Nos. 09-16860; 10-15059 _____________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ____________________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee-Cross-Appellant, v. AUTOZONE, INC., Defendant-Appellant-Cross-Appellee. _______________________________________________________ On Appeal from the United States District Court for the District of Arizona _______________________________________________________ PRINCIPAL AND RESPONSE BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS APPELLEE-CROSS-APPELLANT _______________________________________________________ P. DAVID LOPEZ General Counsel CAROLYN L. WHEELER Acting Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel PAULA R. BRUNER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, N.E. Washington, D.C. 20507 (202) 663-4731 paula.bruner@eeoc.gov TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii STATEMENT OF JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ISSUES PRESENTED FOR REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 STATEMENT OF THE FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1. The Sexual Harassment Claim. . . . . . . . . . . . . . . . . . . . . . . . 3 2. The Retaliation Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3. Trial Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4. The District Court Decisions. . . . . . . . . . . . . . . . . . . . . . . 18 SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Appeal No. 09-16860 I. THE DISTRICT COURT PROPERLY UPHELD THE JURY'S VERDICT ON THE SEXUAL HARASSMENT CLAIM BECAUSE THE JURY'S FINDING THAT AUTOZONE DID NOT PROVE ITS AFFIRMATIVE DEFENSE IS SUPPORTED BY SUBSTANTIAL EVIDENCE. . . . . . . . . . . . . . . . . . 26 A. Evidence that AutoZone's response to Stacy Wing's sexual harassment complaint in June 2003 was inadequate and ineffective supports the jury finding that AutoZone failed to establish the first prong of the affirmative defense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 B. Evidence that Wing complainted of sexual harassment to her store manager, district manager, and human resources manager supports the jury determination that Wing exercised reasonable care to avoid harm and AutoZone failed to prove the second prong of the affirmative defense. . . . . . 44 II. THE DISTRICT COURT PROPERLY UPHELD THE JURY'S PUNITIVE DAMAGES AWARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Cross-Appeal No. 10-15059 THE DISTRICT COURT COMMITTED REVERSIBLE ERROR WHEN IT REFUSED, ON THE RETALIATION CLAIM, TO INSTRUCT THAT THE DENIAL OF A PROMOTION CLAIM WAS AN ADVERSE ACTION IN THIS CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 STATEMENT OF RELATED CASES. . . . . . . . . . . . . . . . . . . . . . . . . . . 63 CERTIFICATE OF COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .64 CERTIFICATE OF SERVICE TABLE OF AUTHORITIES CASES Brooks v. City of San Mateo, 229 F.3d 917 (9th Cir.2000). . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Browning v. United States, 567 F.3d 1038 (9th Cir. 2009), cert. denied, --- S.Ct. ----, 2010 WL 1525795 (U.S. Apr 19, 2010). . . . . . 3, 54 Burlington Indus. Inc. v. Ellerth, 524 U.S. 742 (1998). . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 27, 28 Byrd v. Maricopa County Sheriff's Dep't, 565 F.3d 1205 (9th Cir. 2009), reh'g en banc granted, 583 F.3d 673 (9th Cir. 2009). . . . . . . . . . . . . . . 54 City of Long Beach v. Standard Oil Co., 46 F.3d 929 (9th Cir. 1995). . . . . . . . . . . . . . . . . . . . . . . . 53, 54 Clark v. United Parcel Serv., Inc., 400 F.3d 341 (6th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Coates v. Sundor Brands, Inc., 164 F.3d 1361 (11th Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . 46 Craig v. M & O Agencies, Inc., 496 F.3d 1047 (9th Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . .46 Davis v. Tri-State Mack Distrib., Inc., 981 F.2d 340 (8th Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . 43 DeJesus v. K-Mart Corp., 9 Fed. Appx. 629 (9th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . 47 Distacio v. Perkin Elmer Corp., 157 F.3d 55 (2d Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . 34 EEOC v. AutoZone, Inc., 2008 WL 4183389 (D.Ariz. Sep. 11, 2008). . . . . . . . . . . . . . . . . . . . . 16 EEOC v. Go Daddy Software, Inc., 581 F.3d 951 (9th Cir. 2009) petition for cert. filed, No. 09-1071, 78 U.S.L.W. 3549 (U.S. Mar. 4, 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 49 EEOC v. Harris Farms Inc., 274 Fed. Appx. 511 (9th Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . 61 Ellison v. Brady, 924 F.2d 872 (9th Cir. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Faragher v. Boca Raton, 524 U.S. 775 (1998). . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 27, 28 Fuller v. City of Oakland, 47 F.3d 1522 (9th Cir. 1995). . . . . . . . . . . . . . . . . . . . . . . . 38, 39 Galdamez v. Potter, 415 F.3d 1015 (9th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . 60 Gilbrook v. City of Westminster, 177 F.3d 839 (9th Cir.), cert. denied, 528 U.S. 1061 (1999). . . . . . . . . . . . . . . . . . . . . . . . 54 Gizoni v. Southwest Marine Inc., 56 F.3d 1138 (9th Cir.), cert. denied, 516 U.S. 944 (1995). . . . . . . . . . . . . . . . . . . . . . . . 60 Gorzynski v. Jetblue Airways Corp., 596 F.3d 93 (2d Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . 45, 48 Hardage v. CBS Broadcasting, Inc., 427 F.3d 1177 (9th Cir. 2005), cert. denied, 549 U.S. 812 (2006). . . . . . . . . . . . . . . . . . . . . . . . 35 Harris v. Forklift Sys., Inc., 510 U.S. 17 (1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Holly D. v. Calif. Inst. of Tech., 339 F.3d 1158 (9th Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . .47 Intlekofer v. Turnage, 973 F.2d 773 (9th Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Jones v. Williams, 297 F.3d 930 (9th Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Kolstad v. American Dental Ass'n, 527 U.S. 526 (1999). . . . . . . . . . . . . . . . . . . . . . . . . . . 50, 51, 52 Los Angeles Mem'l Coliseum Comm'n v. Nat'l Football League, 726 F.2d 1381 (9th Cir. 1984). . . . . . . . . . . . . . . . . . . . . . . . . . .54 Loughman v. Malnati Org. Inc., 395 F.3d 404 (7th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . 42 May v. City of Lafayette, 18 Fed. Appx. 559 (9th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . 61 Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 28 Montero v. AGCO Corp., 192 F.3d 856 (9th Cir.1999). . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Nichols v. Azteca Restaurant Enter., Inc., 256 F.3d 864 (9th Cir. 2001). . . . . . . . . . . . . . . . . . . . . 28, 32, 37, 43 Obrey v. Johnson, 400 F.3d 691 (9th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Pennsylvania State Police v. Suders, 542 U.S. 129 (2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Reeves v. Sanderson Plumbing Prods. Inc., 530 U.S. 133 (2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26, 33 Smith v. Wade, 461 U.S. 30 (1983). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Swenson v. Potter, 271 F.3d 1184 (9th Cir. 2001). . . . . . . . . . . . . . . . . . . . .35, 37, 38, 40 Swinton v. Potomac Corp., 270 F.3d 794 (9th Cir. 2001). . . . . . . . . . . . . . . 27, 34, 44, 51, 52, 54, 59 Tennant v. Peoria & Pekin Union Ry. Co., 321 U.S. 29 (1944). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 TXO Prod. Corp. v. Alliance Resources Corp., 509 U.S. 443 (1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Williamson v. City of Houston, 148 F.3d 462 (5th Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . 46 STATUTES AND OTHER AUTHORITY 28 U.S.C. § 1291. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 42 U.S.C. § 1981a(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Fed. R. App. P. 4(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF JURISDICTION The Commission incorporates by reference the appellant's statement of subject matter and appellate jurisdiction, adding: This Court also has jurisdiction over the EEOC's cross-appeal pursuant to 28 U.S.C. § 1291. The EEOC's appeal is from the amended and final judgment of the district court filed on November 10, 2009. I-SER-9.<1> The Commission filed a timely notice of appeal on January 8, 2010, pursuant to Fed. R. App. P. 4(a)(1)(B). II-SER-50. ISSUES PRESENTED FOR REVIEW Appeal No. 09-16860<2> 1. Whether the district court properly denied AutoZone's motion for judgment as matter of law as to the affirmative defense on the Commission's sexual harassment claim. 2. Whether the district court properly upheld the jury's punitive damages award. Cross-Appeal No. 10-15059 Whether the district court committed reversible error when it refused to include denial of promotion as an adverse action to which Wing had been subjected in its jury instruction on the retaliation claim despite substantial evidence in the record that supported the theory. Reviewability and Standard of Review: The EEOC submitted proposed jury instructions, stating that the adverse action for which it had the burden of proof was whether Stacy Wing had been denied a promotion in retaliation for complaining about sexual harassment. II-SER-107. The Commission reiterated its position when it filed objections to AutoZone's characterization of the adverse action as a demotion or withdrawal of promotion in its proposed retaliation jury instructions. Id. at 110. Over the Commission's continued objections, id. at 71, the district court issued preliminary, final, and revised jury instructions on the retaliation claim that restricted the adverse action to withdrawal of the promotion. Id. at 69-70, 100, 102. The jury returned a verdict against the EEOC on the retaliation claim. I-SER-26. The court entered judgment on the verdict, AER-1, and reiterated its ruling in an amended judgment. See generally id. at 9. Because the EEOC properly raised objections to the content of the retaliation jury instruction at trial, this Court may review for abuse of discretion whether the challenged instruction inadequately comported with the evidence and theory of the case. Browning v. United States, 567 F.3d 1038, 1041 (9th Cir. 2009). STATEMENT OF THE CASE The Commission incorporates by reference the appellant's statement of the case. As to the retaliation claim, the Commission presented evidence at trial that Wing had been discriminatorily denied a promotion and proposed jury instructions reflecting this theory. II-SER-107. The district court refused to issue the Commission's proposed jury instruction, noting only the withdrawal of promotion as the adverse action supporting the retaliation claim. Id. at 69-70, 100, 102. The jury found against the EEOC on the retaliation claim, I-SER-26, and on November 10, 2009, the district court entered an amended judgment that, among other things, upheld the adverse jury verdict on the retaliation claim. See generally id. at 9. The EEOC cross-appeals from this final judgment as to the retaliation claim. II-SER- 50. STATEMENT OF THE FACTS 1. The Sexual Harassment Claim In April or May 2003, Stacy Wing was hired to work at AutoZone's Store 2737 as a part-time customer service representative. I-SER-33, 35; III-SER-269- 70. At the time, two other women worked at Store 2737 - Luz Hernandez and Razia Bracho. They were both commercial drivers and therefore, often not in the store. III-SER-256, 270. Hence, Wing worked in a predominantly male environment. Jose Contreras was Wing's store manager and immediate supervisor. AER 203. According to Scott Anderson, the regional human resources manager for AutoZone's Phoenix region in 2003, AER-20, 203, and the company handbook, all managers are responsible for enforcing AutoZone's zero-tolerance sexual harassment policy. AER-26, 190; II-SER-213. Specifically, the policy mandates that "[a]ny AutoZoner who receives a complaint or becomes aware of a sexual harassment situation is required to report the allegation to management immediately." AER-190. The policy promises that "management will thoroughly investigate each reported allegation as confidentially as possible" and indicates that "sexual harassment or harassment of any nature" may result in immediate termination. Id. Specific grounds for termination in the handbook include "unwelcome verbal, nonverbal or physical sexual advances" and "sexually offensive remarks and jokes." Id. In cases of harassment, disciplinary authority rests with the store managers, district managers, and regional operations managers. II-SER-207-08. Anderson was not sure if every manager in the Phoenix region received a copy of the handbook. II-SER-234. While a signed form in store manager Contreras' file indicated that Contreras had received a 1997 handbook, Id. at 188- 89; AER-187, there was no evidence that he possessed the 2002 handbook. Id. at 234. Store managers, however, are responsible for getting their own handbooks and for distributing them to the employees. Id. at 162. Wing believes that she received an employee handbook from Contreras, but he did not mention that it contained company policies or stress its importance. III-SER-292-93. An acknowledgement form indicates that she received the handbook in 2004. Id. at 293-94. Sexual harassment training is required of all AutoZone managers and employees. II-SER-129-131. Anderson recalled being given sexual harassment training by AutoZone only once in 1996. Id. at 128-29. Contreras had no documents in his personnel file indicating that he had ever been given sexual harassment training. Id. at 185-87, 234-35. District manager Brian Goddard said he had no recollection of formal training for store managers on sexual harassment. III-SER-359. Wing was never offered or attended sexual harassment training while she was at AutoZone and was not aware that such training was available. Id. at 295-96. Within the first month of her employment, Wing experienced verbal sexual harassment by her supervisor Contreras. Specifically, Wing testified that at the beginning of her employment, Contreras treated her "fine." III-SER-274. But, one day, "roughly a couple of weeks into it," Id. at 276, she was stocking candy and he said, "you know, your butt looked really good in that skirt you were wearing when you came in to get your application." Id. at 275. Wing said that she "just kind of stood there shocked." Id. But "after the shock wore off, which seemed like forever I told him not to talk to me like that, because I . . . just didn't appreciate him talking to me like that" and "[i]t made me uncomfortable." Id. In that same month, Contreras' sexual comments quickly progressed to physical harassment that included "humping" Wing from behind, grabbing her head, and demanding that she suck his penis. Id. at 276-77. AutoZone's problem-solving procedures have multiple avenues for reporting harassment. AER-191. Step 1 requires the employee to discuss the problem with the immediate supervisor. The supervisor is to investigate the complaint and ensure that appropriate action is taken as quickly as possible.<3> Id. Wing repeatedly complained about the harassment to her supervisor Contreras, but Contreras would not stop his misconduct. III-SER-314-15. Step 2 of AutoZone's problem-solving procedures indicates that if the complaint is not settled in the first step, the employee shall submit the concern or complaint to the district manager. AER-191. The district manager must, within a reasonable time, discuss the problem with the employee, determine if further action is necessary, and notify the employee of the decision. Id. According to Anderson, the district manager also is required to report "immediately" sexual harassment complaints to AutoZoner Relations and to Anderson. II-SER-212-14. In May 2003, after Wing experienced another "humping" incident with Contreras, III-SER-349, Wing contacted district manager James Monti. Id. at 279- 80. Monti was Contreras' boss. Id. at 272-73, 279-80; AER-24. She discovered Monti's phone number on a "problem solving poster." Id. at 279. The poster said "if you have a problem . . . try to resolve it with your store manager. And if that doesn't work then you contact [Monti.]" Id. at 279. Wing explained that this is how she learned that Monti was Contreras' boss. Id. at 279-80. The poster did not mention sexual harassment. Id. at 280. When Wing reached Monti, she told him she wanted to report that she was being sexually harassed. Id. Instead of handling Wing's complaint, Monti immediately referred her to Scott Anderson, the Regional Human Resources Manager. Id. Consequently, Wing did not get to tell Monti what Contreras had done to her and Monti never inquired about her complaint. Id. at 280-81. Wing said Monti "[k]ind of blew me off. * * * As soon as I said 'sexual harassment,' he said, you need to call this guy. And gave me the number and that was it." Id. at 280. Wing did not contact Anderson right away. She explained that she had "to muster up enough courage just to tell Jim Monti and make the report what was happening to me. * * * I know that I needed to call somebody in order for it to stop, but I felt like I was brushed off. * * * And I wasn't really ready to jump back in to tell somebody else again. * * * [W]hen [Monti] brushed me off on the other guy, I felt - it kind of let me down a little bit. I had to re-up to call him. So I believe it could have been a . . . week, two weeks maybe" before she contacted Anderson. III-SER-282. In June 2003, after a "few" unsuccessful attempts, III-SER-282, Wing reported by phone to Anderson that she had been sexually harassed by Contreras. Id.; II-SER-215-16. The general harassment policy and the problem-solving procedures state that an employee may complain to "human resources" or "the regional or divisional human resources manager." AER-190, 191. As the regional human resource manager, Anderson was responsible for conducting "confidential" investigations of inappropriate conduct and sexual harassment complaints. Id. at 190; II-SER-119, 12-23, 207. When he received a sexual harassment complaint, as a standard operating procedure, he said he would inform the divisional human resources manager about the complaint and that he would be investigating it. II- SER-136-37. Anderson also said he would interview the complainant and request a statement describing what happened, identifying witnesses, and explaining when and where it happened. Id. at 138-39. Once he obtained a written statement, he would arrange to interview any potential witnesses and secure their written statements. Id. at 140. Finally, he would interview the alleged offender and obtain a statement. Id. Several days after Wing's phone call, Anderson went to store 2737 to investigate the report. III-SER-351. He spoke with Wing onsite in a semi-public area for about four hours. Id. at 283-84, 351. She told him that she was a new hire and had been physically and verbally sexually harassed by Contreras. Id. at 284. As Anderson questioned her about the harassment, Wing stated that she prepared a written statement as a part of the investigation. Id. at 284-86; II-SER-148. Anderson additionally claimed that for 30-45 minutes he interviewed five employees (Raiza Bocha, Luz Hernandez, Justin Pierce, Hector Barajas, and Steve Corbeil) regarding Wing's allegations of sexual harassment and obtained written statements from them all. II-SER-149-52, 156, 202, 218, 230. However, Hernandez, Barajas, and Corbeil testified that they did not recall speaking to Anderson as part of this investigation. Id. at 240; III-SER-257, 261, 267. Corbeil did not begin to work for AutoZone until 2004, well after Wing's June 2003 sexual harassment complaint, and "never met [Anderson]." III-SER-267, 286. Additionally, Bracho did not speak English, III-SER-270, Anderson did not speak Spanish fluently, II-SER-160, and Anderson admitted that none of the witnesses he interviewed required a translator. Id. at 219. Lastly, Anderson stated that he interviewed Contreras the same day he interviewed Wing and the witnesses and obtained a written statement in which Contreras asserted that he was innocent. Id. at 152-53. Anderson said he then reminded Contreras about the company policies pertaining to sexual harassment and retaliation and cautioned him to "make sure his behavior was appropriate." Id. at 153. Anderson said he forwarded the employee statements to AutoZoner Relations and received verbal feedback that there was not anything actionable and to offer Wing the option of a transfer. II-SER-158-59. Anderson testified that he met with Wing a second time to inform her "that there was nothing to corroborate any statements," Id. at 160, and offered Wing a chance to transfer to another store if she was uncomfortable working with Contreras, but Wing declined the offer. Id.; AER-42. Wing testified to the contrary that Anderson did not meet with her, share the results of his investigation, or advise her that he was unable to corroborate her allegations. III-SER-290. Instead, she attempted to call Anderson after the June meeting and at least twice left a message with a person named Kelly as well as on Anderson's voicemail, but Anderson never returned her calls. Id. at 291. Wing also denied that Anderson offered a transfer option. Id. at 290-91. Anderson did not submit a final report to AutoZoner Relations regarding the June investigation. II-SER-183. Further, although Anderson testified that, after an investigation, he always created an investigative file in which he placed any documentation or evidence he was provided, Id. at 142-43, and company policy required that the original investigative file, including but not limited to witness statements and a video, if any, for any sexual harassment complaint, be maintained in the Regional Human Resource Office and a copy be sent to AutoZoner Relations, AER-204, AutoZone was unable to produce any of the employee statements associated with the June investigation because all were lost. AER-205. After her June meeting with Anderson, Wing did not file a complaint with AutoZoner Relations because she was not familiar with the department. III-SER- 311, 347. She also did not file a complaint with Staci Saucier, the divisional human resources manager, because she did not know Saucier was Anderson's boss until Saucier met with Wing after Contreras had resigned. Id. at 311-12. At the time of the harassment, Wing also had not heard of the EEOC and therefore did not attempt to file a charge. Id. at 312. Contreras' physical and verbal harassment of Wing continued. III-SER-297. The harassment included grabbing the back of her head, pulling her into his crotch, telling customers that she had AIDS "because it was proven that 83 percent of African American women had AIDS," calling her a slut, and slapping her in the face with his penis. Id. at 298-300. Wing said that these incidents occurred in the public part of the store, where there were surveillance cameras near the cash registers, by the safe, in the back of the stock room, and in some of the store aisles. Id. at 300. She believed the security cameras were in the store since she first started working at AutoZone. Id. at 303. John Millan, a former AutoZone employee, testified that he witnessed Contreras's ongoing harassment of Wing. He said he observed Contreras commit an offensive act towards Wing four or five months before Contreras resigned in December 2003. III-SER-251-52. He said that while Wing "was bent over on the accessory aisle putting away stuff, [Contreras] made a gesture like she was giving him head." Id. at 252. He said that Contreras did not seem bothered by the fact that Millan had witnessed the gesture. Id. at 253. Millan could tell that Wing was "mad" from her expression and "the way she conducted herself during the day." Id. Milan did not report the incident. Id. at 254. In late November 2003, Joe Acuna, who had just been hired by AutoZone as a commercial specialist manager, witnessed Contreras sexually harassing Wing. AER-203; III-SER-360-61. Specifically, he observed Contreras grab Wing by the back of her neck, push her head towards his crotch, and pull out his penis. III- SER-360-61; see also id. at 316. Luz Hernandez witnessed the incident as well, and said that "Jose grabbed [Stacy] by the back of the head," pushed her toward his crotch, and said, 'do you want some protein?'" Id. at 257-58, 264. Although Hernandez was aware of the sexual harassment policy, she said she did not report the incident since she was not the target. Id. at 260. Wing also did not report the incident. She explained that, "I felt, and I still feel to this day, they didn't help me from when I asked for him to help me. And when I say 'him,' I'm referring to Scott Anderson. They never helped me. * * * He never called me. I called him. . . three times. He never returned not one of my calls." Id. at 317. Additionally, Wing was aware that the incident was reported because "Joe Acuna told me that he was going to report it, that he had to" because "as a manager it was his job to report it." Id. at 317-18. Acuna reported the incident to Anderson, who confirmed the harassment after watching a surveillance video of the incident. AER-203.<4> Anderson claimed that he did not know the store had a video camera installed in 2003. II-SER-218. He said it was "a new practice" and when he informed Kirk Carter, the regional loss prevention manager, about the assault, Carter told him that the store had a video camera. Id. Anderson claimed "this was my first opportunity to have video evidence of a potential assault or sexual harassment." Id. Carter, however, said that he did not tell Anderson about the cameras because Anderson already knew about them. II-SER-248. Referring to the video of the incident, Anderson said that, after twice jerking Wing's head to his crotch, II-SER-171, Contreras looked into the camera "without a look of fear." Id. at 203. Anderson said, "It just shocked me his arrogance, . . . that he was, hey, see what I did. He knew he was being videoed." Id. at 172. Carter also watched the video and observed that after the sexual assault, Contreras "was apparently laughing, apparently he thought it was kind of funny." Id. at 249- 50. Anderson interviewed Wing about the incident offsite and, according to Wing, took another written statement from her. III-SER-320; II-SER-228.<5> Anderson asked why Wing did not contact him about the harassment, and she explained that she was still waiting to hear from him regarding her June complaint. Id. at 321-23; II-SER-175-76. According to Wing, Anderson reacted negatively to her response, and told her the videotape showed her hitting Contreras after he grabbed her. Id. at 322-23. Anderson allegedly then told Wing that "they would have to make a determination as to whether they would let her come back to work or if [she] was going to lose [her] job for insubordination" based on her hitting Contreras. Id. at 325-26. Anderson then sent Wing home with pay. Id. at 326; II- SER-179. Anderson returned to the store and informed Contreras that it had a video of him sexually harassing Wing. II-SER-181. Contreras denied the incident and asked to see the video. Id. Rather than terminating Contreras, Anderson offered him a choice -- be suspended pending an investigation or resign immediately - and counselled him that "it would look better on his resume if he resigned." Id. at 181- 82. Contreras resigned. Id. at 182. Anderson had the then district manager Brian Goddard note on company's "Termination Report" that Contreras was not eligible for rehire. AER-204. However, the reason given for the termination was "Quit without Notice." AER-192. Anderson did not write up a report about the December investigation or inform AutoZoner Relations or his supervisor Saucier about the incident or the investigation. II-SER-184. 2. Retaliation Claim At the conclusion of Anderson's "confidential" meeting with Wing to discuss her June complaint, Wing said that Anderson gave her his card and told her in Contreras' presence "don't worry, Miss Wing, we're going to look into your investigation of sexual harassment by Jose Contreras." III-SER-287. Although Anderson denies making the statement, II-SER-221, Wing said she knew Contreras heard Anderson's comment because "[Contreras] said, so you like to call on people" and referred to her as a "snitch" a few days later. III-SER-288. Wing believed that she was denied a promotion because she complained about the harassment. During Wing's tenure at AutoZone, she twice took training to qualify for a promotion to the position of Parts Service Manager (PSM). I-SER- 35. The first training occurred while Contreras was her store manager but after she had filed her first sexual harassment report with Anderson. According to Wing, district manager Goddard directed Contreras to train her to be a PSM. But after she had completed training, Contreras told her that she would not be promoted to PSM because she had complained about him to Anderson. III-SER- 335, 354. After Contreras' resignation, his temporary replacement (Derrick Edwards) gave Wing the passcode necessary to work as a PSM, but she still was not promoted to the position. Id. at 336-37. Shortly thereafter, the code was deactivated by the new store manager Howard Brown. Id. at 338-39, 354. Wing filed an EEOC charge against AutoZone on January 29, 2004, alleging sexual harassment and retaliation. Id. at 346, 352. Wing participated in a second PSM training under Brown. Id. at 355. Although he never told her he personally would not promote her, id., Wing claims that Brown told her that AutoZone had "'no intention of promoting [her] to PSM because [she] had gone to an outside agency'" to complain. Id. at 340-41. She also said that Scott Schmitt, the district manager, told her that she was not being promoted to PSM because she "did not keep [her] mouth shut and had gone to an outside agency.'" Id. at 342. 3. Trial Proceedings In March 2006, EEOC filed a complaint alleging that Wing had been subjected to unlawful sexual harassment and retaliation. II-SER-115-16. Throughout the pre-trial and trial proceedings, EEOC advanced the argument and proffered evidence that, in addition to withdrawing her promotion, AutoZone retaliated against Stacy Wing when three managers -- store manager Contreras, Contreras' replacement Howard Brown, and district manager Scott Schmitt -- denied her the promotion to PSM because she had complained about the sexual harassment. See, e.g., I-SER-35; II-SER-90-91, 96, 116. Consequently, the Commission requested a retaliation instruction based on the theory that the adverse act was a denial of a promotion: The plaintiff has the burden of proving each of the following elements by a preponderance of the evidence: Ms. Wing engaged in or was engaging in an activity protected under federal law . . . . Defendant denied Ms. Wing a promotion to a Parts Sales Manager position; and Defendant denied Ms. Wing the Part Sales Manager position because she engaged in protected activity. II-SER-107. AutoZone objected to the inclusion of the Commission's denial of promotion claim as adverse action in the jury instructions on retaliation and argued that the only asserted adverse actions were a demotion or a withdrawal of promotion, "not that the company failed to promote Ms. Wing in the first instance." See, e.g., II-SER-103,109. EEOC reiterated that the retaliation claim was broader and that the denial of promotion claim was consistent with the complaint, which stated that Wing had been subjected to retaliation, "including, but not limited to, the withdrawal of promotion." Id. at 110. At the close of the Commission's case-in-chief and after both parties had rested, AutoZone again attempted to restrict the retaliation claim to whether Wing had a promotion withdrawn. Id. at 73. The Commission again asserted that the adverse action should include a denial of promotion, id. at 69-72, 86-87, and reiterated its objection to the restricted instruction before it was presented to the jury. Id. at 71. 4. The District Court Decisions As an initial matter, the district court rejected AutoZone's Rule 50(a) motions for judgment as a matter of law on the hostile work environment and retaliation claims because there were factual disputes on the affirmative defenses and promotion claims that were appropriate for jury resolution. I-SER-21-24. However, over the objections of the EEOC, and contrary to the evidence and theories advanced by the Commission, the district court issued a jury instruction specifically restricting the retaliation claim to the withdrawal of promotion. II- SER-69-70. The jury rendered a verdict for the EEOC on the sexual harassment claim, but found against the EEOC on its claim for retaliation. AER-1. The jury awarded Wing $15,000 in compensatory damages and $50,000 in punitive damages. Id. at 2. The district court entered judgment on the verdict on June 11, 2009. Id. On July 24, 2009, the district court rejected AutoZone's Renewed Motion for Judgment as a Matter of Law or Alternatively, Motion for New Trial regarding its affirmative defenses as to the hostile work environment and punitive damages claims. AER-3. The court observed that in considering the Rule 50(b) motion, it must draw all reasonable inferences in favor of the nonmoving party and refrain from making credibility determinations or weighing the evidence. Id. at 5. With respect to AutoZone's affirmative defense to the Commission's hostile work environment claim, the court stated that although AutoZone had an anti-harassment policy in place, the Commission presented evidence that the policy was not effectively implemented. Id. at 6. With respect to corrective action, the court noted that the evidence regarding AutoZone's investigation of Wing's harassment complaints was "highly contested." Id. Namely, the evidence was disputed as to how many employees, if any, other than Wing, Anderson actually interviewed during his June 2003 investigation. Id. at 7. Three witnesses that he claimed to have interviewed did not corroborate Anderson's testimony. Id. Additionally, Wing testified that Anderson failed to return her phone calls and the parties stipulated that the investigative files, witness statements, and the videotape of the December 2003 incident of sexual harassment were lost. Id. Viewed in the light most favorable to the Commission, the court stated that it could not conclude "'that a reasonable jury would not have a legally sufficient evidentiary basis" for finding that AutoZone had not proved the first prong of the affirmative defense. Id. Turning to the second prong of whether Wing unreasonably failed to avoid harm, the court noted that it was undisputed that Wing complained to three individuals: the store manager Contreras, the district manager Monti, and the regional human resources manager Anderson. AER-7. All three individuals were identified in the AutoZone's policy as appropriate contacts for a sexual harassment complaint. Also, Wing testified that she tried to contact Anderson on three occasions after his June investigation but he never returned her calls. Id. at 7-8. Even though Anderson disputed having received any messages from Wing, the court stated that a jury could have credited Wing's testimony over Anderson's and found that Wing tried to avail herself of AutoZone's complaint procedures. Id. at 8. Hence, the court decided that the affirmative defense was properly sent to the jury and that there was a legally sufficient evidentiary basis to support a finding that AutoZone had not proved its affirmative defense. Id. The district court also declined to grant judgment for AutoZone on the punitive damages claim. The court noted that, because AutoZone argued for the first time in its Rule 50(b) motion that the trial evidence was insufficient to establish that its "managerial agent" acted within the scope of his employment when Contreras sexually harassed Wing, the argument was waived. AER-8-9. The court also rejected AutoZone's argument that it could not be held liable for punitive damages because it engaged in good faith efforts to comply with Title VII. Id. at 9. The court decided that "[a] jury could have concluded that Defendant's failure to maintain critical evidence, including the investigative files and surveillance video, did not demonstrate a good faith effort to comply with Title VII" and that Anderson's failure to properly investigate Wing's complaint and return her phone calls also demonstrated a lack of good faith. Id. Finally, the court decided that AutoZone's Rule 59(a) motion for a new trial on the hostile environment and punitive damages claims was not warranted because undisputed evidence established that Wing was sexually harassed, witness testimony suggested that Anderson's investigation of Wing's complaints lacked thoroughness, several witnesses denied being interviewed at all by Anderson, and stipulations showed that AutoZone inexplicably lost critical evidence. AER-10. Thus, the court ruled that a jury could have concluded that AutoZone created a hostile work environment and did not prove its affirmative defense. Id. Furthermore, as to punitive damages, the court decided a new trial was not warranted because testimony that Contreras sexually harassed Wing and then looked into the security camera and laughed, and evidence that Anderson failed to investigate thoroughly Wing's allegations, return her phone calls, or maintain important evidence, "negat[ed] [AutoZone's] argument that it engaged in good- faith efforts to comply with Title VII." Id. at 11. On November 9, 2009, the district court granted the Commission's Rule 59(e) motion to amend the judgment to add equitable relief. I-SER-12. The amended judgment ordered, inter alia, that AutoZone establish a Title VII training program to educate on a yearly basis its employees, supervisors, and managers about sexual harassment and how to deal with complaints. Id. at 10. AutoZone was also directed to display in a prominent location its posters explaining the company's responsibilities and the employees' rights under Title VII and to modify its posters to provide contact information for the EEOC's Phoenix office. Id. In response to AutoZone's Rule 60(b) motion for reconsideration and the Commission's opposition, the court modified the equitable relief to require AutoZone to obtain the updated EEO posters found on the EEOC's website, to add contact information for the EEOC's Phoenix office, and to display all of its posters in a "prominent location frequented by employees other than the managers' office." Id. at 7. SUMMARY OF THE ARGUMENT The district court properly denied AutoZone's motion for judgment as a matter of law ("JMOL") on the EEOC's sexual harassment claim because there was substantial evidence in the record to support the jury's finding that AutoZone did not prove an affirmative defense as set forth in the Supreme Court's decisions in Burlington Indus. Inc. v. Ellerth, 524 U.S. 742, 765 (1998), and Faragher v. Boca Raton, 524 U.S. 775, 807 (1998). Because the record evidence, accordingly, did not compel a finding in AutoZone's favor on the defense it asserted, JMOL was not proper. The Faragher/Ellerth defense requires the employer to show that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior and that the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided or to avoid harm otherwise. Here, there was more than sufficient to support the jury's finding that AutoZone failed to take effective remedial action and should be held liable for harassment. Evidence showed that AutoZone failed to comply with its own anti-harassment policies in dealing with Wing's complaints, lacked compliance with the reporting requirements by the managers who were notified about the sexual harassment, lacked regular anti-harassment training for managers and employees, conducted an inadequate investigation of Wing's June 2003 complaint, and lost critical evidence, including witness statements and a video of the December 2003 sexual assault. Additionally, evidence that Wing duly invoked AutoZone's anti-harassment policy and grievance procedures when she reported the sexual harassment on multiple occasions to three different managers, all of whom were designees in the policy, supported the jury's finding that she made reasonable efforts to correct the harassment and prevent further harm. In that immunity from liability depends on AutoZone's ability to prove both prongs of the affirmative defense, and the evidence supports a finding that AutoZone failed to prove either prong, the district court properly denied AutoZone's post-trial motion for judgment as a matter of law on the affirmative defense to the sexual harassment claim. The district court's denial of AutoZone's Rule 50(b) motion as to punitive damages also was proper. Viewed in the light most favorable to the Commission, there was sufficient evidence to support the jury's finding that AutoZone did not engage in good faith efforts to comply with Title VII. Evidence of management's inaction and inadequate response after receiving Wing's sexual harassment complaints, employee testimony controverting the human resources manager's allegedly "thorough" investigation of Wing's June complaint, and AutoZone's loss of critical evidence concerning the investigations of both the June and December sexual harassment complaints was sufficient to send the issue of punitive damages to the jury and to allow the jury to find that AutoZone did not satisfy the good faith exception. With respect to the cross-appeal, however, the district court abused its discretion and committed reversible error when, on the retaliation claim, it limited the adverse action in the jury instruction to a withdrawal of a promotion and refused to include a denial of promotion as another potential adverse act. Had the jury been permitted to consider whether Wing was denied the promotion, along with whether the promotion had been withdrawn, it might have reached a different outcome because there was substantial evidence in the record from which the jury could have concluded that Wing was denied the promotion for retaliatory reasons. In particular, there was testimonial evidence that Wing had been told on three separate occasions by three managers that she was not going to receive a promotion because she had complained about Contreras' sexual harassment. Additionally, undisputed evidence established that Wing ultimately was not promoted. Lastly, unlike the withdrawal claim, the denial of promotion did not require Wing to prove that she had been promoted. Consequently, the district court abused its discretion in failing to instruct the jury to determine whether Wing had been denied a promotion, and that error prejudiced the Commission's case. Judgment on the retaliation claim therefore should be reversed and remanded for a new trial. ARGUMENT Appeal No. 09-16860 Review of the district court's denial of a Rule 50(b) motion for judgment as a matter of law on the hostile environment and punitive damages claims, after a verdict has been returned, is de novo. EEOC v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009). Thus, like the district court, this Court must review of the jury's verdict challenged by the Rule 50(b) motion for "substantial evidence." Id. In conducting this review, however, the Court must make all reasonable inferences in the light most favorable to the non-moving party, in this case the EEOC, and refrain from reweighing the evidence, evaluating the credibility of the witnesses, or substituting its judgment for that of the jury. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Go Daddy, 581 F.3d at 961. Moreover, the Court is not to entertain "conflicting circumstantial evidence in order to take the case away from the jury on a theory that the proof gives equal support to inconsistent and uncertain inferences. The focal point of judicial review is the reasonableness of the particular inference or conclusion drawn by the jury." Tennant v. Peoria & Pekin Union Railway Co., 321 U.S. 29, 35 (1944). In other words, the test "is whether the evidence permits only one reasonable conclusion, and that conclusion is contrary to the jury's verdict." Reeves, 530 U.S. at 150. I. THE DISTRICT COURT PROPERLY UPHELD THE JURY'S VERDICT ON THE SEXUAL HARASSMENT CLAIM BECAUSE THE JURY'S FINDING THAT AUTOZONE DID NOT PROVE ITS AFFIRMATIVE DEFENSE IS SUPPORTED BY SUBSTANTIAL EVIDENCE Title VII prohibits sexual harassment that is "sufficiently severe or pervasive 'to alter the conditions of [the victim's] employment and create an abusive working environment.'" Harris v. Forklift Sys., Inc., 510 U.S. 17, 21 (1993) (quoting Meritor Savings Bank v. Vinson, 477 U.S. 57, 67 (1986)). Absent a tangible job action, an employer is vicariously liable for sexual harassment by a supervisor unless the employer can establish a two-pronged affirmative defense. Ellerth, 524 U.S. at 765 and Faragher, 524 U.S. at 807. The employer must prove both of the following elements: "(a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise." Id. The premise is "that an employer may escape liability for harassment by certain of its employees when it undertakes appropriate steps to remedy the situation" and that "a harassed employee bears some responsibility to avoid or mitigate workplace hostility." Swinton v. Potomac Corp., 270 F.3d 794, 802 (9th Cir. 2001). In this appeal, AutoZone contends that the district court should have granted its Rule 50(b) motion because "there was no legally sufficient evidentiary basis for the jury to conclude that AutoZone did not prove its affirmative defense to the EEOC's hostile work environment claim." AutoZone (AZ) Br. at 18 (emphasis in original). Specifically, AutoZone argues that, consistent with the requirements of Faragher/Ellerth, it took preventive and corrective action because it implemented and distributed an anti-harassment policy, investigated Wing's complaints, and permanently removed the harasser from the company once Wing's allegations were corroborated. AZ Br. at 2. Additionally, it asserts that Wing unreasonably failed to avoid harm because she admitted to receiving and knowing about the anti- harassment policy, but unreasonably delayed making a report of sexual harassment and admitted that she failed to use the company's policies and procedures. Id. AutoZone's arguments are without merit. A. Evidence that AutoZone's response to Stacy Wing's sexual harassment complaint in June 2003 was inadequate and ineffective supports the jury's finding that AutoZone failed to establish the first prong of the affirmative defense The district court properly denied judgment as a matter of law regarding the first prong of the affirmative defense because there was sufficient evidence from which the jury could conclude that AutoZone's managers did not "exercise[] reasonable care to prevent and correct promptly any sexually harassing behavior." Ellerth, 524 U.S. at 765; Faragher, 524 U.S. at 807. AutoZone correctly notes that it had an anti-harassment policy in effect at the time Wing was hired and harassed, that Wing admitted to knowing about the policy, and that the policy provided employees with options for reporting sexual harassment. AZ Br. at 19. However, the mere existence of a policy and grievance procedure and the victim's awareness of them do not automatically insulate an employer from liability for supervisory sexual harassment. Vinson, 477 U.S. at 72. While such measures tend to show that the employer has taken reasonable steps to prevent sexual harassment, see Nichols v. Azteca Restaurant Enterprises, Inc., 256 F.3d 864, 877 (9th Cir. 2001) (deciding that company exercised reasonable care to prevent harassment where victim was aware of the company's anti-harassment policy and attended the required company-wide sexual harassment training), where there is evidence that the company's policies or procedures were ineffective or not enforced, as in this case, the company can be found to have failed to demonstrate that it met its duty to exercise reasonable care. Id. Here, there is substantial evidence supporting the jury's conclusion that AutoZone's policy was ineffective because, as the district court stated, AutoZone's anti-harassment policy and grievance procedures were "not always effectively implemented." AER-6. For example, the court observed that "Contreras' personnel file did not contain a handbook acknowledgment form or evidence that he was trained on sexual harassment" and "Wing's personnel file had a handbook acknowledgment form signed in March 2004, approximately one year after she started working for Defendant." Id. According to testimony by Scott Anderson, the human resources manager, all managers were responsible for enforcing AutoZone's sexual harassment policy, AER-26; II-SER-200, 213 & 234, but evidence established that some of the managers may not have received AutoZone's handbook, which contained the sexual harassment policy. AER-190. Indeed, Anderson testified that he was not sure if every manager received a copy of the handbook. II-SER-234. More importantly, he said that he found no evidence that store manager Contreras had obtained a handbook since 1997, id. at 189, or that he had a copy of the 2002 handbook which was in effect in 2003. Id. at 210; AER- 187. Similarly, employee receipt of the handbook and policies was questionable. Although Wing believed that she received an employee handbook from Contreras shortly after she started the job in 2003, III-SER-292-93, her personnel file contained an acknowledgment form indicating that she did not receive a handbook until 2004, one year later. Id. at 293-94. Next, although AutoZone was supposed to train all managers and employees on sexual harassment, II-SER-129-30, which focused on the handbook and its policies, AER-25, evidence in the record indicated that AutoZone failed to execute this mandate. In particular, Anderson said he did not take any training at AutoZone after 1996, II-SER-128-29; there was no record in Contreras' personnel file that he had any sexual harassment training, id. at 185-87, 234-35, district manager Brian Goddard said he had no recollection of formal training for store managers on sexual harassment, III-SER-359, and Wing said she had never attended such training at AutoZone and was not aware that it was available. Id. at 295-96. Given the uncertainty and inconsistency associated with AutoZone's dissemination and communication of its policies via its handbook and sexual harassment training, there was sufficient evidence to support the jury's conclusion that AutoZone's policy was ineffective and thus did not exercise reasonable care to prevent or correct sexual harassment. On appeal, AutoZone contends that the absence of a 2003 handbook acknowledgment form in Contreras' and Wing's personnel files is irrelevant to the issue of whether the company's policy "was both reasonable and was communicated to the employees[.]" AZ Br. at 19. Specifically, AutoZone argues that Wing admitted knowing about the policy from seeing a poster and from receiving a handbook within a month of her hire. Further, AutoZone argues that evidence indicated that Contreras had sexual harassment training and had no questions about the company's policy. Id. AutoZone's argument is unavailing. Even if Wing was aware of AutoZone's grievance procedure from the poster, that poster did not mention sexual harassment or convey the company's anti-harassment policy, III-SER-280; I-SER-16, but rather served as a general "problem solving guide" that set forth an internal "chain of command" for persons with a problem. Id. at 279-80; I-SER-16. Further, the poster "fail[ed] to describe employees' rights under Title VII or provide appropriate contact information" for the EEOC's Phoenix office or the Arizona Civil Rights Division in the event a person wanted to make an external report of sexual harassment. I-SER-16. Similarly, even if Wing had possession in 2003 of the company's handbook containing the detailed policies and grievance procedures of the company, Contreras' failure to stress the importance of the handbook's contents and to secure her signature on an acknowledgement form in 2003 to ensure she was aware of the policy, III-SER-294, along with his directive that Wing read the handbook at her "leisure," id. at 292-93, all underscore the ineffectiveness of the company's policy. Id. at 293.<7> To be sure, Contreras' lax attitude about the tenets of the handbook and its anti-harassment policies as demonstrated by his failure to secure his own current copy of the handbook, II-SER-189, and his repeated violations of the anti- harassment policies, see, e.g., III-SER-275-77& 297, despite Wing's complaints and Anderson's admonition to watch his behavior following the June investigation, III-SER-314-15; II-SER-153, certainly support a jury's finding that AutoZone failed to exercise reasonable care at this location. In any case, the mere existence of anti-harassment policies and grievance procedures is not dispositive because it does not answer whether the company took reasonable steps to promptly correct sexual harassment. Nichols, 256 F.3d at 877. This case is a classic example because, as the district court noted, "the evidence presented by the parties as to the investigation undertaken by Defendant in response to Ms. Wing's harassment complaints was highly contested," AER-6, and thus fails to support "only one reasonable conclusion" that was "contrary to the jury's verdict." Reeves, 530 U.S. at 150. To begin with, under AutoZone's policy, management was required to accept, discuss, investigate, and resolve sexual harassment complaints and the district manager was required to report harassment complaints to AutoZone Relations. AER-190-91. Sufficient evidence established that management did not satisfy these obligations. Specifically, when Wing complained to Contreras about his sexual harassment, he blatantly and repeatedly ignored her complaints, III- SER-314-15, and on occasion, laughed when she threatened to report him. Id. at 277. By May 2003, she complained to district manager Monti about the sexual harassment but he "blew her off" and passed the responsibility to Anderson. Id. at 280-81. Inconsistent with company policy, AER-191, Monti failed to inform AutoZoner Relations that he had received a complaint, never met with Wing or inquired about the details of the complaint, III-SER-273, 280-81, and did not follow up to determine whether the harassment had ended. Id. at 281. Viewed in the light most favorable to the Commission, this evidence demonstrates, and the jury could so find, that whatever AutoZone's policy may say in writing, in practice the responses of these managers to Wing's sexual harassment complaints revealed that AutoZone's policy of encouraging employees "to bring their concerns and complaints to the attention of management so a resolution can be reached through appropriate channels" was ineffective. AER-191. Further, their failure to comply with AutoZone's reporting requirements supports the jury's finding that the company's response to Wing's complaints was inadequate. See Swinton, 270 F.3d at 810 ("the inaction of even relatively low-level supervisors may be imputed to the employer if the supervisors are made responsible, pursuant to company policy, for receiving and acting on complaints of harassment"); Distacio v. Perkin Elmer Corp., 157 F.3d 55, 64-65 (2d Cir. 1998) (supervisor's failure to comply with the company's reporting requirements that directed supervisors who receive a harassment complaint to: "inform the Human Resources Department of allegation of sexual harassment by employees or non-employees within 24 hours or reporting of the incident, and assist, as requested, with investigation of such allegations" is evidence tending to show that the company's response was inadequate).<8> Notwithstanding the evidence supporting the jury's verdict, AutoZone argues that it should have prevailed on the corrective measure issue because, in denying JMOL, the district court "overlooked undisputed facts" that Anderson immediately conducted an investigation into Wing's June 2003 complaint, reminded Contreras of the company's harassment policy despite an inability to corroborate Wing's allegations, and that he immediately removed the harasser when he received corroborating evidence in December, ensuring that Contreras would never work for the company again. AZ Br. at 21. In asserting its version of the events, AutoZone miscomprehends the district court's analysis and ignores controverting record evidence. Like the jury, the district court took into account the "undisputed facts" emphasized by AutoZone. However, unlike AutoZone, the jury or the court did not assess them in a vacuum, but rather "'consider[ed] the overall picture' to determine whether the employer's response was appropriate." Hardage v. CBS Broadcasting, Inc., 427 F.3d 1177, 1186 (9th Cir. 2005) (quoting Swenson v. Potter, 271 F.3d 1184, 1197 (9th Cir. 2001)). In particular, the jury and court could have considered that, although in June 2003 Anderson interviewed Wing and obtained her written statement about Contreras' harassment, he did not act promptly. Rather, he waited a week to come to the store, III-SER-351, and then lost her statement which contained critical information about the severity and pervasiveness of Contreras' harassment. AER- 205. The record also showed that Anderson failed to conduct a "thorough" investigation of Wing's harassment complaint. See AER-190. Anderson's testimony that he interviewed five employees (Hernandez, Barajas, Pierce, Corbeil, and Bracho), obtained their written statements, and that none of them were able to corroborate Wing's allegations, see, e.g., II-SER-149-52, was contradicted or otherwise undermined by evidence in the record. Specifically, Hernandez, Barajas, and Corbeil all testified that Anderson never spoke to them or took their statements regarding the sexual harassment of Wing. III-SER-259, 261, 267; II-SER-240. Further, interviews of two of the employees would have been difficult, if not impossible. Bracho only spoke Spanish, id. at 286-87, and Anderson admitted he did not speak Spanish fluently, II-SER-160, and did not use a translator for any of the witnesses. Id. at 219. Corbeil did not begin to work for AutoZone until 2004, well after Wing's June sexual harassment complaint. III-SER-267, 286. Accordingly, he could not have been interviewed by Anderson because he was not even employed by AutoZone at the time of Wing's incident. In fact, Corbeil testified that he "never met" Anderson. Id. at 267. Oddly, AutoZone argues that "whether or not Mr. Anderson interviewed other individuals is not relevant to whether the company's actions were reasonable given Ms. Wing's failure to identify any specific witness." AZ Br. at 21-22. This argument is untenable and further demonstrates AutoZone's misunderstanding of its responsibility to take reasonable steps to prevent and correct sexual harassment. First, AutoZone's obligation to conduct a thorough investigation is not dependent on a harassment victim's ability to identify witnesses. It is up to the employer to inquire thoroughly to satisfy itself that it has amassed the necessary information. An employer cannot point to a victim's inability to specifically identify witnesses and thereby relieve itself of its investigatory obligations because such action would unreasonably "place[] virtually all of its remedial burden on the victimized employee." Nichols, 256 F.3d at 876. In addition, the substantial evidence suggesting that Anderson lied about conducting interviews goes to his overall credibility. And his credibility on the question of how he conducted the investigation bears directly on the issue of whether the company's actions were reasonable. This fact is not altered by whether Wing identified any specific witness. AutoZone also argues that "[w]hether or not the alleged harassment continued after Ms. Wing reported Mr. Contreras in May or June 2003 does not affect the 'reasonableness' of the company's actions." AZ Br. at 22. It asserts that "'an employer can act reasonably, yet reach a mistaken conclusion as to whether the accused employee actually committed harassment." Id. (quoting Swenson, 271 F.3d at 1196). In fact, AutoZone argues that it should have prevailed because Wing "was unable to present any testimony from any individual who witnessed any of the conduct she alleged occurred except for the office incident for which Mr. Contreras was removed from the company[.]" Id. at 23. These arguments are equally tenuous. This Court has said that "the 'fact of investigation alone' is not enough. An investigation that is rigged to reach a predetermined conclusion or otherwise conducted in bad faith will not satisfy the employer's remedial obligation." Swenson, 271 F.3d at 1193 (quoting Fuller v. City of Oakland, 47 F.3d 1522, 1529 (9th Cir.1995)). Here, AutoZone ignores evidence suggesting that Anderson's inability to corroborate Wing's June 2003 allegations was largely because he never spoke to any employees to determine whether they had witnessed Contreras' harassment of Wing. II-SER-240; III-SER-257, 261, 267, 286. Further, AutoZone disregards that the Commission presented at trial testimony by employee John Millan who stated that, "four or five months before Contreras resigned," he saw Contreras make sexually offensive gestures towards Wing and that Contreras did not seem bothered that Millan witnessed the gesture. See III-SER-251-52. In that Contreras resigned in December 2003, a jury could reasonably deduce that Millan witnessed an incident that occurred shortly after Anderson initiated his June investigation of Wing's complaint. Thus, the jury could decide that Anderson's inexplicable failure to interview Millan quite possibly denied him an opportunity to corroborate Wing's allegations and resulted in an inadequate investigation. Cf. Fuller, 47 F.3d at 1529 ("An employer whose sole action is to conclude that no harassment occurred cannot in any meaningful sense be said to have "remedied" what happened. Denial does not constitute a remedy."). Lastly, even if there were no witnesses to Wing's harassment, Anderson still did not exhaust all reasonable avenues to corroborate Wing's allegations. The record contained evidence that Store 2737 had approximately six or seven surveillance cameras on the premises in June 2003. II-SER-167, 245; III-SER- 303. The cameras were generally placed near the front registers, in the office area and on the front and back doors, id. at 246, and covered the areas of the store where Wing's sexual harassment occurred. III-SER-300. Anderson failed to check the store's surveillance cameras' videotapes to determine whether there was visual evidence of Wing's harassment in June 2003. II-SER-167. While Anderson claimed that he did not know there were cameras in the store when he investigated Wing's June complaint, and had learned about them from the loss prevention managers during the investigation of the December sexual assault, id. at 166-67 & 218, Kirk Carter, the regional loss prevention manager, said that Anderson already knew about the cameras and did not need to be told about them. Id. at 248. Citing Swenson for the principle that "where 'the proof of harassment is weak and disputed . . . the employer need not take formal disciplinary action simply to prove that it is serious about stopping sexual harassment,'" AZ Br. at 24 (quoting 271 F.3d at 1197-98), AutoZone maintains that it took "sufficient remedial action." Id. at 23. Contrary to AutoZone's assertions, this case is not at all like Swenson. In Swenson, this Court held that the employer's response was reasonable where the employer immediately warned the harasser that his conduct was sexual harassment, ordered him to keep away from the complainant, and promptly separated him from the complainant pending the outcome of the investigation, and the harassment stopped as a result of the employer's intervention. See Swenson, 271 F.3d at 1192-98. Here, in contrast, Anderson did not inform Contreras that his conduct was inappropriate or sexual harassment, and did not order him to keep away from Wing, and, as a result, the harassment continued. Hence, AutoZone's reliance on Swenson is misplaced because Anderson's efforts in this case are not comparable. Indeed, the evidence heard by the jury suggests that rather than remediate the situation, the manner in which Anderson conducted the "investigation" actually exacerbated the harassment. For instance, contrary to the policy's directive to conduct investigations "as confidentially as possible," AER-190, Anderson interviewed Wing at the store in a semi-public area for over four hours while Contreras was in the store. III-SER-283-84; see also II-SER at 228. Wing also testified that, at the conclusion of Anderson's onsite investigation, in Contreras' presence, Anderson gave her his business card and told her "don't worry, Miss Wing, we're going to look into your investigation of sexual harassment by Jose Contreras." Id. at 287; II-SER-202-03. Wing said she knew Contreras heard Anderson because thereafter Contreras said to her, "so you like to call on people" and a few days later, called her a "snitch." Id. at 288. After the interview, Contreras became more abusive and aggressive and increased his sexual harassment of her. Id. at 298-300. The evidence further indicated that the tenor of Anderson's approach throughout the process was dismissive or even hostile toward Wing. According to Wing, Anderson never advised her of the results of his investigation. III-SER-290- 91; but see II-SER-159. Wing testified that despite phone calls to Anderson after the June investigation, and leaving messages in an effort to report additional acts of harassment and to learn about the status of the investigation, Anderson never returned her calls. Id. at 291. In fact, she did not see or speak to Anderson again until December when he came to the store in response to Acuna's report of sexual harassment. Id. at 344; but see II-SER-222. Wing also testified that Anderson reacted negatively when she explained that she did not call him about the November assault because she was still waiting to hear from him about her June complaint, id. at 321-22, and that, in response, he threatened her with termination for insubordination because the video showed her hitting Contreras after he twice shoved her face into his crotch. Id. at 323, 325-26. Given this evidence, the jury certainly was free to find that AutoZone's written policy was far from effective in practice. In a similar vein, the jury verdict was properly upheld because evidence also indicated that Anderson's resolution of Wing's sexual harassment complaints was not reasonably calculated to end the harassment. Despite the gravity of Wing's sexual harassment allegations in June, Anderson's resolution of Wing's complaint was merely to remind Contreras about AutoZone's sexual harassment and retaliation policies and to caution him to engage in "appropriate" behavior. II- SER-152, 190; see also Loughman v. Malnati Org. Inc., 395 F.3d 404, 407 (7th Cir. 2005) (where victim complained of "serious physical violations" as well as inappropriate jokes or comments, "a reasonable jury could determine that simply talking to the people involved in the first two aggressive incidents was not a sufficient response"); Ellison v. Brady, 924 F.2d 872, 882 (9th Cir. 1991) (if the employer "fail[s] to take even the mildest form of disciplinary action" the remedy is insufficient under Title VII); cf. Intlekofer v. Turnage, 973 F.2d 773, 780 (9th Cir. 1992) (oral warning may be sufficient where employer expresses strong disapproval, demands that the harassment stop and threatens harsher discipline in the event the conduct does not cease). Anderson did not censure Contreras, inform him of available disciplinary action if other complaints were registered, or separate him from Wing. He also did not require Contreras to take sexual harassment training, II-SER-191, or check Contreras' personnel file to determine whether he had received any anti-harassment training. Id. at 174. Had he done so he would have learned that Contreras had not been trained, id. at 186-87, 234-35, and did not have a current AutoZone handbook containing the company's anti-harassment policies. Id. at 210; AER-187. Consequently, given that Contreras escalated his harassment of Wing after Anderson's warning, AutoZone's efforts obviously failed to "remedy the harassment that had already occurred, and was not adequate to deter future harassment." Nichols, 256 F.3d at 876. Hence, a reasonable jury could conclude that AutoZone's remedial response was ineffective. Davis v. Tri-State Mack Distrib., Inc., 981 F.2d 340, 343 (8th Cir. 1992) (holding that employer's failure to take prompt remedial action upon receiving employee's complaints of supervisor's offensive conduct was supported by evidence of increase in supervisor's conduct). Finally, after Anderson conducted the June and December investigations, contrary to company procedures, he failed to submit investigative reports to AutoZoner Relations, II-SER-174, 183-84, or to follow "standard operating procedures" by informing Saucier about the incidents or investigations. Id. at 184. Further, despite the company's policy requiring retention of investigative files, the company failed to preserve the documentation associated with Wing's complaint. AER-205. These lapses, in conjunction with evidence of the overall circumstances of how AutoZone addressed Wing's complaints, could lead a jury to conclude that AutoZone failed to effectively implement the tenets or spirit of its own anti- harassment policies. Thus, as the district court properly concluded, there was a legally sufficient basis for the jury to find that AutoZone failed to establish the first prong of the affirmative defense that it exercised reasonable care to prevent and correct promptly the harassment. See AER-7. Accordingly, the district court's judgment should be affirmed on this issue. B.Evidence that Wing complained of sexual harassment to her store manager, district manager, and human resources manager supports the jury determination that Wing exercised reasonable care to avoid harm and that AutoZone failed to prove the second prong of the affirmative defense With respect to the second prong of the affirmative defense, "a harassed employee bears some responsibility to avoid or mitigate workplace hostility." Swinton, 270 F.3d at 802. To satisfy this prong, AutoZone must prove that Wing failed to fulfill her duty to avail herself of the company's complaint procedures. Pennsylvania State Police v. Suders, 542 U.S. 129, 152 (2004) ("[f]ollowing Ellerth and Faragher, the plaintiff who alleges no tangible employment action has the duty to mitigate harm, but the defendant bears the burden to allege and prove that the plaintiff failed in that regard"). AutoZone cannot satisfy its burden in this case because there was substantial evidence that Wing's complaints were reported promptly and in accordance with AutoZone's anti-harassment policy and grievance procedure to support the jury verdict and the district court's denial of AutoZone's JMOL motion on this issue. According to AutoZone's policy, an employee complaining of harassment "should discuss the problem with the supervisor or any other member of management as soon as possible." AER-191. As the district court noted, AER-7, undisputed facts revealed that when the harassment started, Wing promptly complained to two managers before she reached out to Anderson. III-SER-314. To begin with, Wing immediately and first complained to Contreras, who was both the store manager and her immediate supervisor, when he subjected her to verbal and physical sexual harassment. Id. at 275-78, 314-15. The fact that Contreras also was her harasser does not make Wing's action unreasonable. See Gorzynski v. Jetblue Airways Corp., 596 F.3d 93, 104-05 (2d Cir. 2010) (rejecting employer's argument that plaintiff "did not reasonably avail herself of its sexual harassment policy because she complained only to her harasser" as "a brittle reading of the Faragher/Ellerth defense" because "[w]e do not believe that the Supreme Court, when it fashioned this affirmative defense, intended that victims of sexual harassment, in order to preserve their rights, must go from manager to manager until they find someone who will address their complaints."). AutoZone's anti- harassment policy and grievance procedure identified the store manager as an appropriate official to receive complaints of sexual harassment, and thus Wing's reports to Contreras were compliant with the company's procedures and therefore reasonable. See, e.g., Clark v. United Parcel Serv., Inc., 400 F.3d 341, 350 (6th Cir. 2005) (in supervisory harassment case, observing that where the company "has, through its sexual harassment policy, placed a duty on all supervisors and managers to 'report[] incidents of sexual harassment to the appropriate management people,'" the company has a duty to take preventative and corrective action based on harassing incidents witnessed by all supervisors and managers regardless of their specific position in the company) (quoting Coates v. Sundor Brands, Inc., 164 F.3d 1361, 1364 (11th Cir. 1999)); Williamson v. City of Houston, Tex., 148 F.3d 462, 466 (5th Cir. 1998) ("When an organization designates a particular person or persons to receive harassment complaints, it sends a clear signal that those persons have the authority to accept notice of harassment problems."). When her complaints fell on deaf ears, Wing said that within "four days to a week," she attempted to contact the district manager Monti to file a sexual harassment report against Contreras. III-SER-279. Such a short delay is not unreasonable and is "markedly different from cases where victims have allowed the harassment to continue for a period of months or years before finally reporting it to the appropriate authority." Craig v. M & O Agencies, Inc., 496 F.3d 1047, 1056-57 (9th Cir. 2007)(holding that neither a delay of seven or nineteen days is unreasonable); Holly D. v. Calif. Inst. of Tech., 339 F.3d 1158, 1178 (9th Cir. 2003) (finding unreasonable delay where plaintiff waited a full two years from the first sexual incident and a full year after she testified the sexual activity was unwelcome before reporting the behavior); DeJesus v. K-Mart Corp., 9 Fed. Appx. 629, 630 (9th Cir. 2001) (deciding plaintiff unreasonably failed to use complaint procedures where she delayed reporting harassment "until months after it first began"); Montero v. AGCO Corp., 192 F.3d 856, 863 (9th Cir.1999) (finding a two-year delay in reporting the conduct to be unreasonable)). Moreover, undisputed evidence establishes that her actions were consistent with Step 2 of the reporting procedures. AER-191. Lastly, Wing reasonably availed herself of AutoZone's grievance procedures because, at Monti's direction, she contacted Anderson. As the regional human resources manager, Anderson, like Contreras and Monti, was identified in AutoZone's policy and grievance procedures as a designated recipient of sexual harassment complaints. Thus, sufficient evidence established that Wing took reasonable care to avoid harm. Notwithstanding Wing's efforts to notify AutoZone about the sexual harassment, AutoZone contends that the district court erred in denying its renewed motion for JMOL because factual disputes regarding whether Wing attempted to contact Anderson by telephone after June 2003 are neutralized by her admission that she failed to utilize the company's policies and procedures when she did not report the initial or alleged continuing harassment immediately and when she did not complain about the investigation or the way her June 2003 complaint was handled. AZ Br. at 25. AutoZone's arguments are unavailing. The record reflects that, after Monti directed her to contact Anderson, Wing said she waited about two weeks to call him because she had "muster[ed] up enough courage just to tell Jim Monti and make the report of what was happening to me . . . but I felt like I was brushed off. *** And I wasn't really ready to jump back in to tell somebody else again." III-SER-282. In light of Wing's new hire status, id. at 284, shocking confrontation with physical harassment at the hands of her immediate supervisor shortly after she began her employment, id. at 286, and experience with dismissive reactions to her complaints by managers in the grievance chain of command, id. at 280-81, 314-15, the jury could have found Wing's reasons for hesitating to contact Anderson credible and justified. Cf. Gorzynski, 596 F.3d at 105 ("There is no requirement that a plaintiff exhaust all possible avenues made available where circumstances warrant the belief that some or all of those avenues would be ineffective or antagonistic. Considering the courage it takes to complain about what are often humiliating events and the understandable fear of retaliation that exists in many sexual harassment situations, we decline to read the rule so rigidly."). Moreover, while AutoZone argues that Wing's two-week delay in reporting Contreras' harassment to Anderson was unreasonable as a matter of law, AZ Br. at 25, there is no legal authority, and AutoZone cites none, that supports such a conclusion. Finally, AutoZone's argument that Wing unreasonably failed to report post- June harassment or to utilize other avenues if she was dissatisfied with Anderson's response, AZ Br. at 26, is equally unavailing. Albeit disputed, Wing testified that she attempted to contact Anderson several times after the June investigation to inform him but he never returned her calls. III-SER-291. Further, she explained that she did not attempt to complain beyond Anderson because she had not heard of AutoZoner Relations, Saucier, or the EEOC at that time. Id. at 31-12, 348. In that these facts rest on credibility and the weight of conflicting evidence, the district court properly rejected AutoZone's attempt to substitute its judgment for that of the jury. Go Daddy, 581 F.3d at 961 (district court is to refrain from reweighing the evidence, assessing credibility, or substituting its judgment). Ultimately, AutoZone gains nothing from attacking Wing's actions. As a new employee who had not received sexual harassment training or possibly, the company's handbook at the time of her harassment, Wing invariably took appropriate steps to provide AutoZone with sufficient notice that sexual harassment was occurring so that AutoZone could have taken prompt and remedial action and stopped the harassment, and AutoZone failed to do so. The reasonableness of Wing's actions therefore precludes AutoZone from establishing the second prong of the affirmative defense. Accordingly, substantial evidence supported the jury determination that AutoZone failed to prove an affirmative defense, thus justifying the district court's denial of AutoZone's JMOL motions. II.THE DISTRICT COURT PROPERLY UPHELD THE JURY'S PUNITIVE DAMAGES AWARD The district court properly denied AutoZone's Rule 50(b) motion on punitive damages because the evidence at trial, properly viewed in the light most favorable to the Commission, supports the finding that AutoZone did not engage in good faith efforts to comply with Title VII. Punitive damages are available under Title VII. 42 U.S.C. §1981a(b)(1). The primary purpose of such damages is to punish unlawful conduct and to deter its repetition. Smith v. Wade, 461 U.S. 30, 49 (1983) ("deterrence of future egregious conduct is a primary purpose . . . of punitive damages"). A jury's punitive damages award is entitled to "a strong presumption of validity" when that award is the product of a process which includes "review . . . by the [factfinder] who also heard the testimony." TXO Prod. Corp. v. Alliance Resources Corp., 509 U.S. 443, 456-57 (1993). A claim for punitive damages, in cases in which the decision-makers are low-level managers, can be defeated by demonstrating that the managers' discrimination was "contrary to the employer's 'good-faith efforts to comply with Title VII.'" Kolstad v. American Dental Ass'n, 527 U.S. 526, 545-46 (1999). However, to satisfy the good-faith exception, an employer cannot simply show that it has adopted an anti- discrimination policy; it must establish that it implemented and enforced its policies and procedures in good faith. Id. at 544 (employers are not subject to punitive damages for discriminatory conduct by their managerial employees if they can show that they maintained and enforced good-faith antidiscrimination policies); Swinton, 270 F.3d at 810-11 ("[I]t is well established that it is insufficient for an employer simply to have in place anti-harassment policies; it must also implement them."). In appealing the district court's JMOL ruling on the punitive damages issue, AutoZone argues that the Commission "failed to introduce any evidence that AutoZone knew its actions towards Miss Wing may have violated federal law or that any employee acted with malice or indifference to Miss Wing's rights." AZ Br. at 28. Additionally, AutoZone argues that punitive damages should not have been awarded in this case because it had anti-discrimination policies, training programs, and grievance procedures in place at the time of the incidents in question that demonstrated its "good faith" efforts to comply with the law. Id. It also argues that it conducted a "good faith" investigation of Wing's complaints. Id. For reasons already discussed herein and given by the district court, there is sufficient evidence to support both the jury's conclusion that AutoZone did not engage in good faith efforts to comply with Title VII and the district court's denial of JMOL on the issue. Therefore, AutoZone's arguments must fail. First, contrary to AutoZone's assertion, there is sufficient evidence in the record to support the jury's finding that AutoZone employees acted with malice or reckless indifference to Wing's federally protected rights. Evidence shows that store manager Contreras and district manager Monti, who were both charged with the enforcement of the company's policies and reporting requirements, and inferentially aware of AutoZone's sexual harassment policies, were recklessly indifferent to Wing's complaints and the company's purportedly zero-tolerance stance towards sexual harassment. Despite Wing's complaints, Contreras continued his campaign of verbal and physical harassment against Wing, while Monti failed to report her complaint to AutoZone Relations and did not follow up to determine whether the harassment had ended. Kolstad, 527 U.S. at 536 (punitive damages are available where an employer "discriminate[s] in the face of a perceived risk that its actions will violate federal law"). Second, AutoZone's assertion of "good faith" efforts by having an anti- harassment policy, grievance procedure, and training programs is undercut by evidence that dissemination of this information to managers and employees was inconsistent and sometimes non-existent, and therefore ineffective in advancing the education and protection of the employees under Title VII. Cf. Kolstad, 527 U.S. at 545 ("The purposes underlying Title VII are similarly advanced where employers are encouraged to adopt antidiscrimination policies and to educate their personnel on Title VII's prohibitions.") (emphasis added). Third, evidence indicated that Anderson's June investigation of Wing's complaint was not thorough or designed to stop or correct the harassment. In sum, AutoZone's initial inadequate investigation and resolution of the May complaint, along with its failure to preserve the investigative files and the surveillance video of the December assault, weigh against a finding of good faith compliance with Title VII. Therefore, this Court should affirm on this issue because the jury properly decided that a punitive damages award was appropriate and the district court properly determined that AutoZone had not established its punitive damages affirmative defense as a matter of law. Cross-Appeal No. 10-15059 THE DISTRICT COURT COMMITTED REVERSIBLE ERROR WHEN IT REFUSED, ON THE RETALIATION CLAIM, TO INSTRUCT THE JURY THAT THE DENIAL OF A PROMOTION WAS AN ADVERSE ACTION IN THIS CASE When jury instructions are challenged, they are to be considered as a whole and evaluated as to whether they were misleading or inadequate, and whether any error was harmful. City of Long Beach v. Standard Oil Co., 46 F.3d 929, 935 (9th Cir. 1995). It is not necessarily reversible error, however, if the court did not "use the exact words proposed by a party, incorporate every proposition of law suggested by counsel or amplify an instruction if the instructions as given allowed the jury to determine intelligently the issues presented." Byrd v. Maricopa County Sheriff's Dep't, 565 F.3d 1205, 1214-15 (9th Cir. 2009) (quoting Los Angeles Mem'l Coliseum Comm'n v. Nat'l Football League, 726 F.2d 1381, 1398 (9th Cir.1984)), reh'g en banc granted, 583 F.3d 673 (9th Cir. Oct 06, 2009) (argument held and decision pending). But the "[j]ury instructions must be formulated so that they fairly and adequately cover the issues presented, correctly state the law, and are not misleading." Gilbrook v. City of Westminster, 177 F.3d 839, 860 (9th Cir. 1999). Hence, a jury instruction that misstates the law or fails to instruct on the proper theory of the case is reviewed de novo, Long Beach, 46 F.3d at 935, while the formulation or choice of words in the jury instruction is reviewed for an abuse of discretion. Browning v. United States, 567 F.3d 1038, 1041 (9th Cir. 2009). If the jury instruction is infirm, this Court will reverse "unless the error is more probably than not harmless." Swinton, 270 F.3d at 805. At issue here is the district court's jury instruction regarding adverse action. Specifically, the court informed the jury that "[p]laintiff has the burden of proving . . . by a preponderance of the evidence," II-SER-69, that: [D]efendant subjected Miss Wing to an adverse employment action. That is, withdrawing a promotion to a Parts Sales Manager position. And . . . Miss Wing was subjected to an adverse employment action because of her opposition to sexual harassment and or assistance or participation in an investigation of sexual harassment. If you find that plaintiff has proved . . . these elements, your verdict should be for the plaintiff. If, on the other hand, plaintiff has failed to prove any of these elements, your verdict should be for the defendant. An action is an adverse employment action if a reasonable employee would have found the action materially adverse, which means it might have dissuaded a reasonable worker from making or supporting a charge of discrimination. Id. at 69-70. The denial of the promotion claim should have been included in the jury's adverse action instruction because "[a] party is entitled to an instruction about his or her theory of the case if it is supported by law and has foundation in the evidence." Jones v. Williams, 297 F.3d 930, 934 (9th Cir. 2002). On this record, the district court committed reversible error in its formulation of the jury instructions on retaliation because there was substantial evidence that Wing had been denied a promotion because she complained about sexual harassment; hence, the exclusion of the denial of promotion as an adverse action was misleading, prejudicial, and substantially affected the outcome of the case. The district court failed to understand that the Commission's theory was that at different stages of Wing's employment tenure with AutoZone, Wing was denied a promotion and/or had the promotion withdrawn for retaliatory reasons. In presenting the retaliation claim prior to and during the trial, the Commission argued that AutoZone retaliated against Wing after she complained about sexual harassment when AutoZone denied or refused her a promotion to the PSM job and when it withdrew her promotion to the PSM job.<9> The Commission's complaint alleged: "Defendants' unlawful retaliation includes but is not limited to withdrawing Ms. Wing's promotion to a Parts Service Manager or Parts Sales Manager position." II-SER-116 (emphasis added). At summary judgment, the Commission argued that Contreras' refusal to promote Wing because she had complained "constitute[d] one adverse employment action." Id. at 113. EEOC also contended that, after Contreras resigned, Wing was given a PSM password and duties by an interim store manager while her promotion was being finalized, but the new store manager, Howard Brown, deactivated the password and the promotion was withdrawn. Id. Finally, the Commission argued that when Wing completed the PSM training under Brown a second time and still was not promoted, this was another adverse act, namely the denial of a promotion. Id. Indeed, in its summary judgment order, the Court recognized the Commission's retaliation theory and stated: "Wing believes she was denied a promotion. If she subjectively believed the denial was a punitive measure resulting from her complaints, it 'might have dissuaded a reasonable worker from making or supporting a charge of discrimination' and constitute an adverse employment action." I-SER-48 (emphasis added). The Commission also produced evidence and argued in support of the denial claim during the trial. In its opening argument, EEOC counsel indicated that AutoZone punished Wing for complaining by not promoting her to Parts Sales Manager, a position she trained for, not once, but twice. II-SER-90-9. Specifically, the Commission argued that in January 2004, Stacy Wing filed a charge of discrimination with the EEOC. Afterwards, she was told by two other members of management, Howard Brown and Scott Schmitt, that she would not be promoted to Parts Sales Manager, a position she had trained for twice, because she could not keep her mouth shut, she went to an outside agency, and complained to the EEOC. EEOC maintained that Wing was never promoted to Parts Sales Manager because "[t]hey kept their word." Id. at 96. Wing testified that, after her first sexual harassment complaint to Scott Anderson, district manager Brian Goddard asked her if she would be interested in becoming a PSM and directed her supervisor and harasser Contreras to train her for the position. III-SER-332-33. Goddard admitted that he had a conversation with Wing about becoming a PSM and that he directed Contreras to train her. Id. at 357-58. Contreras gave her a training guide, which she completed, and she shadowed some managers. Id. at 333-34, 353-54. Additionally, former PSM Josh Arias stated that Contreras indicated to him that Contreras thought Wing was qualified to be a PSM. Id. at 266. Wing averred that after she completed the PSM training and inquired about the promotion, Contreras said, "I'm not getting promoted because I told on him." Id. at 335, 354. Similarly, after she completed training under store manager Brown, she said he told her "[y]ou're not going to get promoted because you had went to an outside agency," id. at 340-41, and that this mandate was confirmed by district manager Scott Schmitt who said, "I didn't know how to keep my mouth shut, I went to an outside agency, I'm not getting promoted. That was the long and the short of it." Id. at 342. Finally, the Commission requested the following retaliation instruction based on the theory that the adverse act was a denial of a promotion: The plaintiff has the burden of proving each of the following elements by a preponderance of the evidence: Ms. Wing engaged in or was engaging in an activity protected under federal law . . . . Defendant denied Ms. Wing a promotion to a Parts Sales Manager position; and Defendant denied Ms. Wing the Part Sales Manager position because she engaged in protected activity. II-SER-107. When AutoZone twice proposed a retaliation instruction describing the adverse action as only a demotion, id. at 103, 109, the Commission argued that such characterization "inaccurately reflect[ed] the EEOC's allegations in this case and the Court's ruling on Defendant's Motion for summary judgment, which concludes that EEOC has alleged that defendant denied Ms. Wing a promotion and that this denial is an adverse employment action." Id. at 110. On the whole, the Commission took the necessary steps to proffer and support its theory that the adverse acts to which Wing was subjected included a denial of the PSM promotion as well as its withdrawal. Accordingly, it follows that the district court erred as a matter of law and fact in failing to so instruct the jury because the court's omission of the adverse act of denial of promotion rendered the jury instruction incomplete. Swinton, 270 F.3d at 802 ("looking to the instructions as a whole, the substance of the applicable law was [not] fairly and correctly covered"). By limiting the adverse action instruction to the withdrawal of a promotion, the jurors were not permitted to consider that AutoZone also could be liable for retaliation if it had denied Wing the promotion because of her protected activity. Based on the instruction given and the evidence in the record, the jury, in rendering a verdict against the Commission on the retaliation claim, likely found that Wing had never been promoted and that AutoZone therefore could not have "withdrawn" the promotion. Because the court failed to give a complete instruction, the jury was not permitted to find that Wing was denied the promotion for retaliatory reasons despite the presence of evidence to support such a finding. Gizoni v. Southwest Marine Inc., 56 F.3d 1138, 1142 (9th Cir. 1995) (where the record "provided an evidentiary basis for such an instruction," the district court erred "[b]y failing to instruct the jury on the [omitted] concept"). This difference is more than semantical. Had the denial of the promotion been presented as an adverse act, the jury might have reached a different outcome because the evidence could have supported a finding that AutoZone denied Wing the promotion because she complained about sexual harassment. See Galdamez v. Potter, 415 F.3d 1015, 1025 (9th Cir. 2005) ("In this circuit we presume prejudice where civil trial error is concerned, and the burden shifts to [defendant] to demonstrate 'that it is more probable than not that the jury would have reached the same verdict' had it been properly instructed.") (quoting Obrey v. Johnson, 400 F.3d 691, 701 (9th Cir. 2005)). Unlike the withdrawal claim, the denial of promotion claim did not require proof that Wing ever held the PSM position. In addition, a favorable judgment on the retaliation claim might have resulted in more punitive damages as the retaliation could have been viewed as additional evidence of AutoZone's reckless indifference to Wing's rights under Title VII as well as its lack of good faith compliance. EEOC v. Harris Farms Inc., 274 Fed. Appx. 511, 514 (9th Cir. 2008) (holding that there was "sufficient evidence from which the jury could find that managers acted with reckless indifference to [the victim's] federal right to be free from retaliation for her complaints about sexual harassment," which supported the $300,000 punitive damages award). Accordingly, the court's restriction of the adverse action instruction to the withdrawal of the promotion claim was misleading and prejudicial. May v. City of Lafayette, 18 Fed. Appx. 559, 560 (9th Cir. 2001) ("Because the court's instruction did not include that alternative theory at all, but there was some evidence to support it, we reverse and remand for a new trial"). Therefore, we urge this Court to reverse the district court's judgment on the retaliation claim, set aside the jury's verdict on this issue, and remand the retaliation claim for a new trial. CONCLUSION This Court should affirm the district court's judgment on the verdict as to the sexual harassment claim and award of punitive damages. However, this Court should reverse the trial court's judgment as to the retaliation issue raised in the cross-appeal and remand that claim for further proceedings because there was substantial evidence in the record to support the Commission's proposed jury instruction and the court's failure to include the denial of promotion claim in the jury instructions was prejudicial error that substantially impacted the outcome of the case. Respectfully submitted, P. DAVID LOPEZ General Counsel CAROLYN L. WHEELER Acting Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel s/PAULA R. BRUNER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, N.E. Washington, D.C. 20507 (202) 663-4731 paula.bruner@eeoc.gov STATEMENT OF RELATED CASES Pursuant to 9th Cir. R.28-2.6, the undersigned states that the EEOC is not aware of any related cases that are pending in this Court. s/PAULA R. BRUNER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, N.E. Washington, D.C. 20507 (202) 663-4731 paula.bruner@eeoc.gov CERTIFICATE OF COMPLIANCE I certify that this Principal and Response Brief of the EEOC complies with the type-volume limitation of Fed. R. App. R. 28.1(e)(2)(B) because this brief contains 14, 253 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(A)(7)(B) (iii). This brief also complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Microsoft Word 2003 Times Roman 14 pt. s/PAULA R. BRUNER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, N.E. Washington, D.C. 20507 (202) 663-4731 paula.bruner@eeoc.gov CERTIFICATE OF SERVICE I hereby certify that, on June 16, 2010, pursuant to 9th Cir. R. 25-5, an electronic copy of the EEOC's Principal and Response Brief along with the certificate of service was electronically filed using the Court's ECF system to counsel for defendant-appellant, AutoZone, Inc.: Tracy E. Kern, Esq. Jones, Walker, Waechter, Poitevent, Carre?re & Den?egre 201 St. Charles Avenue, 47th Floor New Orleans, LA 70170-5100 Laurie M. Chess, Esq. 601 Brickell Key Drive, Suite 500 Miami, Florida 33131 Donald Peder Johnsen, Esq. Gallagher & Kennedy, P.A. 2575 East Camelback Road Phoenix, Arizona 85016-9225 s/PAULA R. BRUNER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 131 M Street, N.E., 5th Floor Washington, DC 20507 202-663-4731 June 16, 2010 CERTIFICATE FOR BRIEF IN PAPER FORMAT I certify that this brief is identical to the version submitted electronically on June 16, 2010. s/PAULA R. BRUNER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 131 M Street, N.E. Washington, D.C. 20507 (202) 663-4731 paula.bruner@eeoc.gov *********************************************************************** <> <1> References to the Supplemental Excerpts of Record is by volume and page number (e.g., I-SER-1). References to AutoZone's Excerpts of Record is AER- page number (e.g., AER-1) in order to be consistent with AutoZone's citations. <2> AutoZone asserts that it is "appealing the jury verdict and the denial of the motion for judgment as a matter of law" as set forth in the district court's July 24, 2009 decision. AZ Br. at 2. The Commission therefore treats as abandoned AutoZone's arguments for a new trial that also were presented to the district court in the same filing. <3> If the employee is not comfortable going to the immediate supervisor, he or she can go to the district manager, the regional or divisional human resources manager, or AutoZoner Relations department. AER-191. AutoZoner Relations is part of the company's legal department in Memphis, Tennessee. AER-204. <4> AutoZone was unable to produce documentation of Acuna's report of Contreras' sexual harassment of Wing and the video that captured Contreras' offensive acts. AER-205-06. <5> AutoZone was unable to produce this document as well. <6> The unpublished summary judgment decision is also available at EEOC v. AutoZone, Inc., 2008 WL 4183389 (D.Ariz. Sep. 11, 2008). <7> In contrast to Contreras' behavior, when Howard Brown replaced Contreras as store manager in 2004, he gave Wing a copy of the AutoZone handbook, told her she needed to read it, and that once she read and understood it, she should sign the acknowledgment form in the handbook. III-SER-293. <8> AutoZone's sexual harassment policy also required employees to file a report with management if they became aware of any harassment. AER-190. John Millan and Luz Hernandez both testified that they saw Contreras sexually harass Wing. III-SER-251-52, 257-58, 264. However, neither reported the incidents even though they both were aware of the sexual harassment policy's mandate, id. at 254, 260, permitting the jury to consider their failure to comply as additional evidence of the company's anti-harassment policy's ineffectiveness. <9> Indisputably, the denial or refusal of a promotion is an adverse action for retaliation purposes. See Brooks v. City of San Mateo, 229 F.3d 917, 928 (9th Cir. 2000) ("Among those employment decisions that can constitute an adverse employment action are termination, dissemination of a negative employment reference, issuance of an undeserved negative performance review and refusal to consider for promotion.").