Intlekofer v. Turnage ( 1992 )

CYNTHIA HOLCOMB HALL, Circuit Judge:

Plaintiff Joyce Intlekofer appeals the district court’s judgment in favor of her employer, the Veterans Administration (“VA”), in this Title VII action. She challenges the district court’s finding that the VA took reasonable and appropriate steps to end the sexual harassment by her coworker.

The district court had jurisdiction under 42 U.S.C. § 2000e-5(f)(3) and 28 U.S.C. §§ 1331 and 1343. We have jurisdiction over this timely appeal pursuant to 42 U.S.C. § 2000e-5(j) and 28 U.S.C. § 1291, and we reverse.

I

In May, 1988, Joyce Intlekofer initiated this Title VII action against the VA alleging sexual harassment, sexual discrimination, and retaliation.¹ She complained that the VA was liable for the sexual harassment by her co-worker, .Norman Cortez, because the VA had actual knowledge of the harassment, yet failed to take immediate and appropriate action to remedy it. After a bench trial, the district court found that Norman Cortez’s behavior, although not overtly sexual, constituted sexual harassment. Nevertheless, it found that the YA could not be held liable under Title VII because the YA “acted promptly and reasonably in responding to plaintiffs Reports of Contact.”² Intlekofer appeals only the latter ruling.

Intlekofer and Cortez were co-workers in the Medical Administration Services division of the VA Medical Center. The district court found that Intlekofer and Cortez were involved in a personal, intimate relationship prior to 1987. In 1987, however, Intlekofer began to file Reports of Contact complaining about Cortez’s behavior toward her. From April 1987 to July 1988 Intlekofer filed approximately sixteen Reports of Contact. Although the majority of Reports concern Cortez, only eight involve specific incidents between Intlekofer and Cortez. The other Reports of Contact discuss either allegations about Cortez’s behavior reported to Intlekofer by other coworkers, or actions taken by Intlekofer in response to Cortez’s actions.

The VA first became aware of the problem between Intlekofer and Cortez in April of 1987, when Intlekofer filed her first Report of Contact with her supervisor, Pat Kehoe. That report alleged harassment in the form of “touching, highly personal and private suggestions and constant pressure to enter into a totally unwanted relationship.” Kehoe met with Intlekofer to discuss the report, but Intlekofer apparently declined to give a more detailed description of Cortez’s behavior. During a subsequent meeting with Cortez, Kehoe informed him that the behavior Intlekofer had described was inappropriate and must stop immediately. Kehoe also told Cortez that “if there should be additional complaints in the future, a more severe disciplinary measure would be required.”

The second Report of Contact stated that Cortez telephoned Intlekofer at her home, asked her personal questions and requested her permission to go to her house after his shift ended. Intlekofer followed Kehoe’s advice and quickly “conclud[ed] the unwanted conversation.” A five-month interval separated this occurrence and the next Report, which was filed on November 4, 1987. It documented an incident in which Cortez screamed at Intlekofer in front of staff and patients, claiming that Intlekofer gave him a poor shift schedule and threatening that he would call in sick.

Despite a subsequent warning by VA management to stop interacting with Intle-kofer, Cortez continued his behavior. The fourth Report of Contact, filed November 29, 1987, revealed that Cortez monitored Intlekofer’s telephone calls, informing some callers that Intlekofer was busy and then hanging up. The Report also described verbal quarrels between the two, and stated that Intlekofer felt Cortez’s behavior was harassment. Johanna Skinner, a fellow employee, corroborated this Report.

Intlekofer filed her fifth Report on December 10, 1987. It disclosed that one night Cortez “chased [her] out of the hospital” stating “I’ll get you for this. I owe you one.” Intlekofer indicated that such behavior made her fear for her life. A witness filed a Report on December 9, 1987, corroborating Intlekofer’s Report. Kehoe met with Cortez to discuss the incident, but decided not to discipline him or issue a warning because Cortez said he had only asked Intlekofer why she was leaving in the middle of her shift.

The sixth Report concerned the December 18, 1987, meeting between Intlekofer and Michael Brown, Chief of Medical Administration Services, in which Brown discussed Intlekofer’s complaints and allegedly accused her of leading Cortez on. The seventh Report repeated a conversation between Cortez and an unknown employee in which Cortez told the employee that Intle-kofer was dumb. Intlekofer filed the eighth Report on January 5, 1988,³ alleging that at the end of her late night shift, Cortez threatened to “run outside the VA to see which way I would go home. He told me that if I didn’t go towards my home, he knew I must be going to meet someone.” The day after these threats, Cortez yelled at her.

Intlekofer filed the ninth and tenth Reports of Contact within two days of one another — on January 14 and 16, 1988. Neither Report concerned direct confrontations between Intlekofer and Cortez. In one, Intlekofer alleged that Cortez continued to talk about her to other employees. The other concluded that Cortez ruined her reputation because three co-workers had recently taken a sudden interest in her and had individually asked her out on dates.

Intlekofer filed an informal complaint with the Equal Employment Opportunity Commission (“E.E.O.C.”) in early December, 1987. Brown and Kehoe met with Cortez on January 26, 1988, to inform him “that he must change his behavior toward Joyce Intlekofer and that any future valid complaints filed by Ms. Intlekofer ... could lead to disciplinary action.” After two months of investigation, Donna Reese, the E.E.O.C. counselor for the VA, issued a report concluding that Cortez was sexually harassing Intlekofer. The report made four proposals for remedying the harassment: (1) Cortez should receive professional counseling; (2) Cortez and Intlekofer should not work the same shifts; (3) Cortez must stop discussing Intlekofer with other employees; and (4) Cortez and Intlekofer should limit their contact at work to VA business. Although the VA disagreed with the report and did not believe that Cortez’s actions constituted sexual harassment, it adopted the last three courses of action. Specifically, the VA adjusted both Intlekofer and Cortez’s shifts in order to reduce contact at work, and repeatedly warned both employees not to be in the Medical Center at any time other than during their respective shifts. The VA also forbade Cortez from speaking with other employees about Intlekofer, and told both employees to limit their contact at work to business matters. It declined to adopt the first recommendation, citing its lack of authority to order Cortez to seek outside help in the form of professional psychological counseling.

After the VA instituted the three measures, Intlekofer filed six Reports of Contact in the next six months. Only three Reports concerned incidents between Cortez and Intlekofer, and none alleged that Cortez continued to discuss Intlekofer with other employees. The February 15, 1988, Report stated that Cortez “throws keys at me, gives me looks that could kill, and does not give any report as to what is happening at the hospital.” On June 1, 1988, Intlekofer filed a Report stating that Cortez made an obscene gesture at her in the employee parking lot. Finally, one of the three Reports filed July 7, 1988, claimed that a coworker saw Cortez draw an obscene picture on Intlekofer’s locker.⁴

While the VA investigated Intlekofer’s complaints and held continuous counseling sessions with Cortez in which he received both oral warnings to refrain from talking to or about Intlekofer, and threats that he would be disciplined if he continued his behavior, the VA did not take more severe disciplinary steps against Cortez, such as issuing a formal warning letter or imposing probation or suspension. Moreover, it is unclear whether the VA met with Cortez after each Report of Contact or sporadically. Kehoe estimated that she had approximately ten meetings with Cortez in response to Intlekofer’s Reports of Contact, and that she spent a total of two weeks working time attempting to solve the conflict. Although Brown estimated that he spent approximately one hundred hours trying to remedy the problem, he did not discipline Cortez in any manner other than meeting with him and requesting that he stop the harassment and that he stay away from Intlekofer.

Maryann Coffey, the Director of the VA Medical Center, met with Intlekofer at least four times starting in December of 1987. Each meeting took approximately one to two hours. Coffey attempted to change Cortez’s and Intlekofer’s shifts in an effort to separate the two, but did not meet with Cortez personally or discipline him in any other manner. Jacqueline Freeman, the Personnel Management Specialist, met with Kehoe and Brown to discuss possible scheduling changes. She also looked for other positions for both Intlekofer and Cortez, but could not find a suitable position for either employee.

Brown, Coffey and Kehoe met several times after Reese submitted her report in order to prepare a settlement agreement. Each of the three proposed settlement agreements offered to continue implementing Reese’s recommendations in exchange for Intlekofer withdrawing her formal complaint with the E.E.O.C.⁵ Intlekofer refused each proposal.

II

We review the district court’s findings of fact for clear error. Jordan v. Clark, 847 F.2d 1368, 1375 (9th Cir.1988), cert. denied, 488 U.S. 1006, 109 S.Ct. 786, 102 L.Ed.2d 778 (1989). The district court’s conclusion that the VA took immediate and appropriate remedial action, however, is reviewed de novo because it “requires us to consider legal concepts in the mix of fact and law.” United States v. McConney, 728 F.2d 1195, 1202 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984); see also Jordan, 847 F.2d at 1375 n. 7 (whether employee’s conduct creates hostile environment under Title VII reviewed de novo).

Ill

After the district court’s decision in this case, this Circuit enunciated the standards by which an employer’s actions should be measured when deciding whether the employer is liable for sexual harassment by an employee. See Ellison v. Brady, 924 F.2d 872 (9th Cir.1991). Thus, before evaluating the appropriateness of the VA’s conduct, we must decide whether the standard announced in Ellison applies retroactively to the present case. Retroactivity depends on an analysis of three factors: (1) whether Ellison announced a new rule of law; (2) whether retroactive application of the Ellison rule “will further or retard its operation;” and (3) whether retroactive application would produce inequitable results. See Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 92 S.Ct. 349, 355-56, 30 L.Ed.2d 296 (1971).

According to Chevron Oil, a case establishes a new rule “either by overruling clear past precedent on which litigants may have relied ..., or by deciding an issue of first impression whose resolution was not clearly foreshadowed.” Id. We dq not believe that Ellison created a new rule of law. In Ellison, this court held that the employer’s remedial action “should be ‘reasonably calculated to end the harassment.’ ” Id. at 882, quoting Katz v. Dole, 709 F.2d 251, 256 (4th Cir.1983). Essentially, “[e]mployers should impose sufficient penalties to assure a workplace free from sexual harassment.” Ellison, 924 F.2d at 882. If an employer knows or should have known of the harassment, it must take some form of disciplinary action. Id. (failure to “take even the mildest form of disciplinary action” renders the remedy insufficient under Title VII). The precise nature of the disciplinary action is up to the employer, provided that it is “assessed proportionately to the seriousness of the offense.” Id.

The VA argues that insofar as Ellison creates a duty to take at least the mildest form of disciplinary action, instead of merely requesting that the behavior stop, the case is a departure from current precedent in that it takes “discretion away from the employer to decide what is appropriate in the circumstances.” We disagree. Not only does Ellison’s holding leave considerable discretion to the employer, it was clearly foreshadowed by this court’s decision in E.E.O.C. v. Hacienda Hotel, 881 F.2d 1504 (9th Cir.1989). In that case, we held that an employer is liable if it fails to remedy the harassment. Hacienda Hotel, 881 F.2d at 1515-16. A logical reading of this language encompasses the idea that the employer must take some form of disciplinary action against the harassing co-worker in order to assure a workplace free of sexual harassment.

Moreover, the regulation enforcing Title VII states that “an employer is responsible for acts of sexual harassment in the workplace where the employer ... knows or should have known of the conduct, unless it can show that it took immediate and appropriate corrective action.” 29 C.F.R. § 1604.11(d) (emphasis added). We interpret the phrase “appropriate corrective action” to require some form, however mild, of disciplinary measures. Action is “corrective” only if it contributes to the elimination of the problem at hand. Because disciplinary measures are more likely to decrease the likelihood of repeated harassment than a mere request to stop the behavior, disciplinary measures are “corrective” within the meaning of the regulation.

Finally, Ellison directly adopted the Fourth Circuit’s test announced in Katz, 709 F.2d at 256 (remedy must be “reasonably calculated to end the harassment”). While the Katz test does not explicitly require disciplinary measures, application of the test indicates that at least some form of discipline is necessary to satisfy the requirements of Title VII. In Swentek v. USAIR, Inc., 830 F.2d 552 (4th Cir.1987), the Fourth Circuit held that the employer properly remedied the sexual harassment by investigating the allegations, giving written warnings to refrain from harassing behavior, and warning that subsequent behavior would result in suspension. Id. at 558; see also Barrett v. Omaha Nat. Bank, 726 F.2d 424, 427 (8th Cir.1984) (adopting Katz test and holding employer not liable when it investigated allegations and warned employee that further misconduct would result in termination). The court found it significant that no further complaints were lodged by the complainant after the employer’s actions. Swentek, 830 F.2d at 558. This emphasis on ending the harassment through remedial measures reveals that the employer’s actions must be of a disciplinary nature.

We hold that employers have long been on notice, under the EEOC Compliance Guidelines, Hacienda Hotel, and case law of the Fourth and Eighth Circuits, that they are required under Title VII to intervene promptly and effectively to put an end to workplace sexual harassment.

The second inquiry requires us to decide whether retroactive application will further or frustrate the purpose of the rule announced in Ellison. Chevron Oil, 404 U.S. at 106-07, 92 S.Ct. at 355-56. The purpose of the Ellison rule is maintenance of an environment free from sexual harassment. Ellison, 924 F.2d at 882. To achieve this goal, the remedies must focus not only on changing the harasser’s behavior, but also on “persuad[ing] potential harassers to refrain from unlawful conduct.” Id. Obviously, retroactive application of Ellison will not improve Intlekofer’s working environment since she has resigned from her position. Nevertheless, measuring the VA’s conduct by the Ellison standard will further its purpose because the next time the VA is confronted with sexual harassment allegations, it will be encouraged to impose more severe disciplinary action against the transgressor once an initial counseling session fails to cure the harassment. This will decrease the likelihood of future prolonged sexual harassment by fellow employees. See Ellison, 924 F.2d at 882 (discussing importance of deterrent effect of disciplinary measures).

The third inquiry demands that we examine whether retroactivity would result in an inequity to the VA. Chevron, 404 U.S. at 106-07, 92 S.Ct. at 355-56. Prior to Ellison the VA clearly had a duty to take action to remedy the harassment. See Hacienda Hotel, 881 F.2d at 1515-16. While the VA attempted counseling and separation of shifts, the harassment continued. Thus, the VA’s actions cannot be said to have been reasonably calculated to end the harassment. Because the VA would be liable under existing precedent, there is no inequity in applying Ellison’s rule to the VA’s actions.

IV

Turning to the central issue, we must now decide whether the VA’s actions comported with the standard set out in Ellison. The district court found that the VA “acted promptly and reasonably in responding to plaintiff’s Reports of Contact.” In so ruling, the court relied on the fact that Kehoe thoroughly investigated the first complaint and met with Cortez in order to avoid further hostility. It also found that the VA made several attempts to separate Intlekofer and Cortez so that they did not work the same shift or run into one another at the change of shifts. Finally, the trial judge deemed it significant that “both parties were counselled to avoid each other except as necessary for work at the Veterans Administration.”

The VA argues that its duty to take remedial action did not arise until Reese submitted her report concluding that Cortez was sexually harassing Intlekofer. It was not until this point, the VA contends, that it knew Cortez’s conduct was unlawful. This line of argument, which appears frequently throughout the VA’s brief, is foreclosed since neither party appealed the district court’s finding that Cortez engaged in sexual harassment from April 1987 until July 1988⁶, and that the VA was aware of Cortez’s conduct. Because we are constrained by the district court’s sexual harassment determination, the only issue confronting us is whether the VA took prompt and appropriate remedial action designed to end the sexual harassment by Norman Cortez.⁷

We find that the VA did not meet the standard set out in Ellison because it did not respond in a manner likely to put a stop to Cortez’s unlawful behavior. Specifically, the VA failed to take more severe disciplinary measures against Cortez once it learned that his harassing behavior had not stopped. Ellison held not only that the remedies must be “reasonably calculated to end the harassment,” but that the remedies must be of a disciplinary nature. Ellison, 924 F.2d at 882 (“Employers send the wrong message to potential harassers when they do not discipline employees for sexual harassment.”). If the employer “fail[s] to take even the mildest form of disciplinary action” the remedy is insufficient under Title VII. Id. Of course, I acknowledge that “discipline” can take many forms, and I do not attempt to confine the employer to options specifically mentioned in this opinion. The important point is that the appropriateness of the remedy depends on the seriousness of the offense, the employer’s ability to stop the harassment, the likelihood that the remedy will end the harassment, and “the remedy’s ability to persuade potential harassers to refrain from unlawful conduct.” Id.

Intlekofer argues that counseling can never be considered “disciplinary,” and that therefore the VA failed to satisfy its duty under Ellison. Although Ellison stated that “Title VII requires more than a mere request to refrain from the discriminatory conduct,” counseling sessions are not necessarily insufficient. Id. Indeed, an oral rebuke may be very effective in stopping the unlawful conduct. At the first sign of sexual harassment, an oral warning in the context of a counseling session may be an appropriate disciplinary measure if the employer expresses strong disapproval, demands that the unwelcome conduct cease, and threatens more severe disciplinary action in the event that the conduct does not cease. I approve of this remedy in a case such as this where the harassing conduct is not extremely serious and the employer cannot elicit a detailed description concerning the occurrence, from the victim. I stress, however, that counseling is sufficient only as a first resort. If the harassment continues, limiting discipline to further counseling is inappropriate. Instead, the employer must impose more severe measures in order to ensure that the behavior terminates. Again, the extent of the discipline depends on the seriousness of the conduct. Ellison, 924 F.2d at 882.⁸

Here, Kehoe’s initial counseling and warning that Cortez would be subject to future disciplinary actions would have been sufficient had Cortez not continued to harass Intlekofer. Since Cortez did not discontinue the unwanted contact, the VA was required by Title VII and the implementing regulations to carry through with its threat to discipline him more severely. Though the VA attempted an informal separation of Cortez’s and Intlekofer’s shifts shortly after the first Report of Contact, this measure obviously was unsuccessful.⁹

Certainly after Intlekofer filed the third, fourth and fifth Reports of Contact (all within a thirty-day span), the VA should have done more than counsel Cortez and continue the informal separation. All three reports reveal that Cortez continued to harass Intlekofer, yet there is no evidence that Cortez was reprimanded, issued a written warning, or disciplined in any other manner. At this point, the degree of the harassment had escalated, not because Cortez’s behavior was overtly sexual in nature or grew increasingly worse, but because Cortez showed no intention to heed the VA’s warnings and restrain himself. The VA therefore had a duty to institute more severe disciplinary measures commensurate with the duration of the harassment.

Failure to impose more harsh disciplinary measures rendered the VA’s initial warning an empty threat. The VA’s counseling sessions and informal attempts at separation did nothing except assure Cortez that continued harassment would be tolerated. In this context, the VA’s behavior was not “reasonably calculated to remedy the harassment.”

The VA argues that the sexual harassment ended after it adopted the recommendations in Reese’s report. This is not correct. Although the VA received no more reports of Cortez discussing Intlekofer with other employees, it did receive two reports of direct contact between Cortez and Intlekofer. In one, Cortez allegedly threw his keys at Intlekofer and gave her threatening looks. In the other, Cortez made an obscene gesture toward Intlekofer in the employee parking lot. A third Report revealed that Cortez was seen drawing an obscene picture on Intlekofer’s locker. As these occurrences indicate, Cortez did not discontinue his behavior after the VA implemented Reese’s recommendations.

V

We hold that the VA’s response to Intle-kofer’s repeated complaints was insufficient under Title VII. Although the VA did not sit idly by while Intlekofer continued to file Reports of Contact about Cortez’s conduct, it did fail to take measures that were reasonably calculated to end the harassment. The VA continued to counsel Cortez and to attempt an informal separation when it was apparent that these disciplinary measures were ineffective in terminating Cortez’s behavior. Even after the VA instituted formal separation and continued to warn Cortez that further harassment would result in disciplinary action, Cortez’s behavior did not subside. More severe disciplinary action was necessary.

We therefore REVERSE the judgment of the district court and REMAND for a calculation of damages, attorney’s fees and costs.¹⁰

1 . The district court’s opinion addressed only the sexual harassment claim. Since Intlekofer did not argue this omission as an issue on appeal, we will not consider it. Instead, we address the only issue properly raised and argued — whether the VA's actions were reasonably calculated to end the sexual harassment by Norman Cortez.

2 . A "Report of Contact” is the VA’s method of communication between management and staff. It is used primarily to communicate complaints, events, or meetings.

3 . The Report is actually dated 1/5/87. In its findings of fact, the district court stated that this Report was filed in January of 1988. The VA maintains that the district court is correct, and that the 1987 date is a mistake. Because there is no evidence nor arguments to the contrary, the district court’s finding is not clearly erroneous.

4 . At oral argument, counsel for the VA stated that the obscene gesture consisted of Cortez giving Intlekofer "the finger,” and that the obscene picture portrayed a dildo.

5 . Intlekofer filed a formal complaint with the E.E.O.C. in early February, after Reese completed her investigation and filed her report.

6 . Intlekofer argues that the VA had notice of the harassment as early as January, 1987. After listening to the testimony, however, the district court concluded that the VA did not have notice until April of that same year. This finding is not clearly erroneous.

7 . Judge Wiggins, in his dissent, determines that the behavior of Mr. Cortez did not constitute a prima facie case of sexual harassment. However, this issue was not properly before the court as it was not raised by the Veterans Administration on appeal.

8 . I do not understand Judge Keep’s objection to my opinion given the description of appropriate disciplinary measures in the above paragraph.

9 . I want to highlight a point emphasized in Ellison: harassment is to be remedied through actions targeted at the harasser, not at the victim. Jn Ellison, we explained that

the victim of sexual harassment should not be punished for the conduct of the harasser. We wholeheartedly agree with the EEOC that a victim of sexual harassment should not have to work in a less desirable location as a result of an employer’s remedy for sexual harassment.

Ellison, 924 F.2d at 882. Here, the VA's approach to the problem focussed as much on Intlekofer as it did on Cortez. Not only did the VA have numerous counselling sessions with Intlekofer in order to discuss how she could help stop the harassment, it forced Intlekofer to work different shift schedules and actively sought to have her transferred to a different position. While the VA apparently was trying to solve the situation, it did so at the expense of disrupting Intlekofer’s life. This is not the price that victims must pay for reporting sexual harassment at the workplace. I realize that the VA also tried to change Cortez’s schedule. But considered in isolation from the actions taken with respect to Intlekofer, those taken with respect to Cortez were minimal.

10 . Because Intlekofer is the prevailing party in this appeal, we grant her request for attorney's fees under section 706(k) of Title VII, 42 U.S.C. § 2000(e-5)(k). The amount of fees shall be determined on remand.