S.C. No. 23505 IN THE SUPREME COURT OF THE STATE OF HAWAII LELAND GONSALVES, Plaintiff, Appellee and Cross-Appellant, vs. NISSAN MOTOR CORPORATION IN HAWAII, LTD., INFINITI MOTOR SALES, INC., et al., Defendants, Appellants and Cross-Appellees. CIVIL CASE NO. 98-4827 (VSM) (Other Civil Action) FIRST CIRCUIT COURT HON. VICTORIA S. MARKS, Judge BRIEF OF EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE C. GREGORY STEWART General Counsel GWENDOLYN YOUNG REAMS Associate General Counsel VINCENT J. BLACKWOOD Assistant General Counsel PAUL D. RAMSHAW Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W., Room 7816 Washington, DC 20507 (202) 663-473 TABLE OF CONTENTS INTEREST 1 STATEMENT OF THE ISSUE 2 STATEMENT OF THE CASE 3 SUMMARY OF ARGUMENT 4 ARGUMENT 4 CONCLUSION 10 CERTIFICATE OF SERVICE 11 S.C. No. 23505 IN THE SUPREME COURT OF THE STATE OF HAWAII LELAND GONSALVES, Plaintiff-Appellee, Cross-Appellant, vs. NISSAN MOTOR CORPORATION IN HAWAII, LTD.; INFINITI MOTOR SALES, INC.; et al., Defendants-Appellants, Cross-Appellees. ON APPEAL FROM THE FIRST CIRCUIT COURT BRIEF OF EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE STATEMENT OF INTEREST The Equal Employment Opportunity Commission is the agency established by Congress to administer, interpret and enforce Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., which prohibits sex discrimination, including sexual harassment, in the workplace. Employers play an important role in achieving the objectives of the statute. They have a legal obligation to ensure compliance with Title VII in their workplaces, and they face significant financial liability if they fail to fulfill that obligation. In this action an employer has been ordered to pay millions in damages to a former supervisory employee who was discharged after an investigation of claims of sexual harassment by one of his subordinate employees. These damages were awarded by a jury which was not fully informed of defendants' legal duty to promptly and effectively address complaints of sexual harassment and which was instructed that it could find defendants liable for discriminating against the plaintiff if it believed that defendants' investigation was less than “fair and thorough.” These instructions permitted the jury to award substantial damages against an employer that was discharging in good faith its legal duty to address complaints of sexual harassment. Because the Commission is concerned that, if allowed to stand, this judgment will deter other employers from fulfilling their role in ensuring compliance with Title VII, we offer our views. STATEMENT OF THE ISSUE<1> Whether the trial court erred by instructing the jury that it could find defendants liable of sex discrimination if it decided that defendants' investigation of allegations of sexual harassment by the plaintiff was not “fair and thorough.” STATEMENT OF THE CASE After Neldine Torres complained that her supervisor, Leland Gonsalves, was sexually harassing her, her employers conducted an internal investigation and then hired an outside expert to conduct an independent investigation. Based on the results of these investigations, defendants concluded that Gonsalves sexually harassed Torres, retaliated against her for complaining, and behaved inappropriately towards some female customers. When defendants fired Gonsalves, he instituted this lawsuit. Gonsalves alleges, inter alia, that his discharge constituted unlawful sex discrimination and retaliation under H.R.S. chh. 368 & 378. In response to this allegation, defendants asserted that they fired Gonsalves because they believed he engaged in sexual harassment and retaliation, and not because of his sex or his complaint about Torres. At trial, Gonsalves contended that defendants disciplined him too quickly (because, e.g., they had not yet received a final report from the outside expert) and too harshly (because, e.g., they normally used progressive discipline). In response defendants tried to introduce the EEOC guidelines on sexual harassment and requested an instruction informing the jury it could consider them. The trial court would not allow the guidelines to be placed in evidence. Defendants also asked the trial court to warn the jury not to second-guess their decision to fire Gonsalves, but the trial court rejected this proposed instruction. Instead, the court instructed the jury that it could find defendants liable for sex discrimination if it deemed their investigations of Torres's allegations less than “fair and thorough.” The court failed to inform the jury that defendants had a legal duty to effectively respond to complaints of sexual harassment. SUMMARY OF ARGUMENT The trial court deprived defendants of a fair opportunity to defend themselves against plaintiff's sex discrimination and retaliation claims by, among other things, permitting the jury to find for the plaintiff if it believed defendants' investigations of the allegations of sexual harassment were not “fair and thorough.” This error, if not corrected, will tend to chill employers from playing the significant role assigned them in federal and state law to ensure compliance with those laws in the workplace. ARGUMENT In instructing the jury on plaintiff's sex-discrimination claim, the trial court properly directed the jury to focus on defendants' motivation for firing plaintiff. The trial court erred, however, when it rejected the defendants' proffered instruction warning the jurors not to second-guess defendants' business judgment, and instead instructed the jurors that they could find defendants liable for sex discrimination if they decided that defendants' investigation of plaintiff's conduct was less than “fair and thorough.” When an employee challenges a decision as discriminatory and the employer articulates a legitimate business reason for it, the employee bears the burden of proving that the employer's stated reason is pretextual. See, e.g., Furukawa v. Honolulu Zoological Society, 85 Haw. 7, 12 (Haw. 1997). It is not the jury's role “‘to second-guess the wisdom of an employer's decisions as long as the decisions are not [discriminatorily] motivated.'” Chapman v. AI Transport, 2000 WL 1459447, *12 (11th Cir. Oct. 2, 2000) (en banc) (quoting Alexander v. Fulton County, Ga., 207 F.3d 1303, 1341 (11th Cir. 2000)). See also Kendrick v. Penske Transportation Serv., Inc., 220 F.3d 1220, 1233 (10th Cir. 2000) (same).<2> A jury is therefore not permitted to find the employer liable for discrimination solely because the jury, putting itself in the employer's shoes, disagrees with the action the employer took. See, e.g., Smith v. Leggett Wire Co., 220 F.3d 752, 763 (6th Cir. 2000) (reversing judgment for plaintiff in discrimination action where jury appeared to second-guess employer's decision to fire plaintiff for misconduct, stating that “it is inappropriate for the judiciary to substitute its judgment for that of management”). Accordingly, a plaintiff cannot normally establish pretext simply by offering evidence that the employer exercised poor business judgment, or even evidence that the employer was mistaken in believing there was misconduct or poor performance. See, e.g., McKnight v. Kimberly Clark Corp., 149 F.3d 1125, 1129 (10th Cir. 1998) (“An articulated motivating reason is not converted into pretext merely because, with the benefit of hindsight, it turned out to be poor business judgment. The test is good faith belief.”); Abioye v. Sundstrand Corp., 164 F.3d 364, 368 (7th Cir. 1998) (same). The issue is thus not the quality of defendants' business judgment, or whether defendants acted wisely or negligently. The issue is whether defendants' decision to fire plaintiff was motivated by discriminatory intent on their part or by their good-faith belief that plaintiff had committed misconduct meriting termination. See, e.g., Waggoner v. City of Garland, Texas, 987 F.2d 1160, 1165 (5th Cir. 1993) (“The real issue is whether the employer reasonably believed the [complaining] employee's allegation [of misconduct by the plaintiff] . . . and whether the decision to discharge the [plaintiff] was based on that belief.”). Here the trial court not only rejected defendants' proffered instruction warning against second-guessing; it also instructed the jury that one of the two issues it “must decide” was “[w]hether [defendants'] investigation of Plaintiff Leland Gonsalves' conduct was fair and thorough.” Since this instruction invited the jurors to substitute their judgment for that of defendant and to decide whether they viewed defendants' actions as “fair,” it was error. See Chapman, 2000 WL at *13 (“We are not in the business of adjudging whether employment decisions are prudent or fair.”); Brocklehurst v. PPG Indus., Inc., 123 F.3d 890, 898 (6th Cir. 1997) (“The district court erred in instructing the jury . . . that it may consider the ‘fairness' of [the employer's] decision to discharge [plaintiff] when assessing the credibility of the reasons offered in support of that decision.”); Manzer v. Diamond Shamrock Chems. Co., 29 F.3d 1078, 1984-85 (6th Cir. 1994) (“‘just cause' arguments . . . must not be allowed to creep into an employment discrimination action”). If Gonsalves had evidence that defendant's actions were grossly negligent or strikingly unreasonable, that evidence would be admissible to attack defendants' credibility in claiming they fired him for the reasons they stated (on the theory that prudent business persons do not ordinarily act in such a manner). But even evidence of this degree of recklessness should be considered only insofar as it leads the jury to question the credibility of defendants' explanation for the termination. Hollins v. FNMA, 2000 WL 1511750, *6 (D.C. Oct. 12, 2000) (not yet released for publication) (rejecting plaintiff's attack on the quality of employer's investigation as irrelevant to credibility of employer's articulated reason for firing plaintiff). The court's instructions in this case failed to convey any such limitation to the jury, thus inviting them to find the defendants liable for discrimination if it found their treatment of plaintiff unfair. The trial court compounded its error by limiting defendants' ability to introduce evidence establishing that they had a legal duty to investigate allegations of sexual harassment and, should the investigation reveal illegal harassment, to discipline the offending employee in a manner calculated to stop his offensive conduct and to deter such conduct by their other employees. The jury should not have been permitted to assess defendants' alleged “rush to judgment” without knowing that defendants were legally obligated to act “promptly” to investigate and halt any harassment, and that they could have been found liable to Torres had they failed to do so. See Faragher v. City of Boca Raton, 524 U.S. 775, 806 (1998) (to “implement clear statutory policy,” courts should “recognize the employer's affirmative obligation to prevent violations and give credit . . . to employers who make reasonable efforts to discharge their duty”). For the same reasons, the jury should not have been allowed to assess defendants' investigation without being familiar with the Commission's guidelines on how employers should conduct such investigations. It is particularly troublesome for a court to allow a jury to second-guess the conduct of an employer's investigation and the discipline the employer chooses to impose when the investigation and the discipline constituted the employer's attempt to comply with its obligation under Title VII and the Hawaii Fair Employment Practices Law (“HFEPL”) to take measures to combat sexual harassment. Title VII relies heavily on voluntary compliance by employers to achieve the statute's goal of equal employment opportunities. Stockley v. AT&T Information Systems, Inc., 687 F. Supp. 764, 769 (E.D.N.Y. 1988) (“private compliance and enforcement procedures [by employers] are essential to the success of EEOC's efforts to eliminate employment discrimination”). In particular, employers are directed to take all reasonable steps to prevent sexual harassment, and to correct it promptly when it occurs. Faragher, 524 U.S. at 806 (employers have an “affirmative obligation to prevent [sexual harassment]”); Garziano v. E.I. DuPont de Nemours & Co., 818 F.2d 380, 388 (5th Cir. 1987) (same). A similar obligation is imposed on employers under Hawaii law. See H.A.R. § 12-46-109(c)-(d) (employer is liable for sexual harassment under certain circumstances if it “fails to take immediate and appropriate corrective action”). Vigorous actions by employers to deter and punish sexual harassment are essential if the legislative purpose of eliminating harassment is to be achieved. If the judgment in this case is allowed to stand, it will have a chilling effect on employers attempting to respond effectively to complaints of sexual harassment. The enforcement of Title VII would be significantly impeded if employers were to moderate their disciplinary actions unduly in order to avoid liability. Cf. Cotran v. Rollins Hudig Hall Int'l, Inc., 948 P.2d 412, 420 (Cal. 1998) (holding, in context of wrongful discharge action, that “a standard permitting juries to reexamine the factual basis for the decision to terminate for misconduct – typically gathered under the exigencies of the workaday world and without benefit of the slow-moving machinery of a contested trial – dampens an employer's willingness to act”). CONCLUSION For the foregoing reasons, the Commission urges this Court to reverse the judgment for plaintiff on his sex-discrimination claim. Respectfully submitted, DAPHNE BARBEE-WOOTEN U.S. Equal Employment Opportunity Commission 300 Ala Moana Blvd., Room 7-127 Honolulu, Hawaii 96850 (808) 541-3121 CERTIFICATE OF SERVICE I hereby certify that two copies of the foregoing brief were served by mailing them on this date first class, postage prepaid, to the following counsel of record: Jerry M. Hiatt, Esq. Bays, Deaver, Hiatt, Lung & Rose 1099 Alakea Street, 16th floor Honolulu, Hawaii 96813 Anna M. Elento-Sneed Pacific Tower, Suite 2200 1001 Bishop Street Honolulu, Hawaii 96813 Daphne Barbee-Wooten Attorney U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 300 Ala Moana Blvd., Room 7-127 Honolulu, HI 96850 (808) 541-3121 November ____, 2000 TABLE OF AUTHORITIES FEDERAL CASES Abioye v. Sundstrand Corp., 164 F.3d 364 (7th Cir. 1998) 6 Alexander v. Fulton County, Ga., 207 F.3d 1303 (11th Cir. 2000) 5 Brocklehurst v. PPG Industrial, Inc., 123 F.3d 890 (6th Cir. 1997) 7 Chapman v. AI Transport, 2000 WL 1459447 (11th Cir. Oct. 2, 2000) (en banc) 5 Faragher v. City of Boca Raton, 524 U.S. 775 (1998) 8, 9 Garziano v. E.I. DuPont de Nemours & Co., 818 F.2d 380 (5th Cir. 1987) 9 Kendrick v. Penske Transportation Service, Inc., 220 F.3d 1220 (10th Cir. 2000) 5 Manzer v. Diamond Shamrock Chemicals Co., 29 F.3d 1078 (6th Cir. 1994) 7 McKnight v. Kimberly Clark Corp., 149 F.3d 1125 (10th Cir. 1998) 6 Smith v. Leggett Wire Co., 220 F.3d 752 (6th Cir. 2000) 5 Stockley v. AT&T Information Systems, Inc., 687 F. Supp. 764 (E.D.N.Y. 1988) 8 Waggoner v. City of Garland, Texas, 987 F.2d 1160 (5th Cir. 1993) 6 STATE CASES Cotran v. Rollins Hudig Hall International, Inc., 948 P.2d 412 (Cal. 1998) 9 Furukawa v. Honolulu Zoological Society, 85 Haw. 7 (Haw. 1997) 5 Hollins v. FNMA, 2000 WL 1511750, 6 (D.C. Oct. 12, 2000) (not yet released for publication) 7 STATUTES AND REGULATIONS H.R.S. § 378-2 (1) 5 H.A.R. § 12-46-109(c)-(d) 9 Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., 1 42 U.S.C. § 2000e-2(a) 5 1 The Commission takes no position on the other issues raised in this appeal. 2 Hawaiian courts normally follow Title VII precedent in interpreting the state's fair employment practices law unless the relevant statutory provisions differ. See Furukawa, 85 Haw. at 13. The relevant statutory provisions here do not differ in any material way. Compare 42 U.S.C. § 2000e-2(a) with H.R.S. § 378-2 (1).