The full case caption appears at the
end of this opinion. EVANS, Circuit Judge. Allegedly fed up with herboss making highly offensive remarks, Louise Hillcomplained and ultimately sued her employerAmerican General Finance, Incorporated for sexualand racial harassment and for retaliating againsther for complaining about it, all under Title VII(42 U.S.C. sec. 2000e et seq.). Prior to therecent establishment of a standard for companyliability based on the conduct of supervisorsunder Title VII, the district court grantedsummary judgment dismissing Hill’s case. Our taskis to determine whether the grant of summaryjudgment is consistent with the standard as itwas set out in Faragher v. City of Boca Raton,524 U.S. 775, 118 S. Ct. 2275 (1998), andBurlington Indus., Inc. v. Ellerth, 524 U.S. 742,118 S. Ct. 2257 (1998). Hill went to work in the defendant’s Alton,Illinois, office in September 1994. She became alending/collection administrator. Her job was toextend loans and credit, close on loans, andcollect past-due accounts. She worked in a one-room office with up to eight other people,including her supervisor Darin Brandt. At thetime, Hill was the only African-American workingin the tiny office. Hill alleges that within a month of her arrivalin the office, Brandt began to act in a way whichamounted to sexual and racial harassment. He madereference to the size of his penis. He said, “Ilike a woman with a big ass, like Louise’s.” Heasked her if a doctor’s appointment was for herbreasts or between her legs. He talked about theways he liked sex, the frequency of sex, andabout pornographic movies. He once, according toHill, rubbed his pelvis against her buttocks andsaid, “Boy that feels good.” He said, “Once yougo black, you never go back”; “Don’t come intothis office talking black, because this ain’t noAunt Jemima office”; he was “sick of black peoplegetting food stamps and having all those blackbabies.” In moving for summary judgment, AGF hadto accept Hill’s allegations as true. The companyalso does not contest that Brandt’s conduct washarassment. On February 2, 1995, Hill wrote a letter toAGF’s chief executive officer complaining ofBrandt’s behavior to customers and of his vulgarlanguage. She signed the letter “Lillie Rogers,”representing herself as a customer. She wroteanother letter on February 6 which she signed “avery worried and frighten[ed] employee.” OnFebruary 23 the Human Resources Departmentconducted an investigation; Hill was interviewed,and although the director of operations, GaryEnglish, suspected that Hill had written theletters, Hill did not acknowledge that she had.No other employees confirmed any of theharassment, but some admitted they hadconversations of a sexual nature in the office.On March 9 English issued Brandt a warning forallowing such conversations to take place. Aboutthe same time, English mentioned that AGF wouldbe opening additional offices and suggested thepossibility that Hill might be interested intraining in what seems to have been a self-directed, computerized, instructional program,called the BEST program, to be an assistantmanager. English considered Hill to be anoutstanding salesperson and that her talent fordealing with people was the best he’d ever seen. On April 14 Hill wrote a letter to English inwhich she set out instances of harassment. Thistime she signed her own name. Two days later,Carleen Thompson, the company’s human resourcesattorney, and Larry Bauer, outside counsel forthe company, went to Alton to investigate. Theyconducted a follow-up investigation on April 26,1995. Thompson concluded that she should issue awritten warning to Brandt, provide him withadditional training, transfer and demote him, andtransfer Hill to prevent retaliation from her co-workers. On May 2, 1995, Brandt was transferredto the Belleville branch office with a $10,000reduction in pay. He received a written warningfor failing to cooperate with the investigationand for inappropriate conduct. At the end ofApril, Thompson informed Hill that she was beingtransferred to the Kingshighway office in St.Louis. Hill says it was a transfer to a dangeroushigh-crime area in which she was required to makedoor-to-door collection calls; AGF says eveningcalls were extremely rare. Hill also claims thatthe manager at Kingshighway was openly hostile toher; she says he recommended that she be firedfor allegedly providing competitors with names ofprospective loan applicants, but she wasexonerated. Nevertheless, she resigned on July 6,1995. We review grants of summary judgment de novo,drawing all reasonable inferences from the factsin favor of the nonmovant. Parkins v. CivilConstructors of Illinois, Inc., 163 F.3d 1027(7th Cir. 1999). Summary judgment is appropriateonly if “there is no genuine issue as to anymaterial fact and . . . the moving party isentitled to a judgment as a matter of law.”Federal Rule of Civil Procedure 56(c). We mayaffirm on any ground on which there is support inthe record. Parkins. We evaluate this case, then,to see if the record is sufficiently developedfor us to fairly apply the Faragher-Ellerthstandard or whether a remand to the districtcourt is required for an expansion of the record. Whether a remand is necessary is a fact-basedcall. Some cases have been remanded for necessarydevelopment of the record. In fact, the Ellerthcase itself was remanded so that the “DistrictCourt will have the opportunity to decide whetherit would be appropriate to allow Ellerth to amendher pleading or supplement her discovery.”Ellerth, at 2271. Other cases have done prettymuch the same thing. See Rubidoux v. ColoradoMental Health Inst. Pueble, 173 F.3d 1291 (10thCir. 1999); Burrell v. Star Nursery, Inc., 170F.3d 951 (9th Cir. 1999); Wilson v. City ofPlano, Texas, 164 F.3d 900 (5th Cir. 1999). Onthe other hand, of course, the Court found therecord in Faragher sufficient to orderreinstatement of the judgment for Faragher.Similarly, although with a judgment for thedefendant, we found in Shaw v. Autozone, Inc.,180 F.3d 806, 814 (7th Cir. 1999), cert. denied,120 S. Ct. 790 (2000), that “while the standardfor liability has changed, the record andarguments were fully developed for application ofthe new standard.” The new standard is: An employer is subject to vicarious liability toa victimized employee for an actionable hostileenvironment created by a supervisor withimmediate (or successively higher) authority overthe employee. When no tangible employment actionis taken, a defending employer may raise anaffirmative defense to liability or damages,subject to proof by a preponderance of theevidence . . . . The defense comprises twonecessary elements: (a) that the employerexercised reasonable care to prevent and correctpromptly any sexually harassing behavior, and (b)that the plaintiff employee unreasonably failedto take advantage of any preventive or correctiveopportunities provided by the employer or toavoid harm otherwise. While proof that anemployer had promulgated an anti-harassmentpolicy with complaint procedure is not necessaryin every instance as a matter of law, the needfor a stated policy suitable to the employmentcircumstances may appropriately be addressed inany case when litigating the first element of thedefense. . . . No affirmative defense is available, however,when the supervisor’s harassment culminates in atangible employment action, such as discharge,demotion, or undesirable reassignment. Ellerth, at 2270; see also Faragher at 2292-2293. Although Hill claims that she suffered anadverse employment action as part of theretaliation against her, she does not argue thatshe suffered a tangible employment action as partof her harassment claims. In fact, in herdeposition she states on several occasions thatin her mind the adverse employment action was notbased on either racial or sexual harassment, butrather was in retaliation for her lodging hercomplaint. Therefore, under Ellerth and Faragherthe company has a possible defense to theharassment claims, and our review of the recordconvinces us that AGF has established the defenseas a matter of law. One element of the defense involves whether theemployee took advantage of opportunities toprevent harassment. On the basis of the record wemust conclude that Hill did not notify thecompany of the harassment until her letter ofApril 14. The February letters were not areasonable effort at notification. They were notsigned and she did not acknowledge that she hadwritten those letters when the companyinvestigated the complaints set out in theletters. In fact, Hill began her April 14 letterby apologizing: “Please accept my apology for notbeing completely honest during the interview withyou and the attorneys for the company.” She thenproceeded to lay out some of her complaints aboutMr. Brandt and his treatment of her. So, startingwith her letter of April 14 Hill took reasonablesteps to correct the situation which existed inthe Alton office. But the same cannot be said forher actions before April 14. The other element of the defense is whether thecompany “exercised reasonable care to prevent andcorrect promptly any sexually harassingbehavior.” It is not disputed that after theApril 14 letter the company took immediatecorrective action. In a flash, after the receiptof the letter, the company again investigatedBrandt’s conduct. Hill testified that Englishcame to Alton on April 16 in response to hercomplaint and told her that if she had anyproblems she should call him. In fact, by Hill’sown account, she and Brandt were in the Altonoffice together for only 5 or 6 days after thecompany received her complaint. Carleen Thompsonand Larry Bauer also conducted an investigation,and as a result, Thompson concluded that bothBrandt and Hill should be transferred out of theAlton office. Brandt’s salary was cut by $10,000in the transfer. In regard to this element of the defense, weare also told that we may consider whether thecompany had policies or procedures to helpemployees deal with problems of harassment. Whilean appropriate anti-harassment policy withcomplaint procedure is not always necessary tosustain the defense, it is a relevantconsideration. Ellerth. AGF had a number of policies in place at thetime of these events.
[FOOTNOTE 1] While they may leaveroom for improvement, the policies get the jobdone. One was entitled “Equal EmploymentOpportunity; Policy Regarding,” dated August 1,1994. It set out that AGF’s policy was to complywith laws regarding equal employment withoutregard to race. Questions regarding this policywere to be directed to the group manager ofEmployee and Field Relations. Another policystatement was entitled “Sexual Harassment in theWorkplace; Policy Regarding.” It set out AGF’sgoal “to maintain a work environment free ofsexual harassment.” The policy prohibited “sexualadvances, requests for sexual favors, and otherverbal or physical conduct of a sexual nature”when, as relevant here, the “conduct has thepurpose or effect of substantially interferingwith an individual’s work performance or creatinga work environment that is reasonably perceivedby the individual to be intimidating, hostile, oroffensive.” A complaint procedure was set out inanother memorandum dated May 16, 1994, andinvolved four basic levels. The first is to theimmediate supervisor or manager. If that fails(as it obviously would here) or if the “employeedoes not feel it is a matter that can bediscussed with the supervisor,” the employee candiscuss the matter with the appropriate FieldRelations Consultant; the Associate Director,Employee Relations and Benefits; or the Directorof Human Resources and Systems Management. Thethird is a complaint to the Fair EmploymentPractices Compliance Officer. A telephone numberfor complaints is provided. The fourth level isthe Personnel Administration Committee throughthe Director of Human Resources and SystemsManagement. Hill claimed that she did not recall havingreceived copies of the policies. Perhaps not, butCarleen Thompson testified at her deposition thatthe policies within each branch office were keptin a set of notebooks in a “public access typeplace” where the employees could look at them.More importantly, Hill testified that she knewwhen she began to work for AGF that there was ahuman resource group in the company whose job itwas to make sure there was no sexual or racialharassment of employees. She testified that sheknew she could complain to that group if therewas a problem with harassment. She alsoacknowledged knowing that she could talk withEnglish about complaints. And, of course, that isprecisely what she did. While it is true that heranonymous letter and the one signed with afictitious name might show that she was somewhatapprehensive about complaining, we havepreviously determined that apprehension does noteliminate the requirement that the employeereport harassment: “an employee’s subjectivefears of confrontation, unpleasantness orretaliation do not alleviate the employee’s dutyunder Ellerth to alert the employer to theallegedly hostile environment.” Shaw v. Autozone,at 813. As a matter of law, on the record as it exists,AGF is entitled to summary judgment. DarinBrandt’s behavior, as alleged, was ignorant andloutish. However, when the company was notifiedof his behavior, it reacted with commendablealacrity in almost a textbook example of what issupposed to happen. Having failed to recoverdamages, Hill may not see it quite that way, but,in fact, the goal of Title VII is prevention, notdamages. When prevention occurs and there is noadverse employment action, strict liability doesnot apply. In Faragher the Court said: Although Title VII seeks “to make persons wholefor injuries suffered on account of unlawfulemployment discrimination,” [citation omitted],its “primary objective” like that of any statutemeant to influence primary conduct, is not toprovide redress but to avoid harm. At 2292. Hill also contends that she was retaliatedagainst in her transfer to Kingshighway and hertreatment once she got there. To prevail on thisclaim, Hill must show that she suffered anadverse job action because of her complaints ofharassment. McKenzie v. Illinois Dep’t ofTransp., 92 F.3d 473 (7th Cir. 1996). Absentdirect evidence of retaliation, she must showthat (1) she engaged in activity protected underTitle VII; (2) she suffered an adverse employmentaction; and (3) a causal connection existsbetween the adverse action and her participationin the protected activity. Smart v. Ball StateUniversity, 89 F.3d 437 (7th Cir. 1996). Anadverse action occurs when an employee is firedor demoted, suffers a decrease in benefits orpay, or is given a significantly lesser job. Notevery unwelcome employment action qualifies as anadverse action. Negative reviews, a change in jobtitle, an increased distance to travel to work,or a lateral transfer do not, by themselves,qualify. Id. After Hill’s April 14 letter, she contends thatshe was retaliated against by a transfer toKingshighway and then by being forced out of atraining program. The transfer, however, was toa position which presented better opportunitiesfor her as Hill herself admitted in herdeposition. The training program was a self-directed program which she voluntarily startedwhen she arrived at Kingshighway. She resignedher position before completing the program. Other”allegations” of retaliation, such as that hernew supervisor rummaged in her desk drawers andwaste can and listened to her telephone calls,cannot be considered adverse employment actions.In fact, at her deposition she acknowledged thatshe had no facts to support those claims. The most serious problem Hill encountered atKingshighway occurred when her supervisorrecommended that she be terminated. But he had areason; Hill had given a friend at a competingcompany information about loans AGF had rejected(presumably so the friend’s company could makethe loans). For her efforts to help her friend,she had obtained a one-percent kickback, all ofwhich, needless to say, was in violation of AGF’spolicies, though Hill claimed she did not knowabout any such policies. AGF gave her a secondchance and rejected the recommendation toterminate her. Given what Hill did, it is astretch to think that, in fact, her supervisorwas retaliating against her in this instance forcomplaining about harassment at another office byanother supervisor. In short, Hill cannot sustaina claim of retaliation. Accordingly, we are convinced that the recordbefore us supports the grant of summary judgmentand that it would be a wasteful and fruitlessexercise to require the district court to lookagain at the matters we just considered. Thejudgment is AFFIRMED. DIANE P. WOOD, Circuit Judge, dissenting in part.The recent decisions from the Supreme Court onthe subject of workplace harassment emphasize theimportance of the policy on harassment that acompany adopts and maintains, when liability forthe actions of a supervisor are at issue. SeeFaragher v. City of Boca Raton, 524 U.S. 775(1998); Burlington Industries, Inc. v. Ellerth,524 U.S. 742 (1998). When an employee whocomplains of sexual or other forbidden harassmentfrom a supervisor can point to a tangibleemployment action, the employer is subject tovicarious liability no matter what policy it hason the books. If the complaining employee has notsuffered from a tangible employment action,however, the employer is liable unless it canestablish the two elements of a new affirmativedefense. Those elements are (1) that the employerexercised reasonable care both to prevent and tocorrect promptly any sexually (or, as here,racially) harassing behavior, and (2) that theplaintiff employee unreasonably failed to takeadvantage of any preventive or correctiveopportunities that were provided by the employeror otherwise available. Faragher, 524 U.S. at807; Ellerth, 524 U.S. at 765. Louise Hill’s case arose before either Faragheror Ellerth was decided, and so it is hardlysurprising that the district court did not followthe language of those opinions chapter, book, andverse. Nevertheless, it is our duty now, on denovo review from the grant of summary judgment infavor of defendant American General Finance(AGF), to decide whether the company is entitledto prevail as a matter of law. The majority hasfound that the record is sufficiently developedto permit this court to apply the new legalstandards and to affirm the district court’sjudgment. With respect, I cannot agree.Significant facts remain to be developed on bothparts of the employer’s affirmative defense–adefense, it is important to remember, on whichthe defendant bears the burden of proof, not theplaintiff. Looking at the facts in the light mostfavorable to Hill, as we must, I cannot find thatAGF has succeeded in meeting that burden. Like the majority, I find no serious disputeover the question whether Hill suffered anytangible employment action, such as discharge.There is no hint of that in the record. I alsoagree that the Faragher/Ellerth approach appliesto cases based on racial harassment in theworkplace, just as it does to sexual harassment.See Allen v. Michigan Dept. of Corrections, 165F.3d 405, 411 (6th Cir. 1999); Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 156 F.3d 581,593 (5th Cir. 1998); Wright-Simmons v. City ofOklahoma City, 155 F.3d 1264, 1270 (10th Cir.1998). The central question is thus whether it isclear beyond dispute that AGF has, on the basisof undisputed facts, established its affirmativedefense. Unlike the majority, I begin with an analysisof AGF’s policy against workplace harassment–apolicy that the majority concedes left some “roomfor improvement.” Ante at 6. One document towhich AGF points did no more than to say that itwas AGF’s policy to comply with laws regardingequal employment without regard to race, and tomention that questions with respect to thispolicy were to be directed to the group managerof employee and field relations. What kind ofpolicy is this? Was AGF trying to communicate toits employees that it had decided not to be ascofflaw? Employees would have had a right toassume that their employer was not deliberatelysetting out to violate relevant federal and statestatutes. This policy accomplishes nothing,unless we are giving employers credit for statingthe obvious and for giving a telephone number forfurther inquiries. Its unsatisfactory nature isapparent when we compare it to the carefulpolicies so many employers have adopted, bothbefore and since the decisions in Faragher andEllerth. Those policies take care to define foremployees what kinds of behavior are forbidden,to underscore the fact that even supervisoryemployees must treat everyone with respect, toset forth alternate ways to voice complaints (incase one route is effectively blocked because theharassing supervisor would get in the way), andto stress the importance of preventive measures. Careful policies describe the disciplinarymeasures the company might use in a harassmentcase, encourage employees to make complaints,state unequivocally that retaliation will not betolerated, and explain that complaints will beexamined in a confidential manner. In addition,policies should describe the responsibility ofsupervisors (and employees) who learn ofharassment through informal channels. See, e.g.,Montero v. Agco Corp., 192 F.3d 856, 862 (9thCir. 1999); Shaw v. Autozone Inc., 180 F.3d 806,809 (7th Cir. 1999); Fenton v. HiSan Inc., 174F.3d 827, 833 (6th Cir. 1999); Wilson v. TulsaJunior College, 164 F.3d 534, 541 (10th Cir.1998); Lockard v. Pizza Hut, Inc., 162 F.3d 1062,1066 (10th Cir. 1998). A second policy on whichAGF relied addressed sexual harassmentspecifically. The majority describes it, and soI will not repeat every detail. Even though itgoes into somewhat greater detail about the kindof behavior the policy addresses, it too does notmeet the standards that have been found to besatisfactory. Yet another memorandum outlines afour-step complaint procedure. Even if we were to agree that the latter twopolicies somehow met the legal requirements thatthe Supreme Court had in mind, however, more isnecessary. Critically, the employer has theburden not only to show that it has enacted anadequate policy, but also that it has takenreasonable care (1) to prevent and (2) promptlyto correct any harassing behavior. If theemployees do not know that a policy exists, theneven the most admirable policy will notaccomplish either of those goals. And it is onthis point that AGF is most vulnerable. Hillclaimed that she did not recall ever receivingthose policies. AGF did not try to refute thistestimony by showing, as many employers do, thatHill signed for receipt of the policies when shejoined the company, nor did it introduce evidenceindicating when the policies were first releasedto the workforce. It did not do this because, atleast as the record shows so far, that neverhappened. Instead, the best AGF could do was toassert that the policies were buried in somenotebooks that were themselves located in a”public access area” and accessible to employees.If this is all it did (and we must so assume atthis stage of the proceedings), I would find itto be insufficient to show the requiredreasonable care for purposes of the affirmativedefense. Cf. Savino v. C.P. Hall Co., 199 F.3d925, 932-33 (7th Cir. 1999) (sexual harassmentpolicy posted, with instructions on how to reportharassment); Montero, 192 F.3d at 862 (handbookwith harassment policy distributed to allemployees as well as a separate memorandum andtwo pamphlets describing that policy); Shaw, 180F.3d at 809 (copy of harassment policy given toeach employee in employee handbook and trainingprovided periodically to managers on thecompany’s sexual harassment policies andguidelines). Employees cannot be expected to goaround opening up all sorts of unmarked binders,to see if by any chance they might contain thecompany’s harassment policy. Because AGF in my view fails the first of thetwo required showings for the affirmativedefense, it is not entitled to summary judgment.The Supreme Court indicated in Faragher andEllerth that the two factors were independentcriteria, both of which had to be satisfied.Thus, even if the majority is correct and theuncontested facts showed that Hill had some ideahow to complain, I would regard the summaryjudgment as incorrect. In fact, however, theuncontested facts do not show that she knew whatto do. Granted, she did not follow the proceduresprescribed in the collection of policies andmemoranda on which AGF is now relying(undoubtedly because she did not know what theysaid). This failure on her part cannot be calledunreasonable as a matter of law, since themeasures the company took to bring the properprocedures to her attention are subject todispute. I concur in the majority’s rejection of Hill’sretaliation claim, which does not rest on thekinds of disputed facts that should allow her toproceed on the harassment claim. I would,however, reverse the entry of summary judgmentand remand Hill’s harassment claim for furtherproceedings, and to that extent I respectfullydissent. :::FOOTNOTES:::
FN1 The policies were marked as exhibits at Hill’sdeposition. However, they were not included inthe original appeal record. On January 27, 2000,we granted AGF’s motion to supplement the recordwith the documents.
Hill v. American Gen. Fin., Inc. In the United States Court of Appeals For the Seventh Circuit No. 99-2682 LOUISE HILL, Plaintiff-Appellant, v. AMERICAN GENERAL FINANCE, INCORPORATED,a corporation, Defendant-Appellee. Appeal from the United States District Court for the Southern District of Illinois. No. 96 C 242–William D. Stiehl, Judge. Argued January 21, 2000–Decided May 4, 2000 Before POSNER, Chief Judge, and DIANE P. WOOD and EVANS, Circuit Judges.
