When Alleged Hostile Work Environment Does Not Constitute Actionable Title VII Harassment – Summary Judgment in Favor of the Employer

Mulligan-Grimstad v. Morgan Stanley, 877 F.3d 705 (7th Cir., Dec. 11, 2017)

Scenario: Kerrie is hired in 2001 as a sales associate at a financial advisory firm. She enjoys success at work, including promotions. In 2005, she is teamed with John, a male senior financial advisor, on several client accounts. This partnership lasts 7 years until the firm fires Kerrie after its investigation into her processing of a fraudulent wire transfer request.

Kerrie sues the employer, alleging she was fired on the basis of her sex and that her male coworkers’ mistreatment of her over the course of her career created a sexually hostile work environment. She alleges that coworkers harassed her, unduly criticized her, and made sexual advances toward her from 2003 to 2009, though she never reported harassment to management. She also alleges that in 2011, John regularly commented on revealing outfits worn by a CNBC anchor; that after she got married he asked her to plan any pregnancy around his work schedule; and that he told a client that Kerrie planned to start a family. The employer responds that it fired her for a legitimate business reason – the wire transfer – and that the allegations related to her hostile environment claim, even if accepted as true, are not severe or pervasive enough to create a hostile work environment under Title VII of the Civil Rights Act of 1964.

The district court agreed with the employer and granted summary judgment in its favor. The 7th Circuit Court of Appeals affirmed the district court’s decision.

Highlights of the decision:

  1. First, Kerrie argued that she did not violate the employer’s wire transfer policy and, therefore, must have been fired her because of her sex. The court rejected this argument, stating that it will not act as a “super personnel department” – so long as Kerrie’s sex did not influence the decision to fire her, the decision — even if made by misapplying the employer’s performance policies – does not violate Title VII.
  2. Second, Kerrie argued that a similarly situated male oversaw a fraudulent wire transfer but, unlike her, he was not fired. Kerrie argued that this differential treatment proved sex discrimination. The court rejected the argument, finding that the male employee had no significant disciplinary actions on his record, whereas Kerrie had two. The court thereby found that Kerrie and the male were not “similarly situated,” and that the firm’s decision to fire Kerrie, but not the male employee, “sheds little light on why it fired” Kerrie. Further, the firm showed that it fired a male employee who had a checkered disciplinary record after he processed a fraudulent wire transfer request. The court found that this suggested that the firm fired Kerrie for her job performance rather than her sex.
  3. Finally, Kerrie claimed that her male co-workers — who lacked decision-making power to fire her — used the decision-maker as a dupe in a deliberate scheme to trigger the sex-based discriminatory firing decision. This is known as the “cat’s paw theory.” In essence, Kerrie argued that: a) John and another male wanted her fired because they disliked women or worried that she might become pregnant; b) then, between her mishandling of the wire transfer and her dismissal, told the decision-maker to fire her; and c) the decision-maker fired her in part due to their influence. The court rejected this argument because, at most, Kerrie suggested that the men could have met with the decision-maker between the fraud and the firing and that they could have passed their discriminatory views to the decision-maker at such a meeting. The court found this speculation insufficient to establish cat’s paw influence.
  4. The court also found that the male employees’ conduct did not create a hostile work environment because their comments were not “sufficiently severe or pervasive to alter the conditions of employment.” The court found that the conduct was not physically threatening or humiliating, did not unreasonably interfere with Kerrie’s work performance, and at most may have been offensive.

The #METOO and TIME’S UP movements are causing more employers to review their anti-harassment policies and to provide comprehensive Equal Employment Opportunity training to their supervisors. Di Monte & Lizak provides on-site, off-site, group, and one-on-one training to private, public, and non-for-profit employers, including law firms. Let me know how we may help you.


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