Lori Freeman v. Dal-Tile Corporation

Filed: May 1, 2014
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1481
(5:10-cv-00522-BR)
LORI FREEMAN,
Plaintiff – Appellant,
v.
DAL-TILE CORPORATION, d/b/a Dal-Tile Distribution,
Incorporated, d/b/a Dal-Tile Services, Incorporated,
Defendant – Appellee,
and
VOSTONE INCORPORATED; TIMOTHY KOESTER,
Defendants.
O R D E R
The Court amends its opinion filed April 29, 2014, as
follows:
On page 18, second paragraph, line 3 -- “Freeman used
racial slang” is corrected to read “Koester used racial slang.”
For the Court – By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1481
LORI FREEMAN,
Plaintiff – Appellant,
v.
DAL-TILE CORPORATION, d/b/a Dal-Tile Distribution,
Incorporated, d/b/a Dal-Tile Services, Incorporated,
Defendant – Appellee,
and
VOSTONE INCORPORATED; TIMOTHY KOESTER,
Defendants.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. W. Earl Britt, Senior
District Judge. (5:10-cv-00522-BR)
Argued: January 29, 2014 Decided: April 29, 2014
Before TRAXLER, Chief Judge, and NIEMEYER and SHEDD, Circuit
Judges.
Reversed in part, affirmed in part, and remanded by published
opinion. Judge Shedd wrote the majority opinion, in which Chief
Judge Traxler joined. Judge Niemeyer wrote an opinion
concurring in part and dissenting in part.
ARGUED: Anne Warren King, GEORGETOWN UNIVERSITY LAW CENTER,
Washington, D.C., for Appellant. Kristine Marie Sims,
CONSTANGY, BROOKS & SMITH, LLP, Winston-Salem, North Carolina,
for Appellee. ON BRIEF: Brian Wolfman, Institute for Public
Representation, GEORGETOWN UNIVERSITY LAW CENTER, Washington,
D.C., for Appellant. William J. McMahon, IV, CONSTANGY, BROOKS
& SMITH, LLP, Winston-Salem, North Carolina, for Appellee.
2
SHEDD, Circuit Judge:
Lori Freeman appeals a grant of summary judgment in favor
of her former employer, Dal-Tile Corporation, on her claims of
racial and sexual hostile work environment, constructive
discharge, and common law obstruction of justice. For the
reasons discussed more fully below, we reverse the grant of
summary judgment on the hostile work environment claims and
remand them for further consideration. We affirm the grant of
summary judgment on the claims of constructive discharge and
common law obstruction of justice.
I.
Dal–Tile Corporation manufactures, distributes, and markets
ceramic tile and natural stone products. 1 It operates eight
manufacturing facilities, five regional distribution centers,
and over 250 sales service centers, including both stone yards
and tile showrooms.
In June 2008, Dal–Tile acquired the assets of Marble Point,
Inc., a stone yard located in Raleigh, North Carolina, from
owner Marco Izzi. Dal–Tile incorporated this newly-acquired
1
All facts discussed in this opinion are presented in the
light most favorable to Freeman, the non-moving party. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)(“The
evidence of the non-movant is to be believed, and all
justifiable inferences are to be drawn in his favor.”); Evans v.
Techs. Applications & Serv. Co., 80 F.3d 954, 958 (4th Cir.
1996).
3
operation into a sale-service center organization (the
“Stoneyard”). After this sale, Izzi purchased an ownership
interest in VoStone, Inc., a Raleigh-based kitchen and bath
remodeling center. A significant percentage of VoStone's
business involved working with Dal–Tile.
In August 2006, Freeman began working as a receptionist for
Dal–Tile’s predecessor, Marble Point. She was hired on a
temporary basis through a staffing agency, but after six months,
she joined Marble Point as a permanent employee. Throughout her
tenure at Marble Point, Freeman reported to Izzi and to
assistant manager Sara Wrenn. Following Dal–Tile's acquisition
of Marble Point, Freeman became a Dal–Tile employee, 2 and Wrenn
continued to be her supervisor. Freeman’s first position with
Dal–Tile was General Office Clerk. Over time, Freeman began
interacting more frequently with Dal–Tile's customers, and she
effectively functioned as a Customer Service Representative. In
2
In June 2008, Dal–Tile's Regional Human Resources Manager
visited the Stoneyard and held a group meeting with the
employees to review Dal–Tile's policies and employee benefits
programs. At that time, Freeman received Dal–Tile's employee
handbook, including its policy prohibiting harassment and
discrimination. Dal–Tile's policy against harassment, which was
in place throughout Freeman’s tenure, states that Dal–Tile will
not tolerate harassment based on an individual's sex, race, or
other protected characteristics. It also defines the sort of
conduct prohibited, provides avenues for employees to report
harassment to the company, and prohibits retaliation against
individuals who raise complaints under the policy.
4
May 2009, she was promoted to the role of Sales Consultant. In
November 2009, Freeman’s position was reclassified to Customer
Service Representative.
The harassment claims at issue are based on the behavior of
Timothy Koester, an independent sales representative for
VoStone. Freeman usually interacted with Koester more than once
a day while he was conducting business with Dal–Tile on behalf
of VoStone.
About two weeks after Freeman became a temporary employee
with Marble Point in August 2006, she overheard Koester as he
walked into Wrenn's office and, referencing a photograph of two
former employees, asked Wrenn and another employee: “[H]ey, who
are these two black b****es[?]” J.A. 76. After the incident,
Freeman asked Wrenn about Koester, inquiring: “[W]ho was he and
what was his deal[?]” J.A. 77. Wrenn replied: “[H]e's an
asshole, but I don't think he'll do it again.” Id. The next day,
Freeman told Koester “how uncomfortable and demeaning that made
[her] feel,” and she asked him not to use that sort of language
anymore. J.A. 75.
Freeman also recalled Koester making comments about women
he had been with the night before. On one occasion, Koester
showed her a photograph of a naked woman on his cell phone and
remarked: “[T]his is what I left in my bed to come here today.”
J.A. 80. On a different occasion, Freeman overheard Koester
5
talking with one of her co-workers, Jodi Scott, about
photographs of Scott's daughters that were displayed in Scott's
office. According to Freeman, Koester told Scott: “I'm going to
hook up with one your daughters,” or “I'm going to turn one of
your daughters out.” J.A. 136. Scott replied: “[Y]ou better stay
away from my kids,” or “[D]on't talk to me about my kids.” Id.
In a different instance, Koester passed gas on Freeman’s
phone. Koester was using Freeman’s office phone, and she was
standing there waiting for him to finish his conversation.
Before Koester hung up the phone, he held it to his buttocks and
passed gas on it. J.A. 81. Wrenn was present for this incident.
Freeman immediately began crying and had to leave the room to
calm down. J.A. 82.
In June 2009, Koester called Freeman about covering a
customer appointment for him because he had been partying the
night before. Koester indicated that he could not come into the
office, saying: “I'm just too f***ed up, don't take offense, but
I'm as f***ed up as a n****r's checkbook.” J.A. 99. Freeman told
Wrenn about Koester's comment that same day, but Wrenn just
“scoffed and shook her head and put her head back down and
continued on with trying to pick the nail polish off of her
nails . . . .” J.A. 102. Freeman also reported Koester's remark
to James Vose, one of the co-owners of VoStone. Vose laughed and
6
said: “[Y]ou got to admit that's kind of funny, just do what I
do and hit him because he's an asshole.” J.A. 107.
Subsequently, on July 29, 2009, Koester called Dal–Tile's
general office line, and Freeman answered the phone. Koester had
his six-year-old daughter, Angelina, with him at the time.
Freeman, who knew Angelina, asked Koester to tell Angelina that
she said “hi.” Instead, Koester put Freeman on speaker phone so
that she and Angelina could talk with one another. Freeman then
heard Angelina ask: “Daddy, who's that[?]” J.A. 111. Koester
replied: “[T]hat's the black b**** over at Marble Point.” Id.
Freeman “immediately became very irate.” Id. She told Koester:
“[D]on't you ever call me a black b**** as long as you live.”
Id. Koester responded: “[O]h, word.” Id. Freeman promptly told
Wrenn about Koester's comment, but Wrenn appeared disinterested
and continued a conversation that she had been having with some
other co-workers.
In addition to these specific incidents, Freeman and other
co-workers testified more generally that Koester frequently made
inappropriate sexual comments. Freeman testified that Koester
“was always coming in making some sort of lewd comments.” J.A.
78. She also stated that “maybe two or three times a week” she
would have to correct Koester and tell him not to say something
inappropriate. J.A. 79. Freeman explained that Koester would
“come in to discuss what he did the night before with whatever
7
woman he was with and [Freeman] would tell him [she didn’t] want
to hear it.” J.A. 80. Wrenn confirmed this, stating that “he
liked to brag about his, you know, evening excursions, or his
weekend excursions. . . . [T]here were times where he would say
something about what he did the night before that had sexual
content to it.” J.A. 269. According to Wrenn, “[h]e always made
comments about women.” J.A. 274. Wrenn also testified that
Koester used the word “b****” in the office, such as “You should
have seen these hot b****es I met last night.” J.A. 268. Jodi
Scott testified that Koester used the word “b****” “[u]sually
about every time that he came in.” J.A. 381–82. Wrenn even
referred to Koester as a “pig.” J.A. 253. Koester himself also
admitted he made sexual comments in the office. J.A. 325.
Freeman and other co-workers also testified generally about
Koester’s inappropriate racial remarks. For instance, Koester
used racial “slang” such as “Yo, b****” and “How’s my b****es?”
when talking to the female employees. J.A. 384–85. Jodi Scott
testified that Koester used racial language every day that he
came into the office. J.A. 386. Koester himself admitted to
using African-American type slang. J.A. 325. Cathy Diksa, a
human resource manager, explained that according to manager
Wrenn, Koester used racial language in the office. J.A. 217. For
instance, following the election of Barack Obama in 2008,
Koester said to Freeman, “[Y]ou guys won.” J.A. 355. Koester
8
himself testified that he probably made comments about taking
“beautiful black girls” home with him. J.A. 343. He also
admitted that he made comments that were “[m]aybe racially
inappropriate.” J.A. 344.
Following the most recent “black b****” incident in July
2009, Freeman reported Koester’s remarks to Cathy Diksa in human
resources after Wrenn ignored her complaint. Diksa initially
promised Koester would be permanently banned from the facility.
However, the company lifted the ban and instead prohibited
Koester from communicating with Freeman. He was allowed on the
premises but had to coordinate all on-site meetings through
Wrenn.
Freeman was so upset about the prospect of being forced to
interact with Koester that she took a medical leave of absence
beginning September 2, 2009. During this time she received
treatment for depression and anxiety. Freeman returned to work
around November 19, 2009. Wrenn informed Freeman that Koester no
longer worked for VoStone but for another kitchen and bath
fabricator. Wrenn told Freeman that Koester would continue to
call Wrenn’s cell phone and not the general office line if he
needed to conduct business with Dal-Tile.
On December 7, 2009, Freeman notified Dal–Tile that she was
resigning from her position effective December 11, 2009. Freeman
testified that she resigned because the depression and anxiety
9
became too much for her; she was constantly worried she would
encounter Koester at work. J.A. 179–80.
In October 2009, while on medical leave, Freeman filed a
charge with the Equal Employment Opportunity Commission
(“EEOC”), asserting that Dal–Tile had subjected her to
discrimination based on her sex and race.
After receiving a right to sue letter, Freeman brought this
action in the Eastern District of North Carolina, asserting
claims for racial hostile work environment under 42 U.S.C. §
1981; racial and sexual hostile work environment under Title VII
of the Civil Rights Act of 1964; discriminatory discharge under
42 U.S.C. § 1981; and obstruction of justice under North
Carolina common law. 3 The obstruction of justice claim is based
on the allegation that Dal-Tile failed to issue a litigation
hold on e-mails after it received her October 28, 2009 EEOC
charge and thus destroyed a significant number of e-mails
pursuant to its email retention policy.
Following discovery, in May 2012, Dal-Tile filed a motion
for summary judgment. The district court granted this motion.
Freeman v. Dal-Tile Corp., 930 F. Supp. 2d 611 (E.D.N.C. 2013).
3
She also asserted retaliatory demotion and discharge
claims under 42 U.S.C. § 1981, but she does not appeal the
dismissal of those claims.
10
First, the district court held that in regard to the racial
and sexual hostile work environment claims, Freeman did not
present sufficient evidence to create a genuine dispute of
material fact on the issue of whether the harassment was
objectively severe or pervasive. However, the district court
noted “that plaintiff subjectively perceived the alleged racial
and sexual harassment to be abusive.” Id. at 628.
Second, the district court ruled that even if the
harassment was found to be objectively severe or pervasive
enough to alter Freeman’s work conditions, Dal-Tile would still
be entitled to summary judgment because Freeman could not
establish that liability should be imputed to Dal-Tile. The
district court used a negligence standard, adopted from an
unpublished opinion of this Court, in which “an employer is
liable [for the actions of a third party] ‘if it knew or should
have known of the harassment and failed to take appropriate
actions to halt it.’” Id. at 638 (quoting EEOC v. Cromer Food
Servs., Inc., 414 F. App’x 602, 606 (4th Cir. 2011)).
Applying this standard, the district court held that Dal-
Tile did not have actual or constructive knowledge of the
harassment because “no reasonable fact-finder could conclude
that plaintiff’s statement[s] to Wrenn constituted a complaint,
either formal or informal.” Id. at 639. Further, the district
court noted that “even if [it] were to assume arguendo that the
11
. . . remarks that plaintiff made to Wrenn could somehow be
construed as complaints, it is undisputed that plaintiff knew
there were additional avenues that she could have pursued if she
was unsatisfied with Wrenn’s response.” Id. at 640. In the
second inquiry of the negligence analysis, whether the
employer’s response was appropriate, the district court ruled
that Dal-Tile’s response to Koester’s behavior was adequate as a
matter of law.
Third, the district court held that Freeman was not
constructively discharged but, rather, voluntarily resigned. The
district court noted that Freeman was “unable to show that
anyone at Dal-Tile acted deliberately with an unlawful
discriminatory intent in order to force her to resign either
before or after she returned from medical leave.” Id. at 647.
Lastly, the district court ruled that Freeman’s North
Carolina obstruction of justice claim failed as a matter of law.
The district court stated that “the evidence does not support a
finding that anyone at Dal-Tile intentionally destroyed emails
in order to keep plaintiff from proceeding with a legal claim.”
Id. at 648.
II.
This Court “review[s] the district court’s grant of summary
judgment de novo, applying the same legal standards as the
district court and viewing the facts and inferences drawn from
12
the facts in the light most favorable to . . . the nonmoving
party.” Evans v. Techs. Applications & Serv. Co., 80 F.3d 954,
958 (4th Cir. 1996).
On appeal, Freeman argues 1) a reasonable jury could
conclude that she was subjected to a racially and sexually
hostile work environment; 2) a reasonable jury could find that
liability for Koester’s harassment is imputable to Dal-Tile; 3)
a reasonable jury could find that she was constructively
discharged; and 4) North Carolina common law requires only
general intent not specific intent for obstruction of justice
claims, and the destruction of emails here meets this standard.
We address each in turn.
III.
Freeman first argues the district court erred in granting
summary judgment on her hostile work environment claims. Under
Title VII, “[i]t shall be an unlawful employment practice 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. “Since an
employee's work environment is a term or condition of
employment, Title VII creates a hostile working environment
cause of action.” EEOC v. R & R Ventures, 244 F.3d 334, 338 (4th
13
Cir. 2001) (citing Meritor Sav. Bank, FSB v. Vinson, 477 U.S.
57, 73 (1986)).
For this Court to reverse the district court’s grant of
summary judgment to Dal-Tile on her hostile work environment
claims, Freeman must establish that the evidence, viewed in her
favor,
would allow a reasonable jury to conclude that the
harassment was (1) unwelcome, (2) based on [Freeman’s]
gender or race, (3) sufficiently severe or pervasive
to alter the conditions of her employment and create
an abusive atmosphere, and (4) imputable to [Dal-
Tile].
EEOC v. Cent. Wholesalers, Inc., 573 F.3d 167, 175 (4th Cir.
2009) (citing EEOC v. Sunbelt Rentals, Inc., 521 F.3d 306, 313–
14 (4th Cir. 2008)).
First, Freeman must establish that a reasonable jury could
conclude that the sex- or race-based harassment was unwelcome.
As discussed above, Freeman complained of her harassment to
Wrenn, human resources, and Koester himself. She told Koester
repeatedly to stop making such crude and demeaning comments. She
cried in both Wrenn and Koester’s presence over the harassment.
She eventually was treated for depression and anxiety because of
it. Based on this evidence, we believe that a reasonable jury
could find that both the sex- and race-based harassment were
unwelcome.
14
Second, Freeman must show that a reasonable jury could find
that the harassment was based on her sex or race. The evidence
shows that Koester used the word b**** in the office almost
every time he came in, often discussed his sexual encounters
with women, showed naked pictures of women to Freeman and
others, frequently made “lewd” comments, discussed having sex
with a co-worker’s daughters, and called Freeman a “black
b****,” among other things. Based on this evidence, a reasonable
jury could find that the harassment was based on Freeman’s sex.
See, e.g., Forrest v. Brinker Intern. Payroll Co., 511 F.3d 225,
229 (1st Cir. 2007) (stating that a “raft of case law”
“establishes that the use of sexually degrading, gender-specific
epithets, such as . . . ‘b****,’ . . . has been consistently
held to constitute harassment based upon sex”).
Regarding race, Koester discussed bringing “black girls”
home with him, used racial slang in the office on a daily basis,
said “black b****” at least twice (once directed at Freeman),
told Freeman he was “as f***ed up as a n****r’s checkbook,” and
admitted to maybe using “racially inappropriate” language in the
office. In light of this evidence, a reasonable jury could find
that Koester’s harassment was also based on Freeman’s race. See
Spriggs v. Diamond Auto Glass, 242 F.3d 179, 185 (4th Cir. 2001)
(describing the use of the word “n****r” as an “unambiguously
15
racial epithet” (quoting Rodgers v. Western–Southern Life Ins.
Co., 12 F.3d 668, 675 (7th Cir. 1993))).
Third, Freeman must show that a reasonable jury could find
that the sex- or race-based harassment was so severe or
pervasive as to alter the conditions of her employment and
create an abusive or hostile atmosphere. “This element of a
hostile work environment claim has both subjective and objective
parts.” Cent. Wholesalers, Inc., 573 F.3d at 175 (citing Harris
v. Forklift Systems, Inc., 510 U.S. 17, 21–23 (1993)). Freeman
thus “must show that [she] did perceive, and a reasonable person
would perceive, the environment to be abusive or hostile.” Id.
Regarding the subjective component, the district court
stated, and we agree, that the evidence supports a finding that
Freeman subjectively perceived both types of harassment to be
abusive or hostile. As discussed above, Freeman complained about
the harassment to her supervisor, human resources, and Koester
himself. She cried at work in front of co-workers because of the
harassment. The evidence also shows the harassment interfered
with her ability to work, as she was often distracted by
Koester’s inappropriate behavior and the stress that she felt
from having to interact with him. Freeman ultimately had to take
medical leave and seek treatment for depression and anxiety
because of Koester’s harassment. In light of this evidence, we
conclude that a reasonable jury could find that Freeman found
16
the harassment subjectively hostile or abusive. See Cent.
Wholesalers, Inc., 573 F.3d at 176 (finding a triable issue of
fact on subjective perception of hostility where plaintiff
“complained about both types of harassment and stated that she
found such harassment objectionable” and “that the harassment
caused her emotional distress”); Harris v. Mayor & City Council
of Baltimore, 429 F. App’x 195, 202 (4th Cir. 2011) (finding a
triable issue of fact on subjective perception of hostility
where plaintiff presented evidence that she complained of
harassment, suffered from a depressive disorder because of her
work experiences, and was seen crying at work by a co-worker).
Next we must determine whether the harassment was
objectively severe or pervasive.
This objective inquiry “is not, and by its nature
cannot be, a mathematically precise test.” Harris, 510
U.S. at 22. “Rather, when determining whether the
harassing conduct was objectively severe or pervasive,
we must look at all the circumstances, including the
frequency of the discriminatory conduct; its severity;
whether it is physically threatening or humiliating,
or a mere offensive utterance; and whether it
unreasonably interferes with an employee's work
performance.” Sunbelt, 521 F.3d at 315 (quotation
marks omitted). “[N]o single factor is” dispositive,
Harris, 510 U.S. at 23, as “[t]he real social impact
of workplace behavior often depends on a constellation
of surrounding circumstances, expectations, and
relationships which are not fully captured by a simple
recitation of the words used or the physical acts
performed,” Oncale v. Sundowner Offshore Services,
Inc., 523 U.S. 75, 82 (1998).
Cent. Wholesalers, Inc., 573 F.3d at 176.
17
Here, the record is replete with evidence of frequent
abusive behavior by Koester during Freeman’s tenure with Marble
Point and Dal-Tile. Regarding the sex-based harassment, Koester
repeatedly used the word “b****” in the office, inquired about
two “black b****es” he saw in a picture, called Freeman a “black
b****,” passed gas on Freeman’s phone, and often discussed his
sexual experiences with women, including showing co-workers
naked pictures on his phone. He made “lewd” comments on a
regular basis, and was described by Wrenn as a
“pig.” Freeman has certainly established a triable issue on
whether the sex-based harassment was objectively severe or
pervasive. See, e.g., Cent. Wholesalers, Inc., 573 F.3d at 176
(finding that the frequent use of the word “b****,” coupled with
both displays of scantily clad or naked women in the office and
inappropriate sexual jokes, was sufficient to create a triable
issue of fact on the issue of objective hostility).
Based on the evidence, a reasonable jury could also find
the race-based harassment was objectively severe or pervasive.
Koester used racial slang in the office on a daily basis. He
inquired about two “black b****es” he saw in a picture. He
called Freeman a “black b****” in the presence of his young
daughter. He discussed bringing home black women to have sex
with them. He told Freeman he was “as f***ed up as a n****r’s
checkbook.”
18
To begin, “the word ‘n****r’ is pure anathema to African-
Americans,” Spriggs, 242 F.3d at 185, as it should be to
everyone. Moreover, as we have stated before, “[w]e cannot
ignore . . . the habitual use of epithets here or view the
conduct without an eye for its cumulative effect. Our precedent
has made this point repeatedly.” Sunbelt Rentals, Inc., 521 F.3d
at 318. Therefore, when viewing the circumstances as a whole, we
find the use of the word “n****r,” coupled with the on-going
offensive racial talk, use of the term “black b****” on more
than one occasion (once directed at a black employee), and
sexual talk regarding black women, is sufficient evidence for a
reasonable jury to find the race-based harassment was
objectively severe or pervasive.
Lastly, Freeman must establish a “basis for imposing
liability” on Dal-Tile for the sex- or race-based harassment.
Gilliam v. S.C. Dep't of Juvenile Justice, 474 F.3d 134, 142
(4th Cir. 2007). The district court adopted a negligence
standard for analyzing an employer’s liability for third-party
harassment under Title VII. This Court has not yet adopted this
standard in a published opinion, but we do so today. 4 Similar to
4
Other circuits to address the issue have also adopted a
similar standard. See Dunn v. Washington Cnty., 429 F.3d 689,
691 (7th Cir. 2005)(“[T]he plaintiff bears the burden of showing
that the employer knew of the problem (usually though not always
this requires the employee to show that a complaint was made)
(Continued)
19
the reasoning we set forth for employer liability for co-worker
harassment, “an employer cannot avoid Title VII liability for
[third-party] harassment by adopting a ‘see no evil, hear no
evil’ strategy.’” Ocheltree v. Scollon Prods., Inc., 335 F.3d
325, 334 (4th Cir. 2003) (en banc). Therefore, an employer is
liable under Title VII for third parties creating a hostile work
environment if the employer knew or should have known of the
harassment and failed “to take prompt remedial action reasonably
calculated to end the harassment.” Amirmokri v. Baltimore Gas &
Elec. Co., 60 F.3d 1126, 1131 (4th Cir. 1995) (quoting Katz v.
Dole, 709 F.2d 251, 256 (4th Cir. 1983)) (internal quotation
marks omitted) (applying this standard to co-worker harassment).
and that the employer did not act reasonably to equalize working
conditions once it had knowledge.”); Galdamez v. Potter, 415
F.3d 1015, 1022 (9th Cir. 2005) (“An employer may be held liable
for the actionable third-party harassment of its employees where
it ratifies or condones the conduct by failing to investigate
and remedy it after learning of it.”); Watson v. Blue Circle,
Inc., 324 F.3d 1252, 1259 (11th Cir. 2003) (“When, as in this
case, the alleged harassment is committed by co-workers or
customers, a Title VII plaintiff must show that the employer
either knew (actual notice) or should have known (constructive
notice) of the harassment and failed to take immediate and
appropriate corrective action.”); Turnbull v. Topeka State
Hosp., 255 F.3d 1238, 1244 (10th Cir. 2001) (holding that “an
employer may be responsible for sexual harassment based upon the
acts of nonemployees” under a “negligence analysis”).
This Court has also adopted this negligence standard in a
prior unpublished opinion. See EEOC v. Cromer Food Servs., Inc.,
414 F. App’x 602, 606–07 (4th Cir. 2011), and both parties agree
that a negligence analysis is appropriate.
20
Applying this standard here, we conclude that a reasonable
jury could find that Dal-Tile knew or should have known of the
harassment. Here, Freeman presented evidence that Wrenn, her
supervisor, knew of all three of the most major incidents: the
two “black b****” comments, and the “f***ed up as a n****r’s
checkbook” comment. Wrenn was present for the first “black
b****” comment, which Freeman complained about to Wrenn
afterward. Freeman also complained to Wrenn specifically about
the other two comments from Koester almost immediately after
they occurred. 5 When Freeman complained to Wrenn about the
“f***ed up as a n****r’s checkbook” comment, Wrenn “scoffed and
shook her head and put her head back down and continued on with
trying to pick the nail polish off of her nails.” J.A. 102. When
Freeman complained about the second “black b****” comment, Wrenn
simply rolled her eyes and went on talking to a co-worker. J.A.
112. In addition to these most severe incidents, Wrenn was also
present the time Koester passed gas on Freeman’s phone and
Freeman began crying and had to leave the room.
Not only did Wrenn know of these specific and more severe
incidents, but she also knew the harassment was an on-going
situation. As discussed above, Wrenn herself testified that she
5
Per the company’s harassment policy, Freeman did exactly
what she was supposed to by telling Wrenn, her supervisor, of
the harassment. J.A. 199.
21
knew Koester used the word “b****” in the office frequently,
that he made sexual comments in the office, that he showed
pictures of naked women on his phone in the office, and that he
“always made comments about women.” J.A. 268–74. Wrenn herself
referred to him as a “pig.” J.A. 253. Cathy Diksa also testified
that Wrenn knew Koester used “racial language” in the office.
J.A. 217.
This evidence, if proven true, shows that Dal-Tile, through
its agent Wrenn, had actual knowledge of the harassment and that
Freeman found it offensive, as shown by Freeman’s frequent
complaints and her negative reaction to his behavior. However,
even if Wrenn did not have actual knowledge that Freeman was
offended by Koester’s behavior, at the very least, she should
have known it: Wrenn was aware of Koester’s on-going
inappropriate behavior and comments, had received several
complaints about the harassing incidents from Freeman, had
witnessed Freeman crying from the harassment, and knew
incendiary terms like “n****r” and “black b****” had been used
in the presence of a black, female employee. As stated above,
“[a]n employer cannot avoid Title VII liability for coworker
harassment by adopting a ‘see no evil, hear no evil’ strategy.”
Ocheltree, 335 F.3d at 334. Therefore, we conclude a reasonable
jury could find that Dal-Tile knew, or at the very least, should
have known, of Koester’s harassment.
22
In addition, Freeman has at least created a triable issue
of fact as to whether Dal-Tile’s response to halt the harassment
was adequate. Despite Wrenn’s notice of Koester’s on-going
behavior, Dal-Tile did not take any effective action to halt the
harassment until Freeman reported up the chain to Cathy Diksa in
human resources after the final “black b****” comment. 6 At that
point, the harassment had been ongoing for three years. Diksa
originally told Freeman that Koester would be permanently banned
from Dal-Tile. J.A. 121–22. However, the company lifted the ban
and instead simply prohibited Koester from communicating with
Freeman while still allowing him on the premises if he
coordinated his meetings through Wrenn.
As stated above, once an employer has notice of harassment,
it must “take prompt remedial action reasonably calculated to
end the harassment.” Amirmokri, 60 F.3d at 1131 (quoting Katz,
709 F.2d at 256) (internal quotation marks omitted). Not only
did Dal-Tile fail to take any serious action for three years in
spite of the long list of ongoing harassment by Koester, but
particularly shocking to us is the fact Dal-Tile took absolutely
no action when Koester passed gas on Freeman’s phone and made
Freeman cry in Wrenn’s presence, nor when Freeman promptly
6
Wrenn did tell Koester not to use inappropriate language
after the first “black b****” comment, but that proved
ineffective as the harassment continued for three more years.
23
complained to Wrenn that Koester had used the word “n****r” on
the phone with her. Although the harassment eventually stopped
after the communication ban was put into place, the harassment
had continued unabated for three years prior to that. While a
communication ban may have been an adequate response had it been
put into place sooner, Dal-Tile’s failure was in not responding
promptly to the harassment. Based on this evidence, we believe a
reasonable jury could conclude that Dal-Tile failed to take
“prompt remedial action reasonably calculated to end the
harassment.”
In sum, we believe a reasonable fact-finder could find
there was an objectively hostile work environment based on both
race and sex and that Dal-Tile knew or should have known of the
harassment and failed to adequately respond. We, therefore,
reverse the district court’s grant of summary judgment in favor
of Dal-Tile on Freeman’s racial and sexual hostile work
environment claims under Title VII, as well as her racial
hostile work environment claim under 42 U.S.C. § 1981, and we
remand for further consideration in the district court. 7
7
The standard used to evaluate a racial hostile work
environment claim under § 1981 is the same as the standard used
under Title VII. Spriggs, 242 F.3d at 184. Thus our analysis is
the same for both racial hostile work environment claims here.
24
IV.
Freeman also appeals the district court’s ruling that she
was not constructively discharged under 42 U.S.C. § 1981. 8 An
employee is considered constructively discharged “if an employer
deliberately makes the working conditions intolerable in an
effort to induce the employee to quit.” Honor v. Booz-Allen &
Hamilton, Inc., 383 F.3d 180, 186-87 (4th Cir. 2004) (quoting
Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1353-54 (4th Cir.
1995)) (internal quotation marks and citations omitted). Freeman
must prove two elements to demonstrate constructive discharge:
“(1) the deliberateness of [Dal-Tile’s] actions, motivated by
racial bias, and (2) the objective intolerability of the working
conditions.” Id. at 186-87.
Here, Freeman did not present sufficient evidence to create
a question of fact as to whether Dal-Tile deliberately attempted
to induce her to quit, nor that her working conditions at the
time she resigned were objectively intolerable. Rather, the
evidence shows that within weeks from returning from a two month
medical leave, Freeman voluntarily resigned from her position.
She had had no contact with Koester for months, nor had he even
been in the building at the same time as her since she had
8
Freeman brought her constructive discharge claim solely
under 42 U.S.C. § 1981, and thus it is only based on racial
discrimination.
25
returned from leave. Freeman presented no evidence that
Koester’s harassment was still creating an objectively hostile
work environment at the time she resigned, nor that Dal-Tile was
allowing him to harass her in a deliberate attempt to force her
to quit. Therefore, we affirm the district court’s grant of
summary judgment to Dal-Tile on the constructive discharge
claim.
V.
Finally, Freeman contends that the district court erred in
awarding Dal-Tile summary judgment on the North Carolina common
law obstruction of justice claim. Freeman argues that Dal-Tile
should have put a litigation hold on all relevant emails
beginning no later than when it received Freeman’s complaint in
November 2009, and maybe even as early as when she contacted
human resources about the situation in August 2009.
In North Carolina, “acts which obstruct, impede or hinder
public or legal justice . . . amount to the common law offense
of obstructing justice.” Blackburn v. Carbone, 703 S.E.2d 788,
794 (N.C. Ct. App. 2010) (quoting Henry v. Deen, 310 S.E.2d 326,
334 (N.C. 1984)). The offense requires proof that the defendant
acted “willfully and with an intent to defraud.” State v.
Eastmen, 438 S.E.2d 460, 464 (N.C. Ct. App. 1994). In other
words, North Carolina law requires that the defendant acted with
the specific intent to obstruct justice, not just the general
26
intent to do the act which resulted in the obstruction. See
Blackburn, 703 S.E.2d at 795 & n.6 (“[A]ny action intentionally
undertaken by the defendant for the purpose of obstructing,
impeding, or hindering the plaintiff’s ability to seek and
obtain a legal remedy will suffice to support a claim for common
law obstruction of justice. . . . The necessity for showing an
intentional act of misconduct by the defendant is delineated in
a number of criminal obstruction of justice cases.”).
Here, Freeman presented no evidence that Dal-Tile destroyed
emails with the intent to hinder the litigation. Rather, they
were destroyed pursuant to Dal-Tile’s email retention policy.
Therefore, we affirm the district court’s holding that there is
not a viable obstruction of justice claim under North Carolina
common law.
VI.
In conclusion, we reverse the district court’s grant of
summary judgment in favor of Dal-Tile on the sexual and racial
hostile work environment claims under Title VII, and the racial
hostile work environment claim under § 1981, and we remand these
claims for further consideration in the district court. We
affirm the district court’s grant of summary judgment in favor
of Dal-Tile on the constructive discharge claim and the North
Carolina obstruction of justice claim.
REVERSED IN PART, AFFIRMED IN PART, AND REMANDED
27
NIEMEYER, Circuit Judge, concurring in part and dissenting in
part:
This case involves a workplace allegedly made hostile by
the conduct of a customer of the employer. In recognizing that
employers can be liable in cases where the harassing conduct was
that of a third party, the majority extends the scope of Title
VII beyond what the Supreme Court has so far recognized. I have
grave concerns about such an extension when hostile work
environment claims were themselves an extension of Title VII,
which was designed to regulate the employer-employee
relationship.
But even recognizing that there are some adventuresome
cases concluding that an employer can be liable for its failure
to take action to protect its employees from a third party’s
harassment, see, e.g., Dunn v. Wash. Cnty. Hosp., 429 F.3d 689,
691 (7th Cir. 2005), I conclude that the majority’s opinion
today goes so far that it cannot find support even in them. An
employer in this kind of case may be liable at most for its own
negligence in allowing the conduct of its customers to turn its
workplace into a hostile work environment -- i.e., a work
environment that, as a result of the customers’ conduct, becomes
“permeated with discriminatory intimidation, ridicule, and
insult that is sufficiently severe or pervasive to alter the
conditions of [an employee’s] employment.” Harris v. Forklift
Sys., Inc., 510 U.S. 17, 21 (1993) (internal quotation marks and
citations omitted). As a negligence case, the analysis must
focus on identifying when the employer knew or should have known
that its employee was being subjected to harassment based on the
employee’s “race, color, religion, sex, or national origin,” 42
U.S.C. § 2000e-2(a)(1), and then on evaluating the adequacy of
the employer’s response at that point. See Burlington Indus.,
Inc. v. Ellerth, 524 U.S. 742, 759 (1998).
In this case, the majority concludes that a reasonable jury
could find Dal-Tile liable under Title VII for discriminating
against Lori Freeman, its employee, because it permitted a Dal-
Tile customer, Timothy Koester, to engage in continuous sex-
based and race-based harassment of Freeman for three years. I
believe, however, that a closer review of the record does not
support that overly generalized conclusion.
The record only supports the inference that Koester’s
conduct rose to the level of actionable harassment in the summer
of 2009. To be sure, Koester’s conduct in the office prior to
that point had been coarse, crude, and ugly. But there is
insufficient evidence in the record to allow a reasonable jury
to conclude that, prior to the summer of 2009, his conduct had
created a hostile or abusive working environment for Freeman at
Dal-Tile. In August 2006 (shortly after Freeman began her
employment at Dal-Tile), Freeman did hear Koester use the phrase
29
“black bitches” in Dal-Tile’s office when referring to a
photograph of two former employees. But she also heard a Dal-
Tile assistant manager, Sara Wrenn, immediately respond to
Koester, directing him “not to use that language here.” J.A.
76. And for nearly three years thereafter, Freeman “carried on
a working relationship with [Koester],” describing herself as
being “friendly with [him] as long as he wasn’t making . . .
lewd comments.” J.A. 126. When Freeman thought Koester was
behaving inappropriately, she would tell him to cut it out, just
as her coworkers did. As Wrenn explained:
[T]he minute [Freeman] started with [Dal-Tile], she
fit right in with us. And, you know, everybody knew
that [Koester] ran his mouth, and you know, like I
said, it was never malice, it was never malicious. He
was just crude, and everybody knew exactly how to
handle him and put him in his place, and Lori
[Freeman] fell right into that, and she had no
problems calling him out . . . .
J.A. 292. Similarly, Freeman stated that she had a good working
relationship with all of her coworkers, describing the office as
“very close knit.” J.A. 58. Thus, unlike the circumstances
presented in EEOC v. Cent. Wholesalers, Inc., 573 F.3d 167, 170
(4th Cir. 2009), and Mosby-Grant v. City of Hagerstown, 630 F.3d
326, 330 (4th Cir. 2010), where the plaintiff-employees were
surrounded by multiple individuals who regularly referred to
women as “bitches” and engaged in other demeaning conduct, the
30
record here is clear that Koester was the outlier in an
otherwise harmonious and harassment-free office environment.
A jury could find, however, that the circumstances for
Freeman did change in the summer of 2009 when she reasonably
began to perceive Koester’s conduct as being so offensive as to
make her work environment abusive. This is when Koester told
Freeman that he was as “fucked up as a nigger’s checkbook” and
then, several weeks later, called her a “black bitch.” But it
was also at this point that Dal-Tile intervened to protect
Freeman. The day after Koester made the “black bitch” comment
to Freeman, Dal-Tile told Koester that he was suspended from the
premises. And while Dal-Tile eventually agreed to conduct
business with Koester again, it was only with restrictions in
place that ensured that Freeman would not have to interact with
him. Indeed, Koester never made another inappropriate remark in
Freeman’s presence.
This is not a case where an employer knew that its employee
was experiencing actionable harassment but did nothing in
response. Rather, the record shows that Dal-Tile did indeed
intervene and intervened effectively. I would accordingly
affirm the district court’s summary judgment in favor of Dal-
Tile on all of Freeman’s claims, including her hostile work
environment claims.
31