Townsend v. Benjamin Enterprises, Inc., No. 09-0197 (2d Cir. 2012)
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Plaintiff Townsend alleged that she was sexually harassed by defendant, who was the husband of the President of her company, the sole corporate Vice President, as well as a shareholder of the company. Before Plaintiff Grey-Allen, the Human Resources Director of the company, completed an internal investigation of these allegations, she was fired by defendants. On appeal, the parties challenged the decisions of the district court that granted summary judgment dismissing Grey-Allen's Title VII retaliation claim; denied defendants' post-trial motion for judgment as a matter of law or, in the alternative for a new trial; and awarded Townsend attorney's fees and costs. The court considered all of the arguments of the parties and affirmed the judgment of the district court.
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09-0197-cv (L) Townsend v. Benjamin Enterprises, Inc. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ____________________________________ August Term, 2011 (Argued: August 30, 2011 Decided: May 9, 2012) Docket Nos. 09-0197-cv(L), 09-4509-cv(XAP) ____________________________________ MARTHA DIANE TOWNSEND, Plaintiff-Cross-Appellee, KARLEAN VICTORIA GREY-ALLEN, Plaintiff-Appellant-Cross-Appellee, v. BENJAMIN ENTERPRISES, INC., HUGH BENJAMIN, MICHELLE BENJAMIN, Defendants-Appellees-Cross Appellants. ____________________________________ Before: LIVINGSTON and LOHIER, Circuit Judges, and KOELTL, District Judge.* ____________________________________ This is an appeal and cross-appeal from a final judgment of 36 the United States District Court for the Southern District of 37 New York (Yanthis, Magistrate Judge). The parties challenge the * The Honorable John G. Koeltl, of the United States District Court for the Southern District of New York, sitting by designation. 1 decisions of the district court that granted summary judgment 2 dismissing plaintiff Karlean Victoria Grey-Allen s Title VII 3 retaliation claim; denied the defendants post-trial motion for 4 judgment as a matter of law or, in the alternative, for a new 5 trial; and awarded plaintiff Martha Diane Townsend $141,308.80 6 in attorney s fees and costs. 7 8 9 10 11 Because we find no error in the district court s decisions, we affirm. Judge Lohier concurs in a separate opinion. _________________________ STEPHEN BERGSTEIN, Bergstein & Ullrich, LLP, Chester, NY, for Plaintiff-AppellantCross-Appellee Karlean Victoria GreyAllen and Plaintiff-Cross-Appellee Martha Diane Townsend. RICHARD G. KASS, Amy M. Culver, Of Counsel, Bond, Schoeneck & King, PLLC, New York, NY, for Defendants-Appellees-CrossAppellants Benjamin Enterprises, Inc., Hugh Benjamin, and Michelle Benjamin. GAIL S. COLEMAN, Attorney, P. David Lopez, General Counsel, Lorraine C. Davis, Acting Associate General Counsel, Carolyn L. Wheeler, Assistant General Counsel, for Amicus Curiae U.S. Equal Employment Opportunity Commission. MARGARET MCINTYRE, for Amicus Curiae National Employment Lawyers Association, New York. ______________________ -2- 1 JOHN G. KOELTL, District Judge: 2 3 Among other issues, this appeal requires us to answer two 4 questions of first impression in this Court: first, whether 5 there is a viable claim of retaliation under Title VII of the 6 Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et 7 seq. ( Title VII ), for participating in an internal employer 8 investigation prior to any proceeding before the Equal 9 Employment Opportunity Commission ( EEOC ); and, second, 10 whether an employer is liable under Title VII for sexual 11 harassment committed by a senior executive who is a proxy or 12 alter ego for the employer, despite the existence of a 13 possible affirmative defense under the Supreme Court s 14 decisions in Faragher v. City of Boca Raton, 524 U.S. 775 15 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 16 742 (1998). 17 These questions arise in the following context. The 18 plaintiff Martha Diane Townsend was employed by defendant 19 Benjamin Enterprises, Inc. ( BEI ). 20 sexually harassed by defendant Hugh Benjamin, who was the 21 husband of BEI President Michelle Benjamin, and the sole 22 corporate Vice President of BEI, as well as a shareholder of 23 BEI. 24 Resources Director ( HR Director ) of BEI, began to conduct an She alleged that she was Plaintiff Karlean Victoria Grey-Allen, the Human -3- 1 internal investigation of the allegations. 2 completing the investigation, she was fired by defendant 3 Michelle Benjamin. 4 was in retaliation for her participation in the internal 5 investigation. 6 However, before Grey-Allen alleged that her termination Grey-Allen and Townsend sued BEI, Michelle Benjamin, and 7 Hugh Benjamin in the United States District Court for the 8 Southern District of New York for violations of Title VII; New 9 York Human Rights Law, N.Y. Exec. Law § 290 et seq. ( New York 10 Human Rights Law ); and New York State tort law. 11 Court (Yanthis, Magistrate Judge)1 granted summary judgment 12 dismissing Grey-Allen s retaliation claims, and a jury 13 returned a verdict in favor of Townsend against BEI, Michelle 14 Benjamin, and Hugh Benjamin. 15 denied the defendants motion for judgment as a matter of law 16 or, in the alternative, for a new trial, and awarded Townsend 17 attorney s fees and costs. 18 19 The District Thereafter, the Magistrate Judge This is an appeal and a cross-appeal challenging three orders of the Magistrate Judge. 1 Pursuant to 28 U.S.C. § 636(c), the parties consented to have the Magistrate Judge conduct all proceedings including trial. -4- 1 First, Grey-Allen challenges the order granting summary 2 judgment dismissing her Title VII retaliation claim.2 3 district court granted summary judgment on the ground that 4 Grey-Allen s participation in an internal employer 5 investigation into Townsend s sexual harassment allegations, 6 an investigation that was not connected to any formal charge 7 with the EEOC, did not qualify as protected activity under the 8 participation clause of Title VII s anti-retaliation 9 provision. 10 The Townsend v. Benjamin Enters., Inc., No. 05 Civ. 9378, 2008 WL 1766944 (S.D.N.Y. Apr. 17, 2008). 11 Second, BEI and the Benjamins challenge the district 12 court s order denying their post-trial motion for judgment as 13 a matter of law or, in the alternative, for a new trial.3 14 They contend that the district court erred in rejecting 15 various arguments asserted by the defendants, including their 2 The district court granted summary judgment dismissing GreyAllen s retaliation claims under both Title VII and the New York Human Rights Law, and noted that [c]ourts analyze retaliation claims under the New York Human Rights Law in the same manner as Title VII claims. Townsend v. Benjamin Enters., Inc., No. 05 Civ. 9378, 2008 WL 1766944, at *2 & n.3 (S.D.N.Y. Apr. 17, 2008). Grey-Allen did not brief the issue of whether it was error for the district court to grant summary judgment dismissing her New York Human Rights Law retaliation claim and has therefore waived any such argument. 3 BEI and Michelle Benjamin appeal those portions of the jury verdict that were against them. Hugh Benjamin does not appeal the tort verdict against him. -5- 1 argument that there is no proxy or alter ego exception to 2 the Faragher/Ellerth affirmative defense. 3 Third, BEI and the Benjamins challenge the district 4 court s order awarding Townsend $141,308.80 in attorney s fees 5 and costs. 6 and costs accrued after the defendants made an Offer of 7 Judgment pursuant to Federal Rule of Civil Procedure 68 8 because, they assert, the Offer exceeded the sum of Townsend s 9 ultimate recovery and her fees and costs at the time of the They argue that Townsend was not entitled to fees 10 Offer. 11 reached a contrary conclusion because it erred in calculating 12 the reasonable hourly rate for an attorney s services by 13 considering the prevailing market rate in the district, rather 14 than the rate stated in Townsend s retainer agreement with her 15 counsel. 16 17 They contend that the district court mistakenly Because we find no error in the district court s thoughtful and well-reasoned opinions, we affirm. 18 19 BACKGROUND 20 I. 21 Townsend began working at BEI in June 2002. She held the 22 position of office manager and First Impressions Director, or 23 receptionist. 24 individuals to work for local companies. BEI trains disadvantaged or low-skilled -6- Michelle Benjamin, 1 the President of BEI, is a co-owner of BEI and has the power 2 to hire and fire employees. 3 Michelle Benjamin and is the sole corporate Vice President of 4 BEI, as well as a corporate shareholder. 5 owned 34% of the corporate shares but owned only 5% of the 6 corporate shares at the time of trial. 7 Hugh Benjamin is married to Hugh Benjamin once Townsend alleged that Hugh Benjamin sexually harassed her 8 from the summer of 2003 through March 2005 by directing 9 sexually offensive comments at her, propositioning her, 10 touching her sexually, and sexually assaulting her. On March 11 9, 2005, Townsend told Michelle Benjamin about the harassment. 12 On March 17, 2005, Townsend reported the sexual harassment to 13 Karlean Victoria Grey-Allen, the HR Director of BEI. 14 15 16 II. Grey-Allen began working for BEI as the HR Director in 17 August 2004. When Townsend reported the sexual harassment to 18 her, Grey-Allen asked Townsend to provide a written and oral 19 account of the events that had occurred. 20 spoke with the New York State Division of Human Rights, which 21 suggested that she interview Hugh Benjamin and then separate 22 him from Townsend. 23 and asked him to work from home. Grey-Allen also Grey-Allen then interviewed Hugh Benjamin -7- 1 On March 21, 2005, Grey-Allen discussed the sexual 2 harassment allegations with Dennis Barnett, a management 3 consultant retained by BEI. 4 train Grey-Allen when she arrived at BEI, and Grey-Allen 5 described him as a mentor with whom she believed she could 6 share confidential concerns. 7 Grey-Allen s conversation with Barnett and allegedly deemed it 8 inappropriate. 9 same day, asserting that Grey-Allen had breached 10 11 Barnett had been assigned to Michelle Benjamin learned of Michelle Benjamin terminated Grey-Allen that confidentiality by speaking with Barnett. On March 22, 2005, Michelle Benjamin took over the 12 investigation of Townsend s sexual harassment allegations. 13 She allowed Hugh Benjamin to return to the office. 14 retained HR Delivery, Inc. ( HR Delivery ), an outside human 15 resources organization, to conduct the investigation. 16 Allen contends that the investigation by HR Delivery was 17 inadequate and that Michelle Benjamin controlled how the 18 investigation was conducted and what information HR Delivery 19 was able to access. 20 nothing happened between Hugh Benjamin and Townsend and that 21 it was a he said versus she said case. 22 She also Grey- HR Delivery ultimately concluded that On March 23, 2005, Townsend resigned from BEI. She told 23 Michelle Benjamin that she could not take it in that office 24 after Hugh Benjamin was permitted to come back to work. -8- In 1 April 2005, Townsend and Grey-Allen filed a joint complaint 2 with the EEOC. 3 the time Grey-Allen conducted her investigation or at the time 4 Grey-Allen was terminated. No charge had yet been filed with the EEOC at 5 6 III. 7 Townsend and Grey-Allen filed their complaint in the 8 Southern District of New York on November 4, 2005. 9 February 3, 2006, the defendants served Townsend with an Offer 10 of Judgment pursuant to Rule 68 for $50,000, inclusive of all 11 attorney s fees and costs accrued through that time. 12 rejected that Offer. 13 Judgment to Grey-Allen. 14 On Townsend The defendants did not make an Offer of On March 13, 2008, the district court initially denied 15 the defendants motion for summary judgment that sought to 16 dismiss all claims by Townsend and Grey-Allen. 17 Benjamin Enters., Inc., No. 05 Civ. 9378, 2008 WL 686631 18 (S.D.N.Y. Mar. 13, 2008). 19 for reconsideration, the district court granted summary 20 judgment dismissing Grey-Allen s retaliation claims under 21 Title VII and the New York Human Rights Law, holding that, by 22 participating in an internal investigation into Townsend s 23 sexual harassment allegations that was not associated with any 24 EEOC proceeding, Grey-Allen had not engaged in protected Townsend v. However, on the defendants motion -9- 1 activity under the participation clause of Title VII s anti- 2 retaliation provision.4 3 Townsend, 2008 WL 1766944, at *2. Townsend s claims proceeded to a jury trial. On December 4 12, 2008, the jury returned a verdict in favor of Townsend for 5 $30,400. 6 Townsend to a hostile work environment and also found that he 7 was the alter ego of BEI and that his actions were therefore 8 imputed to BEI. 9 civil battery. The jury found that Hugh Benjamin had subjected The jury also found Hugh Benjamin liable for The jury did not find BEI liable under Title 10 VII for constructive discharge. 11 $5200 against BEI, Michelle Benjamin, and Hugh Benjamin under 12 Title VII and the New York Human Rights Law5 and $25,200 13 against Hugh Benjamin under New York tort law. 14 The jury award consisted of On October 2, 2009, the district court awarded attorney s 15 fees and costs to Townsend in the amount of $141,308.80. The 16 district court thereafter denied a motion for reconsideration 17 of this fee award. 18 Civ. 9378, 2009 WL 3722716 (S.D.N.Y. Nov. 6, 2009). Townsend v. Benjamin Enters., Inc., No. 05 4 The district court noted that Grey-Allen concede[d] that she cannot claim protection under the opposition clause [of Title VII] because she lacked a good faith belief that Townsend was sexually harassed. Townsend, 2008 WL 1766944, at *2. 5 BEI alone was found liable for violations of Title VII, and Michelle Benjamin, Hugh Benjamin, and BEI were found jointly and severally liable for violations of the New York Human Rights Law. -10- 1 Grey-Allen filed her notice of appeal on January 12, 2009 2 and an amended notice of appeal on November 2, 2009. Cross- 3 appellants BEI, Michelle Benjamin, and Hugh Benjamin filed 4 their notice of appeal on October 28, 2009. 5 6 DISCUSSION 7 I. 8 A. 9 Grey-Allen contends that the district court erred in 10 holding that the participation clause of Title VII s anti- 11 retaliation provision does not protect participation in an 12 internal employer investigation not associated with any formal 13 EEOC charge. 14 granting summary judgment dismissing her Title VII retaliation 15 claim on this basis. 16 summary judgment de novo, construing the evidence in the 17 manner most favorable to the non-moving party. 18 Vill. of Cornwall-on-Hudson Police Dep t, 577 F.3d 415, 427 19 (2d Cir. 2009). She argues that the district court thus erred in We review a district court s grant of See Okin v. 20 The district court found that Grey-Allen did not engage 21 in protected activity under the participation clause because 22 23 24 25 26 [i]n order to gain protection under the participation clause, the participation must be in an investigation or proceeding covered by Title VII, and thus not in an internal employer investigation. Correa v. Mana Prods., Inc., [550 F. Supp. 2d 319, 329 (E.D.N.Y. 2008).] Here, -11- 1 2 3 4 5 6 it is undisputed that Grey-Allen s investigation was conducted pursuant to her employer s internal procedures; more to the point, Grey-Allen s actions were not associated with any Title VII proceeding. Townsend, 2008 WL 1766944, at *2. 7 participation clause covers internal investigations not 8 associated with a formal EEOC charge6 is a question of first 9 impression in this Court. The question of whether the 10 Section 704(a) of Title VII contains both an opposition 11 clause and a participation clause, making it unlawful for an 12 employer to retaliate against an individual because he has 13 opposed any practice made an unlawful employment practice by 6 We express no opinion on whether participation in an internal investigation that is begun after a formal charge is filed with the EEOC falls within the scope of the participation clause. Some courts have answered this question in the affirmative. Abbott v. Crown Motor Co., 348 F.3d 537, 543 (6th Cir. 2003) ( [W]e hold that Title VII protects an employee s participation in an employer s internal investigation into allegations of unlawful discrimination where that investigation occurs pursuant to a pending EEOC charge. ); Clover v. Total Sys. Servs., Inc., 176 F.3d 1346, 1353 (11th Cir. 1999) ( [W]e recognize that, at least where an employer conducts its investigation in response to a notice of charge of discrimination, and is thus aware that the evidence gathered in that inquiry will be considered by the EEOC as part of its investigation, the employee s participation is participation in any manner in the EEOC investigation. ); see also EEOC v. Total Sys. Servs. Inc., 221 F.3d 1171, 1174 n.3 (11th Cir. 2000) (distinguishing case from Clover on the ground that no EEOC charge had been filed before the alleged retaliatory act). Because the investigation and alleged retaliation at issue here occurred before any charge was filed with the EEOC, we need not reach this question. See Hatmaker v. Mem l Med. Ctr., 619 F.3d 741, 747 (7th Cir. 2010) (reserving judgment on this question when internal employer investigation had no nexus to pending EEOC charge). -12- 1 this subchapter, or because he has made a charge, testified, 2 assisted, or participated in any manner in an investigation, 3 proceeding, or hearing under this subchapter. 4 2000e-3(a). 5 that she was not covered by the opposition clause, because she 6 did not know whether Townsend s allegations of harassment were 7 true and thus lacked a good-faith belief that the 8 discriminatory action had occurred, which is required for 9 protection under the opposition clause.7 42 U.S.C. § In the proceedings below, Grey-Allen conceded Townsend, 2008 WL 10 1766944, at *2. 11 conducting an investigation into Townsend s allegations of 12 sexual harassment in her capacity as BEI s HR Director, she 13 engaged in protected activity under the participation clause. 14 Instead, Grey-Allen asserted that, by As in all statutory construction cases, we begin with 15 the language of the statute. United States v. Am. Soc y. of 16 Composers, Authors & Publishers, 627 F.3d 64, 72 (2d Cir. 17 2010) (quoting Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 18 (2002)). Grey-Allen contends that the language participate[] 7 The district court granted summary judgment before the Supreme Court rendered its decision in Crawford v. Metropolitan Government of Nashville & Davidson County, 555 U.S. 271 (2009), which adopted an expansive interpretation of the opposition clause of Title VII s anti-retaliation provision. Counsel for Grey-Allen contended at oral argument that Grey-Allen would have been protected by the opposition clause had the proceedings occurred after Crawford and had she relied on the opposition clause. (Oral Arg. Tr., Aug. 30, 2011 ( Tr. ), at 9-10.) -13- 1 in any manner in an investigation, proceeding, or hearing 2 under this subchapter, 42 U.S.C. § 2000e-3(a), encompasses 3 participation in any proceeding intended to remedy employment 4 discrimination under Title VII, including internal sexual 5 harassment investigations not connected with any formal EEOC 6 proceeding or charge. 7 interpretation of the language of the statute. 8 9 We decline to adopt such a strained The language of the participation clause confines those proceedings in which participation is protected to those 10 under this subchapter, meaning subchapter VI of Chapter 21 11 of Title 42. 12 subchapter is devoted to describing the enforcement powers of 13 the EEOC and the procedures by which the EEOC carries out its 14 investigations and hearings. 15 2000e-8, 2000e-9. 16 subchapter thus plainly refers to an investigation that 17 occur[s] in conjunction with or after the filing of a formal 18 charge with the EEOC; it does not include participating in an 19 employer s internal, in-house investigation, conducted apart 20 from a formal charge with the EEOC. 21 F.3d at 1174. 22 42 U.S.C. §§ 2000e 2000e-17. Much of this See, e.g., 42 U.S.C. §§ 2000e-5, An investigation . . . under this Total Sys. Servs, 221 Every Court of Appeals to have considered this issue 23 squarely has held that participation in an internal employer 24 investigation not connected with a formal EEOC proceeding does -14- 1 not qualify as protected activity under the participation 2 clause. 3 221 F.3d at 1174; Vasconcelos v. Meese, 907 F.2d 111, 113 (9th 4 Cir. 1990). 5 Circuits have also suggested that, for conduct to be protected 6 by the participation clause, it must occur in connection with 7 a formal EEOC proceeding. 8 v. Dall. Morning News, Inc., 209 F.3d 419, 428 (5th Cir. 9 2000).8 10 See Hatmaker, 619 F.3d at 746-47; Total Sys. Servs, The Courts of Appeals for the Fifth and Sixth See Abbott, 348 F.3d at 543; Byers While Grey-Allen points to the decision by the Court of 11 Appeals for the Ninth Circuit in Hashimoto v. Dalton, 118 F.3d 12 671 (9th Cir. 1997), where the court concluded that the 13 plaintiff s visit to the Navy s Equal Employment Opportunity 14 (EEO) counselor qualified as protected activity under the 15 participation clause, id. at 680, Hashimoto is distinguishable 16 from Grey-Allen s case. 17 time Hashimoto was decided required a federal employee to make 18 a complaint to the EEO counselor within thirty days of the 19 alleged discrimination as part of the required exhaustion of 20 administrative remedies. The EEOC regulations in force at the See id. at 678; 29 C.F.R. 8 Several district courts in this Circuit have similarly concluded that participation in an internal investigation is not participation in a proceeding triggering the participation clause. See, e.g., Correa, 550 F. Supp. 2d at 329; Bick v. City of New York, No. 95 Civ. 8781, 1997 WL 381801, at *4 (S.D.N.Y. July 10, 1997). -15- 1 § 1613.214(a)(1)(i) (1987). 2 counselor constituted participation in an investigation, 3 proceeding, or hearing under Title VII, because the 4 complaint was required by the EEOC regulations as a 5 prerequisite to bringing a claim.9 6 Thus, the complaint to the EEO The case law from other Courts of Appeals thus supports 7 our conclusion that the plain language of the participation 8 clause does not include participation in an internal employer 9 investigation unrelated to a formal EEOC charge. 10 Grey-Allen relies on the decisions in Deravin v. Kerik, 11 335 F.3d 195 (2d Cir. 2003), and McMenemy v. City of 12 Rochester, 241 F.3d 279 (2d Cir. 2001), but those decisions 13 offer little support for her position. 14 for the proposition that defending oneself in an EEOC 15 investigation is protected activity under the participation 16 clause; it sheds no light on whether participation in an 17 internal employer investigation so qualifies. 18 204-05. Deravin stands merely 335 F.3d at While this Court held in McMenemy that a city 9 The same was true in Kurtz v. McHugh, 423 F. App x 572 (6th Cir. 2011), where the court found that the plaintiff engaged in protected activity under the participation clause by making a statement to the EEO counselor and otherwise participating in EEO proceedings. Id. at 578. The employee in that case was a federal employee and was thus required under the EEOC regulations to make a complaint to the EEO counselor within forty-five days of the discriminatory conduct in order to exhaust administrative remedies. See id. at 575-76; 29 C.F.R. § 1614.105(a)(1) (2010). -16- 1 employee s internal investigation of sexual harassment 2 allegations constituted protected activity, this Court 3 analyzed the participation clause and opposition clause 4 together and thus did not decide the independent question of 5 whether participation in an internal employer investigation 6 qualifies as protected activity under the participation 7 clause. 8 9 241 F.3d at 283-85. Grey-Allen also contends that the affirmative defense created by the Supreme Court in Faragher and Ellerth brings 10 internal investigations under Title VII within the language 11 of the participation clause. 12 Supreme Court established an affirmative defense to an 13 employer s vicarious liability for a hostile work environment 14 created by a supervisor of the plaintiff employee. 15 such a defense successfully, the employer must not have taken 16 a tangible employment action against the plaintiff and must 17 demonstrate: (a) that the employer exercised reasonable care 18 to prevent and correct promptly any sexually harassing 19 behavior, and (b) that the plaintiff employee unreasonably 20 failed to take advantage of any preventive or corrective 21 opportunities provided by the employer or to avoid harm 22 otherwise. 23 765. 24 an incentive for employers to conduct internal investigations In Faragher and Ellerth, the To raise Faragher, 524 U.S. at 807; Ellerth, 524 U.S. at While the Faragher/Ellerth affirmative defense creates -17- 1 in order to show that they have met the first prong of this 2 defense, it does not impose an obligation on employees to 3 participate in such investigations as a necessary prerequisite 4 to bringing a discrimination claim under Title VII. 5 Sys. Servs., 221 F.3d at 1174 n.3 ( According to the EEOC, 6 [Faragher and Ellerth] essentially made reporting an incident 7 of harassment to the employer a new prerequisite to filing a 8 claim. 9 decisions. . . . We do not believe Congress intended to See Total We disagree with the EEOC s use of these important 10 protect absolutely every sexual harassment complaint made to 11 an employer . . . as a protected activity under the 12 participation clause. ). 13 a basis for bringing internal investigations not associated 14 with a formal EEOC charge under this subchapter within the 15 language of the participation clause.10 Faragher and Ellerth do not provide 10 The EEOC has submitted an amicus brief urging us to adopt a contrary interpretation of the participation clause, one that embraces internal employer investigations. The EEOC s views are entitled to deference to the extent they have the power to persuade. See Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) ( The weight of [an agency s] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control. ); N.Y. State Rest. Ass n v. N.Y.C. Bd. of Health, 556 F.3d 114, 130-31 (2d Cir. 2003) (amicus brief from the Food and Drug Administration was subject to Skidmore deference). However, for the reasons explained above, we do not find the EEOC s interpretation persuasive in this case. -18- 1 Grey-Allen also argues more generally that, because 2 internal investigations are integral to the deterrent aims and 3 effective operation of Title VII, participation in such 4 investigations should qualify as protected activity. 5 this cannot be squared with the plain language of the 6 participation clause, which requires that the investigation in 7 which the employee participates be under Title VII, not 8 merely integral to effectuating its purposes. However, 9 We thus affirm the district court s grant of summary 10 judgment dismissing Grey-Allen s Title VII retaliation claim. 11 12 B. 13 Because we affirm the district court s grant of summary 14 judgment dismissing Grey-Allen s Title VII retaliation claim, 15 we need not address the question of whether a reasonable jury 16 could find that Grey-Allen was the victim of retaliation. 17 18 19 II. BEI and the Benjamins raise a number of arguments on this 20 appeal. They first assert that the district court erred in 21 denying their motion for judgment as a matter of law or, in 22 the alternative, for a new trial. 23 that the district court committed the following errors: 24 concluding that there is a proxy or alter ego exception to -19- Specifically, they claim (1) 1 the Faragher/Ellerth affirmative defense; (2) finding that a 2 reasonable jury could conclude that Hugh Benjamin was a 3 proxy or alter ego for BEI; (3) instructing the jury on 4 proxy/alter ego liability; and (4) instructing the jury on 5 Michelle Benjamin s individual liability.11 6 Second, BEI and the Benjamins argue that the district 7 court abused its discretion in awarding Townsend $141,308.80 8 in attorney s fees and costs. 9 10 A. 11 BEI and the Benjamins argue that the district court erred 12 in denying their motion for judgment as a matter of law or, in 13 the alternative, for a new trial. 14 court s denial of a motion for judgment as a matter of law de 15 novo. 16 140, 142 (2d Cir. 2003). 17 judgment as a matter of law only if, notwithstanding making 18 all credibility assessments and drawing all inferences in 19 favor of [the non-moving party], a reasonable juror would be 20 compelled to accept the view of [the moving party]. 21 Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 22 98, 109 (2d Cir. 2002) (internal quotation marks and citations We review a district See Parrot v. Guardian Life Ins. Co. of Am., 338 F.3d We will reverse the denial of 11 BEI and the Benjamins also argue that, if the Faragher/Ellerth affirmative defense can be applied in this case, they established that defense as a matter of law. -20- 1 omitted). We review a district court s denial of a motion for 2 a new trial for abuse of discretion. 3 Inc. v. Trafalgar Power Inc., 227 F.3d 8, 15 (2d Cir. 2000). 4 A motion for a new trial ordinarily should not be granted 5 unless the trial court is convinced that the jury has reached 6 a seriously erroneous result or that the verdict is a 7 miscarriage of justice. 8 quotation marks and citations omitted). See Hydro Investors, Medforms, 290 F.3d at 106 (internal 9 10 11 1. BEI and the Benjamins first argue that the district court 12 erred in concluding that the doctrine of proxy/alter ego 13 liability survives Faragher and Ellerth. 14 the Faragher/Ellerth affirmative defense remains available 15 even when the alleged harasser holds a sufficiently high 16 position within the hierarchy of an organization to be 17 considered the organization s proxy or alter ego. 18 question of first impression in this Court. 19 They contend that This is a This argument cannot be squared with a fair reading of 20 Faragher and Ellerth. 21 outlining its previous case law on the liability of employers 22 in sexual harassment cases. 23 that our cases have established few definite rules for 24 determining when an employer will be liable for a In Faragher, the Supreme Court began by 524 U.S. at 785-93. -21- While noting 1 discriminatory environment that is otherwise actionably 2 abusive, id. at 788, the Court highlighted those areas of the 3 law in which there was little ambiguity. 4 One such area was the doctrine of proxy/alter ego 5 liability, which is related to, but distinct from, vicarious 6 liability. 7 that standards for binding the employer were not in issue in 8 Harris [v. Forklift Systems, Inc., 510 U.S. 17 (1993)], given 9 that the individual charged with creating the abusive The Court noted that it was [not] exceptional 10 atmosphere was the president of the corporate employer and 11 thus was indisputably within that class of an employer 12 organization s officials who may be treated as the 13 organization s proxy. 14 Court s decision in Torres v. Pisano, 116 F.3d 625 (2d Cir. 15 1997), for the proposition that a supervisor may hold a 16 sufficiently high position in the management hierarchy of the 17 company for his actions to be imputed automatically to the 18 employer. 19 Torres, 116 F.3d at 634-35 & n.11). 20 approvingly described by Faragher, thus holds an employer 21 liable in its own right for wrongful harassing conduct, rather 22 than vicariously liable for actions of the employer s agents.12 Id. at 789. The Court also cited this Faragher, 524 U.S. at 789-90 (citing and quoting 12 This doctrine, as The Court in Faragher also relied upon the proxy/alter ego doctrine to explain its prior cases holding that liability for -22- 1 Similarly, the Court in Ellerth invoked the alter ego 2 doctrine in its discussion of employer liability principles 3 and carefully distinguished the doctrine from the facts of the 4 case before it. 5 the Restatement (Second) of Agency] addresses direct liability 6 . . . and indirect liability, where the agent s high rank in 7 the company makes him or her the employer s alter ego. 8 of the parties contend [the supervisor s] rank imputes 9 liability under this principle. . . . So, for our purposes 524 U.S. at 758 ( Subsection [219(2)](a) [of None 10 here, subsection[] (a) . . . can be put aside. ). Ellerth 11 instead derived the appropriate standard for non-proxy 12 employer liability, and its two-part affirmative defense, from 13 Section 219(2)(d) of the Restatement, which concerns 14 vicarious liability for intentional torts committed by an 15 employee. Id. at 759; see also id. at 759-65. 16 Moreover, Faragher and Ellerth made clear that they did 17 not intend to depart from these well-established theories of 18 employer liability in sexual harassment cases. 19 Faragher explained that the Supreme Court had affirmed the Indeed, discriminatory employment actions with tangible results is to be imputed to employers. 524 U.S. at 790 ( A variety of reasons have been invoked for this apparently unanimous rule. Some courts explain, in a variation of the proxy theory discussed above, that when a supervisor makes such decisions, he merges with the employer, and his act becomes that of the employer. (emphasis added)). -23- 1 relevance of agency principles in those cases in Meritor 2 Savings Bank, FSB v. Vinson, 477 U.S. 57 (1986), and that 3 Meritor s statement of the law is the foundation on which we 4 build today. 5 affirmative defense builds upon rather than repudiates the 6 theory of proxy/alter ego liability articulated in the Court s 7 prior cases. 8 9 524 U.S. at 791-92. Thus, the Faragher/Ellerth Every Court of Appeals to have considered this issue has held that the Faragher/Ellerth affirmative defense is 10 unavailable when the supervisor in question is the employer s 11 proxy or alter ego. 12 F.3d 376, 383-84 (5th Cir. 2003) (holding that the 13 Faragher/Ellerth defense is unavailable when the harassing 14 supervisor is . . . indisputably within that class of an 15 employer organization s officials who may be treated as the 16 organization s proxy (quoting Faragher, 524 U.S. at 789) 17 (emphasis omitted)); Johnson v. West, 218 F.3d 725, 730 (7th 18 Cir. 2000) (same); cf. Passantino v. Johnson & Johnson 19 Consumer Prods., Inc., 212 F.3d 493, 517 (9th Cir. 2000) 20 (holding that the Faragher/Ellerth affirmative defense is 21 inapplicable as a defense to punitive damages when the 22 corporate officers who engage in illegal conduct are See Ackel v. Nat l Commc ns, Inc., 339 -24- 1 sufficiently senior to be considered proxies for the 2 company ).13 3 The EEOC s interpretation of Title VII, as set forth in 4 its Enforcement Guidance, is in accord with this analysis. 5 See EEOC Enforcement Guidance: 6 for Unlawful Harassment by Supervisors, 1999 WL 33305874, at 7 *18 (June 18, 1999) ( [When the alleged harasser qualifies as 8 the employer s proxy], the official s unlawful harassment is 9 imputed automatically to the employer. Vicarious Employer Liability Thus, the employer 10 cannot raise the [Faragher/Ellerth] affirmative defense, even 11 if the harassment did not result in a tangible employment 12 action. (footnote omitted)). 13 is entitled to deference to the extent it has the power to 14 persuade. 15 Corp. v. Morgan, 536 U.S. 101, 110 n.6 (2002) (EEOC s 16 interpretation contained in Compliance Manual subject to The EEOC s Enforcement Guidance See Skidmore, 323 U.S. at 140; Nat l R.R. Passenger 13 Other Courts of Appeals have continued to apply the proxy/alter ego doctrine after Faragher and Ellerth but have not ruled on whether proxy/alter ego liability bars an employer from raising the Faragher/Ellerth defense. See Helm v. Kansas, 656 F.3d 1277, 1286 (10th Cir. 2011) ( We have not squarely addressed whether an employer may rely on the Faragher/Ellerth defense when a victimized employee seeks to impose liability on the employer under the alter-ego theory . . . . We need not decide that issue to resolve this case, however, as we conclude that . . . Judge Stewart did not operate as the alter ego of the State. ); Mallinson-Montague v. Pocrnick, 224 F.3d 1224, 1228 n.2, 1232-33 (10th Cir. 2000) (court did not address the issue because the plaintiff did not raise the question and the Faragher/Ellerth affirmative defense failed on the merits). -25- 1 Skidmore deference); Mack v. Otis Elevator Co., 326 F.3d 116, 2 127 (2d Cir. 2003) ( While we are not bound by [the EEOC s] 3 enforcement guidelines, they are entitled to respect to the 4 extent that they are persuasive. ). 5 above, we find the EEOC s interpretation persuasive. For the reasons explained 6 In sum, there was no error in the district court s 7 conclusion that the Faragher/Ellerth defense is unavailable 8 when the alleged harasser is the employer s proxy or alter ego 9 and in the district court s denial of the defendants post- 10 trial motion on this basis. 11 12 13 2. BEI and the Benjamins next argue that the jury could not 14 reasonably have concluded that Hugh Benjamin was BEI s alter 15 ego and that the district court thus erred in denying the 16 defendants motion for judgment as a matter of law on this 17 basis. 18 We disagree. BEI and the Benjamins argue that no reasonable jury could 19 find that BEI condoned Hugh Benjamin s harassment, given that 20 BEI s President was Hugh Benjamin s wife. 21 relevant question is not whether the employer approved of the 22 actions of the supervisor but rather whether the supervisor 23 occupied a sufficiently high position in the management 24 hierarchy of the company for his actions to be imputed -26- However, the 1 automatically to the employer. 2 (quoting Torres, 116 F.3d at 634); see also Ackel, 339 F.3d at 3 384 ( [T]he only factor relevant to the determination of 4 whether [the supervisor in question] was a proxy for [the 5 employer] is whether he held a sufficiently high position in 6 the management hierarchy so as to speak for the corporate 7 employer. (quoting Faragher, 524 U.S. at 789)). 8 9 Faragher, 524 U.S. at 789-90 In this case, the jury reasonably could have concluded that Hugh Benjamin occupied such a position. Courts of 10 Appeals have considered supervisors to be of sufficiently high 11 rank to qualify as an employer s proxy or alter ego when the 12 supervisor is a president, owner, proprietor, partner, 13 corporate officer, or otherwise highly-positioned in the 14 management hierarchy. 15 Helm, 656 F.3d at 1286 ( In Faragher, the Supreme Court 16 suggested that presidents, owners, proprietors, partners, 17 corporate officers, and supervisors with a high position in 18 the management hierarchy are the types of officials who can be 19 considered an organization s alter ego. ); EEOC v. Karenkim, 20 Inc., No. 08 Civ. 1019, 2010 WL 3810160, at *4-5 (N.D.N.Y. 21 Sept. 22, 2010) (applying same standard). 22 is the only corporate Vice President of BEI, operating as 23 second-in-command, with a position immediately below Michelle 24 Benjamin in the corporate hierarchy. Johnson, 218 F.3d at 730; see also -27- Here, Hugh Benjamin He is also a corporate 1 shareholder with a financial stake in BEI. All of BEI s 2 corporate shares are held by Hugh Benjamin, Michelle Benjamin, 3 and their two children. 4 reasonably could have concluded that Hugh Benjamin was 5 sufficiently high within the corporate hierarchy to qualify as 6 BEI s alter ego. 7 triable issue of fact with respect to whether supervisor was a 8 proxy for the corporation when he was President and General 9 Manager of the company and a stockholder and member of the Given these facts, the jury See Ackel, 339 F.3d at 384 (finding a 10 Board of Directors with managerial duties); Mallinson- 11 Montague, 224 F.3d at 1232-33 (holding that alter ego 12 instruction was appropriate based on the supervisor s high 13 managerial rank as Senior Vice President of Consumer Lending 14 and his supervisory duties). 15 Moreover, Hugh Benjamin exercised a significant degree of 16 control over corporate affairs, which is consistent with alter 17 ego liability. 18 corporate decisions including hiring, and the supervisors and 19 managers in the field reported directly to him. 20 Mallinson-Montague, 224 F.3d at 1233 (finding persuasive that 21 Senior Vice President of Consumer Lending had the authority 22 to hire and fire employees in [his] department and was the 23 ultimate supervisor of all employees in [his] department ). 24 While Michelle Benjamin had the power to overrule Hugh He collaborated with Michelle Benjamin on -28- See 1 Benjamin s decisions, this fact alone, without more evidence 2 of pervasive control over Hugh Benjamin by other corporate 3 officers at BEI, is not sufficient to establish as a matter of 4 law that Hugh Benjamin was not BEI s alter ego. 5 at 1233 (holding that an alter ego instruction was appropriate 6 when supervisor in question answered only to the company s 7 president), with Johnson, 218 F.3d at 730 (holding that a 8 supervisor could not be considered employer s proxy/alter ego 9 when he had at least two levels of supervisors and likely Compare id. 10 others within the organization s bureaucracy). Nor does the 11 fact that Hugh Benjamin owned only 5% of the corporate stock 12 at the time of trial conclusively establish that he is not 13 BEI s alter ego. 14 acting as a corporation s proxy, Ackel, 339 F.3d at 384; 15 moreover, Hugh Benjamin owned 34% of the corporate shares 16 until 2004, when some of the shares were transferred to the 17 Benjamins children for estate planning purposes, a transfer 18 that did not affect Hugh Benjamin s decisionmaking authority. 19 Thus, because Hugh Benjamin occupied a high managerial rank 20 within BEI and because he exercised significant control over 21 the company s operations, the jury reasonably could have 22 concluded that he was BEI s alter ego. 23 therefore did not err in denying the defendants motion for 24 judgment as a matter of law on this basis. Stock ownership is not a prerequisite for -29- The district court 1 3. 2 BEI and the Benjamins also argue that the district 3 court s jury instruction on alter ego liability was erroneous 4 and that the district court abused its discretion in denying 5 the defendants motion for a new trial on this basis. 6 grant a new trial if the jury instruction was erroneous and if 7 that error was not harmless. 8 Admin., 361 F.3d 749, 758 (2d Cir. 2004). 9 erroneous if the instruction misleads the jury as to the We will Sanders v. N.Y.C. Human Res. [A] jury charge is 10 proper legal standard, or it does not adequately inform the 11 jury of the law. 12 (2d Cir. 1997). 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Luciano v. Olsten Corp., 110 F.3d 210, 218 The district court s jury instruction on alter ego liability provided in relevant part that: Under both federal and state law, an employer is strictly liable for hostile work environment sexual harassment by a supervisor when the supervisor s role is more than a mere supervisor and is actually identical to that of the employer. In other words, where an employee serves in a supervisory position and exercises significant control over an employee s hiring, firing or conditions of employment, that individual operates as the alter ego of the employer, and the employer is strictly liable for any unlawful employment practices of the individual without regard to whether the employer knew of the individual s conduct. Therefore, . . . you must determine whether, under all of the circumstances, [Hugh Benjamin] served in a supervisory position and exercised significant control -30- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 over an employee s employment. hiring, firing or conditions of If you determine that Hugh Benjamin was employed in a position sufficiently elevated within the corporate hierarchy as to be viewed as the employer s alter ego, then you must also find Defendant Benjamin Enterprises strictly liable for hostile work environment sexual harassment under both federal and state law, and Defendant Michelle Benjamin strictly liable for hostile work environment sexual harassment under New York State law. On the other hand, if you determine from all of the circumstances that Hugh Benjamin s role in the corporation was not sufficiently elevated within the corporate hierarchy to be considered the employer s alter ego, then the employer s liability is not automatic . . . . BEI and the Benjamins contend that the jury instruction 23 was erroneous because it suggested to the jury that an 24 individual could be an employer s alter ego merely because 25 that individual serves in a supervisory position and 26 exercises significant control over an employee s hiring, 27 firing or conditions of employment. 28 ego liability is not so broad as to encompass such a wide 29 range of individuals. 30 They argue that alter We agree. The jury instruction was erroneous because it gave the 31 jury a misleading impression of the proper standard for alter 32 ego liability. 33 that an individual qualifies as the alter ego of an employer 34 where that individual serve[s] in a supervisory position and Specifically, the instruction twice stated -31- 1 exercise[s] significant control over an employee s hiring, 2 firing or conditions of employment. 3 mere status as a supervisor with power to hire or fire is not 4 sufficient to render that individual an alter ego of an 5 employer. 6 make employers always automatically liable for sexual 7 harassment by their supervisors . . . . (quoting Meritor, 8 477 U.S. at 72)); Mallinson-Montague, 224 F.3d at 1233 9 (finding that the district court erred in concluding that the However, an individual s See Faragher, 524 U.S. at 792 ( Title VII does not 10 alter ego instruction was appropriate simply because [the 11 defendant] was the Plaintiffs supervisor and exercised a high 12 degree of control over them ).14 13 It is true, as Townsend argues, that other portions of 14 the jury instruction ameliorated this error to some extent by 15 stating that the supervisor s role [must be] more than a mere 16 supervisor and by directing the jury to consider whether 17 Hugh Benjamin was employed in a position sufficiently 18 elevated within the corporate hierarchy as to be viewed as the 19 employer s alter ego. 20 portions of the charge were sufficient to correct the 21 misleading impression created by the other erroneous 22 statements. However, we cannot conclude that these Given that the jury instruction twice stated that 14 Indeed, counsel for both parties objected to this language in the proposed jury instruction. -32- 1 an individual qualifies as an alter ego where he or she 2 serve[s] in a supervisory position and exercise[s] 3 significant control over an employee s hiring, firing or 4 conditions of employment, the jury could have been left with 5 the erroneous impression that a supervisor in this position 6 is, by definition, sufficiently elevated within the corporate 7 hierarchy for alter ego liability to attach. 8 However, the error in the instruction was harmless. 9 An error is harmless only when we are persuaded it did not 10 influence the jury s verdict. Sanders, 361 F.3d at 758 11 (quoting Gordon v. N.Y.C. Bd. of Educ., 232 F.3d 111, 116 (2d 12 Cir. 2000)). 13 influence the jury s finding with respect to alter ego 14 liability because no reasonable juror could have concluded 15 that Hugh Benjamin was not the alter ego of BEI. 16 Benjamin was extremely elevated in the corporate hierarchy of 17 BEI, serving as the only corporate Vice President, second only 18 to Michelle Benjamin, BEI s President. 19 officer, he answered only to Michelle Benjamin and exercised 20 managerial responsibility for day-to-day operations of BEI. 21 He was also a corporate shareholder with a financial stake in 22 BEI. 23 his significant control over the company s operations, we are 24 persuaded that any error in the district court s jury We are persuaded that the error here did not Hugh As a senior corporate Given Hugh Benjamin s extremely high rank within BEI and -33- 1 instruction did not influence the jury s finding with respect 2 to alter ego liability and was therefore harmless. 3 4 Accordingly, we affirm the district court s denial of the defendants post-trial motion on this basis. 5 6 7 4. We have found that the district court correctly concluded 8 (1) that the Faragher/Ellerth defense is unavailable when the 9 supervisor in question is the employer s proxy or alter ego; 10 (2) that the jury reasonably could have concluded that Hugh 11 Benjamin was BEI s alter ego; and (3) that there was no 12 prejudicial error in the jury instruction on alter ego 13 liability. 14 raising the Faragher/Ellerth defense in the proceedings below, 15 the argument by BEI and the Benjamins that the 16 Faragher/Ellerth defense was proven in this case as a matter 17 of law is moot. Because BEI was thus properly precluded from 18 19 20 5. BEI and the Benjamins next claim error in the district 21 court s instruction regarding individual liability for 22 Michelle Benjamin under the New York Human Rights Law. 23 jury instruction provided in relevant part that: -34- The 1 2 3 4 5 6 7 8 9 10 11 12 If you determine that Hugh Benjamin was employed in a position sufficiently elevated within the corporate hierarchy as to be viewed as the employer s alter ego, then you must also find Defendant Benjamin Enterprises strictly liable for hostile work environment sexual harassment under both federal and state law, and Defendant Michelle Benjamin strictly liable for hostile work environment sexual harassment under New York State law. BEI and the Benjamins do not dispute that the jury 13 instruction correctly states the law on employer liability 14 under § 296(1) of the New York Human Rights Law. 15 provision, an individual is properly subject to liability for 16 discrimination when that individual qualifies as an 17 employer. 18 as an employer when that individual has an ownership 19 interest in the relevant organization or the power to do more 20 than carry out personnel decisions made by others. 21 v. Chem. Bank, 473 N.E.2d 11, 12 (N.Y. 1984) (per curiam). 22 The jury instruction accurately reflects these principles. 23 Because there was no dispute that Michelle Benjamin had an 24 ownership interest in the company and the power to hire and 25 fire employees, it was proper for the district court to 26 instruct the jury that, as a matter of law, it must find 27 Michelle Benjamin strictly liable upon a finding that Hugh 28 Benjamin qualified as BEI s alter ego. N.Y. Exec. Law § 296(1). -35- Under this An individual qualifies Patrowich 1 BEI and the Benjamins nonetheless contend that the jury 2 instruction was unfair because the claims against Michelle 3 Benjamin had been premised on a theory of aiding and abetting 4 liability under § 296(6) of the New York Human Rights Law 5 rather than a theory of employer liability under § 296(1). 6 However, this assertion does not demonstrate that the jury 7 instruction was incorrect as a statement of the legal 8 principles applicable to § 296(1). 9 the original complaint premised its claims against Michelle Nor does it matter that 10 Benjamin on § 296(6). The failure in a complaint to cite a 11 statute, or to cite the correct one, in no way affects the 12 merits of a claim. 13 matters. 14 1988) (en banc); see also Flickinger v. Harold C. Brown & Co., 15 947 F.2d 595, 600 (2d Cir. 1991) (directing the entry of 16 judgment for plaintiff on a legal theory not pleaded in the 17 complaint). 18 that they were prejudiced in any way by the fact that this 19 theory of liability was not raised earlier. 20 had notice of the proposed jury charge and an opportunity to 21 object to it prior to summations. 22 they would have conducted their defense any differently had 23 the original complaint alleged employer liability under 24 § 296(1), perhaps because they do not dispute that Michelle Factual allegations alone are what Albert v. Carovano, 851 F.2d 561, 571 n.3 (2d Cir. Moreover, BEI and the Benjamins have not shown -36- The defendants They do not assert that 1 Benjamin plainly qualifies as an employer under this 2 provision.15 3 Michelle Benjamin s individual liability was not erroneous. Thus, the district court s jury instruction on 4 5 B. 6 BEI and the Benjamins next argue that the district 7 court s award of attorney s fees was an abuse of discretion. 8 Our review of an award of attorneys fees is highly 9 deferential to the district court and we will reverse such 10 an award only for an abuse of discretion. 11 Grp., Inc. v. Playboy Enters., Inc., 246 F.3d 142, 146 (2d 12 Cir. 2001) (quoting Alderman v. Pan Am World Airways, 169 F.3d 13 99, 102 (2d Cir. 1999)). 14 Crescent Publ g Under Title VII, the court, in its discretion, may allow 15 the prevailing party . . . a reasonable attorney s fee . . . 16 as part of the costs. 17 the district court awarded attorney s fees and costs to 18 Townsend in the amount of $141,308.80. 19 fees and costs accrued both before and after the defendants 20 made an Offer of Judgment pursuant to Rule 68 ( Rule 68 21 Offer ) in the amount of $50,000. 42 U.S.C. § 2000e-5(k). 15 In this case, This award included BEI and the Benjamins At oral argument, counsel for BEI and the Benjamins conceded that [i]f there were a pleading that [Michelle Benjamin] were the employer then [the district court] would have been right to give the instruction at issue here. (Tr. 40). -37- 1 contend that the plaintiff is not entitled to fees and costs 2 accrued after the defendants Rule 68 Offer. 3 Rule 68 provides in relevant part that: 4 5 6 7 8 9 10 11 Fed. R. Civ. P. 68. 12 recover from the defendant attorney s fees and costs accrued 13 after an Offer of Judgment is served if the Offer exceeds the 14 sum of the plaintiff s ultimate recovery plus the amount of 15 fees and costs accrued by the plaintiff as of the time of the 16 Offer. 17 v. MTA N.Y.C. Transit Auth., 457 F.3d 224, 229 (2d Cir. 2006). 18 Here, the district court concluded that the $50,000 Rule 68 19 Offer did not exceed the sum of the $30,400 jury verdict and 20 the fees and costs accrued as of the date of the Rule 68 21 Offer. 22 therefore entitled to recover reasonable fees and costs, 23 including those accrued after the Rule 68 Offer. 24 [A] party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued. . . . If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made. Thus, a prevailing plaintiff may not See Marek v. Chesny, 473 U.S. 1, 11-12 (1985); Reiter The district court determined that the plaintiff was To determine pre-Offer attorney s fees, the district 25 court applied the familiar method of deriving reasonable 26 hourly rates for attorney and paralegal services from the 27 prevailing market rate for counsel of similar experience and -38- 1 skill in the district, and multiplying these respective rates 2 by the number of hours reasonably expended by attorneys and 3 paralegals prior to the Rule 68 Offer.16 4 contend that the district court erred in arriving at an 5 attorney hourly rate of $350 based on prevailing market rates, 6 rather than a rate of $250 based on Townsend s retainer 7 agreement with counsel. 8 Townsend would pay to her attorneys various amounts depending 9 on whether the case settled or went to trial. BEI and the Benjamins That retainer agreement provided that One measure was 10 that Townsend would pay to her attorneys 30% of any pre-trial 11 settlement or $250 per hour, whichever was greater. 12 parties agree that, had the rate of $250 been used, the Rule 13 68 Offer would have exceeded the sum of the plaintiff s 14 ultimate recovery plus pre-Offer fees and costs. 15 The The district court did not err in declining to use the 16 retainer rate as the basis for calculating the reasonable 17 hourly rate. 18 the Supreme Court made clear that, in determining a reasonable 19 hourly rate for an attorney s services, the amount set forth In Blanchard v. Bergeron, 489 U.S. 87 (1989), 16 The district court determined the reasonable hourly rate for attorneys services to be $350 and the reasonable rate for the paralegal to be $100. Multiplying these respective figures by the reasonable hours expended, and adding $308.50 in pre-Offer costs, the district court arrived at a total of $25,963.50. The sum of this figure and the $30,400 jury award was $56,363.50, more than the $50,000 Rule 68 Offer. -39- 1 in a contingent fee retainer agreement is not dispositive. 2 Id. at 93. The Court explained that: 3 4 5 6 7 8 9 10 11 12 13 14 Id.; see also Reiter, 457 F.3d at 232-33 (holding that the 15 market rate rather than the retainer agreement rate was the 16 best measure of the reasonable hourly rate when the retainer 17 agreement rate was discounted for the plaintiff in a civil 18 rights case). 19 determination of a reasonable hourly rate contemplates a 20 case-specific inquiry into the prevailing market rates for 21 counsel of similar experience and skill to the fee applicant s 22 counsel, an inquiry that may include judicial notice of the 23 rates awarded in prior cases and the court s own familiarity 24 with the rates prevailing in the district. 25 Clinton Cnty., 433 F.3d 204, 209 (2d Cir. 2005). 26 [A]s we see it, a contingent-fee contract does not impose an automatic ceiling on an award of attorney s fees . . . . As we understand § 1988 s provision for allowing a reasonable attorney s fee, it contemplates reasonable compensation, in light of all of the circumstances, for the time and effort expended by the attorney for the prevailing plaintiff, no more and no less. Should a fee agreement provide less than a reasonable fee calculated in this manner, the defendant should nevertheless be required to pay the higher amount. Indeed, this Court has instructed that Farbotko v. The district court, relying on Farbotko, conducted just 27 such a case-specific inquiry here. 28 hourly rates awarded to civil litigators in similar firms in 29 the district, concluding that they ranged from $225 to $375 -40- The court examined the 1 per hour. The court also noted that one of Townsend s 2 attorneys had been awarded $310 per hour in another case in 3 the Southern District of New York two years before the fee 4 award in this case. 5 affidavit from an attorney in another law firm attesting that 6 rates charged by attorneys in her firm ranged from $675-900, 7 reasoning that this attorney s firm was much larger in size 8 than Townsend s attorneys firm and thus not an accurate 9 comparator for assessing hourly rates in the district. The court declined to rely on an The 10 court also noted its familiarity with prevailing rates in 11 this district for attorneys of similar skill, reputation and 12 experience at small firms engaged in civil rights litigation. 13 Based on all these factors, the court concluded that a 14 reasonable hourly rate for Townsend s attorneys was $350, 15 rather than the $375 they had requested. 16 thus clearly conducted a careful analysis of comparable hourly 17 rates in the district. 18 and was not an abuse of discretion.17 The district court The rate of $350 was wholly reasonable 17 Using this rate, the It is important to note that the relevant time period in relation to which the prevailing market rate should be calculated, for purposes of assessing whether a plaintiff is entitled to post-Offer fees and costs, is the time at which the Rule 68 Offer was served on the plaintiff (here 2006), rather than the time at which the attorney s fee application was made (here 2009). There is no indication that the district court s analysis was erroneous in this respect. In examining the rates awarded to other civil litigators in the district, the court cited awards that took place between 2005 -41- 1 amount of pre-Offer fees and costs, in combination with the 2 plaintiff s ultimate recovery, exceeds the Rule 68 Offer. 3 Thus, the district court was correct to award fees and costs 4 incurred both before and after the Rule 68 Offer. 5 BEI and the Benjamins also argue that the district court 6 should have adjusted the pre-Offer fee award downward for lack 7 of success because of the allegedly low amount of the jury 8 verdict. 9 figure should not be reduced simply because a plaintiff However, [a] presumptively correct lodestar 10 recovered a low damage award. Cowan v. Prudential Ins. Co. 11 of Am., 935 F.2d 522, 526 (2d Cir. 1991); see also Kassim v. 12 City of Schenectady, 415 F.3d 246, 252 (2d Cir. 2005) ( [W]e 13 have repeatedly rejected the notion that a fee may be reduced 14 merely because the fee would be disproportionate to the 15 financial interest at stake in the litigation. ). 16 the district court carefully analyzed the hours for which 17 compensation was sought, reducing those it deemed excessive, 18 and also applied an across-the-board reduction of 15% to the 19 post-Rule 68 Offer fees to reflect the lack of success on 20 Townsend s constructive discharge claim and to account for 21 some excessiveness in the fee application. Moreover, It was well within and 2008 and also noted an award to one of Townsend s attorneys in 2007. These are not so far in time from the 2006 Rule 68 Offer to suggest that the district court s analysis was erroneous. -42- 1 the district court s discretion to refuse to apply a further 2 downward adjustment to the pre-Offer fee award. 3 4 We thus affirm the district court s attorney s fee award in its entirety. 5 6 7 CONCLUSION We have considered all of the arguments of the parties. 8 To the extent not specifically addressed above, they are 9 either moot or without merit. 10 For the reasons explained above, we affirm the judgment of the district court. -43- 1 2 LOHIER, Circuit Judge, concurring: I agree completely with the majority opinion relating to Townsend. I also reluctantly 3 concur in its decision to affirm the dismissal of Grey-Allen s claim under Title VII of the Civil 4 Rights Act of 1964. I write separately to explain that affirming requires reference to the 5 legislative history of Title VII s antiretaliation provision because the text is ambiguous. I also 6 write to suggest that Congress should act to clarify Title VII if it desires to prohibit private 7 employers from retaliating against employees merely because they participate in internal 8 investigations of discrimination complaints prior to any involvement by the EEOC. 9 Title VII s antiretaliation provision, section 704(a), has two distinct clauses forbidding 10 retaliation against employees engaged in protected activity: the opposition clause and the 11 participation clause. The opposition clause makes it unlawful . . . for an employer to 12 discriminate against any . . . employee[] . . . because he has opposed any practice made unlawful 13 . . . by this subchapter, while the participation clause makes it unlawful for an employer to 14 discriminate against any employee because he has made a charge, testified, assisted, or 15 participated in any manner in an investigation, proceeding, or hearing under this subchapter. 42 16 U.S.C. § 2000e-3(a). 17 Although there may be some question about whether Grey-Allen opposed any unlawful 18 employment practice (a question to which I turn below), she accused her employer of violating 19 only the participation clause. Similarly, on appeal, Grey-Allen s employer relied solely on its 20 assertion that the participation clause does not apply to internal investigations. There was strong 21 evidence that it fired Grey-Allen for no reason other than that she conducted an effective internal 22 investigation of a sexual harassment claim against a corporate vice-president. I begin, therefore, 1 1 with the following question: Does the participation clause allow a private employer to fire a 2 human resources director or EEO officer because she conducted a neutral investigation of an 3 employee s discrimination claim without involving the EEOC? 4 Congress has never directly confronted the issue of whether private-sector employees 5 who undertake these important investigations are protected from retaliation under the 6 participation clause. The Supreme Court explicitly left open the question of whether the 7 participation clause protects these employees in Crawford v. Metropolitan Government of 8 Nashville & Davidson County, Tennessee, 555 U.S. 271 (2009), even as it answered a similar 9 question in the context of the opposition clause. Ultimately, the statutory text and legislative 10 history of Title VII persuade me that the majority opinion correctly resolved this question in 11 favor of the employer in this case, although I arrive at that conclusion using a different route. 12 I start with the text of the statute. I agree with my colleagues that the phrase 13 investigation . . . under this subchapter clearly includes EEOC investigations. I disagree, 14 however, that the phrase, which should be interpreted broadly, unambiguously excludes internal 15 investigations conducted by employers. See EEOC v. Total Sys. Servs., Inc., 240 F.3d 899, 901 16 (11th Cir. 2001) (dissent from denial of rehearing in banc). First, certain provisions of Title VII 17 the subchapter to which the clause refers1 suggest a role for non-governmental enforcement 18 of the statute. For example, section 705(g)(1) of Title VII authorizes the EEOC to cooperate 19 with and . . . utilize regional, State, local, and other agencies, both public and private, and 20 individuals. 42 U.S.C. § 2000e-4(g)(1). Second, other provisions of Title VII expressly limit 1 Title VII is codified as Subchapter VI of Chapter 21 of Title 42 of the United States Code. 2 1 the term investigation to an investigation by the EEOC, indicating that Congress clearly could 2 and did refer solely to EEOC investigations when it intended to do so. See id. § 2000e-5(b) 3 (referring to investigation by [the] Commission ); id. § 2000e-8(a) (referring to any 4 investigation of a charge filed under [the EEOC s enforcement provision] of this title [section 5 706] ); id. § 2000e-9 (referring to investigations conducted by the Commission or its duly 6 authorized agents or agencies ). As a result, I conclude that the phrase investigation . . . under 7 this subchapter is ambiguous, and I proceed to the legislative history to determine what 8 Congress meant by it. See SEC v. Rosenthal, 650 F.3d 156, 161 (2d Cir. 2011). 9 Congress appears to have had only government investigations in mind in 1964. There is 10 no indication in the legislative history of Title VII that Congress meant to include internal 11 investigations by private employers in the participation clause. I recognize that when it 12 originally enacted Title VII, Congress hoped to encourage employers to comply voluntarily with 13 the act, EEOC v. Shell Oil Co., 466 U.S. 54, 77 (1984), but Congress does not appear to have 14 embraced internal investigations as a way to do so. It did not once mention internal 15 investigations by private employers in the debates and speeches leading up to the enactment of 16 Title VII or in subsequent major amendments to the statute. This is not surprising since, as the 17 EEOC acknowledged at oral argument, it appears that there really weren t such investigations 18 prior to 1964. Tr. of Oral Arg. at 17:11-19. They also appear not to have been among 19 Congress s concerns in subsequent major amendments to Title VII in 1972, 1978 and 1991. 20 Instead, it seems that Congress focused on protecting employees who participated in EEOC 3 1 investigations, other federal-sector investigations,2 or analogous state-sponsored investigations. 2 Without evidence that private-sector internal investigations existed and that Congress considered 3 them at the time it enacted Title VII, I am hard pressed to conclude from the legislative history 4 that Congress intended to include these investigations in the ambit of the participation clause. 5 Even the EEOC s interpretation of the participation clause, as reflected in its Compliance 6 Manual, is of little help to Grey-Allen. While not entitled to full deference under Chevron, 7 U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the manual and 8 other EEOC directives nevertheless reflect a body of experience and informed judgment to 9 which courts and litigants may properly resort for guidance, and are entitled to a measure of 10 respect under the less deferential Skidmore standard. Fed. Express Corp. v. Holowecki, 552 11 U.S. 389, 399 (2008); see also Crawford, 555 U.S. at 276. Although the EEOC argued as amicus 2 As originally enacted in 1964, Title VII did not apply to federal employees. Instead, employment discrimination claims brought by federal employees were governed by Executive Orders and agency regulations. In general, a federal agency accused of discrimination would investigate the claim, conduct a hearing and render a final decision . . . . Pueschel v. United States, 369 F.3d 345, 352 (4th Cir. 2004). As Congress was surely well aware in 1964, federal regulations in place pursuant to Executive Order No. 10590, 20 Fed. Reg. 409 (Jan. 19, 1955), directed the heads of each federal department or agency to designate an Employment Policy Officer (later changed to an Equal Employment Opportunity, or EEO, Officer), who was required to conduct prompt internal investigation[s] of each complaint of alleged discrimination in personnel matters within his department or agency. 5 C.F.R. §§ 1401.4, 1401.17 (1964); see 5 C.F.R. § 713.204(d)(4) (1968) (designating EEO Officers to investigate complaints within federal agencies). These internal federal agency investigations continued after Congress amended Title VII by passing the Equal Employment Opportunity Act of 1972 (the EEOA ) to extend its coverage to most federal employees. See 42 U.S.C. § 2000e-16; 117 Cong. Rec. 32,105 (1971); S. Rep. No. 92-415, at 14 (1971), reprinted in Senate Subcommittee on Labor of the Committee on Labor and Public Welfare, Legislative History of the Equal Employment Opportunity Act of 1972, at 423 (1972) ( Under present procedures, in most cases, each [federal] agency is still responsible for investigating . . . itself. ). For these reasons, the phrase investigation . . . under this subchapter appears to include internal investigations of discrimination conducted by federal agencies through EEO Officers. 4 1 on appeal that it has long regarded internal investigations as covered by the participation clause, 2 see Br. of EEOC as Amicus Curiae in Supp. of Appellant Grey-Allen 19, the EEOC s 3 Compliance Manual does not state that the participation clause covers activity undertaken in the 4 course of an internal investigation by an employer. The manual s guidance about whether an 5 individual is protected under the participation clause does not mention internal investigations, 6 referring instead to individuals [who] challeng[e] employment discrimination under the statutes 7 enforced by EEOC in EEOC proceedings, in state administrative or court proceedings, as well as 8 in federal court proceedings, and to individuals who testify or otherwise participate in such 9 proceedings. 2 EEOC Compliance Manual § 8-II-C, p. 614.0005 (May 1998); see id. § 2-II-A, 10 p. 605.0005 (2008) (referring the reader to the 1998 EEOC Compliance Manual for more 11 detailed guidance on protected activity).3 To be sure, the manual states that [p]rotected activity 12 [under section 704(a)] . . . includes . . . presenting evidence as part of an internal investigation 13 pertaining to an alleged EEO violation. Id. § 2-II-A, p. 605.0005. But it justifies its 14 interpretation by reference to the opposition clause rather than the participation clause. See id. 15 n.41. 3 In contrast to the current manual, which does not state that cooperating with internal investigations is protected by the participation clause, an archived page of the EEOC s website cites [c]ooperating with an internal investigation of alleged discriminatory practices as an example of protected activity under the participation clause. Retaliation, http://archive.eeoc.gov/types/retaliation.html (last modified Mar. 11, 2009). Of course, the EEOC, like any other agency, is entitled to change its mind and change course. But the argument that it advances in its amicus brief (an argument that accords with the March 2009 archived website page referenced above) differs from its published, official interpretation of the participation clause, and it offers no support for its assertion that it has long adopted a more expansive interpretation of the participation clause. In the absence of a reasoned analysis explaining why its position differs from that set out in the Compliance Manual, the EEOC s new argument is entitled to considerably less deference than a consistently held agency view. Am. Fed n of State, Cnty. & Mun. Emps. v. Am. Int l Grp., Inc., 462 F.3d 121, 129 (2d Cir. 2006) (quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515 (1994)). 5 1 For these reasons, I am compelled to agree with the decision to affirm the judgment of 2 the District Court. As a policy matter, however, the distinction between investigations in which 3 the government is involved and internal investigations strikes me as antiquated and arbitrary. 4 The facts of this case starkly illustrate the arbitrariness. Had Grey-Allen conducted her 5 investigation under the auspices of a government agency such as the EEOC, her actions would 6 have been protected under the participation clause. But because she conducted the same internal 7 investigation without EEOC involvement, her actions are not protected. 8 Changes in the last decade to the enforcement and interpretation of Title VII underscore 9 the wisdom of eliminating this distinction and protecting employees who participate in private- 10 sector internal investigations. In particular, Faragher v. Boca Raton, 524 U.S. 775 (1998), and 11 Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), represent a significant shift in the 12 Title VII landscape, and the changes wrought by both cases are now woven into governmental 13 and corporate equal employment opportunity practices. Internal investigations form an integral 14 part of Title VII today, with or without the formal involvement of the EEOC so much so that 15 the Supreme Court has interpreted Title VII broadly to avoid undermin[ing] the 16 Ellerth-Faragher scheme, along with the statute s primary objective of avoid[ing] harm to 17 employees. Crawford, 555 U.S. at 279 (emphasis added) (quoting Faragher, 524 U.S. at 806). 18 I recognize that the conclusion that the majority and I draw from the text, legislative 19 history, and agency interpretations of Title VII is in tension with these recent developments and 20 with the principle that, when reviewing Title VII, we should broadly interpret the phrase under 21 this subchapter. See Thompson v. N. Am. Stainless, LP, 131 S. Ct. 863, 868 (2011) ( Title 22 VII s antiretaliation provision must be construed to cover a broad range of employer conduct. ). 23 But it is up to Congress, now accustomed to the centrality of internal investigations in the 6 1 employment context as a result of these developments, to consider the issue. Congress is best 2 placed to fill this statutory gap between the text and history of the participation clause on the one 3 hand, and Title VII s broad antiretaliation goals on the other hand. It may decide to do so by 4 clarifying that the participation clause prohibits private employers from firing their human 5 resources directors and EEO officers simply because they have conducted an internal 6 investigation of, say, a sexual harassment complaint. 7 I have two final observations. First, in agreeing that Grey-Allen was not protected from 8 retaliation under the participation clause as Congress conceived it in 1964, the majority and I 9 take some solace in the possibility that, after Crawford, employees in Grey-Allen s position will 10 be protected by the opposition clause. That remains to be decided; whether a human resources 11 director who neutrally investigates a claim of discrimination nevertheless can be said to 12 oppose a discriminatory practice is an open question in this Circuit. Second, when Congress 13 enacted Title VII, it was aware of the existence of state agencies like the New York State 14 Division of Human Rights ( NYSDHR ), and it authorized the newly created EEOC to 15 cooperate with and . . . utilize regional, State, local, and other agencies. 42 U.S.C. § 2000e- 16 4(g)(1); see United States Equal Employment Opportunity Commission, Legislative History of 17 Titles VII and XI of Civil Rights Act of 1964, 3044-45 (1968) (interpretative memorandum 18 introduced into congressional record by Senators Clark and Case, the Senate floor managers for 19 Title VII). Moreover, it contemplated that the EEOC and, by extension, analogous state agencies 20 would provide technical assistance to employers who requested it to further their compliance 21 with Title VII. 42 U.S.C. § 2000e-4(g)(3). In this case, Grey-Allen sought and received advice 22 from the NYSDHR on proceeding with the sexual harassment investigation. In my view, 23 involving a state agency such as the NYSDHR was enough to transform the internal 7 1 investigation into an investigation . . . under this subchapter. 42 U.S.C. § 2000e-3(a). The 2 majority opinion does not suggest anything to the contrary. Grey-Allen, however, never 3 advanced this argument before the District Court, and she therefore forfeited it. See Local 377, 4 RWDSU, UFCW v. 1864 Tenants Ass n, 533 F.3d 98, 99 (2d Cir. 2008) (finding an argument 5 not raised before the district court forfeited on appeal); Tr. of Oral Arg. at 5:6-24, 8:12-20, 6 21:12-22:3. Even with these two possible forms of protection, however, Congress should clarify 7 whether the kind of investigation Grey-Allen conducted falls within the protective sweep of the 8 participation clause. 8
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