to a member of Wax Works management (Klem), arguably in accordance with the company's sexual harassment policy,
Wax Works next argues Ogden's retaliation claim
Wax Works next argues there was insufficient evidence to support Ogden's constructive discharge.
Wax Works next argues there was insufficient evidence to support the punitive damages award. Our inquiry into this issue is now governed by Kolstad v. American Dental Ass'n, 527 U.S. 526, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999), rendered June 21, 1999, while the parties were briefing this appeal.
In Kolstad, the United States Supreme Court clarified "[t]he precise burden a plaintiff must carry to prove malice or recklessness for purposes of 42 U.S.C. § 1981a(b)(1) . . . ." E.E.O.C. v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1244 (10th Cir.1999) (citing Kolstad, 527 U.S. 526, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999)). "Under the terms of [§ 1981a(b)(1)], . . . punitive damages are available in claims under Title VII . . . . [where] the employer has engaged in intentional discrimination and has done so `with malice or with reckless indifference to the federally protected rights of an aggrieved individual.'" Kolstad, 119 S.Ct. at 2121 (citing § 1981a(b)(1)). The Kolstad Court rejected an interpretation which would have required "egregious" conduct by an employer before punitive damages could be available under this provision.
The Court made clear, however, that the punitive damages inquiry does not end with a showing of the requisite malice or reckless indifference on the part of certain individuals; the plaintiff must impute liability for punitive damages to the employer. See Kolstad, 119 S.Ct. at 2126. For these purposes, the Court adopted the Restatement (Second) of Agency § 217C, which, of relevance to this appeal, "contemplates liability for punitive awards where an employee serving in a `managerial capacity' committed the wrong while `acting in the scope of employment.'" Id. (citing Restatement (Second) of Agency, § 217C)). Allowing that "no good definition of what constitutes a `managerial capacity'
"Recognizing Title VII as an effort to promote prevention as well as remediation, and observing the . . . limits on vicarious liability for punitive damages," the Court created an exception to the Restatement rule whereby an employer may escape vicarious liability for the discriminatory employment decisions of managerial agents where those decisions are contrary to the employer's "good faith efforts to comply with Title VII." See Kolstad, 119 S.Ct. at 2129. The Court left to lower courts the determination of what measures constitute "good faith efforts," stating only that "Title VII is designed to encourage the creation of anti-harassment policies and effective grievance mechanisms[,]" and "[t]he purposes underlying Title VII are similarly advanced where employers are encouraged to adopt anti-discrimination policies and to educate their personnel on Title VII's prohibitions." Kolstad, 119 S.Ct. at 2129.
Because Wax Works did not object to the punitive damages instruction in the district court or on appeal, we apply Kolstad to the record before us, asking whether a reasonable jury could find Wax Works liable for punitive damages.
Concerning Hudson's malice or recklessness, Wax Works can scarcely dispute
Concerning Wax Works' vicarious liability under the Restatement (Second) Agency § 217C, there is substantial evidence that Hudson served in a managerial capacity and acted within the scope of his employ. Hudson undisputedly supervised several stores, and possessed the authority to schedule and conduct performance evaluations, and thereby to effectuate employee raises. These duties were the kind he was employed to perform; his abusive conduct occurred for the most part during working hours on Wax Works premises; and his conduct was "actuated in part to serve Wax Works." Lowery, 206 F.3d at 444-45; E.E.O.C., 187 F.3d at 1248. See Kolstad, 119 S.Ct. at 2128-29.
Concerning its purported "good faith efforts to comply with Title VII," Wax Works points to its written sexual harassment policy, and policy of encouraging employees with grievances to contact the home office. "Plainly, such evidence does not suffice, as a matter of law," to establish "good faith efforts" in the face of substantial evidence that the company "minimized" Ogden's complaints; performed a cursory investigation which focused upon Ogden's performance, rather than Hudson's conduct; and forced Ogden to resign while imposing no discipline upon Hudson for his behavior. Deffenbaugh-Williams, 188 F.3d at 286 (Wal-Mart's policy of encouraging employees to contact management with grievances did not suffice to establish good faith efforts as a matter of law, in light of Wal-Mart's failure to respond effectively to plaintiff's complaints).
A motion for a new trial should only be granted if the jury's verdict was against the great weight of the evidence so as to constitute a miscarriage of justice. Denesha v. Farmers Ins. Exch., 161 F.3d 491, 497 (8th Cir.1998). We review the denial of a motion for a new trial for abuse of discretion. Bevan v. Honeywell, Inc., 118 F.3d 603, 612 (8th Cir.1997).
Wax Works' request for a new trial centers largely upon its contention that the district court abused its discretion when it admitted into evidence a five-minute videotape depicting the lewd activities
We further find, for the reasons set forth above, that the jury's verdict was not against the weight of the evidence. See id. ("A district court's determination that the verdict is not against the weight of the evidence is virtually unassailable.").
Finally, we reject Wax Works' argument that the jury's $500,000.00 punitive damages award was excessive. The district court reduced the award to $260,000.00 pursuant to § 1981a(b)(3)(D), reducing the ratio to compensatory damages to 6.5 to 1. "We do not think this amount is excessive as a matter of law, given the abusive and repeated harassment [Ogden] suffered at the hands of supervisor [Hudson]." Kimbrough, 183 F.3d at 785 (upholding a punitive award with a 10 to 1 ratio to compensatory damages).