8-1700-7294-2
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE MINNESOTA DEPARTMENT OF HUMAN RIGHTS
Lori Hutchinson,
Complainant,
FINDINGS OF FACT,
V. CONCLUSIONS OF LAW
AND ORDER
Minnesota Sphagnum. Inc.,
Respondent.
The above-entitled matter came on for hearing before Administrative Law
Judge Jon L. Lunde commencing at 9:00 a.m. on Monday, April 12, 1993 at the
Government Services Center, Room 608, 320 West 2nd Street, in Duluth,
Minnesota. The hearing was held pursuant to a Notice of and Order for Hearing
and Prehearing Order dated December 17, 1992. The record closed on May 14,
1993, when the last authorized filing was made.
Douglas P. Merritt and Cynthia L. Evenson, of Falsani, Balmer, Berglund &
Merritt, Attorneys at Law, 1200 Alworth Building, 306 West Superior Street,
Duluth, Minnesota 55802, appeared on behalf of Complainant, who was present at
the hearing. Joseph J. Mihalek, of Fryberger, Buchanan, Smith It Frederick,
Attorneys at Law, 700 Lonsdale Building, 302 West Superior Street, Duluth.
Minnesota 55802-1863, appeared on behalf of Minnesota Sphagnum, Inc.
NOTICE
Pursuant to Minn. Stat. sec. 363.071, subd. 2 and 3, this Order is the final
decision in this case and under Minn. Stat. 363.072, the Commissioner of the
Department of Human Rights or any other person aggrieved by this decision may
seek judicial review pursuant to Minn. Stat. S 14.63 through 14.69.
STATEMENT OF ISSUES
The issues in this case are:
1. Whether Minnesota Sphagnum, Inc. is answerable for the sexual
harassment, if any, of the Complainant on the grounds that it failed to take
timely and appropriate action to stop the harassment after the perpetrator's
actions were known;
2. Whether the Respondent retaliated against COmplaint by cutting her
hours due to the sexual harassment complaint she made to respondent; and
3. The damages, if any. and other relief the Complainant is entitled to
receive or the Respondent should be ordered to provide.
FINDINGS OF_FACT
1. Minnesota Sphagnum. Inc. (HSI) Is a Minnesota business corporation.
it was originally incorporated in Michigan in 1986. Hyde Park Products, Inc.,
a New York corporation, owns 50% of MSI's stock. The other 50% is owned by
Conrad Fafard, Inc., a Massachusetts corporation. Raymond Howard Hughes, a
law school graduate, is MSI's president and is actively involved In the
management of MSI's Minnesota operations from his office in New York. Conrad
(Andy) Fafard, an officer of HSI. is also actively involved in the business
from his office in Massachusetts.
2. MSI's only business is located in Floodwood, Minnesota where it is
engaged in the production of sphagnum peat moss on 550 acres of land leased
from the state of Minnesota. Most of MSI's employees work on a seasonal
basis. About 30 work in the summer, when peat moss is harvested; about 10
work in the winter, when peat moss Is shipped. Even permanent employees work
reduced hours in the winter months. Most of MSI's employees work in the
plant, In the shop, or outside. All but a few of MSI's employees are men.
One woman, Lori Hutchinson, works for HSI all year. Ste is the only woman
employee in the winter. In the summer, a few other women are employed as
field laborers.
3. Lori Hutchinson is woman who resides in Floodwood, Minnesota. She
was initially hired to work as a tractor operator for HSI on July 13, 1989.
Within two weeks she was hired as a secretary/receptionist to work on a
full-time basis forty hours weekly. Hutchinson still works for HSI but only
on a part-time basis twenty hours weekly. Hutchinson was supervised by
Chester C. Lamb, MSI's general manager, until Friday, January 31, 1992, when
Lamb resigned. Subsequently, commencing Monday, February 17, 1992, Hutchinson
was supervised by Timothy R. Davern, MSI's current general manager Davern,
like Lamb before him, was the highest ranking person at Floodwood reporting
only to Hughes and Fafard. The general manager is responsible for the
day-to-day supervision and management of the Floodwood operation.
4. Hutchinson worked in a trailer on MSI's Floodwood premises. The
trailer also served as an employee lunchroom, and part of It was used as the
general manager's office. Hutchinson was responsible for typing, filing,
answering the phone, and preparing purchase orders, bills of lading, payrolls
and invoices. Her desk was situated in the lunchroom area. During the
regular course of her employment, Hutchinson had frequent telephone contacts
with Hughes and ample opportunity to bring any job-related complaints to his
attention during her conversations with him.
5. In April 1991, Lamb hired Anthony Kasparec as MSI's maintenance
supervisor. Kasparec was responsible for maintaining MSI's machinery. Prior
to that time, HSI did not have a designated maintenance person. Instead,
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maintenance responsibilities were spread among several employees. As the
maintenance supervisor, Kasparec supervised up to two other employees: Sam
Bailey and Alan Barlau. He did not, however, have any supervisory authority
over Hutchinson.
6. Early in June, 1991 , when Hutchinson was at a pop machine near the
bailer room, Kasparec snuck up on her from behind, grabbed her pants, and
attempted to pull them down. He was only partially successful. She prevented
him from totally pulling them down by grabbing the front of her pants and
pulling up. When Kasparec was attempting to pull her pants down, Hutchinson
yelled out for him "to get the hell out of here." The incident was observed
by Sam Bailey. Neither Bailey nor Hutchinson reported the incident to Lamb at
that time, but Hutchinson informed Brian VandeNest about it: a couple of days
later. VandeNest was a field supervisor/manager at MSI who, like Kasparec,
reported to the general manager.
7. On July 24, 1991, Hutchinson delivered a telephone message to
Kasparec at the plant. After she had done so, Kasparec again grabbed her
pants and pulled them down. Two days later, on Friday, July 26, 1991,
Kasparec did the same thing when she brought a message to the shop. On both
occasions, Hutchinson was angry and embarrassed. She swore at Kasparec and
told him to "knock that shit off." Hutchinson erroneously believed that other
employees had witnessed Kasparec's last two actions.
S. Hutchinson reported the incidents of July 24 and July 26 to Lamb
early the following week. Lamb did not have much to say, but he did ask her
if she provoked Kasparec. She told him she hadn't. She also told Lamb not to
mention the matter to Kasparec because she was afraid of him, had to work with
him and didn't want to make matters worse for her. Ex. B. However, she asked
Lamb to talk to all employees about sexual harassment and behavior toward
her. Ex. B. Lamb generally discussed the use of vulgar language and behavior
around Hutchinson at lunchtime shortly after Hutchinson's complaint. Kasparec
was present at the tin*. Because Hutchinson asked Lamb not to mention her
complaint to Kasparec, Lamb saw no need to discuss the matter with Fafard and
Hughes even though he could tell she was concerned.
9. In August, Kasparec engaged in other offensive behavior towards
Hutchinson. He rubbed or pushed against her, passed gas in front of her, and
indicated that he wanted to date her and sleep with her. She rejected his
proposals saying: "fat chance", "I doubt it" and "only in your dreams."
Hutchinson reported these incidents to Lynn Vaughn. Vaughn worked for Fafard
in Massachusetts and Hutchinson believed lie was a "middle man" to Fafard.
Vaughn listened to her complaints but told her it was not his Job to report
her complaints. However, in June and July 1991, when David Leonzal complained
to Lamb about being mistreated by Kasparec, Lamb reported the complaints to a
"Mr. Lynn" in the Massachusetts office.
10. In mid-August Kasparec either quit or was discharged by Lamb due, in
part, to disagreements he had with Lamb. A few days later, Kasparec contacted
Fafard and Hughes, to were attending a peat moss conference in Duluth. He
persuaded them to rehire him and the three of them met with Lamb to discuss
the matter on or about August 22 or 23, 1991. At the conclusion of these
discussions, Kasparec's duties were expanded and Lamb understood that his
supervisory authority over Kasparec was being assumed by Fafard.
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11 . Fafard and Hughes returned to their offices In the east on Friday.
August 23. 1991, which was same day Hutchinson was married. On Tuesday,
August 26. 1991, while in the presence of Hutchinson and other employees in
the trailer, Kasparec openly boasted about previously pulling Hutchinson's
pants down and said he wished she would wear them again. Hutchinson told him
to quit talking about the matter. Being upset about Kasparec's statements and
worried about her reputation, -as well as the fact that Kasparec had been
rehired. Hutchinson immediately went to Lamb and asked him if he told Hughes
and Fafard about her complaint against Kasparec. Lamb said he forgot. She
told him to inform them because she didn't want Kasparec around her and wanted
them to do something -about it. On August 28, Lamb informed Hughes about
Hutchinson's charges. Hughes instructed Lamb to inform Kasparec that Hughes
was aware of Hutchinson's charge and that Kasparec should stay away from her.
On September 2, 1992, after Lamb spoke to Kasparec, Kasparec telephoned Fafard
and advised him that Hutchinson and Lamb were plotting to get rid of him.
Fafard telephoned Lamb that day and asked him how things were going since the
last meeting at MSI on August 23. At that time, Lamb reported Hutchinson's
allegations against Kasparec to him. Ex. C.
12. After Hughes learned about Hutchinson's allegations against
Kasparec, he spoke to Kasparec on the telephone. During that conversation,
Kasparec denied that he had engaged in any inappropriate conduct. Based on
his conversations with Lamb and Kasparec, Hughes decided not to undertake a
formal investigation or discipline Kasparec. Hughes felt that Kasparec was
too valuable to discharge and wanted to avoid legal entanglements that could
arise if Kasparec was discharged. However, Hughes Informed Kasparec that
attempts to pull Hutchinson's pants down would not be tolerated and if any
such conduct was repeated, Kasparec would be discharged. Hughes also informed
Kasparec that he would be monitoring the situation.
13. Hughes did not immediately speak to Hutchinson upon learning of her
charges against Kasparec because Hutchinson was hospitalized during the first
week of September. On September 10, 1991, after Hutchinson returned to work,
Hughes discussed the matter with her on the phone. He told her that Kasparec
had denied her charges and that it was a "tough" situation because there were
no witnesses. On September 17, 1991, following his conversations with
Hutchinson, Lamb, and Kasparec, Hughes mailed Hutchinson a copy of his file
memorandum pertaining to her charges. The last paragraph of the memorandum
stated:
Lori stated that she did not wish to pursue this matter
further, assuming there would be no further incidents. I
advised Lori that it is the Company's responsibility to
provide her with a satisfactory working environment and
that Andy Fafard and I should be immediately notified by
her directly if any further incidents occurred.
Ex. E.
14. After Hutchinson received Hughes' September 17 memo he phoned her to
discuss it. At that time, he asked her if there was anything else she wanted
him to do. Hutchinson told Hughes that she was satisfied with the steps he
had taken. Hughes informed her that she was entitled to a nondiscriminatory
environment. She said she understood. He also told her that if anything else
happened it would get his immediate attention and that she should contact him
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immediately with respect to any problems. Hutchinson never asked Hughes to
fire Kasparec and never complained about Kasparec after September 17, 1991.
However. Hutchinson talked to Lamb about Hughes' September 17, 1991 memo.
During that conversation she indicated that she was dissatisfied with Hughes'
response and that she didn't want Kasparec around. Lamb told her she could
talk to Hughes about the matter if she had any complaints. Hutchinson never
told Hughes she was dissatisfied with the steps he took. She felt that
Kasparec was more important to MSI and that her job could be jeopardized if
she pushed for Kasparec's discharge.
15. In September, Hutchinson told Lamb that she was worried about
Kasparec and didn't want to deliver messages to the shop or have Kasparec
around. Lamb honored these requests. He informed Hutchinson that she could
come into his office whenever Kasparec was present. Whenever Lamb Was not
present at the facility, she asked VandeNest to keep his eye on Kasparec.
Because VandeNest was frequently working in the field, and Kasparec liked to
spend time in the trailer, Kasparec would sometimes be alone with Hutchinson
in the trailer.
16. Hutchinson never invited Kasparec's attempts to remove her pants or
his sexual innuendos and remarks. On the contrary, each time they occurred,
she objected and indicated they were unwelcome.
17. During the period from approximately January 31, 1992 through
February 14, 1992, there was no general manager at the Floodwood facility.
Consequently, Kasparec and VandeNest were supervised directly by Hughes and
Fafard from their offices in the East. No one directly supervised Hutchinson
during that two-week period. - Hughes informed Hutchinson to report any
problems she might have with Kasparec to him (luring this time. There is no
evidence that the absence of a general manager was avoidable or that the
Respondent should have taken special action to protect Hutchinson from
Kasparec during that two-week period. During that hiatus, Hutchinson didn't
feel especially safe at work when alone in Kasparec's presence. This was due
in part to the fact that she believed Kasparec knew she had seen at lawyer
about her allegations against him.
18. Since the Respondent began its Floodwood operations, it has
sustained financial losses. These losses were anticipated, but both Fafard
and Hughes felt that steps should be taken to minimize them. To date. MSI's
retained losses are approximately $1 million, and during its last fiscal year
it sustained a $300,000 loss. In November, 1991, Fafard and Hughes took steps
to cut MSI,s losses. One of the steps they took at that time was to reduce
labor costs by cutting its employees' hours. In November, it cut the hours of
most employees nearly in half. Ex. F. Included in the cuts were a reduction
in Hutchinson's hours from 40 to 20 hours weekly effective November 24.
Hutchinson's hours were cut in order to reduce losses, and not in retaliation
for any complaints she made against Kasparec.
19. After Hutchinson's hours were cut, no other employee was assigned to
perform duties she had previously performed and Hutchinson was able to
complete all her job duties working on a part-time basis after her hours were
reduced. Although Lamb had originally requested permission to hire Hutchinson
on a full-time basis, he agreed that there were sound business reasons for
cutting Hutchinson's hours in half. Lamb's successor has not found it
necessary to increase her hours. On the contrary, Hutchinson has been able to
perform her duties working on a part-time basis.
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20. Kasparec's reputation for truthfulness Is exceedingly poor, In the
opinion of his coworkers, he could not be believed on any subject and his
reputation in the community was that he was untruthful.
2 1 . On April 9, 1992 Hutchinson filed discrimination claims against
Kasparec and MSI. In her Complaint against MSI, Hutchinson alleged that she
was discriminated against on the basis of sex In violation of Minn. Stat. i
363.03, subd. 1(2)(c) because she was repeatedly subjected to unwelcome
sexually-oriented physical contact by Kasparec which HSI failed to address in
a timely and appropriate manner. In addition, Hutchinson alleged that MSI
retaliated against her for complaining about Kasparec's behavior by reducing
her working hours in violation of Minn. Stat. 363.03, subd. 7(l) (1990).
22. On November 21, 1992 Hutchinson requested that the Minnesota
Department of Human Rights refer Hutchinson's discrimination charges to the
office of Admintstrative Hearings for a hearing under Minn. Stat. 363.071.
subd. la (1992). The Commissioner of Human Rights referred that charge to the
office of Administrative Hearings on December 16, 1992. The Chief
Administrative Law Judge issued a Notice of and Order for Hearing and
Prehearing Order on December 17, 1992.
23. In 1990, Lamb prepared a proposed company employee manual for MSI.
Hutchinson helped by typing part of the draft. When the manual was completed,
Lamb sent it to Fafard for approval. The manual contains a sexual harassment
policy and procedures for dealing with complaints (Ex. A.). However, the
manual was not distributed to employees and employees were not verbally
notified of MSI's policies and procedures with respect to harassment.
24. Under MSI's manual, supervisors are required to report harassment to
the general manager and the general manager is responsible for investigating
the incident and taking appropriate corrective action. Ex. A. at 2.
Furthermore, the manual authorized disciplinary action for sexual harassment.
Id. at 8-9.
25. Lamb did not know that Kasparec had boasted about pulling
Hutchinson's pants down until late September 1991 or thereafter. At that
time, Lamb also learned that Kasparec had privately admitted pulling her pants
down.
26. As a result of Kasparec's actions, Hutchinson suffered embarrasment,
humiliation and fear. However, Hutchinson's failed pregnancy in 1991 did not
result from Kasparec's actions.
Based (xi the foregoing Findings of Fact, the Administrative Law Judge
makes the following:
CONCLUSIONS OF LAW
1. The Administrative Law Judge has authority to consider the issues
raised by the Complainant's discrimination charges under Minn. Stat.
363.071 , subds. la and 2 and 14.50 (1992).
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2 . The Minnesota Department of Human Rights, the Complainant, and the
Chief Administrative Law Judge have complied with all relevant substantive and
procedural requirements of statute and rule.
3. That MSI is an employer as defined In Minn. Stat. sec. 363.01, subd. 17
(1990).
4. Under Minn. Stat. 363.03, subd. 1(2)(c) It is an unlawful and
unfair employment practice for an employer to discriminate against a person
because of sex with respect to hiring, tenure, compensation, terms, upgrading,
conditions, facility, or privileges of employment.
5. For purposes of Minn. Stat. 363.03, subd. 1(2)(c) discrimination
based upon sex includes sexual harassment. Minn. Stat. 363.01, subd. 14
(1990). Under Minn. Stat. sec. 363.01. subd. 41, sexual harassment includes
unwelcome sexual advances, requests for sexual favors, sexually motivated
physical contact, or other verbal or physical conduct or communication of a
sexual nature if the conduct or communication has the purpose or effect of
substantially interfering with an individual's employment and the employer
knows or should know the existence of the harassment and fails to take timely
and appropriate action.
6. The Complainant was the victim of unwelcome sexual advances,
requests for sexual favors and sexually motivated physical contact of a sexual
nature which substantially interfered with her employment and created an
intimidating, hostile, and offensive working and environment for purposes of
Minn. Stat. 363.01, subd. 41.
7. The Respondent did not take timely and appropriate action upon
learning of the Complainant's charges against Kasparec and the sexual
harassment she was subjected to by him.
8. Because of the Respondent's failure to take timely and appropriate
action to stop Kasparec's harassment, Respondent is liable for it.
9. Respondent's duty to take timely and appropriate action to prevent
further harassment by Kasparec was not excused because Hutchinson asked Lamb
not to confront him.
10. As -a result (A" Kasparec's harassment, Hutchinson was embarrassed,
humiliated and scared. Due to this mental anguish and suffering, she should
be awarded the sum of $5,000.00 under Minn. Stat. 363.071 (1990).
11. Respondent should be ordered to pay a civil penalty to the state in
the amount of $3,500 under Minn. Stat. 363.071 (1990).
12. Respondent should be ordered to pay Hutchinson's reasonable
attorneys fees in the amount of $8,790.00 and costs of $2,244.08 under Minn.
Stat. 363.071 (1990).
13. Respondent's conduct did not involve a willful indifference to her
rights and punitive damages should not be awarded under Minn. Stat. 363.071
and 549.20 (1990).
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14. Under Minn. Stat. sec. 363.03, subd. 7(1) it is an unfair
discriminatory practice for an employer to intentionally engage In a reprisal
against a person opposing unfair discriminatory practices under the Minnesota
Human Rights Act.
15. MSI did not engage in a reprisal against the Complainant by reducing
her working hours in November 1991; the action MSI took was not made because
Complainant opposed a practice forbidden under the Minnesota Human Rights Act
but was taken for cost saving measures applied uniformly to all employees.
Based upon the foregoing Conclusions of Law the Administrative Law Judge
makes the following:
ORDER
IT IS HEREBY ORDERED:
1. That pursuant to Minn. Stat. 363.071, subd. 2 the reprisal charge
filed against Minnesota Sphagnum, Inc. by the Complainant, Lori Hutchinson, be
and the same is hereby DISMISSED.
2. Respondent shall forthwith pay a civil penalty of $3,500 to the
state by mailing a check payable to the general fund of the State of Minnesota
to the commissioner of Human Rights.
3. Respondent shall pay Complainant, Lori Hutchinson, $5.000.00 for
mental anguish and suffering.
4. Respondent shall pay Complainant's attorney, Douglas P. Merritt,
attorneys fees of $8,790.00 and costs of $2,244.08.
5. Respondent shall cease and desist from any further sexual harassment
and shall distribute its sexual harassment policies and procedures to all
employees within sixty days.
Dated this 8th day of June, 1993.
JON L. LUNDE
Administrative Law Judge
Reported: Taped, four tapes.
MEMORANDUM
HARASSMENT
This case involves two charges of discrimination. First, Complainant
alleges that she was sexually harassed by a fellow employee in violation of
Minn. Stat. 363.03, subd. 1(2)(c). The statute makes it an unfair
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employment practice for an employer, because of sex. "to discriminate against
a person with respect to hiring, tenure, compensation, terms, upgrading,
conditions, facilities, or privileges of employment." For purposes of the
statute, discrimination based on sex includes sexual harassment. Minn. Stat.
363.01, subd. 14.
Sexual harassment is defined in Minn. Stat. 363.01, subd. 41 as follows:
"Sexual harassment" includes unwelcome sexual advances,
requests for sexual favors, sexually motivated physical
contact or other verbal or physical conduct or
communication of a sexual nature when:
(3) that conduct or communication has the purpose or
effect of substantially interfering with an individuals
employment * * * or creating an intimidating, hostile, or
offensive employment I * I environment; and in the case
of employment, the employer knows or should know of the
existence of the harassment and fails to take timely and
appropriate action.
Analysis of discrimination charges under the Minnesota Human Rights Act (HRA)
involves three steps. Those steps were first articulated in McDonnell-Douglas
Corp. v. Green , 411 U.S. 792 (1973). The Minnesota Supreme Court has adopted
the three-part McDonnell-Douglas test. Sigurdson v. Isanti County, 386 N.W.2d
715, 720 (Minn. 1986). The three-part test consists of a prima facie case, an
answer, and a. rebuttal. The complainant is required to establish a i
showing of discrimination which, if not explained, raises an inference
of discrimination. If a prima facie case of discrimination is established,
the employer must articulate a legitimate nondiscriminatory reason for its
action (Dr otherwise rebut the prima facie case. Once the employer does so,
the burden of going forward with the evidence reverts to the complainant who
must present evidence of pretext or otherwise show that the employer's
rebuttal is not worthy of belief. At all times, the burden of proof remains
with the complainant.
In order to establish a prima facie case of sexual harassment, the
complainant must show:
(1) The employee belongs to a protected group.
(2) The employee was subject to unwelcome sexual
harassment.
(3) The harassment complained of was based on sex.
(4) The harassment complained of affected a "term,
condition, or privilege" of employment, or more
specifically, in this case, the harassment created an
intimidating, hostile, or offensive working environment.
(5) The employer is liable for the harassment that
occurred based on its actual or imputed knowledge of the
harassment and its failure to take appropriate remedial
action.
Klink v. Ramsey County, 397 N.W..2d 894, 901 (Minn. Ct. App. 1986); Bersie_v.
Zycad Corporation 417 N.W.2d 288, 290 (Minn. Ct. App. 1987).
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In determining whether Hutchinson was the victim of unwanted sexual
harassment all the circumstances surrounding the alleged harassment must be
examined. This Includes the nature and frequency of the incidents and the
context in which they occurred. Continental Can Co., Inc. V. State, 297
N.W.2d 241, 249 (Minn. 1980).
The record shows that Complainant, a woman, belongs to a protected
group. Also, Complainant was subject to unwelcome sexual harassmemt based
upon her sex The harassment consisted of Kasparec's attempts to pull down
her pants on three occasions, bragging about pulling her pants down in her
presence, stating his desire to sleep with her and date her, as well as other
incidental physical contacts and vulgar behavior. Furthermore, the
Administrative Law Judge is persuaded that Kasparec's behavior created an
intimidating, hostile, and offensive working environment for Complainant.
Kasparec's conduct made Hutchinson fearful of him, made it difficult for her
to be in his presence or to be alone with him, required her to stop delivering
messages to employees in the shop as she had done before, and made it
necessary for her to move into the general manager's office whenever Kasparec
was present. The fear of repeated assaultive behavior, sexual remarks and
other unwanted physical touching and requests for physical favors created a
hostile embarrassing environment for her.
The critical issues with respect to the Complainant's case
are whether Kasparec's knowledge of his actions should be imputed to the
employer or whether MSI knew or should have known about the harassment, and
failed to take timely and appropriate corrective measures. Because Kasparec
was not Hutchinson's immediate supervisor, did not generally work in the
trailer where her desk was located, and did not have any input into her job
assignments, her salary, or other tangible terms and conditions of employment,
it is concluded that Kasparec's actions should not be imputed to MSI solely
because he was a "supervisor". MSI's liability, if any, depends therefore on
whether it knew or should have known of Kasparec's actions and failed to take
timely and appropriate corrective action. The facts regarding the employer's
notice of the incidents and the circumstances surrounding them must be
considered. Continental Can Co., Inc. v. State, supra, 297 N.W.2d at 249.
in Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91
L.Ed.2d 49 (1986), the court refused to issue it definitive rule on employer
liability stating as follows:
"We therefore decline the parties' invitation to issue a
definitive rule on employer liability, but we do agree
with the EEOC that Congress wanted courts to look to
agency principles for guidance in this area. While such
common-law principles may not be transferable in all
their particulars to Title VII, Congress' decision to
define "employer" to include any "agent" of an employer,
42 U.S.C.. 2000e(b), surely evinces an intent to place
some limits on the acts of employees for which employers
under Title VII are to held responsible. For this
reason, we hold that the Court of Appeals erred in
concluding that employers are always automatically liable
for sexual harassment by their supervisors. * * * For the
same reason. absence of notice to an employer does not
necessarily insulate that employer from liability.
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Meritor 106 S.Ct. at 2408. In a concurring opinion, a minority of the
court also noted that there is some limitation on the liability of employers,
stating:
Agency principles and the goals of Title VII law make
appropriate some limitation on the liability of employers
for the acts of supervisors. Where, for example, a
supervisor has no authority over an employee, because the
two work in wholly different parts of the employer's
business, it may be improper to find strict employer
liability. * * *
Id. at 2410. In Weaver in Minnesota Vallev Laboratories, Inc., 470 N.W.2d
131, 135 (Minn. Ct. App. 1991) the court held that whether a harassing
supervisor's knowledge that sexual harassment was occurring can be imputed to
an employer cannot be decided using a bright-line test, but requires
case-by-case analysis.
In many cases, a management employee's knowledge of sexual harassment is
imputed to the employer. In Heaser v. Lerch. Bates & Associates, 467 N.W.2d
833, 835 (Minn. Ct. App. 1991) the court stated:
The Minnesota Supreme Court has determined that upon
notice given to management personnel, the manager's
knowledge is imputed to the employer. McNabb v. Cub
Foods, 352 N.W.2d 378, 383 (Minn. 1984). Thus , where a
manager commits sexual harassment, we have repeated held
that the manager's knowledge is imputed to the employer.
Tru-Stone Corp. v. Gutzkow, 400 N.W.2d 836, 839 (Minn.
App. 1987); Clark v. K-Mart Store No. 3059, 372 N.W.2d
847, 850 (Minn. App. 1985); Porrazzo v. Nabisco Inc., 360
N.W.2d 662, 664 (Minn. App. 1985).
However, when the perpetrator of harassment is not the victim's supervisor,
the perpetrator's knowledge of the harassment is not imputed to the employer.
Prescott v. Moorhead State University, 457 N.W.2d 270, 272 (Minn. App. 1990).
Consequently, the Administrative Law Judge is persuaded that Kasparec's
knowledge about his harassment of Hutchinson should not be imputed to MSI and
that MSI can be held liable for the harassment only if' it: knew or should have
known that it occurred and failed to take appropriate remedial action.
Even though Kasparec's knowledge of the harassment he perpetrated should
not be imputed to MSI, MSI had actual notice of Hutchinson's complaint.
Hutchinson informed Lamb about Kasparec's conduct late in July. Lamb was her
immediate supervisor as well as the highest ranking employee at Floodwood.
His knowledge of Hutchinson's complaint is imputed to HSI. see, e.g.. McNabb
v. Cub Foods, 352 N.W.2d 378, 383 (Minn. 1984). Once the record establishes
that the employer had actual notice of Hutchinson's complaint, the timeliness
and appropriateness of MSI's response to the conduct complained about must be
examined. Continental Can Co. Inc. v. State, Supra 297 N.W.2d 241, 249.
The Issues In this case are not unlike those in Gillson v. State,
Department of Natural Resources, 492 N.W.2d 835 (Minn. App. 1992). In that
case, a woman victimized by sexual harassment told a management employee that
she was having problems with her supervisor and did not want to be alone with
him anymore. She also told the manager that she didn't want him to talk to
the offending employee. Id. at 838. The trial court found that the manager
was not justified in accepting the complainant's statement that she would
handle the matter on her own. The trial court noted that because of the
oppressive nature of sexual harassment and its degrading effects on a victim,
the manager should have made sure that her decision was not made under
duress. Here also, Lamb was not justified in accepting Hutchinson's request
that he not confront Kasparec. She specifically told Lamb that she was afraid
of Kasparec and had to work with him. Her request that Lamb not confront
Kasparec was based on her fear of Kasparec and potential retaliation against
her. Under the circumstances, Lamb should have reassured her that Kasparec
would not be permitted to retaliate and that appropriate action to protect her
would be talken or offered other reassurances or assistance. This would have
protected Hutchinson and the other women employed at MSI. Even though It
appears that Lamb had some doubts about Hutchinson's credibility, he should
have commenced and investigation and confronted Kasparec. However, he did not
do so. Instead, as Hutchinson requested, he informally spoke to employees at
lunch break about the use of vulgar language and respecting the rights of
women. Kasparec was present, but the specific items covered by Lamb during
this informal lunchroom discussion and the number of employees who were
present is unknown.
The remedial measures taken by an employer to correct harassment must be
prompt and reasonably calculated to end the harassment. see, e.g., Ellison V.
Brady, 924 F.2d 872, 54 F.E.P. 1346, 1355, 55 F.E.P. III (9th Cir. 1991).
Prompt action requires an employer to act within a matter of hours or days.
Waiting four weeks before acting has been held to be too long. Bennett v. New
York City department of Corrections, 705 F.Supp. 979, 49 F.E.P. 134 (S.D.N.Y.
1989). The prompt action taken by an employer includes the duty to undertake
a reasonable investigation to obtain the truth. Swente v. U.S> Air 830 F.2d.
552 (4th Cir. 1987). Furthermore, the employer should take disciplinary
action which reflects the severity of the harassment. Waltman v.
International Paper Co., 875 F.2d. 468 (5th Cir. 1989). Lamb had a duty to
take prompt remedial steps to end Kasparec's harassment of Hutchinson. He was
obligated to conduct an investigation and take appropriate disciplinary
action. The steps he took were not reasonably designed to end the harassment
and MSI is fortunate that Kasparec did not sexually assault Hutchinson before
he was finally warned. Lamb's action was wholly inadequate given the
outrageous behavior Hutchinson reported to him. Lamb was obligated to
investigate and confront Kasparec. He himself had prepared a draft company
manual containing a policy against sexual harassment and requiring
investigation and appropriate corrective action. Lamb knew the only reason
that Hutchinson did not want him to confront Kasparec was her fear of
reprisal. Her fear did not justify his inaction.
Furthermore. for purposes of tier prima facie showing, the Administrative
Law Judge is persuaded that MSI failed to take appropriate remedial action
when Hughes learned of her complaints. First, the investigation undertaken by
Hughes was limited to conversations with Hutchinson, Lamb, and Kasparec.
Other employees at the plant site were not contacted to determine if they
witnessed the incidents Hutchinson reported or had relevant information.
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Although Kasparec was warned that any further incidents of harassment could
result in his termination, no other disciplinary action was taken against him
by Lamb or Hughes. even though Kasparec's actions were outrageous and his
denials were not worthy of belief. in spite of his reputation for dishonesty,
the fact that he had privately admitted to the behavior Hutchinson asserted,
and had openly bragged about it in front of a number of employees, Hughes
concluded. without a meaningful investigation, that there was insufficient
evidence to credit Hutchinson's accusation. Neither MSI's need for Kasparec's
services nor the fear that discharging him might raise legal complications
justified its failure to take appropriate remedial action.
An employer is not obligated to provide its employees with a pristine
working environment. Continental Can Co., Inc. v. State, 297 N.W.2d 241, 249
(Minn. 1980). However, in that case, the court state:
[A]n employer may be liable for the discriminatory acts
of its agents or supervisory personnel if it fails to
investigate complaints of such discrimination. The
failure to investigate gives tacit support to the
discrimination because the absence of sanctions
encourages abusive behavior. While * * * an employer is
[not] automatically and vicariously liable for all
discriminatory acts of its agents or supervisors, * * *
an employer has an affirmative duty to investigate
complaints of sexual harassment and deal appropriately
with the offending personnel.''
Continental Can Co. v. State, 297 N.W.2d 241, 247 (Minn. 1980) (quoting
Munford v. James T. Barnes & Co. 441 F.Supp. 459, 466 (E.D. Mich. 1977)
(emphasis omitted). Likewise, the failure to timely discipline an employee is
strong evidence of acquiescence in the discriminatory practices. McNabb v.
Cub Foods,352 N.W. 2d 378, 384 (Minn. 1984). When an employer learns of
harassment it must act to prevent and correct the problem. Id . It may be
necessary to discipline the offending employees, adopt and disseminate sexual
harassment policies, change an employee's job assignment or take other
corrective measures. McNabb v. Cub Foods, 352 N.W.2d 378, 384 (Minn. 1984).
Once an employee is provided with the expectation of assistance from his
employer and eliminating the employee's fear of harm from a coworker, the
burden is on the employee to fully apprise the employer of the continuing
facts giving rise to that fear. Without this complete knowledge, it is
reasonable for the employer to assume that the problem has been corrected.
Prescott v. Moorhead State University, 457 N.W.2d 270, 272 (Minn. Ct. App.
1990).
The record shows that Kasparec attempted to pull Hutchinson's pants down
early in June 1991 . This incident was never reported to Lamb or to Hughes.
Subsequently, on July 24 and again on July 26, 1991, Kasparec pulled
Hutchinson's pants down when she was in the facility's plant. She reported
these incidents to Lamb early the following week. Although Hutchinson
testified that the two incidents occurred late in June, her testimony as to
the dates was not persuasive. Although victims frequently delay reporting
sexual harassment, it is unlikely that Hutchinson would have waited until late
July to inform Lamb that Kasparec had pulled her pants down in June. There is
no evidence that anything new transpired between Kasparec and Hutchinson after
the Incidents which would have caused her to complain late in July, if they
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had occurred in June. Several witnesses testified that the first incident
occurred in the early summer. However, Lamb took notes of his conversation
with Hutchinson and prepared it report of that conversation -a day or two
later. fie recorded the incidents as July 24 and July 26. If he had waited
for well over a month before writing her complaints down, it is less likely
that he would have recalled the 24th and 26th as the pertinent dates, which
Hutchinson agrees they were.
On the basis of the entire record, the Administrative Law Judge is
persuaded that MSI should be held liable for Kasparec's harassment of
Hutchinson. This conclusion is based on Lamb's failure to promptly
investigate Hutchinson's report or take steps reasonably designed to end the
harassment, and the blatantly outrageous, humiliating, demeaning, and
frightening nature of Kasparec's acts. An informal statement to respect women
and to watch vulgar language was wholly inadequate given the nature of
Kasparec's facts. Furthermore, Hughes' investigation was inadequate. Hughes
was interested in assuring that Kasparec did not harass Hutchinson in the
future, but he had no interest in disciplining Kasparec for actions that
occurred in the past. Although MSI was not required to discharge Kasparec,
the action it took constituted no more than a slap on the wrist and was
inadequate given the nature of the harassment reported. Although Hughes
testified that he undertook an investigation, he (lid not questions employees
at Floodwood, as he said he did. All the employees who testified stated that
he did not contact them. Hughes's testimony was not persuasive because he did
not discover that Hutchinson was afraid of Kasparec, that one of the incidents
had been observed, that Kasparec had openly bragged about pulling Hutchinson's
pants down, or that Kasparec had confided in some employees that he done so.
Hughes also professed concern about Lamb's failure to promptly report
Hutchinson's initial complaint. His testimony on this point wasn't credible.
Hughes did not question Lamb about his failure to promptly report the
complaint until after the "investigation" was completed. His own summary
states that Lamb "apparently forgot."
Hughes' credibility was impaired by his initial assertion that he and
Fafard had to decide "if" they would undertake an investigation. Although he
promptly withdrew that testimony, his rephrasing was not credible. Also, when
referring to the investigation, Hughes said: "The investigation, if you want
to call it that, basically was satisfactory to Lori." His own words reflect
the inadequacy of the investigation tie made. All Hughes did was talk to
Hutchinson, Lamb and Kasparec. Kasparec denied Hutchinson's allegations. and
Lamb informed him that no one had come forward to verify her charges. Hughes
did not pursue the matter further because he wanted to retain Kasparec
regardless of what an investigation disclosed and was satisfied with a
warning. For all practical purposes, Hughes acquiesced in Kasparec's
harassment prior to September 1. As a result of the combined inaction of Lamb
and Hughes, MSI must be held accountable for Kasparec's harassment of
Hutchinson prior to September 1, 1991.
DAMAGES
Under Minn. Stat. 363.071, subd. 2 (1990), victims of sexual harassment
are entitled to recover for mental anguish and suffering. In this case, the
Administrative Law Judge is persuaded that Hutchinson is entitled to an award
of $5,000 for the mental anguish and suffering she endured between June 1,
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1 991 and September 1, 1991. During that tine, Hutchinson experienced
embarrassment, humiliation, and constant fear. After Hughes warned Kasparec,
however, and Hutchinson was assured that further misbehavior by him would not
be tolerated, damages should not be assessed. The actions Hughes took were
reasonably designed to prevent further harassment and none occurred.
Under Minn. Stat. 363.071, subd. 2 and 549.20 (1990) punitive damages
may also be awarded for discriminatory acts when there is clear and convincing
evidence that the employer's acts show a deliberate disregard for the rights
or safety of others. In this case, the evidence fails to show clear and
convincing evidence that either Lamb or Hughes deliberately disregarded
Hutchinson's rights or safety. Consequently, the Administrative Law Judge is
persuaded that punitive damages should not be awarded.
Minn. Stat. sec. 363.071, subd. 2 (1990) requires the award of a civil
penalty to the state when an employer violates the provisions of the Minnesota
Human Rights Act. Considering the seriousness and extent of the Respondent's
violation, the public harm occasioned by it, the financial resources of the
Respondent and the unintentional violation that occurred, it is concluded that
the Respondent should pay a civil penalty to the state in the amount of
$3,500. The charges Hutchinson filed, which were not pursued by the
Department of Human Rights itself, did not result in significant agency
involvement. If it had, a larger civil penalty would probably be appropriate.
Minn. Stat. 363071, subd l(a) (1990) permits the Administrative Law
Judge to require a respondent to reimburse the charging party for reasonable
attorneys fees. The Complainant's counsel submitted an affidavit for 98.55
hours' work in this case and $2,244.08 in costs. The attorneys fees requested
are based on a billing rate of $125 hourly. Although an award of attorneys
fees is appropriate, all the attorneys fees claimed should not be granted.
The attorney's affidavit indicates that 10.65 hours of the time claimed in
this case was attributable to the Complainant's action against Anthony
Kasparec which was settled. Those hours should not be considered. Hence,
Complainant's counsel should be reimbursed for 87.9 hours' time. Although
counsel indicated that his usual billing is $125 hourly, there is no evidence
that his billing rate is consistent with rates generally charged in Duluth.
Moreover, the time spent by an associate in his firm was billed at the same
rate. The Judge is persuaded, therefore, that the attorneys fees must be
reduced to $100 hourly to reflect the work of the attorney's associate and the
fact that all the relief claimed was not awarded. Hence, attorneys -Fees
payable to complainant's attorney should be limited to $8,790 plus costs.
RETALIATION
Complainant argued that MSI retaliated against her for complaining about
Kasparec's harassment by cutting her normal work-week in half. In order to
establish a prima facie case of retaliation, an employee must establish: (1)
statutorily-protected conduct by the employee; (2) adverse employment action
by the employer; and (3) a cause or connection between the two. Tretter v.
Liquipak Intern.. Inc-, 356 N.W.2d 713, 715 (Minn. Ct. App. 1984). The
Complainant clearly established the first two elements of a prima facie case
by showing that she complained about Kasparec's harassment and subsequently
had her working hours reduced. However, the Administrative Law Judge is not
persuaded that the Complainant established a causal relationship between her
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complaints and the subsequent reduction of her working hours. The strongest
evidence of some causal relationship is a temporal one: that her hours were
reduced less than three months after her complaints against Kasparec. The
Administrative Law Judge is not persuaded that that is sufficient to establish
the prima facie case. Even if it is, MSI provided a legitimate
nondiscriminatory reason for its action and the Complainant failed to show
that the articulated reason was a pretext for discrimination. Evidence in the
record shows that Complainant was not the only employee whose hours were
reduced but that a significant reduction of all employee's working hours was
made. Although the Respondent frequently reduced working hours in the winter,
it decreased the total number of hours by over fifty percent in November 1991
over November 1990. Furthermore. the record shows that MSI was experiencing
large losses, that it discussed reduction of the Complainant's hours with
Lamb, and that there were good business reasons for cutting her work schedule
in half. The record also shows that the duties performed by the Complainant
were not subsequently assigned to another employee and that the Complainant is
currently able to complete her job duties on a half-time. schedule even when
she misses work. Under these circumstances, it is concluded that Complainant
has failed to establish that MSI retaliated against her for the complaint she
made against Kasparec.
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