No. 10-3247 _______________________________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT ________________________________________________________________ EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellee, v. MANAGEMENT HOSPITALITY OF RACINE INC. d/b/a INTERNATIONAL HOUSE OF PANCAKES, FLIPMEASTACK, INC. and SALAUDDIN JANMOHAMMED, Defendants-Appellants. ________________________________________________________________ On Appeal from the United States District Court for the Eastern District of Wisconsin No. 06-C-0715 _________________________________________________________________ BRIEF OF EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS APPELLEE _________________________________________________________________ P. DAVID LOPEZ General Counsel CAROLYN L. WHEELER Acting Associate General Counsel PAULA R. BRUNER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 131 M Street, N.E., Fifth Floor Washington, D.C. 20507 (202) 663-4731(w); (202) 663-7090 (fax) TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv STATEMENT OF JURISDICTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE ISSUES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 STATEMENT OF THE FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 The Corporate Structure and Policies. . . . . . . . . . . . . . . . . . 2 2. The Claimants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3. Sexual Harassment Investigations. . . . . . . . . . . . . . . . . . . . . 15 4. Other Relevant Testimony. . . . . . . . . . . . . . . . . . . . . . . . . .18 SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 I.THE DISTRICT COURT PROPERLY ADMITTED EVIDENCE OF MANAGERS' HARASSMENT OF FEMALE SERVERS OTHER THAN THE CLAIMANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 II.THE DISTRICT COURT PROPERLY DENIED DEFENDANT'S MOTION FOR JUDGMENT AS A MATTER OF LAW ON THE SEXUAL HARASSMENT CLAIM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 A.Substantial evidence supported the jury's finding that claimants were subjected to severe or pervasive sexual harassment in violation of Title VII. . . . . . . . . . . . . . . . . . . . . . . . . .24 B.Substantial evidence supported the jury's finding that Defendants failed to exercise reasonable care to prevent or correct sexual harassment in this workplace and that Shisler and Powell exercised reasonable care to avoid harm. . . . . . . . . . . . . . . . . . 28 III.THE DISTRICT COURT'S REFUSAL TO INCLUDE A SPECIAL INTERROGATORY ON THE VERDICT FORM DID NOT WARRANT A NEW TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 IV.AS A MATTER OF LAW, FLIPMEASTACK WAS LIABLE FOR THE SEXUAL HARASSMENT OF SHISLER AND POWELL. . . . . . . . . . . . . . . . . . . . . . . . 43 V. THE PUNITIVE DAMAGES AWARD WAS APPROPRIATE. . . . . . . . . . . . . . . . . . 50 A. Sufficient evidence established that Defendants did not make good faith efforts to prevent or correct sexual harassment in the workplace. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 B. The district court properly declined to remit Powell's punitive damages award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 VI. THE DISTRICT COURT PROPERLY IMPOSED A BROAD INJUNCTION AGAINST FLIPMEASTACK. . . . . . . . . . . . . . . . . . . . . . . . . . . 54 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58 CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE TABLE OF AUTHORITIES CASES Ammons-Lewis v. Metropolitan Water Reclamation Dist. Of Greater Chicago, 488 F.3d 739 (7th Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Anderson v. City of Bessemer, 470 U.S. 564 (1985). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Berry v. Chicago Transit Auth., 618 F.3d 688 (7th Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Bruso v. United Airlines, Inc., 239 F.3d 848 (7th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . 51, 53 Burlington Indus. Inc. v. Ellerth, 524 U.S. 742 (1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Carr v. Allison Gas Turbine Div. Gen. Motors Corp., 32 F.3d 1007 (7th Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Cerros v. Steel Techs., Inc., 398 F.3d 944 (7th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 31 Continental Ins. Co. v. M/V ORSULA, 354 F.3d 603 (7th Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Cruz v. Town of Cicero, 275 F.3d 579 (7th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Dey v. Colt Constr. & Dev. Co., 28 F.3d 1446 (7th Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 EEOC v. Gurnee Inn Corp., 914 F.2d 815 (7th Cir. 1990). . . . . . . . . . . . . . . . . . . . . . . . . . . 55 EEOC v. Illinois, 69 F.3d 167 (7th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 EEOC v. Ilona of Hungary, Inc., 108 F.3d 1569 (7th Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . .54 EEOC v. V&J Foods, Inc., 507 F.3d 575 (7th Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Emmel v. Coca-Cola Bottling Co., 95 F.3d 627 (7th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Faragher v. Boca Raton, 524 U.S. 775 (1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Franks v. Bowman Transp. Co., Inc., 424 U.S. 747 (1976). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Gentry v. Export Packaging, 234 F.3d 842 (7th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . 25, 29 30 Gorzynski v. Jetblue Airways Corp., 596 F.3d 93 (2d Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Griffin v. Foley, 542 F.3d 209 (7th Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Happel v. Walmart Stores, 602 F.3d 820 (7th Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Hardy v. Univ. of Ill. at Chicago, 328 F.3d 361 (7th Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Harrison v. Dean Witter Reynolds, Inc., 79 F.3d 609 (7th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . .20, 21, 23 Int'l Prod. Specialists, Inc. v. Schwing Am., Inc., 580 F.3d 587 (7th Cir. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Jackson v. County of Racine, 474 F.3d 493 (7th Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 27 Jackson v. Parker, 627 F.3d 634 (7th Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Kolstad v. Am. Dental Ass'n, 527 U.S. 526 (1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50, 51, 52 Kunz v. Defelice, 538 F.3d 667 (7th Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Lebow v. Am. Trans. Air, Inc., 86 F.3d 661 (7th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Loughman v. Malnati Org., Inc., 395 F.3d 404 (7th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Nichols v. Azteca Restaurant Enterp., Inc., 256 F.3d 864 (9th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Papa v. Katy Indus., Inc., 166 F.3d 937 (7th Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Parkins v. Civil Constructors of Ill., Inc., 163 F.3d 1027 (7th Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Pennsylvania State Police v. Suders, 542 U.S. 129 (2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Quest Med., Inc. v. Apprill, 90 F.3d 1080 (5th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 36 Schering Corp. v. Ill. Antibiotics Co., 89 F.3d 357 (7th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Singleton v. Wulff, 428 U.S. 106 (1976). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Swenson v. Potter, 271 F.3d 1184 (9th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Tamayo v. Blagojevich, 526 F.3d 1074 (7th Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . .43, 45 Van Dorn Co. v. Future Chem. & Oil Corp., 753 F.2d 565 (7th Cir. 1985). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Worth v. Tyer, 276 F.3d 249 (7th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 STATUTES Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981a(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 42 U.S.C. § 2000e-5(g)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . 54 STATEMENT OF JURISDICTION Appellant's statement of subject matter and appellate jurisdiction is correct and complete. STATEMENT OF THE ISSUES 1. Whether the district court properly admitted evidence of other managers' harassment of female servers other than the claimants. 2. Whether the district court properly denied Defendants' motion for judgment as a matter of law on the sexual harassment claim. 3. Whether the district court properly denied Defendants' request for a new trial when it exercised its discretion in preparing a verdict form that did not include a question regarding the Defendants' affirmative defense. 4. Whether the trial court properly determined as a matter of law that Flipmeastack was liable for the sexual harassment of the claimants. 5. Whether the district court properly upheld Powell's punitive damages award. 6. Whether the district court properly imposed a broad injunction on Flipmeastack to prevent sexually hostile work environment at the IHOPs it manages. STATEMENT OF FACTS The Equal Employment Opportunity Commission ("EEOC" or "Commission") brought this lawsuit against Defendants Management Hospitality of Racine Inc. ("MHR"), doing business as International House of Pancakes ("Racine IHOP or IHOP"), its owner Salauddin Janmohammed ("Sal" "SJ" or "Janmohammed"), and Flipmeastack Inc., MHR's affiliate management corporation. R.37. EEOC alleged that Defendants violated Title VII when they failed to stop the sexual harassment of two servers, 18-year-old Katrina Shisler and 19-year-old Michelle Powell, by Assistant Manager Rosalio Gutierrez during their employment at an IHOP franchise in Racine, Wisconsin. 1. The Corporate Structure and Policies Sal Janmohammed is the principal owner and franchisee of 21 IHOPs, including one in Racine, Wisconsin. R.163 at 322-24; R.164 at 627. He operated the Racine IHOP under the franchise name of MHR, and was its president and sole shareholder. Id.; R.184 at 24. MHR contracted with Flipmeastack, Inc., a company of which Janmohammed's wife Victoria Janmohammed ("VJ") is president, R.163 at 323, to provide management consulting services for his IHOPs. R.164 at 627. Flipmeastack did not just provide advice, it actually ran the IHOP operations, R.184 at 25, "without any input" from Janmohammed. R.91-2 at 96- 97. For example, while MHR paid a weekly consultant fee to Flipmeastack, Victoria Janmohammed determined what the amount would be based on the profitability of the business. R.164 at 627-28. Further, even though MHR paid the wages of its employees, R.162 at 50, Flipmeastack handled the payroll, determined how much each employee was paid, and whether they received bonuses. See, e.g., R.91-2 at 14, SJ Dep. at 153; R.91-3 at 6, 15, VJ Dep. at 24, 82-83; R.167-1 at 35. On a day-to-day basis, Flipmeastack handled the overall operations of the IHOPs: "H.R., workmen's comp, unemployment, initiatives, marketing tools, . . . [and] billboards. Everything from training to policy making." R.164 at 625; id. at 525-27 (compliance audits, billing and accounting). Steve Kuenstler, Flipmeastack's Director of Operations, handled purchasing for the restaurants. R.91-1 at 4, Smith Dep. at 53. On a biweekly basis, Flipmeastack sent memos to the District (DM), General (GM), and Assistant Managers (AM) concerning corporate meetings, restaurant promotions, and operational changes. R.164 at 640, 648; see, e.g., R.167-1 at 2-4. When the Janmohammeds needed funds, they used a combination of their businesses, including Flipmeastack and MHR, as collateral or "unconditional guarantee" to obtain large loans for the purchase of a restaurant and its furnishings in Indiana, see R.90 at 15 (citing Exh. 79), for which Flipmeastack provided the initial $10,000 lender fee. Id. (citing Exh. 82). After the dissolution and sale of MHR, Flipmeastack also collected the buyer's payments and oversaw the banking of the proceeds and payments to Corporate IHOP. Id. at 13 (citing Exh. 20); R.91- 1 at 8, Smith Dep. at 100-01. In Victoria Janmohammed's opinion, Janmohammed "would have trouble running his restaurants without the help of Flipmeastack" and Flipmeastack would not "have a reason to exist if not for Sal's restaurants." R.91-3 at 10, VJ Dep. at 55. In short, as Victoria Janmohammed testified, "it is a family business." R.164 at 627. Between 2005 and 2007, Flipmeastack managed 500 to 700 employees at the 21 IHOP locations. R.163 at 324. Flipmeastack hired and assigned district managers who in turn hired the restaurant staff and supervised their day-to-day operations of the restaurants. R.184 at 25. For example, DM Steven Smith, an employee of Flipmeastack, R.164 at 525, hired and supervised the restaurants' General Manager, id. at 528, and Assistant Managers, R.163 at 324, and considered himself the servers' "boss." R.164 at 539, 617. Smith's district included IHOPs in Racine and Kenosha, Wisconsin and Gurnee and Waukegan, Illinois, all of which were owned and operated by the Janmohammeds. R.164 at 435-36, 525-26. In 2004, Smith managed the Kenosha IHOP, where Nadia Del Rio was a server, Gutierrez was Assistant Manager, and Michelle Dahl was General Manager. R.163 at 429, 436-37. Dahl later promoted Del Rio to Assistant Manager. Id. at 429-30; R.164 at 529-30. In 2005, Del Rio transferred as Assistant Manager to the Racine IHOP where Charles Hecker was General Manager. Id. at 433. Smith fired Hecker and brought Dahl in as General Manager, with Victoria Janmohammed's approval. R.164 at 528, 634. At Dahl's insistence and with Victoria Janmohammed's concurrence, Smith moved Gutierrez as Assistant Manager to the Racine IHOP. R.91-1 at 29, Smith Dep. at 111-12. In June 2005, Del Rio left the Racine IHOP and ultimately transferred to the Gurnee IHOP, where Smith had rehired Hecker as General Manager. R.163 at 435, 514. In 2005, Flipmeastack formulated and updated the sexual harassment and diversity policy for managers and employees at the Racine IHOP. R.164 at 632. The policy indicated that "any form of unlawful harassment of co-workers or members of the public is absolutely forbidden, regardless of whether it is verbal, physical, or visual harassment." R.162 at 133. It also stated that employees "will report any instances of improper behavior to my Manager or company representative." Id. The policy was zero-tolerance which meant "we do not tolerate any sexual harassment, any discrimination. We don't even tolerate somebody not investigating." R.164 at 633-34. After Janmohammed was once sued for sexual harassment, Victoria Janmohammed added a provision to emphasize "how serious an allegation is" in that people could "lose their jobs because of it." R.164 at 634. The new provision stated: I also understand [] the severity of knowingly making false accusations of discrimination or harassment. Sexual harassment and/or discrimination are a serious charge and should be taken seriously. Id. at 666-67. The policy explained the complaint process, and an IHOP Corporation video "showed the employees that they can go from their immediate representative or immediate supervisor, on up all the way to [Victoria Janmohammed], if they needed to." Id. at 635-37. Victoria Janmohammed confirmed that Gutierrez, Del Rio, and Dahl were managers or company representatives within the terms of the policy and that a complaint to any one of those three would be effective. Id. at 668. This policy was shown to and signed by the servers, then locked in a file cabinet, and servers were not given a copy. Id. at 608, 632. The complaint procedure thus was not available in print. Id. at 670. Victoria Janmohammed required all managers to take the sexual harassment training because the Assistant and General Managers were required to report incidents of sexual harassment and the District Manager was responsible for conducting investigations. R.164 at 525-27, 531, 629-30, 636, 638-39. However, Del Rio testified that she never received sexual harassment training after she became Assistant Manager, R.163 at 430-31, even though Assistant Managers were responsible for the orientation and training of new employees on the sexual harassment and diversity policy. Id. at 385-86. Victoria Janmohammed also met with the DMs to discuss enforcement of the sexual harassment policy. R.164 at 637. Victoria Janmohammed stressed that zero-tolerance also applied to reporting. R.164 at 655. She testified that if a GM or AM failed to report a sexual harassment allegation, "he or she is fired . . . whether or not they believe [the allegation] to be true . . . [because this is] [t]he Manager's responsibility, and what they've been trained to do . . . so it can be properly investigated," id. at 638, "even if they are the harasser." Id. at 639. As GM, Dahl understood that if she received a sexual harassment complaint, she was to follow "chain of command" and contact the DM. R.163 at 465, 472; R.164 at 638. In 2005, Corporate IHOP directed that a crisis management guidelines poster be displayed in every IHOP restaurant. R.164 at 630. This poster had the telephone number for Flipmeastack on it as well as the corporate number for IHOP. Id. at 609, 630; Trial Exh. 1050. It was to be "posted to make sure that the employees know who to call, who to contact, if they have any issues." Id. at 535. Smith added his cell number to the poster. Id. at 536. The "crisis management guidelines poster was reviewed with new employees during orientations." Id. It was also displayed above the break table. Id. Although the poster provided telephone numbers in case of emergencies, such as fires, natural disasters, armed robbery, and discrimination claims, it did not specifically indicate that these were the numbers to call if one had a sexual harassment complaint. Id.at 671-72. Neither Shisler nor Powell had any recollection of seeing the poster in the workplace. R.162 at 121; R.163 at 248-49. According to Victoria Janmohammed, she is "the primary official . . . responsible for preventing discrimination." Id. at 672. Hence, when EEOC notified MHR and Janmohammed that Katrina Shisler had filed a discrimination charge, Flipmeastack filed the response as MHR's "representative," R.167-2 at 2; R.164 at 659, even though MHR had been dissolved. R.164 at 660. 2. The Claimants Katrina Shisler On March 7, 2005, Katrina Shisler began employment with the Racine IHOP after Dahl informed her that Dahl was going to be its new general manager. R.162 at 45. Shisler told Dahl that she had previously worked at the Racine IHOP in 2004 when Charles Hecker was General Manager. Id. at 46-47. Shisler had seen Hecker sexually harass another server, id. at 44-49, and she knew from her orientation that she could report it to any manager. Id. at 125-26. Consequently, she gave Smith a letter outlining issues regarding Hecker's favoritism, unfair work assignments, and sexual harassment of the server. Id. at 46-48. Smith read the letter and took it with him, but his response was "really passive," and he "didn't really say whether or not he was going to take care of it." Id. at 200. Shisler never heard from Smith again. Id. at 64. After Shisler complained to Smith, however, Hecker "actually started treating [her] differently," id. at 47-48, 64-65, and he "stated things that he only could have either been told, or read himself in the letter." Id. at 201. After things worsened with Hecker, Shisler said she "called the Corporation" and was told she "had to go to [Smith] about it." Id. at 66, 202. In light of Hecker's retaliation, Shisler did not go back to Smith. Id. at 146-47. Ultimately, Hecker fired Shisler. Id. at 47-48, 117. Dahl told Shisler that Hecker had been terminated, and invited her to re-apply for employment. R.162 at 46. In 2005, Shisler reported to AMs Gutierrez and Del Rio. R.162 at 49. She was shown the sexual harassment videotape again, and signed the sexual harassment policy indicating that she was aware of her rights and responsibilities. Id. at 131-32. She understood that, under the policy, "company representatives" included Del Rio, Gutierrez, Dahl, and Smith. Id. at 133. Shisler normally worked the second shift on the weekdays, which ended around 10:30 or 11:00 p.m., with Gutierrez, who generally worked the third shift or from dinnertime to 3:00 or 4:00 a.m. R.162 at 54; R.163 at 382. Gutierrez made Shisler "uncomfortable." R.162 at 51. He would ask her to go "in the back" and tell her "I want to fuck you on the pancake batter." Id. Shisler said he made this request "[o]n a daily basis." Id. at 53. Shisler asked Gutierrez to stop making the offensive comments but he persisted and progressed to staring at her body, breasts, and buttocks "like [she] was a piece of meat." Id. at 55. He also would massage her shoulders and press his body up against her back; in response Shisler "told him to get the fuck away from [her]." Id. She felt "bullied" by him and was made to feel "dirty" after he told the cooks in Spanish that he wanted to have sex with her. Id. at 57-58. She also testified that one time he told her that his girlfriend would be fine with his having sex with Shisler because the girlfriend was bisexual and "they frequently picked up girls together." Id. at 59. When Gutierrez would not stop his comments, on March 18, Shisler (along Rachel Schrier and another female server) went to Del Rio and "told her the specifics on what he said to [her]," which included Gutierrez telling her that he thought she was "kinky" and would enjoy "rough" sex. Id. at 59-61. Shisler also told Del Rio that she would "have to be blind if you don't see it going on." Id. at 60. Shisler said Del Rio "blew us off," kept shaking her head, and called them "silly girls." Id. at 62. Del Rio acknowledged that as Assistant Manager, she was to report sexual harassment complaints "immediately to my . . . General Manager, or my District Manager," R.163 at 418, but she denied getting any sexual harassment complaints from Shisler in April or May 2005. Id. at 424-25. Del Rio also said she did not observe any sexual harassment but rather saw Shisler, Michelle Powell, and Gutierrez "always talking" and "[l]aughing." Id. at 423. She admitted she saw Gutierrez "flirting" with the servers, but she did not consider Gutierrez's conduct to be sexual harassment because "he was never touching them" and "they never seemed like they didn't want to be around him." Id. at 438-39. She acknowledged, however, that "if someone is flirting with you, and you don't like it, and they don't stop, that can be sexual harassment." Id. at 439. After Shisler's report to Del Rio about Gutierrez's behavior, Gutierrez "slap groped [Shisler's] butt" while she was bending over. Id. at 56, 61. Shisler then complained to GM Dahl about Gutierrez's conduct turning physical after her complaint to Del Rio. Id. at 62, 64. Shisler said that Dahl told her "this is none of my concern" and then "said we're done here." Id. at 63. Dahl denied receiving any sexual harassment complaint from Shisler. Id. at 472, 476, 491. On April 3, 2005, Shisler came to work early. It was busy and she could not seem to get any assistance, causing her to remark in frustration to another server that she probably should have stayed at her previous job. R.162 at 68-69; R.163 at 238-39, 316. Gutierrez told Shisler to "get the fuck out" because she was fired. Id. at 67-68. Shisler later learned during her unemployment hearing that she had been fired for theft. Id. at 71; R.184 at 2. Consequently, she hired an attorney to clear her name and to report Gutierrez's sexual harassment. Id. at 77-82; R.184 at 2. At trial, Defendants' counsel introduced Shisler's Myspace page and questioned Shisler as to whether she was really offended by Gutierrez's sexual harassment since she considered the satirical videos with sexual content to be "funny as Hell." R.163 at 374. Shisler testified that the videos were posted by her husband, R.162 at 109, and that there is a difference between "those sketches, crude as they are, and somebody in the workplace grabbing you on the butt." Id. at 188. She added "[t]hat was a video actually making fun of rap songs nowadays. And what I experienced in the workplace, that was real." Id. Michelle Powell Michelle Powell worked for the Racine IHOP from October or December 2004 until June 2006. R.163 at 212, 242. She saw the videotape about sexual harassment and read and signed the sexual harassment and diversity policy. Id. at 247. In 2005, GM Dahl brought AM Gutierrez to the Racine IHOP. R.163 at 214. Generally, Powell only worked with Gutierrez once a week when their schedules overlapped because she mostly worked the day shift, which started at 6:00 a.m. and ended around 3:00 p.m. Id. at 255, 383. In late February 2005, Gutierrez began to make offensive comments to Powell such as her "ass looked good in them pants." Id. at 218, 255. Powell considered the comment "inappropriate," id., but "laughed it off, thinking it was a joke[.]" Id. at 219. She realized Gutierrez was not joking when "his harassment continued and became more severe." Id. In early March and on several other occasions, Gutierrez pulled her hair until it hurt because he believed she "would like [sex] rough." Id. at 219, 220, 223, 239, 257, 283. In the third week of March, he followed Powell into the dry storage area and pressed himself up against her while telling her that he "would like to do [her] from behind." Id. at 220-21. In April, he commented that "he would like to eat [her] out" and left a voicemail on Powell's cell phone asking Powell "to hook up" with him. Id. at 219, 258. He also would "brush up" against Powell's breasts and buttocks. Id. at 228. By "the middle of April," it had become common knowledge that Gutierrez was harassing female servers. Id. at 235. On May 9, in Powell's presence, Gutierrez told the cooks in Spanish "how badly he wanted to fuck [her] but [she] wouldn't let him" and then translated what he said for her. Id. at 219-20, 239, 261. He also told her "he thought [she] would get freaky with sex," causing Powell to feel "dirty." Id. at 219-220, 239. Powell repeatedly objected to Gutierrez's verbal harassment and about his pulling her hair, and asked Gutierrez "to knock it off." R.163 at 222, 257. In the first week of April 2005, Powell again told Gutierrez that his comments were inappropriate, but he did not stop. Id. at 222. Consequently, that same week, Powell told Dahl that Gutierrez was "sexually and physically abusing [her] and other female workers" and "grabbing us and saying dirty things to us." Id. at 224- 25. She said Dahl told her that "it would be taken care of." Id. at 225. In the second week of April, Powell said Del Rio approached her and mentioned that servers were complaining about Gutierrez's conduct and wondered if he had done anything to Powell, and she said yes. Id. at 225-26. Del Rio admitted that Powell had asked her "why does [Gutierrez] think . . . I'm like the other girls," but she did not think it was sexual harassment because it did not involve touching and she did not think Powell was "serious." Id. at 439, 443. Del Rio told Powell to report it to Dahl, and Powell told her she already had. Id. at 226, 447-48. Del Rio said she told Powell that she would see what she could do, but she took no action for at least a month when she ultimately told Smith. Id. at 448-450. In the interim, Del Rio never reported Powell's complaint to Dahl or mentioned it to Gutierrez. Id. at 448. She did not advise Powell to call any of the numbers on the crisis management poster, call corporate IHOP, Flipmeastack, or Smith. Id. at 450. Del Rio did not think Powell was being sexually harassed, since she did not appear to be "afraid" of Gutierrez. Id. at 449. In the last week of April, Powell again mentioned Gutierrez's sexual harassment to Dahl during a drive to a management meeting. Id. at 227, 262, 277. Dahl responded that "she already knew what [Powell] was going to say and [she] didn't need to say it." Id. at 227, 239. Dahl denied receiving any complaints from Powell. Id. at 471-72. Powell believed her complaints to Gutierrez, Del Rio, and Dahl were in accordance with IHOP's procedures regarding sexual harassment because they were in management, R.163 at 246, 280-81, and the corporate videotape encouraged employees to complain to management. Id. at 245-48. 3. Sexual Harassment Investigations External Shisler's attorney hired investigator Lilly Brown to obtain information about Shisler's termination and to determine whether sexual harassment was occurring at the restaurant. R.162 at 78; R.163 at 289; R.184 at 2. In May 2005, Brown interviewed several IHOP employees. R.163 at 236-38. On May 10, Brown obtained a witness statement from Powell. Id. at 263, 293. Powell said it was the first time anyone showed interest in what was happening to her. Id. at 283. Brown also interviewed server John Friso, who stated that he had never seen Gutierrez sexually harass anyone but had heard about it frequently and was certain that Dahl was aware of the situation. Id. at 293, 318. On May 12, Brown interviewed server Tashia Petrokonis who reported that Gutierrez had called her home five times between 1:43 and 2:11a.m. to solicit sex. R.163 at 293, 295. Petrokonis said Gutierrez's: sexual harassment has been quite blunt ever since we have met. He uses phrases like I want to take you in the back and fuck you. Or God, your ass looks nice. And has occasionally slapped my butt from time to time. He has harassed a lot of the other girls, and I have witnessed it myself. He likes to touch the girls and rub their shoulders. He also made the same sort of comments to them as well. Id. at 296. On May 23, Brown interviewed Rachel Schreier, R.163 at 293, who reported: At first all was good with [Gutierrez]. *** [I]t eventually went on to him hitting on me and other servers, including Tashia, Michelle P., Christina, hostess and a couple of others. *** He would make comments to me in the galley about you seem like you would be fun in bed. And either sexual gestures like why can't we go in the back and get this done and over with. Which basically was saying he wanted to have sex with me right then and there. Id. at 297. Finally, on May 25, Brown met with Tyler Best, who stated that "he had repeatedly heard [Gutierrez] making sexually harassing comments towards all of the women employees." Id. at 293, 313. Best said that Gutierrez would make comments about taking them into the back and having fun with them as well as statements about their butts or "them giving him head." Id. at 316. Internal On or about May 21, Gutierrez quit the Racine IHOP, R.163 at 378-79, 408; R.164 at 541, 601, after verbally informing Dahl. R.164 at 541. On Dahl's recommendation, Gutierrez became the GM at a Milwaukee IHOP. R.163 at 378- 79, 512. No one at MHR or Flipmeastack ever asked Gutierrez whether he had sexually harassed Shisler or Powell. R.163 at 410. On May 23, Del Rio told DM Smith that a private investigator was asking about Gutierrez's harassment of servers, and volunteered that she had never observed any incidents. R.163 at 425-26; R.164 at 542. Smith testified that Del Rio also told him Powell and other servers had complained to her that Gutierrez was sexually harassing them, and that they had told Dahl but Dahl did not do anything about it. Id. at 542-43. Smith informed Victoria Janmohammed about Del Rio's report, id. at 653, and that Powell had confirmed that Gutierrez had made inappropriate comments to her "pretty much whenever they worked together" as well as to other servers. R.164 at 543, 545, 549, 597, 654. Victoria Janmohammed directed Smith to investigate and have the employees complete investigation forms. Id. at 546, 654. She also told Smith that if he believed "these complaints were made, and . . . were reported to the Manager, that he should take immediate action and terminate the Manager if he believed that she did not take steps to report to [Smith]." Id. at 655. After meeting with Victoria Janmohammed, Smith interviewed more employees, R.164 at 546-49, who all stated a belief that Dahl had known about Gutierrez's harassment of the servers. R.162 at 197; Trial Exh. 8 (Rebecca Bryant); id. at 198 (Tashia Petrokonis and John Friso). Smith did not interview Gutierrez or Shisler as part of his investigation. Id. at 88; R.164 at 553. He did, however, believe that the servers' statements were true, R.164 at 593-94, 598-99, and he concluded that Powell had been sexually harassed. Id. at 595, 599. Smith asked Dahl if she had any complaints of sexual harassment that she did not report. Id. at 492. Dahl told Smith that she did not know what he was talking about it, but he called her a liar. Id. at 493. With Victoria Janmohammed's approval, R.164 at 657-58, on May 25, Smith terminated Dahl for failing to report the sexual harassment complaints she had received. R.163 at 492-93, 499; R.164 at 550, 613. 4. Other Relevant Trial Testimony At trial, Victoria Janmohammed said that she does not know whether Gutierrez harassed Shisler or Powell. R.164 at 672. In her opinion, the external and internal investigative reports established that the sexual harassment policy "was not taken properly." Id. at 672-73. Dahl testified that she had complained to Flipmeastack's upper management about Smith sexually harassing employees. R.163 at 508. She said Smith would get drunk and had called one female employee at night and another on her days off. Id. at 509. An investigation was conducted, but Smith was not fired. Id. Dahl said she also confronted Smith "about running his hand on the cleavage of [her] daughter's photograph," id. at 509-10. Dahl told Del Rio about Smith's misconduct and Del Rio believed it constituted sexual harassment, but Del Rio did not report it. Id. at 453-54. Gutierrez saw Smith rub his fingers on a photograph of Dahl's daughter in the cleavage area and heard him comment "if only she was 18." Id. at 405. Smith's harassment made him uncomfortable, but Gutierrez did not report it because he was afraid Smith would fire him in retaliation. Id. at 406. Dahl also testified that she was present when Del Rio informed Flipmeastack managers that GM Hecker had told a server "he wanted her to wear a mini-skirt so he could taste her." R.163 at 513-14. Hecker was not fired for this misconduct, and Smith rehired Hecker to be GM at the Gurnee IHOP. Id. at 436, 514. SUMMARY OF THE ARGUMENT The district court properly denied Defendants' motion for a new trial because it did not abuse its discretion when it admitted evidence of other acts of sexual harassment in the workplace. The district court also properly denied Defendants' motion for judgment as a matter of law on the EEOC's sexual harassment claim because there was substantial evidence to support the jury's finding that claimants Shisler and Powell were subjected to severe and pervasive sexual harassment and that Defendants did not prove their affirmative defense. The court also properly denied the motion for a new trial because its refusal to include a special interrogatory about the affirmative defense on the verdict form was within its discretion. Further, the district court properly found Flipmeastack liable for the sexual harassment, as the entity that exercised significant control over the MHR employees and operations. On the remedial front, the district court properly upheld the jury's punitive damages award for Powell. Substantial evidence supported the jury's finding that Defendants acted with reckless indifference to her federally protected rights and did not engage in good-faith efforts to comply with Title VII. Further, given the number of employees Flipmeastack managed, the amount was within the statutory limit and did not require a remittitur. Lastly, the district court properly imposed a broad injunction against Flipmeastack as the de facto employer responsible for the Title VII violations the jury found. ARGUMENT I. THE DISTRICT COURT PROPERLY ADMITTED EVIDENCE OF MANAGERS' HARASSMENT OF FEMALE SERVERS OTHER THAN THE CLAIMANTS Defendants challenge the court's admission of Shisler's testimony about sexual harassment by GM Hecker of a female server, and Dahl's testimony that Smith had sexually harassed her. Def. Br. at 46. They argue that the court should have granted its motion for a new trial because this evidence was "irrelevant and highly inflammatory" and it "wrongly prejudiced the jury against defendants." Id. Defendants' arguments lack merit. A district court's ruling on a Rule 59(a) motion for new trial is reviewed for abuse of discretion. Harrison v. Dean Witter Reynolds, Inc., 79 F.3d 609, 614 (7th Cir. 1996). This Court also reviews the district court's admission or exclusion of evidence for abuse of discretion, Griffin v. Foley, 542 F.3d 209, 218 (7th Cir. 2008), and "determine[s] whether the clear weight of the evidence is against the jury verdict, . . . or for some other reason the trial was not fair to the moving party." Harrison, 79 F.3d at 614. Here, the district court did not abuse its discretion in allowing Shisler's testimony regarding Hecker's harassment or Dahl's testimony about Smith's harassment. This testimony was relevant because it cast light on the ineffectiveness of Defendants' sexual harassment policy and complaint mechanism. Shisler testified that she reported Hecker's sexual harassment to Smith and Hecker began to assign her to the worst restaurant sections. Shisler felt Smith was responsible for Hecker's retaliation and thus did not submit her 2005 complaints about Gutierrez's harassment to him. See supra at 8-9. Dahl testified that she had previously reported to Flipmeastack's upper management that Smith had sexually harassed her and servers, but he was not terminated despite the company's "zero- tolerance" policy. Instead, Smith continued to work for Flipmeastack as the District Manager responsible for the enforcement of its sexual harassment policy. See supra at 18. In that this evidence revealed not only high ranking officials' participation in sexual harassment but also the company's failure to take corrective action to stop the harassment by terminating them, as the zero-tolerance policy demanded, the district court correctly concluded that this "evidence of other instances of sexual harassment was relevant to defendants' . . . affirmative defense because it suggested that Flipmeastack's sexual harassment policy was not reasonably effective." R.184 at 19. Finally, admission of Shisler and Dahl's testimony, even if erroneous, was harmless because the record contained overwhelming evidence of the sexual harassment policy's inadequacy and management's failure to enforce it. Under the terms of the policy, AMs Gutierrez and Del Rio were persons to whom sexual harassment complaints could be made and who were obligated to report complaints or knowledge of sexual harassment. See supra at 6. Yet, evidence revealed that Gutierrez engaged in sexual harassment, did not stop or report it, and was not fired. Id. at 9-14, 16. He also admitted that he witnessed Smith's harassment of Dahl but did not report it. Id. at 18. Similarly, Del Rio rejected Shisler's complaint regarding Gutierrez's harassment, took no action on Powell's harassment complaint for a month, id. at 10, 13-15, and she was informed of Smith's harassment of Dahl but did not report that "up the chain of command," R.163 at 418, even though the Assistant Manager's "responsibility, and what they've been trained to do, is to report it to their immediate supervisor so it can be properly investigated." R.164 at 638. Next, convincing evidence in the record, which persuaded even Smith and Victoria Janmohammed indicated that Dahl was aware or received complaints of sexual harassment by Gutierrez and did not report it or take any corrective action. See supra at 17-18. In that this evidence sufficiently demonstrated the ineffectiveness of the sexual harassment policy and its inadequate enforcement, Shisler and Dahl's "other acts" testimony was simply cumulative. Thus, the district court did not abuse its discretion in admitting their testimony and this Court should affirm the district court's denial of a new trial. II. THE DISTRICT COURT PROPERLY DENIED DEFENDANT'S MOTION FOR JUDGMENT AS A MATTER OF LAW ON THE SEXUAL HARASSMENT CLAIM 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 affirmative defense claims, after a verdict has been returned, is de novo. Harrison, 79 F.3d at 613. Thus, like the district court, this Court must review the jury's verdict challenged by the Rule 50(b) motion to determine whether it is supported by "substantial evidence," reversing only if "no rational jury could have found for the plaintiff." Emmel v. Coca-Cola Bottling Co., 95 F.3d 627, 636, 630 (7th Cir. 1996). In conducting this review, this Court must make all reasonable inferences in the light most favorable to the EEOC and refrain from weighing 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); accord Emmel, 95 F.3d at 630. A.Substantial evidence supported the jury's finding that claimants were subjected to severe or pervasive sexual harassment in violation of Title VII Defendants contend that "no reasonable jury could have found that Shisler and Powell experienced severe and pervasive sexual harassment." Def. Brf. at 50. But, as the district court noted, to be actionable, harassing conduct does not need to be both severe and pervasive. R.184, Op. at 6 (citing Jackson v. County of Racine, 474 F.3d 493, 499 (7th Cir. 2007); Cerros v. Steel Techs., Inc., 398 F.3d 944, 950 (7th Cir. 2005)). Here, however, the evidence demonstrated that the harassment was both pervasive and severe. Although Defendants argue that Shisler identified only three incidents over a four-week period, Def. Brf. at 50, Shisler testified that she had been verbally or physically sexually harassed by Gutierrez "[o]n a daily basis," "all the time," and on every shift. R.184 at 7; R.162 at 51-53, 197. See Dey v. Colt Constr. & Dev. Co., 28 F.3d 1446, 1456 (7th Cir. 1994) (reversing summary judgment despite defendant's argument that plaintiff could not recall more than five specific comments because she alleged comments were frequent, and it is for the factfinder to weigh the credibility of her allegations). Here the jury has spoken and Defendants provide no basis for setting aside its verdict. Moreover, as the court observed, R.184 at 6, even if there were only three instances of harassment, which included propositioning her for sex on the pancake batter and groping her buttocks, a jury could conclude that the harassment was severe. Berry v. Chicago Transit Auth., 618 F.3d 688, 692 (7th Cir. 2010) ("uninvited physical contact with intimate parts of the body are among the most severe types of sexual harassment"); Gentry v. Export Packaging, 234 F.3d 842, 850-54 (7th Cir. 2001) (strong indicators that harassment falls on actionable side of divide is where there is unwanted touching and "implicit" invitations to have sex). Next, Defendants' argument that "[a]ny remaining claim that Shisler made, that she was subjectively offended by a few crude comments by Gutierrez, was obliterated by . . . her own Myspace web page[,]" Def. Br. at 51, is specious. As the district court observed, "sharing jokes with friends in an online community is vastly different than being propositioned for sex by a supervisor at work." R.184 at 8. Moreover, the jury could have reasonably disregarded Shisler's MySpace page in assessing whether she was subjectively offended by Gutierrez's harassment since the contents were not shared with Gutierrez and bore no relationship to his harassment, the workplace, or any allegations in the judicial complaint. Cf. Ammons-Lewis v. Metropolitan Water Reclamation Dist. of Greater Chicago, 488 F.3d 739, 746 (7th Cir. 2007) ("Under Title VII, a person's private and consensual sexual activities do not constitute a waiver of his or her legal protections against unwelcome and unsolicited sexual harassment at work."). Further, the record contained sufficient evidence that Shisler was subjectively offended because she repeatedly informed Gutierrez that his conduct was unwelcome and complained to managers Del Rio and Dahl. See supra at 9-11. Accordingly, there is sufficient evidence to support the jury's determination that Shisler was sexually harassed in violation of Title VII. Defendants argue that Powell was not subjected to severe or pervasive harassment because she mentioned seven specific incidents of sexual harassment, only one of which occurred after she complained to both Del Rio and Dahl. Def. Br. at 52. Further, Defendants contend that the last incident of the cooks speaking Spanish to her cannot constitute sexual harassment because "she did not understand what they said." Id. at 52-53. In sum, Defendants assert that Powell's work environment was not sufficiently "hellish" to be actionable. These arguments are untenable. First, Powell, like Shisler, testified that Gutierrez regularly made inappropriate comments about her buttocks and pulled her hair "[m]ultiple times on the same day." R.163 at 218, 255, 283. In addition, the harassment extended beyond the workplace when Gutierrez called her home to ask her to "hook up" with him. Id. at 219, 258-59. As the district court observed, given Powell's level of discomfort in Gutierrez's presence and attempts to avoid him in the workplace, the evidence supported the jury's conclusion that Powell had been subjected to a hostile and abusive work environment. R.184 at 8-9. Second, the fact that Gutierrez made sexual comments in Spanish about Powell to the cooks did not diminish the hostility of the workplace, as Defendants contend. Def. Br. at 52-53. Although Powell did not speak Spanish, she testified that Gutierrez translated what he said and that the whole scenario made her feel "dirty." R.163 at 219-20, 239, 261. Furthermore, testimony that Gutierrez engaged in similar behavior with the cooks towards Shisler and also made her feel dirty corroborated that Powell's incident could have occurred and caused the reaction she had. See supra at 9. Finally, this Court has squarely rejected the suggestion that only "hellish" work environments can support a Title VII claim, and has urged counsel to avoid this "overwrought word" and focus on whether there has been workplace abuse. Jackson, 474 F.3d at 500. Hence, Defendants have offered no basis for holding that a reasonable jury could not have found that the EEOC met its burden of establishing that Shisler and Powell had been sexually harassed in violation of Title VII. B. Substantial evidence supported the jury's finding that Defendants failed to exercise reasonable care to prevent or correct sexual harassment in this workplace and that Shisler and Powell exercised reasonable care to avoid harm Absent a tangible job action, an employer is vicariously liable for sexual harassment by a supervisor unless the employer can 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." Burlington Indus. Inc. v. Ellerth, 524 U.S. 742, 765 (1998); Faragher v. Boca Raton, 524 U.S. 775, 807 (1998). 1. As to the first prong of the defense, the district court correctly determined that substantial evidence supported the jury's conclusion that Defendants' sexual harassment policy and complaint mechanism were not reasonably effective. Although Flipmeastack had a sexual harassment policy in place at the time Shisler and Powell were hired, and they knew about them, see supra at 9, 12, the mere existence of a policy and grievance procedure and the victims' awareness of them do not automatically insulate an employer from liability for supervisory sexual harassment. Meritor Savings Bank v. Vinson, 477 U.S. 57, 72 (1986). 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. See Gentry, 238 F.3d at 848 (inadequacies in implementation of policy justified jury's rejection of employer's defense). Here, the effectiveness of Flipmeastack's policies and procedures was undermined by management's failure to enforce them. First, substantial evidence indicated that the policy and procedures were not taken seriously and that the sexual harassment training was not "successful." Victoria Janmohammed testified that the "zero-tolerance" policy meant "we do not tolerate any sexual harassment, any discrimination." R.164 at 633-34. Yet, evidence demonstrated that managers Hecker, Gutierrez, and Smith engaged in sexual harassment, see supra at 9, 12, and none of them were terminated in accordance with the "zero-tolerance" policy. In fact, Smith actually rehired Hecker despite having received complaints from Shisler and Del Rio about Hecker sexually harassing servers. Id. at 10, 13-14, 19. Additionally, Smith was never investigated, disciplined, or terminated following Dahl's allegations of sexual harassment but instead was retained as District Manager. Id. at 18. From this evidence, the jury could decide that the policy was not one of "zero-tolerance" and that the "consistent stream of harassment" at the restaurant suggested that the sexual harassment policy was "actually not very effective at all." Loughman v. Malnati Org., Inc., 395 F.3d 404, 407 (7th Cir. 2005). Second, although managers were required to take sexual harassment training, evidence suggested that the training was inadequate. Del Rio stated she did not receive training when she became Assistant Manager. See supra at 6. Moreover, even though the policy stated that "any form of unlawful harassment of co-workers or members of the public is absolutely forbidden, regardless of whether it is verbal, physical, or visual harassment," R.163 at 133, Del Rio "blew off" Shisler and Powell's complaints about Gutierrez's behavior and did not consider them to be about sexual harassment because it did not involve touching. Del Rio also saw Gutierrez flirting with the servers and did not report it even though she knew unwelcome flirting could constitute sexual harassment. Id. at 10, 14. Finally, although AMs had an absolute duty to report allegations or complaints of sexual harassment, R.164 at 638, Del Rio stated that she did not report Powell's complaint to upper management because she did not think Powell was "serious" or being sexually harassed since she did not seem to be "afraid" of Gutierrez. R.163 at 439, 449. On these facts, the jury could have decided that, not only was the policy and the management training ineffective, but the protections offered by them were simply illusory. Gentry, 238 F.3d at 848 (upholding jury's determination that employer failed to take preventive or corrective action regarding sexual harassment where evidence revealed deficiencies in harassment policy and a failure to respond to complaints). Third, the record is clear that the investigation of Gutierrez's sexual harassment was not "immediate." "The most significant immediate measure an employer can take in response to a sexual harassment complaint is to launch a prompt investigation to determine whether the complaint is justified. An investigation is a key step in the employer's response, and can itself be a powerful factor in deterring future harassment. By opening a sexual harassment investigation, an employer puts all employees on notice that it takes such allegations seriously and will not tolerate harassment in the workplace. An investigation is a warning, not by words but by action." Swenson v. Potter, 271 F.3d 1184, 1193 (9th Cir. 2001). Here, Victoria Janmohammed testified that, under the zero-tolerance policy, "[w]e don't tolerate somebody not investigating [sexual harassment]." R.164 at 633-34. Yet, although Shisler had been complaining about Gutierrez since March and Powell since April, neither of their complaints were reported or investigated. In fact, the jury could have believed that it was unlikely that any internal investigation would have been conducted if Shisler's private investigator had not started making inquiries. Hence, the managers' failure to report the complaints substantially undermined the effectiveness of the policy's zero-tolerance requirement of prompt investigations. See Cerros, 398 F.3d at 953- 54 ("prompt investigation of the alleged misconduct [is] a hallmark of reasonable corrective action" and "the absence of such action may signal a failure to meet" the prompt and remedial standard). Lastly, the jury also could have concluded that the actions taken by the managers were neither "corrective" nor "effective." Victoria Janmohammed testified that the sexual harassment policy was also zero-tolerant with respect to reporting, meaning that "[i]f a General Manager [or Assistant Manager] fails to report a sexual harassment allegation, he or she is fired . . . whether or not they believe it to be true or not true." R.164 at 638-39. Yet, as previously discussed, the Racine IHOP managers witnessed or received complaints about harassment and consistently failed to report them or take any action. See supra at 10-11, 13-14. On the whole, given managers' harassment in contravention of the policy, Del Rio's misapprehension about the definition of sexual harassment, the substantial delay in the investigation of Gutierrez's harassment, and the managers' inadequate responses to the complaints, there was sufficient evidence to support the jury's conclusion that the Defendants' sexual harassment policy and training was ineffective and that Defendants did not exercise reasonable care in preventing or correcting sexual harassment. Carr v. Allison Gas Turbine Div., General Motors Corp., 32 F.3d 1007, 1012-13 (7th Cir. 1994) (affirming judgment for plaintiff where defendant's "efforts at investigation were lackluster, its disciplinary efforts nonexistent, its remedial efforts perfunctory"). Defendants' remaining challenges to the verdict are equally unavailing. Defendants contend that they could have satisfied the first prong of the affirmative defense if the district court had not improperly relied on "other acts" evidence to conclude that the defendants did not really take sexual harassment seriously. Def. Br. at 56. However, as previously argued, see supra at 21-23, the "other acts" evidence, while relevant, was also supplemental to other evidence in the record that supported the jury's determination. Further, although Defendants contend that the court "misstate[d] the record" when it found Del Rio "apparently was callous" for not taking the complaints seriously, the court made no such "finding," but merely quoted Del Rio's testimony. See R.184 at 12 n.3. The fact that Del Rio felt justified in not reporting the complaints because the servers "never look[ed] like they were afraid of Gutierrez" or their interaction "was not sexual," id., permitted the jury to infer, as the court suggested, that she did not take the complaints seriously. In that the record contained evidence sufficient to support the jury's determination that "Flipmeastack had not properly trained its managers about preventing and correcting sexual harassment," the court's denial of the Defendants' motion should be affirmed. Id. at 12. Defendants also contend that the district court negated their "commendable efforts" by "nitpicking minor elements of the overall sexual harassment program." Def. Br. at 57. They argue that there was no evidence that the policy's inclusion of a statement that employees should not "knowingly" make false claims of sexual harassment actually discouraged anyone from making a complaint, id., but they are wrong. The evidence permitted the inference that the provision was intended to discourage complaints. Indeed, Victoria Janmohammed admitted that the provision was added to the policy after her husband was sued for sexual harassment. See supra at 5. As the district court observed, even though Victoria Janmohammed denied amending the policy in reaction to the lawsuit, the jury was entitled to disbelieve her, R.184 at 22, and this verdict cannot be disturbed on appeal without improperly reweighing the evidence and evaluating the witnesses' credibility. See Reeves, 530 U.S. at 150. Defendants also object to the trial court's observation that there was no hotline for sexual harassment complaints and that information and phone numbers for reporting discrimination claims were buried on a poster dealing with unrelated crises. Def. Br. at 57-58. Defendants complain that the court's "criticism in this regard is arbitrary considering that Powell never bothered to look at the postings." Id. at 57. To begin with, the evidence showed the poster may not have been displayed when Shisler and Powell were harassed, which would explain why Powell did not look at it. More to the point, the district court stated that the poster's inadequacy "was not itself dispositive," but noted that the informality of Defendants' complaint mechanism did not create a clear path for reporting harassment claim-a burden that a Title VII-compliant employer bears-and a requirement that must be considered by the factfinder, particularly when the workforce is comprised of teenagers as was the case here. R. 184 at 14; see EEOC v. V&J Foods, Inc., 507 F.3d 575, 579 (7th Cir. 2007) ("the defendant has the burden of proving that it has established and implemented an effective complaint machinery"); id. at 578 ("[t]he [complaint] mechanism must be reasonable and what is reasonable depends on 'the employment circumstances'" and "[k]nowing that it has many teenage employees, the company was obligated to suit its procedures to the understanding of the average teenager."). While Defendants contend that they had telephone numbers for Dahl, Smith, Flipmeastack, and corporate IHOP posted on its crisis management poster, Def. Br. at 57, that poster was still inadequate because it did not mention sexual harassment or convey the company's anti-harassment policy. R.164 at 671-72. Instead, it served as corporate IHOP's general guide in the event of an emergency and contained a 6-step instruction for managing natural disasters, fires, and armed robbery, which included admonitions to remain calm and refrain from commenting to the media, and had little to do with reporting harassment or discrimination. Id. at 583. Further, the poster did not describe employees' rights under Title VII or provide phone numbers for the EEOC or a local civil rights office in the event the person wanted to make an external report of sexual harassment. See Trial Exh. 1050. The Defendants did not meet their burden of proving the first prong of their affirmative defense, that they exercised reasonable care to take preventive or corrective action. The conclusions of the district court and jury are fully supported by the evidence and Defendants have failed to point to substantial evidence that supports "only one reasonable conclusion" that is "contrary to the jury's verdict." Reeves, 530 U.S. at 150. This Court should therefore affirm the jury's verdict. 2. Defendants also did not satisfy their burden of proving the second prong of the Faragher/Ellerth affirmative defense, that Shisler and Powell unreasonably failed to take advantage of their harassment complaint procedures. There was substantial evidence that both Shisler and Powell reported their complaints promptly and in accordance with Defendants' anti-harassment policy and grievance procedure, and that evidence supports the jury verdict and the district court's denial of Defendants' motion on this issue. According to Defendants' policy, employees were to "report any instances of improper behavior to my Manager or company representative." R.162 at 133. As the creator of the policy, Victoria Janmohammed confirmed that Gutierrez, Del Rio, and Dahl were managers or company representatives within the terms of the policy and that a complaint to any one of those three would be effective. R.164 at 668. Moreover, sexual harassment complaints were to follow the "chain of command." R.163 at 465, 472. As the district court noted, R.184 at 16, testimony revealed that when the harassment started, both Shisler and Powell initially communicated their objections to Gutierrez in his capacity as the Assistant Manager. See supra at 9, 13. Defendants' sexual harassment policy and complaint mechanism identified any manager as an appropriate official to receive complaints of sexual harassment, even if they were the harasser, and Victoria Janmohammed confirmed that the appropriate persons included Gutierrez. Id. at 6. Thus, Shisler's and Powell's reports to Gutierrez were compliant with the company's procedures and therefore reasonable. When Gutierrez refused to stop his harassment, both Shisler and Powell promptly complained to managers Del Rio and Dahl, both of whom are "company representatives" denominated in the policy and complaint mechanism. R.164 at 668. As the district court observed, Shisler reported Gutierrez's behavior to Del Rio on March 18, one day after Gutierrez propositioned her for sex on the pancake batter and three days after he told her he thought she was kinky and liked it rough in bed. R.184 at 16. After Del Rio "blew [her] off," R.162 at 62, and Gutierrez "slap groped [Shisler's] butt," id. at 56, 61, following the "chain of command," R.163 at 465, 472, Shisler complained to Dahl on March 27 about Gutierrez's harassment turning physical after she had complained to Del Rio. R.162 at 62, 64. On these facts, the jury could conclude that Shisler reasonably availed herself of Defendants' grievance procedures. Similarly, Powell tried to convince Gutierrez that his comments were inappropriate during the first week of April, and then told Dahl that Gutierrez was "sexually and physically abusing" her and other female employees and was assured that the situation "would be taken care of." R.163 at 224-25. In the second week of April, Powell also informed Del Rio about Gutierrez's conduct after Del Rio mentioned that servers were complaining about Gutierrez and asked Powell whether he had done anything to her. Finally, in the last week of April, Powell mentioned Gutierrez's behavior to Dahl again but to no avail. See supra at 13-14. In that both Del Rio and Dahl were clearly points of contact for reporting sexual harassment complaints, the evidence supports the jury's conclusion that Powell reasonably availed herself of the Defendants' grievance process. Notwithstanding the claimants' reasonable efforts to notify Defendants about Gutierrez's sexual harassment, Defendants argue that "there is no dispute that they failed, and even refused, to complain to Smith, the 'go-to-guy.'" Def. Br. at 58. This argument is unavailing for several reasons. First, nothing in the policy or the complaint mechanism identifies Smith as the "go-to-guy" for sexual harassment complaints. To the contrary, the policy generally encourages employees to file complaints with "my Manager" or "company representative," and there is no basis to conclude that Shisler or Powell acted unreasonably when they did not complain to Smith. This conclusion is supported by this Court's ruling in Parkins v. Civil Constructors of Illinois, Inc., 163 F.3d 1027 (7th Cir. 1998), that "[w]here a point person [is] not identified or easily accessible, an employer can receive notice of harassment from . . . someone that 'the complainant reasonably believed was authorized to receive and forward (or respond to) a complaint of harassment.'" Id. at 1035 (internal citation omitted). In that Shisler and Powell were teenagers at the time they were harassed, believed they could complain to any manager, did not have copies of the policy or complaint process, and the complaint mechanism did not clearly convey how sexual harassment complaints were to be made, the jury was entitled to resolve that they legitimately complained to persons they reasonably believed were authorized to receive their complaints. Second, the record reflects that Shisler may have had another legitimate reason for not contacting Smith. In 2004, when she reported a manager's sexual harassment of a server to Smith, Smith never contacted her again, the manager made comments that he could have only been told by Smith or read in the complaint she gave him, and she suffered retaliation after the complaint. See supra at 8-9. In light of this prior experience, the jury could have found her decision not to contact Smith in 2005 was justified. Cf. Gorzynski v. Jetblue Airways Corp., 596 F.3d 93, 105 (2d Cir. 2010) ("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."). Lastly, in that Shisler was terminated on April 3, after she complained about Gutierrez to Dahl on March 27, as the district court observed, "the jury could have concluded that Shisler acted reasonably and that she was not required to go directly to Smith." R.184 at 16. Finally, Defendants' argument that they are entitled to judgment as a matter of law on the affirmative defense because Powell admitted that she never attempted to complain to Smith and that had she done so, the harassment might have stopped sooner, is factually and legally unpersuasive. Under the second prong of the Faragher/Ellerth defense, victims of harassment are only required to reasonably "stave off avoidable harm." Pennsylvania State Police v. Suders, 542 U.S. 129, 146 (2004). Consequently, as the court opined in this case, "[o]nce Powell reported the harassment to Dahl and Del Rio and they told her they would take care of it, she had discharged her obligations under the sexual harassment policy." R.184 at 17. Furthermore, even if "Powell might also have complained to Smith once she realized that Dahl and Del Rio had not corrected the problem," as the court noted, "only a few weeks had elapsed between the time that Powell complained to Dahl and the date on which Gutierrez left the restaurant." Id. Thus, "the jury was permitted to conclude that Powell did not act unreasonably in failing to contact Smith during this time period." Id.; see Hardy v. Univ. of Ill. at Chicago, 328 F.3d 361, 365-66 (7th Cir. 2003) (declining to find unreasonable delay as a matter of law where plaintiff waited six weeks to complain). In sum, substantial evidence supported the jury's determination that Defendants failed to prove either prong of their affirmative defense. Thus, the district court's denial of Defendants' motion for judgment as a matter of law should be affirmed. III. THE DISTRICT COURT'S REFUSAL TO INCLUDE A SPECIAL INTERROGATORY ON THE VERDICT FORM DID NOT WARRANT A NEW TRIAL Defendants contend that "[t]here is no dispute that the court properly instructed the jury regarding the elements of the claim of sexual harassment and the defendants' Faragher/Ellerth affirmative defense." Def. Br. at 43. But they assert that the court abused its discretion by failing to include on the Special Verdict form any interrogatories related to the affirmative defense, "a material issue" to their claim of nonliability. Id. Defendants also assert that the court "withdrew from the jury's consideration the defendants' valid theory of defense[.]" Id. Defendants' overstated characterization of the court's action must be rejected. Under Rule 49(a) of the Federal Rules of Civil Procedure, whether to "submit special interrogatories (either on all issues or on a subset of issues like damages) is committed to the sound discretion of the district court." Cruz v. Town of Cicero, 275 F.3d 579, 591 (7th Cir. 2001). Here, the district court's decision to use interrogatories for the damages issues did not compel it to use interrogatories for liability issues. In determining whether the court abused its discretion in declining to include special interrogatories on liability, this Court must evaluate the verdict form in light of the instructions given and, viewing them in their entirety, determine whether the jury was misled in any way. Happel v. Walmart Stores, 602 F.3d 820, 827 (7th Cir. 2010). In this case, the district court gave the jury instructions on sexual harassment and the affirmative defense, R.164 at 742-46, that Defendants concede were correct. Def. Br. at 43. Thus, the district court's decision not to include a question addressing Defendants' affirmative defense on the verdict form, particularly when it also had not delineated in its interrogatories any other elements associated with the sexual harassment claim, was completely within the court's discretion. Accordingly, the district court's denial of the Defendants' motion for a new trial should be affirmed. IV. AS A MATTER OF LAW, FLIPMEASTACK WAS LIABLE FOR THE SEXUAL HARASSMENT OF SHISLER AND POWELL Defendants argue that judgment should have been for Flipmeastack because there is no evidence that Flipmeastack controlled Shisler and Powell's daily work life, set their schedules, supervised them, controlled their employment or work expectations, or had financial responsibility for MHR's operations. Def. Br. at 36. That argument is factually and legally insupportable. As the district court observed, this Court has held that "'multiple entities may be considered an employee's 'employer' for the purposes of Title VII liability.'" R.184, Op. at 26 (quoting Tamayo v. Blagojevich, 526 F.3d 1074, 1088 (7th Cir. 2008). This Court has also ruled that in determining whether an employer-employee relationship exists, an entity's "control" over the person's employment relationship is the dispositive factor. See EEOC v. Illinois, 69 F.3d 167, 169 (7th Cir. 1995) (entity is an indirect or de facto employer where "the defendant . . . controlled the plaintiff's employment relationship). A key factor of that control in an employment relationship is "the power to hire and fire." Id. at 171. Applying the "control" standard to this case, the record is clear that Flipmeastack's power over MHR employees was virtually unlimited. On a broad scale, Sal Janmohammed fully delegated responsibility for his 21 restaurants' 500- 700 employees to Flipmeastack. District Manager Smith made decisions to hire, fire, and relocate subordinate managers and servers at the Racine IHOP, and considered himself their "boss." See supra at 4-5. Although MHR paid the wages of its employees, Flipmeastack handled the payroll, determined how much each employee was paid, and whether they received bonuses. Id. at 3. Lastly, on a biweekly basis, Flipmeastack sent memos to all the managers concerning corporate meetings, restaurant promotions, and operational changes. Id. Flipmeastack was also responsible for making policy and providing training, and that included creating and updating the sexual harassment and diversity policy for managers and employees. See supra at 5-6. After her husband, MHR's owner, was sued for sexual harassment, Victoria Janmohammed added a provision to the policy that required employees to acknowledge understanding "the severity of knowingly making false accusations of discrimination or harassment." Id. at 5. At Flipmeastack's direction, the sexual harassment policy was shown to the servers but then was kept in a locked cabinet. Id. at 6. Flipmeastack also did not have a printed complaint procedure, id., and directed the restaurant managers to post the crisis management poster on which was buried a reference to discrimination claims but no mention of sexual harassment or a specific complaint mechanism for such complaints. Id. at 7. Flipmeastack was responsible for maintaining a workplace free of sexual harassment. Flipmeastack's president Victoria Janmohammed was the primary official responsible for preventing discrimination. Flipmeastack trained MHR's employees and managers on the sexual harassment policy, and directed the managers to enforce the sexual harassment policy. Additionally, Flipmeastack via the District Manager conducted investigations of sexual harassment allegations. See supra at 6-8. These indicia of Flipmeastack's "control" over the MHR employees is sufficient to transform Flipmeastack into Shisler and Powell's employer for Title VII purposes. As this Court explained in Worth v. Tyer, 276 F.3d 249 (7th Cir. 2001), any affiliate "that possibly maintained an employment relationship with" the claimant "may be named as a defendant under Title VII." Id. at 259. Because the discrimination in this case is sexual harassment, the entity in control of the harassment policy and procedures - Flipmeastack - is a proper defendant to be held liable. See Tamayo, 526 F.3d at 1088-89 (holding that entity that controlled salary is proper defendant in pay discrimination case). And since the sexual harassment Shisler and Powell suffered was directly tied to Flipmeastack's policies and the inadequate training it provided the MHR managers, as discussed supra at 29-33, the district court properly found that Flipmeastack was their employer. R.184 at 26 ("the entity with the greatest ability to prevent and correct discrimination - i.e. the entity exercising control over the workplace - should be charged with liability for doing so"). Therefore, the district court properly entered judgment against Flipmeastack on the Title VII sexual harassment claim. Flipmeastack's liability also is supported by this Court's decision in Papa v. Katy Indus., Inc., 166 F.3d 937 (7th Cir. 1999). Although the district court found Papa to be merely instructive, R.184 at 28, the liability judgment can be affirmed on the ground that Flipmeastack was Shisler and Powell's employer under the first prong of piercing the corporate veil. Papa, 166 F.3d at 940-41. As noted above, Flipmeastack's control over MHR employees and managers was extensive and did not end with the simple promulgation of MHR's antidiscrimination policies and complaint procedures. To wit, through its district managers and Victoria Janmohammed, Flipmeastack had authority over the "day to day operations" of Janmohammed's restaurants. R.184, Op. at 25. It made the purchases for the restaurants, and handled compliance audits, billing and accounting for managers and employees, see supra at 3, "H.R., workmen's comp, unemployment, initiatives, marketing tools, doing billboards. Everything from training to policy making." R.164 at 525-27, 625. Furthermore, though Flipmeastack claimed that it had no corporate interrelationship with MHR, Victoria Janmohammed testified that Janmohammed "would have trouble running his restaurants without the help of Flipmeastack" and Flipmeastack would not "have a reason to exist if not for Sal's restaurants." R.91-3 at 10, VJ Dep. at 55. This relational dynamic was made even clearer when the Janmohammeds used a combination of their businesses, including Flipmeastack and MHR, as a form of collateral or "unconditional guarantee" to obtain large loans for the purchase of a restaurant and its furnishings in Indiana, see R.90 at 15 (citing Exh. 79), and, when Flipmeastack provided the initial $10,000 fee to the lender for the loans. Id. (citing Exh. 82). Even after the dissolution and sale of MHR, Flipmeastack collected the buyer's payments and oversaw the banking of the proceeds and payments to Corporate IHOP. Id. at 13 (citing Exh. 20). Moreover, although Victoria Janmohammed claimed only to be an officer of Flipmeastack, she acted as the corporate representative for MHR when she responded to the EEOC's notice that a discrimination charge had been filed against MHR. See supra at 7-8. This is evidence from which the trial court could have concluded that Flipmeastack is inextricably implicated in the business of MHR and vice versa, and it is supported by Victoria Janmohammed's testimony that MHR and Flipmeastack were "a family business." R.164 at 627. For these reasons, because there is such unity of interest and ownership that the separate personalities of the entities no longer exist, and relieving either entity of liability would promote injustice, the corporate veil should have been pierced and liability extended to Flipmeastack on this basis as well. See Van Dorn Co. v. Future Chem. & Oil Corp., 753 F.2d 565, 569-73 (7th Cir. 1985). Defendants argue, however, that Flipmeastack should not be held liable because EEOC did not seek liability based on a "control" or "economic realities" theory and thus waived this theory of liability. Def. Br. at 33. Defendants further argue that the court's sua sponte adoption of a new liability theory at the end stage of the litigation constitutes reversible error because trial courts cannot alter the plaintiff's theory of the case after the time has passed for defendants to present contrary evidence. Id. at 34. The waiver and new theory arguments are specious. Since filing its amended complaint, R.37, the Commission has consistently argued that Flipmeastack should be held jointly and severally liable along with Janmohammed and MHR. In its pre-trial motion on corporate liability, EEOC argued that Flipmeastack "was at all relevant times the common employer, together with [MHR], of the complaining parties" and presented supporting documentation and testimony. R.90. at 11. Defendants acknowledged this theory and filed a response to the Commission's motion. R.117 at 2 ("EEOC's Motion in Limine asks the court rule as a matter of law . . . that Flipmeastack was actually the employer of all employees") (emphasis in original). Further, in its post-trial motion, the EEOC reiterated the argument that Flipmeastack should be held "jointly and severally" liable. R.166 at 4-11. See Quest Med., Inc. v. Apprill, 90 F.3d 1080, 1087 (5th Cir.1996) ("an issue first presented to the district court in a post-trial brief is properly raised below when the district court exercises its discretion to consider the issue"), cited in Int'l Prod. Specialists, Inc. v. Schwing Am., Inc., 580 F.3d 587, 600 (7th Cir. 2009). On the whole, these filings revealed a factual basis on which to analyze Flipmeastack's liability under both the EEOC's Papa theory and the district court's "employee control" theory, and permitted the district court to address both theories. R.184 at 24-28. Hence, the "employee control" theory was not waived and did not constitute an alteration warranting reversal. Defendants' waiver argument has no support in the law. In Singleton v. Wulff, 428 U.S. 106 (1976), the Supreme Court held that, as a general rule, "a federal appellate court does not consider an issue not passed upon below" so as to permit the parties an opportunity to offer all the evidence they believe is relevant to the issues. Id. at 120. See also Jackson v. Parker, 627 F.3d 634, 640 (7th Cir. 2010) (declining to review for plain error because "district court did not have opportunity to address Jackson's argument because he clearly set forth his only claims as one for false arrest"). The Singleton rule presents no bar to this Court's consideration of the Commission's argument for affirmance of the district court's ruling because the trial court expressly "passed upon the issue." Singleton, 428 U.S. at 120; see also Continental Ins. Co. v. M/V ORSULA, 354 F.3d 603, 606 (7th Cir. 2003) ("We may affirm a district court's judgment on alternate grounds found in the record."). As discussed, factual grounds supporting Flipmeastack's liability were thoroughly developed in the district court. There is no basis for Defendants' claim that they had no opportunity to present contradictory evidence. The court's ruling thus did not require nor rest on a "new set of facts" but rather on evidence presented by all parties. Cf. Kunz v. Defelice, 538 F.3d 667, 681 (7th Cir. 2008) (issue not preserved where its resolution "would require the application of a novel legal theory to a new set of facts" without the benefit of full briefing and consideration). The EEOC urges the Court to affirm the judgment that Flipmeastack is liable under either (or both) the Papa rule or the employee control rule endorsed by the district court. See Schering Corp. v. Ill. Antibiotics Co., 89 F.3d 357, 358 (7th Cir. 1996) ("the failure of an appellee to have raised all possible alternative grounds for affirming the district court's original decision . . . should not operate as a waiver. The urging of alternative grounds for affirmance is a privilege rather than a duty."). V.THE PUNITIVE DAMAGES AWARD WAS APPROPRIATE Punitive damages are available under Title VII when defendants have engaged in intentional discrimination "with malice or with reckless indifference to the federally protected rights of an aggrieved individual." 42 U.S.C. § 1981a(b)(1). A claim for punitive damages 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. A. Sufficient evidence established that Defendants did not make good faith efforts to prevent or correct sexual harassment in the workplace The district court properly denied Defendants' Rule 50(b) motion on punitive damages because the evidence at trial, viewed in the light most favorable to the Commission, supported the jury's finding that Defendants did not engage in good faith efforts to comply with Title VII. The Defendants do not dispute the existence of the first required element to support a punitive damages award-that the "relevant individuals knew of or were familiar with the antidiscrimination laws and the employer's policies for implementing those laws." Bruso v. United Airlines, Inc., 239 F.3d 848, 858 (7th Cir. 2001). Because Defendants' managers concededly discriminated in the face of a perceived risk that their actions violated federal law, Kolstad, 527 U.S. at 536, the jury's verdict must stand, because Defendants have also not met their burden of proving that the managers' conduct was contrary to Flipmeastack's good faith efforts to comply with Title VII, id. at 545-46. The record reflects that Defendants had a sexual harassment policy and conducted training on it. However, their assertion of "good faith" efforts is undercut by evidence that the policy was not readily available to the employees, but instead kept in a locked cabinet, R.164 at 637. Further, the complaint mechanism was only on the video and not in print, id. at 608, 632, and buried in the crisis management poster, which addressed nineteen emergencies, did not mention sexual harassment, id. at 670, did not provide contact information for external complaints, id. at 671-72, and may not have been posted during the time period Shisler and Powell were subjected to sexual harassment. R.162 at 121; R.163 at 248-49. Lastly, evidence showed that sexual harassment training for managers was inconsistent or nonexistent. R.163 at 430-31. Viewed in the light most favorable to the EEOC, these are facts that would support the jury's conclusion that Defendants' efforts were ineffective in advancing the education and protection of their employees' rights 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). Notably, while the harassment policy permitted Shisler and Powell to complain to "any manager" or "company representative" and those managers included Gutierrez, Del Rio and Dahl, R.164 at 637, Defendants have repeatedly "blamed the victims" for the ongoing sexual harassment at the Racine IHOP rather than addressing the ineffectiveness of their harassment policy and procedures. Throughout the trial (and in their appellate brief), Defendants stressed the fact that Shisler and Powell did not file complaints with Smith (an alleged harasser himself), even though the policy did not require such action. Since Defendants did not rebut evidence that the managers failed to report promptly the complaints they received about Gutierrez since March 2005, see supra at 9-11, 13-17, the jury could have viewed Defendants' attempt to "place[] virtually all of its remedial burden on the victimized employee[s]" to be an unreasonable response to sexual harassment and not a good-faith effort to comply with Title VII. Nichols v. Azteca Restaurant Enter., 256 F.3d 864, 876 (9th Cir. 2001). On the whole, the infirmities in the Defendants' implementation of its sexual harassment standards makes this case a classic example of why "the implementation of a written or formal antidiscrimination policy [may be] relevant to evaluating an employer's good faith efforts at Title VII compliance, [but] it is not sufficient in and of itself to insulate an employer from a punitive damages award." Bruso, 239 F.3d at 858. Therefore, this Court should affirm. B. The district court properly declined to remit Powell's punitive damages award. Defendants argue that the district court erred in refusing to reduce Powell's $100,000 punitive damages award to $50,000 because the only two workforces potentially at issue was that of MHR and Flipmeastack, which combined totaled less than 100 employees. This argument is without merit. As previously explained, Flipmeastack exercised significant control over the employees at Janmohammed's 21 restaurants, and thus qualified as their employer under Title VII for liability purposes. Since the record is undisputed that Flipmeastack managed 500-700 employees in 2005 when Shisler and Powell were sexually harassed, R.163 at 324 the statutory cap is $200,000. Therefore, this Court should leave Powell's punitive damages award undisturbed. VI. THE DISTRICT COURT PROPERLY IMPOSED A BROAD INJUNCTION AGAINST FLIPMEASTACK Defendants challenge the court's imposition of an injunction against Flipmeastack, arguing that "there is no evidence that sexual harassment at MHR could possibly persist in the future" since "Shisler and Powell no longer work for MHR, never worked for Flipmeastack, and MHR has long since been dissolved." Def. Br. at 41. Defendants add that there is also "no evidence that Flipmeastack, or its employees, perpetrated or directed any acts of harassment or discrimination." Id. (emphasis in original). And, once again, it maintains that it has a "clear and effective sexual harassment policy" that was "diligently implemented at MHR," as well as a "conspicuously displayed" crisis management poster. Id. These arguments should be rejected. When a plaintiff has prevailed and established a violation under Title VII, injunctive relief is available, 42 U.S.C. § 2000e-5(g)(1), and the district court has broad discretion to fashion injunctions addressed to the proven conduct. Id.; Franks v. Bowman Transp. Co., Inc., 424 U.S. 747, 763 (1976); EEOC v. Ilona of Hungary, Inc., 108 F.3d 1569, 1578 (7th Cir. 1997). In so doing, the district court is bound by the jury's factual findings and may make additional findings, Lebow v. Am. Trans Air, Inc., 86 F.3d 661, 672-73 (7th Cir. 1996), and this Court should leave them undisturbed unless it is left with a firm and definite conviction that the district court has committed a mistake. Anderson v. City of Bessemer, 470 U.S. 564, 565 (1985). An injunction is appropriate when the employer has taken no affirmative steps to prevent future discrimination or when the offending parties still work for the employer. EEOC v. Gurnee Inn Corp., 914 F.2d 815, 817 (7th Cir. 1990). Below, the district court granted the EEOC's request for injunctive relief against Flipmeastack to ensure that current and future employees of the restaurants under Flipmeastack's management do not become victims of sexual harassment. R.184 at 30-32. To this end, the district court issued an injunction enjoining Flipmeastack from allowing or failing to prevent or correct sexual harassment of its employees and requiring the creation of a new sexual harassment training program, the reporting of any sexual harassment complaint to the EEOC, the posting of a notice at all of its restaurants, and the maintenance of records indicating its compliance with the injunction. Id. at 31. This relief should be upheld because it is well- tailored to remedy the discrimination found by the jury. As discussed, and as the district court found, Flipmeastack was an "employer" of Shisler and Powell within the meaning of Title VII. Flipmeastack exercised substantial control over their worklife at the Janmohammed-owned IHOP it managed. Additionally, Flipmeastack was responsible for the creation of the sexual harassment policy that was supposed to protect them but did not because it was not enforced. Flipmeastack's president and its district managers were responsible for the training of employees and managers on sexual harassment, but the evidence established that a district manager engaged in sexual harassment and that the training was inadequate, inconsistent, and ignored by the managerial staff. Flipmeastack was responsible for the posting of an inadequately informative crisis management poster that allegedly set forth the grievance process for victims but never mentioned sexual harassment. All of these factors contributed to the existence of a hostile work environment for Shisler and Powell, and thus established Flipmeastack's liability. Because Flipmeastack is the de facto employer of all the employees at the Racine IHOP, it was necessarily the employer of Gutierrez, Del Rio, and Dahl, and thus there was evidence that "its employees perpetrated or directed" acts of harassment. These managers failed to enforce Flipmeastack's sexual harassment policy either by engaging in sexual harassment, failing to report it, or refusing to take preventive or corrective action. Thus, their conduct constituted a violation of Title VII. The record also contained evidence of prior incidents of sexual harassment. Dahl testified that DM Smith sexually harassed her and other servers. Yet, despite Flipmeastack's zero-tolerance policy, he was never terminated or even disciplined. To the contrary, Smith continues to work for Flipmeastack and oversee the operations and employees at IHOPs managed by Flipmeastack. As DM, Smith also remains the point person for conducting sexual harassment investigations and enforcing the sexual harassment policies and procedures. Del Rio and Shisler accused GM Hecker of sexual harassment and he was never investigated, disciplined, or terminated for his misconduct. Instead, Smith rehired him to manage the Gurnee IHOP. This evidence supports the district court's determination that an injunction was necessary to prevent future acts of sexual harassment at the IHOPs Flipmeastack manages. Finally, evidence suggests that sexual harassment at the Flipmeastack- managed restaurants is likely to recur. Flipmeastack still believes that its sexual harassment policy and training program is effective, Def. Br. at 54-57, and, despite the injunction which was effective immediately, has taken no steps to change or improve its policies or practices. R.203. Additionally, Racine managers Smith, Hecker, and Del Rio, who had not complied with the sexual harassment policy, continue to work for Flipmeastack or at the IHOPs under its management. Accordingly, while Shisler and Powell may no longer need the protection of an injunction, the district court properly imposed a broad injunction to protect the other employees under Flipmeastack's control, which advances Title VII's goal of creating workplaces free of discrimination and harassment and the EEOC's interest in protecting the public. Therefore, this Court should uphold the district court's injunction. CONCLUSION This Court should affirm the district court's judgment in all respects. Respectfully submitted, P. DAVID LOPEZ General Counsel CAROLYN L. WHEELER Acting Associate 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 CERTIFICATE OF COMPLIANCE I certify that the Appellee Brief of the EEOC complies with the type-volume limitation of Fed. R. App. R. 28.1(e)(2)(B) because this brief contains 13,499 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 February 9, 2011, pursuant to 7th Cir. R. 31(e)(1), an electronic copy of the EEOC's Appellee Brief along with the certificate of service was electronically filed using the Court's ECF system, and two (2) hard copies using United Parcel Service to counsel for Defendants-Appellants: Robert M. Mihelich, Esq. 2665 South Moorland Road, Suite 200 New Berlin, WI 53151 s/PAULA R. BRUNER Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 131 M Street, N.E., 5th Floor Washington, DC 20507 202-663-4731 February 9, 2011