Oliver Fenceroy v. Gelita USA, Inc., Bob Kersbergen, Tom Haire, Jeff Tolsma, and Jeremy Kneip ( 2019 )


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  •                      IN THE COURT OF APPEALS OF IOWA
    No. 18-1817
    Filed November 6, 2019
    OLIVER FENCEROY,
    Plaintiff-Appellant,
    vs.
    GELITA USA, INC., BOB KERSBERGEN, TOM HAIRE, JEFF TOLSMA, and
    JEREMY KNEIP,
    Defendants-Appellees.
    ________________________________________________________________
    Appeal from the Iowa District Court for Woodbury County, Jeffrey A. Neary,
    Judge.
    A plaintiff appeals the district court summary judgment dismissal of his
    claims of racial harassment, racial discrimination, and intentional infliction of
    emotional distress. AFFIRMED.
    Jay Denne and Stanley E. Munger of Munger, Reinschmidt & Denne, L.L.P.,
    Sioux City, for appellant.
    Ruth A. Horvatich, Aaron A. Clark, and Abigail M. Moland of McGrath North
    PC LLO, Omaha, Nebraska, for appellees.
    Heard by Bower, C.J., and May and Greer, JJ.
    2
    BOWER, Chief Judge.
    Oliver Fenceroy appeals the district court’s granting of summary judgment
    in favor of defendants Gelita USA, Inc. (Gelita), Tom Haire, and Jeff Tolsma and
    dismissing his claims of racial harassment, racial discrimination, and intentional
    infliction of emotional distress. We find Fenceroy did not show Gelita had the
    requisite knowledge to support the harassment claims, did not establish an
    adverse employment action for his discrimination claim, and the evidence did not
    support a finding of severe emotional distress. We affirm.
    I.     Background Facts & Proceedings
    Gelita is a corporation based out of Germany with a plant in Sergeant Bluff,
    Iowa, which produces gelatin products used in a variety of industries. Fenceroy,
    an African-American, began working for Gelita in 1975 and retired in March 2013.
    For the majority of his tenure at Gelita, Fenceroy was the only African-American
    employee in the plant.
    Gelita’s Code of Conduct provided to employees includes an anti-
    harassment policy as well as a reporting procedure. Fenceroy was also aware he
    had complaint procedures available to him through his union membership.
    Gelita holds annual training sessions concerning harassment and
    discrimination, which Fenceroy acknowledged attending on at least three separate
    occasions. Jeff Tolsma, Gelita’s current head of human resources, sent a memo
    to all employees in August 2010, explaining harassment was a serious offense that
    could lead to disciplinary action.
    In October 2011, Fenceroy reported to human resources that a rope he
    believed was tied to resemble a noose was hanging in the plant where he worked.
    3
    Tolsma and the production manager for the plant, Jeremie Kneip, went to the
    factory and looked at the rope, determining the rope—which had a loop tied at the
    end—was used for a valid employment purpose to create pressure on a scale and
    the loop might be used as a handle. But, they ordered the rope to be untied and
    advised Fenceroy of their action. Fenceroy observed the rope was soon tied back
    into the loop by unknown persons in the factory. Tolsma and Kneip do not appear
    to have ordered the rope untied again. However, Fenceroy made no additional
    reports to human resources to complain of the “noose.”
    In 2012, Gelita sent out a “confidential” survey to all employees asking for
    suggested improvements or changes to the harassment policy. Fenceroy did not
    report any harassment through the survey.
    After retiring from Gelita in 2013, Fenceroy filed a complaint with the Iowa
    Civil Rights Commission (ICRC). Fenceroy identified multiple occasions in 2012
    when Gelita employees, including Tom Haire and Bob Kersbergen, made racially
    discriminatory or harassing comments; many of the comments were overtly white
    supremacist in nature or otherwise denigrated African-Americans. Kersbergen
    allegedly assaulted Fenceroy by grabbing and pulling him to the ground. Fenceroy
    alleges Kneip told him not to bother bringing complaints to human resources.
    Fenceroy stated the foremen did not take action when he complained or they
    witnessed the harassing comments. Fenceroy did not report any of the 2012
    incidents to human resources when they occurred or at any time prior to his
    retirement. The ICRC issued Fenceroy a right-to-sue letter.
    4
    On May 30, 2014, Fenceroy filed suit against Gelita and employees Tolsma,
    Kneip, Kersbergen, and Haire, alleging violations of the Iowa Civil Rights Act
    (ICRA) and tortious infliction of emotional distress.
    During the discovery process, the supreme court heard an interlocutory
    appeal, which examined the limits of the attorney–client privilege when a defendant
    relies on the attorney’s investigation.1 Fenceroy v. Gelita USA, Inc., 
    908 N.W.2d 235
    , 238 (Iowa 2018) (deciding “whether plaintiff’s counsel may depose defense
    counsel and obtain counsel’s prelawsuit work product”). The district court’s ruling
    denying a protective order for defense counsel’s investigative notes was affirmed,
    and the case was remanded. 
    Id. at 249
    .
    On April 7, 2016, Gelita, Haire, and Tolsma filed a motion for summary
    judgment. Kersbergen did not join in the motion.2 The motion was amended in
    February 2018, following the supreme court’s ruling on the discovery issue. On
    September 21, the district court granted the motion for summary judgment, holding
    Gelita had established the Faragher-Ellerth affirmative defense3 and was entitled
    to judgment as a matter of law. The court found Gelita had no notice of the
    harassing behavior and could not be held liable for negligent control of the work
    environment; Fenceroy had not established he suffered an adverse employment
    action in his racial-discrimination claim; and Fenceroy could not establish the
    defendants’ conduct resulted in his suffering severe emotional distress.
    1
    The case was stayed in district court during the pendency of the interlocutory appeal.
    2
    Fenceroy’s claims against Kersbergen are still outstanding.
    3
    The Faragher-Ellerth affirmative defense is a “two-part defense [that] requires employers
    to show reasonable care was exercised to ‘prevent and correct promptly any . . . harassing
    behavior’ and to further show the claimant employee ‘unreasonably failed to take
    advantage of any preventive or corrective opportunities provided by the employer.’”
    Fenceroy, 908 N.W.2d at 242 (citations omitted).
    5
    Fenceroy’s claims against Gelita, Haire, and Tolsma were dismissed with
    prejudice. Kneip was not formally served with Fenceroy’s petition, and the court
    dismissed the claims against him without prejudice.
    Fenceroy appeals the summary judgment ruling as to Gelita, Haire, and
    Tolsma. Fenceroy does not appeal Kneip’s dismissal.
    II.    Standard of Review
    “Appellate review of a grant of a motion for summary judgment is for errors
    at law.” Estate of Harris v. Papa John’s Pizza, 
    679 N.W.2d 673
    , 677 (Iowa 2004).
    Summary judgment is to be granted if the evidence shows “that there is no genuine
    issue as to any material fact and that the moving party is entitled to a judgment as
    a matter of law.” Iowa R. Civ. P. 1.981(3). The court looks at the evidence in the
    light most favorable to the non-moving party and considers “every legitimate
    inference that can be reasonably deduced from the record.” Estate of Harris, 
    679 N.W.2d at 677
     (quoting Phillips v. Covenant Clinic, 
    625 N.W.2d 714
    , 718 (Iowa
    2001)).
    III.   Analysis
    A.     Supervisor harassment. To establish a hostile-work-environment
    claim under the ICRA, a plaintiff must show: “(1) he or she belongs to a protected
    group; (2) he or she was subjected to unwelcome harassment; (3) the harassment
    was based on a protected characteristic; and (4) the harassment affected a term,
    condition, or privilege of employment.” Boyle v. Alum-Line, Inc., 
    710 N.W.2d 741
    ,
    746 (Iowa 2006) (quoting Farmland Foods, Inc. v. Dubuque Human Rights
    Comm’n, 
    672 N.W.2d 733
    , 744 (Iowa 2003)).
    6
    An employer may be entitled to the Faragher-Ellerth affirmative defense to
    claims of vicarious liability for harassment by a supervisor that do not involve
    tangible employment action. See Fenceroy, 908 N.W.2d at 241–42. “[V]icarious
    liability does not replace the direct negligence theory of employer liability, but
    rather supplements the theory with an additional agency-based standard.” Id. at
    242. “Generally, if an employee fails to notify the employer of wrongdoing, courts
    have found that such failure, coupled with adequate preventative policies, is
    sufficient to prevail in the defense.” Id. at 246.
    The district court did not examine the underlying hostile-work-environment
    claim, but instead granted summary judgment based on the Faragher-Ellerth
    affirmative defense. The court found Gelita had valid anti-harassment policies in
    place and exercised reasonable care to prevent and correct harassment in the
    workplace. Fenceroy was aware he could file a grievance regarding harassment
    and discrimination. He filed only one grievance during his thirty-seven years of
    employment—in 2011—when he reported a rope looped into an apparent noose.
    Gelita investigated and took action on his grievance.
    Fenceroy had internal procedures available and a union representative who
    could inform Gelita of alleged continuing harassing behaviors by coworkers and
    supervisors. He admitted to knowing and understanding that if his immediate
    supervisor or foreman was the problem, he was to report to an upper manager or
    human resources. He did not do so. Fenceroy made no further complaint nor did
    he take advantage of corrective opportunities offered to him until after he retired—
    a point at which Gelita had no opportunity to fix the problem with respect to
    Fenceroy. Fenceroy’s decision to not pursue corrective actions before retirement
    7
    was not within the control of the employer. We conclude the district court did not
    err in determining Gelita is entitled to the Faragher-Ellerth defense.
    B.     Coworker harassment. When establishing a harassment claim
    against non-supervisors, the plaintiff must establish the employer was negligent in
    controlling working conditions. Farmland Foods, 
    672 N.W.2d at 744
    . To establish
    this claim, in addition to the four elements of a hostile work environment listed
    above, the plaintiff must show the employer “knew or should have known of the
    harassment and failed to take proper remedial action.” 
    Id.
     (citation omitted).
    The district court ruled Fenceroy did not show Gelita “knew or should have
    known of the harassment and failed to take proper remedial action.” See id.; see
    also Boyle, 
    710 N.W.2d at 746
    . The court found no evidence to suggest that
    employee harassment of Fenceroy “was so open and obvious that Gelita should
    have, on its own, discovered the harassment.” Fenceroy did not notify Gelita of
    the continuing harassment, and Gelita took proper remedial action when Fenceroy
    filed his single complaint. Therefore, Fenceroy has failed to establish the final
    element of his harassment claim.
    C.     Discrimination.      To establish a prima facie claim of racial
    discrimination, a plaintiff must show they are a member of a protected class, were
    performing the work satisfactorily, and suffered an adverse employment action.
    Farmland Foods, 
    672 N.W.2d at
    741 n.1. “[A]n adverse employment action is ‘an
    action that detrimentally affects the terms, conditions, or privileges of
    employment.’” Haskenhoff v. Homeland Energy Sols., LLC, 
    897 N.W.2d 553
    , 587
    (Iowa 2017) (citation omitted). The question of “[w]hether an adverse employment
    action occurred ‘normally depend[s] on the facts of each situation.’” 
    Id.
     (citation
    8
    omitted).   “[M]inor changes in working conditions that only amount to an
    inconvenience cannot support discrimination.” Farmland Foods, 
    672 N.W.2d at 742
    .
    Fenceroy claims Gelita constructively discharged him—that leaving the
    “noose” up in the factory meant Fenceroy had no choice but to quit his employment
    at Gelita. “Constructive discharge exists when the employer deliberately makes
    an employee’s working conditions so intolerable that the employee is forced into
    an involuntary resignation.”    Van Meter Indus. v. Mason City Human Rights
    Comm’n, 
    675 N.W.2d 503
    , 511 (Iowa 2004) (citation omitted).            “The test for
    constructive discharge is objective, evaluating whether a reasonable person in the
    employee’s position would have been compelled to resign and whether an
    employee reasonably believed there was no possibility that an employer would
    respond fairly.”   Haskenhoff, 897 N.W.2d at 592.         “[C]onditions will not be
    considered intolerable unless the employer has been given a reasonable chance
    to resolve the problem.” Van Meter Indus., 
    675 N.W.2d at 511
    .
    The district court concluded Fenceroy “did not provide Gelita with a
    reasonable chance to work out any problems he was having while he worked for
    Gelita.” The court also noted the extended timeframe between the 2011 reported
    incident and Fenceroy’s 2013 retirement suggested Fenceroy did not find “his
    working conditions so intolerable that he must resign.”
    In August 2012, Fenceroy provided Gelita with six-month’s notice of his
    intent to retire. He then extended his retirement date an additional month so he
    could qualify for full Social Security benefits at the time of his retirement. In his
    deposition, Fenceroy pinpointed the noose as “the last straw that broke the camel’s
    9
    back.” Fenceroy reported the noose in October 2011 and asserted the rope
    continued to be tied with the loop at the end until his retirement. He did not file a
    complaint or otherwise notify human resources and the company of the loop’s
    continuing existence or of the comments and assaults occurring at work. He
    waited ten months after his complaint before submitting his retirement notice. He
    then remained on the job for an additional seven months after his notice of
    retirement.
    Looking at the evidence in the light most favorable to Fenceroy, we find he
    has failed to allege sufficient facts to establish a constructive discharge. Fenceroy
    has failed to prove an adverse employment action and so has failed to establish a
    prima facie case of racial discrimination. The district court did not err in granting
    the motion for summary judgment on this claim.
    D.     Intentional infliction of emotional distress. A successful claim of
    intentional infliction of emotional distress requires a plaintiff demonstrate four
    elements: “(1) outrageous conduct by the defendant; (2) the defendant
    intentionally caused, or recklessly disregarded the probability of causing, the
    emotional distress; (3) plaintiff suffered severe or extreme emotional distress; and
    (4) the defendant’s outrageous conduct was the actual and proximate cause of the
    emotional distress.” Smith v. Iowa State Univ. of Sci. & Tech., 
    851 N.W.2d 1
    , 26
    (Iowa 2014) (citation omitted). The district court determined Fenceroy’s emotional
    distress did not rise to the level of “severe or extreme emotional distress,” and
    consequently, the claim failed as a matter of law.
    “Our cases that have found substantial evidence of emotional harm have
    had direct evidence of either physical symptoms of the distress or a clear showing
    10
    of a notably distressful mental reaction caused by the outrageous conduct.” Id. at
    30 (citation omitted). In Smith, our supreme court looked to the Restatement
    (Second) of Torts to distinguish between emotional distress—which “includes all
    highly unpleasant mental reactions, such as fright, horror, grief, shame,
    humiliation, embarrassment, anger, chagrin, disappointment, worry, and
    nausea”—and severe or extreme emotional distress that “is so severe that no
    reasonable man could be expected to endure it.” 851 N.W.2d at 30 (quoting
    Restatement (Second) of Torts § 46 cmt. j, at 77–78).
    Fenceroy’s allegations of emotional distress included “fright, horror, shame,
    humiliation, embarrassment, anger, disappointment, and worry.” The language
    tracks the terms listed in the Restatement for “emotional distress.” But severe or
    extreme emotional distress is required.        See id.   Moreover, when comparing
    Fenceroy’s emotional distress allegations to the cases discussed in Smith,
    evaluating sufficient evidence of severe emotional distress to go to the jury,
    Fenceroy’s allegations of distress are akin to the cases where the emotional
    distress alleged was insufficient to reach the jury. See id. at 30–31 (collecting
    cases).4 Fenceroy has not offered evidence of a physical manifestation or a
    debilitating mental or emotional reaction to his coworkers’ conduct. We therefore
    affirm the district court’s finding his claim for intentional infliction of emotional
    distress fails as a matter of law.
    AFFIRMED.
    4
    The cases with sufficient evidence to reach the jury generally exhibited some acute
    physical or psychological manifestation of the distress. See Smith, 851 N.W.2d at 30–31.