Champion v. Nationwide Sec., Inc.

545 N.W.2d 596 (1996)

450 Mich. 702

Cheryl CHAMPION, Plaintiff-Appellant, v. NATIONWIDE SECURITY, INC., Defendant-Appellee, and Eddie Lee Fountain, Defendant.

Docket No. 100521, Calendar No. 6.

Supreme Court of Michigan.

Argued November 8, 1995.

Decided March 19, 1996.

*597 Chambers, Steiner by Angela J. Nicita, Louis G. Corey, and Michelle J. Harrison, Detroit, for plaintiff-appellant.

Plunkett & Cooney, P.C. by Ernest R. Bazzana, Detroit, for defendant-appellee Nationwide Security, Inc.

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Robert L. Willis, Jr., Assistant Attorney General, Detroit, amici curiae for Michigan Civil Rights Commission, and Michigan Department of Civil Rights.

Stark & Gordon by Sheldon J. Stark and Carol A. Laughbaum, Royal Oak, amicus curiae for National Lawyers Guild.

Paul J. Denenfeld, Detroit, amicus curiae for American Civil Liberties Union.

James Schuster, Southfield, amicus curiae for Michigan Employment Lawyers Association.

Jeffrey Meyers, Lansing, amicus curiae for Michigan Trial Lawyers Association.

Julie Field, Ann Arbor, amicus curiae for University of Michigan Women and the Law Clinic.

Elizabeth K. Bransdorfer, Grand Rapids, amicus curiae for Women Lawyers Association of Michigan.

Miller, Canfield, Paddock & Stone, P.L.C. by Alison B. Marshall and Charles S. Mishkind, Grand Rapids, amicus curiae for Michigan Manufacturers Association, and Employers' Association

OPINION

BRICKLEY, Chief Justice.

In this case, we must decide whether an employer is liable for quid pro quo sexual *598 harassment under M.C.L. § 37.2103(i); M.S.A. § 3.548(103)(i) where one of its employed supervisors rapes a subordinate and thereby causes her constructive discharge. We hold that an employer is liable for such rapes where they are accomplished through the use of the supervisor's managerial powers. We believe that this result best effectuates the remedial purpose of the Civil Rights Act, M.C.L. § 37.2101 et seq.; M.S.A. § 3.548(101) et seq. The opinion of the Court of Appeals is reversed insofar as it denies relief under the act. Furthermore, because defendant has made sufficient admissions to establish liability under the rule we announce today, pursuant to MCR 7.316(A)(7), we order the trial court to render judgment in favor of plaintiff under MCR 2.116(I)(2).

I

The incidents giving rise to plaintiff Cheryl Champion's claim began shortly after she returned from a maternity leave to resume her position as a security guard with defendant, Nationwide Security Services, Inc. At that time, the company assigned Ms. Champion to a new supervisor, Eddie Lee Fountain.[1] There is no dispute that Mr. Fountain scheduled plaintiff's work, trained her, and oversaw and evaluated her performance. He also played a role in disciplining her.

During her first days back at work, Mr. Fountain made sexually suggestive remarks to Ms. Champion, including an admission that he was "flirtatious" and that he found her "attractive." Other remarks and sexually suggestive conduct followed.

One Saturday, less than a month after her return, Mr. Fountain unexpectedly contacted Ms. Champion, who was not previously scheduled to work until the following Monday. He asked her if she would be available to report for duty at Deaconess Hospital in Detroit. Ms. Champion agreed to the assignment and prepared to report for work. However, while getting ready, Ms. Champion accidentally burned her uniform trousers while pressing them. She called Fountain to inform him of the accident, and he gave her permission to use regular black or navy blue trousers. Minutes later, however, he called back with the unusual request that she wear a black or blue dress instead. When Ms. Champion informed Mr. Fountain that she did not have a dress and that she was running late, he allowed her to wear her regular trousers.

When Ms. Champion arrived at her post, she learned that Mr. Fountain had dismissed all other security personnel. Ms. Champion and Mr. Fountain were then the only two security guards at the hospital. After Ms. Champion reported to Mr. Fountain, he informed her that he had a state trooper check into her background to find out if she "had a clean medical background." He then remarked that he thought she was "ready" because she had just had a baby. He also stated that he wanted to go home with her to find out if she had a boyfriend. Finally, Mr. Fountain suggested that her future job security and success were tied to his approval or disapproval. Mr. Fountain asserted that if Ms. Champion went along with him, she would have nothing to worry about as long as she worked for him. He said he would "take care of" her and that she would never have to "worry" about her job. At this point, Ms. Champion flatly rejected Mr. Fountain's offer.

Later that same day, the hospital closed and Mr. Fountain and Ms. Champion were the only two people on the premises. At that time, Mr. Fountain told Ms. Champion to accompany him on security rounds. His stated purpose was to train her. However, after Mr. Fountain had ordered Ms. Champion into a remote part of the building, he locked a door to an examination room and trapped her. He then demanded that she have sex with him. When she refused, he raped her.

Ms. Champion immediately left work and returned home. She then reported the rape to police and was rushed by ambulance to the hospital. She never returned to Nationwide after the attack.[2]

*599 Ms. Champion filed the present action in the Wayne Circuit Court on February 14, 1991. Central to this appeal, she alleged that Nationwide, through its agent, Mr. Fountain, had violated her civil rights by engaging in sexual harassment. She further alleged that this discrimination led to her constructive discharge. However, the trial court granted Nationwide's motion for summary disposition of Ms. Champion's sexual harassment claim. The court reasoned that Mr. Fountain was not Ms. Champion's supervisor and, thus, not an "agent" of his employer as required by the Civil Rights Act for recovery.

While agreeing with the result, the Court of Appeals correctly reversed the trial court's finding that Mr. Fountain was not Ms. Champion's supervisor. Indeed, the Court of Appeals found that a "question of fact existed regarding whether Fountain was given the necessary authority to be Nationwide's agent, thus subjecting Nationwide to liability under the theory of respondeat superior." 205 Mich.App. 263, 267, 517 N.W.2d 777 (1994). However, the Court of Appeals upheld the lower court because it concluded that Ms. Champion had not shown that Nationwide or Mr. Fountain used her response to Mr. Fountain's conduct as a factor in a decision affecting her employment. Specifically, it rejected the plaintiff's claim that her constructive discharge constituted the requisite employment decision. As this opinion makes clear, the Court's reasoning was in error.

II

Unlike its federal counterpart, the Michigan Civil Rights Act, M.C.L. § 37.2101 et seq.; M.S.A. § 3.548(101) et seq., contains a provision specifically designed to outlaw two forms of sexual harassment: hostile work environment sexual harassment and "quid pro quo sexual harassment." Radtke v. Everett, 442 Mich. 368, 501 N.W.2d 155 (1993); see also Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 64-65, 106 S. Ct. 2399, 2404, 91 L. Ed. 2d 49 (1986). This case involves quid pro quo harassment.

The act clearly sets forth two separate theories under which a party may make out a claim for quid pro quo harassment:

(i) Discrimination because of sex includes sexual harassment which means unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct or communication of a sexual nature when: (i) Submission to such conduct or communication is made a term or condition either explicitly or implicitly to obtain employment, public accommodations or public services, education, or housing; (ii) Submission to or rejection of such conduct or communication by an individual is used as a factor in decisions affecting such individual's employment, public accommodations or public services, education, or housing. [M.C.L. § 37.2103(i)(i), (ii); M.S.A. § 3.548(103)(i)(i), (ii).]

A party pursuing a claim under the second subsection must establish two things: (1) that she was subject to any of the types of unwelcome sexual conduct or communication described in the statute, and (2) that her employer or the employer's agent used her submission to or rejection of the proscribed conduct as a factor in a decision affecting her employment. See also Kauffman v. Allied Signal, Inc., 970 F.2d 178 (C.A.6, 1992).[3] It *600 is this second requirement that forms the basis of dispute in the present case and we find that Ms. Champion has satisfied that requirement.[4]

It is this Court's opinion that Mr. Fountain's decision to rape Ms. Champion constituted the requisite "decision affecting... employment." In addition, this was a decision taken in response to Ms. Champion's refusal to voluntarily submit to Mr. Fountain's sexual requests. Indeed, lack of consent is the gravamen of a sexual assault.

In reaching our conclusion that plaintiff has satisfied all the requirements under M.C.L. § 37.2103(i)(ii); M.S.A. § 3.548(103)(i)(ii), we reject two theories that defendant claims absolves it of liability. First, defendant asserts that, because it did not actively terminate plaintiff, it made no employment decision in response to her rejection of Mr. Fountain's advances. Second, defendant claims that Mr. Fountain was not acting as its agent when he raped Ms. Champion because defendant did not authorize the rape. We deal with each of these arguments in turn.

We find that the Court of Appeals acceptance of defendant's first argument to be in error because it misinterprets the law of constructive discharge. It is well established that the law does not differentiate between employees who are actually discharged and those who are constructively discharged. In other words, once individuals establish their constructive discharge, they are treated as if their employer had actually fired them. Lopez v. S B Thomas, Inc., 831 F.2d 1184, 1188 (C.A.2, 1987). The decision to terminate in a constructive discharge case, therefore, is imputed to the employer.

The Court of Appeals, however, somehow attributes responsibility for the discharge to Ms. Champion. This result unjustly blames the victim, especially because a constructive discharge occurs only where an employer or its agent's conduct is so severe that a reasonable person in the employee's place would feel compelled to resign. Vagts v. Perry Drug Stores, Inc., 204 Mich.App. 481, 487-488, 516 N.W.2d 102 (1994). Young v. Southwestern Savings & Loan Ass'n, 509 F.2d 140 (C.A.5, 1975). Mr. Fountain's rape of Ms. Champion was certainly conduct severe enough to compel her to resign. Indeed, we would hesitate to expect any rape victim to return to the setting in which her sexual assault occurred.

However, the conclusion that Nationwide's agent constructively discharged Ms. Champion does not, by itself, establish a violation of M.C.L. § 37.2103(i)(ii); M.S.A. § 3.548(103)(i)(ii). The Court of Appeals correctly ruled that liability under the provision occurs only where the constructive discharge is a result of the plaintiff's response to the sexual conduct.

However, in ruling that the constructive discharge in this case did not result from Ms. Champion's refusal to submit to Mr. Fountain's sexual conduct, the Court of Appeals misapprehends the point when the constructive discharge occurred. The discharge did not occur following the rape, but contemporaneously with it. The decision to use force, in other words, was the equivalent of a decision to discharge because Mr. Fountain should have expected that it would lead to Ms. Champion's resignation. This "decision affecting... employment" is actionable under M.C.L. § 37.2103(i)(ii); M.S.A. *601 § 3.548(103)(i)(ii) because Ms. Champion's refusal to comply with Mr. Fountain's requests for sexual favors led to his decision to use force.[5] Therefore, we reject defendant's first argument against liability.

We also reject defendant's second argument. Defendant has suggested that the Civil Rights Act will not impose liability on defendant because it never authorized Mr. Fountain to rape Ms. Champion. Thus, the defense has asserted, even if Mr. Fountain acted as Nationwide's agent while performing his other supervisory duties, he did not act as its agent during the rape.

This construction of agency principles is far too narrow.[6] It fails to recognize that when an employer gives its supervisors certain authority over other employees, it must also accept responsibility to remedy the harm caused by the supervisors' unlawful exercise of that authority. Henson v. City of Dundee, 682 F.2d 897, 909 (C.A.11, 1982).[7] From his scheduling decisions that allowed him to work alone with Ms. Champion to his ordering of her into a remote part of the building, Mr. Fountain used his supervisory power to put Ms. Champion in the vulnerable position that led to her rape. In fact, there is little doubt that Mr. Fountain would have been unable to rape Ms. Champion but for his exercise of supervisory authority.

Therefore, we adopt the nearly unanimous view that imposes strict liability on employers for quid pro quo sexual harassment committed by supervisory personnel.[8] The rationale supporting this rule recognizes that most employers are corporate entities that cannot function without delegating supervisory power. Allowing employers to hide behind a veil of individual employee action will do little, if anything, to eradicate discrimination in the workplace. Id. at 909.

Indeed, immunizing an employer where it did not authorize the offending conduct would create an enormous loophole in the statute. Such a loophole would defeat the remedial purpose underlying this state's civil rights statute and would lead to a construction that is inconsistent with the well-established rule that remedial statutes are to be liberally construed. Eide v. Kelsey-Hayes Co., 431 Mich. 26, 34, 427 N.W.2d 488 (1988); Reed v. Michigan Metro Girl Scout Council, 201 Mich.App. 10, 506 N.W.2d 231 (1993); 3 Singer, Sutherland Statutory Construction (5th ed), § 60.01, pp 147-152.

In fact, under defendant's construction, an employer could avoid liability simply by showing that it did not authorize the sexually offensive conduct. Because employers rarely, if ever, authorize such conduct, employees would no longer have a remedy for quid pro quo sexual harassment. Furthermore, the party engaged in quid pro quo harassment is almost always, by definition, a supervisor. That is, quid pro quo harassment occurs only where an individual is in a position to offer tangible job benefits in exchange for sexual favors or, alternatively, threaten job injury for a failure to submit. That individual is most often a person with supervisory powers.

III

Our ruling today does not extend unlimited liability to employers whose supervisors rape *602 subordinates. However, we hold an employer strictly liable where the supervisor accomplishes the rape through the exercise of his supervisory power over the victim. The rule we fashion is fully consistent with the results reached by other courts addressing this issue and with the legislative intent that employers, not the victims of sexual harassment, bear the costs of remedying and eradicating discrimination.

RILEY, MALLETT and WEAVER, JJ., concur.

BOYLE, Justice (concurring).

I concur in the majority's analysis and with its reversal of the decision of the Court of Appeals. I write separately to indicate my dissatisfaction with the majority's directions to the lower court to enter judgment in favor of the plaintiff pursuant to MCR 2.116(I)(2). I recognize that the Court acts within its power in doing so. MCR 7.316(A)(7). However, facts that this Court could not anticipate may unfold upon further development of the lower court record or, unknown to this Court, may have already been developed. If the state of the record is such that judgment should be entered for the plaintiff, the directive to remand the case to the lower court for further proceedings consistent with this Court's opinion will authorize the trial court to enter judgment. Because the trial court is in the best position to make the determination, I would take that course.

LEVIN and MICHAEL F. CAVANAGH, JJ., concur.

NOTES

[1] Defendant Fountain is not a party to this appeal.

[2] Similarly, as soon as Nationwide found out about the attack, Mr. Fountain was suspended from employment. He, too, has never returned to work for Nationwide.

[3] The first prong of this test was obviously met since Champion did not encourage nor desire the sexual overtures made by Fountain.

Q. He did what now?

A. He locked the door and he stated there is no use of you screaming, running or hollering because no one will hear you, there is no one in the building but me and you.

Q. All right. What happened then?

A. By this time I had really gotten nervous, I began to feel very uncomfortable and inside this room there were three rooms inside this one room and....

Q. What happened next.

* * * * * *

A. Hm-hmm. As we started to go into the other room at this point this is where he approached me and he started kissing me.

Q. And then what happened?

A. At the same point in time he was backing me into another room.

Q. And then what happened?

A. And I told him to stop and he persisted.

Q. And what happened?

A. Once into this room there was like an examining table, he backed me into that table.

Q. And then what happened?

A. I was pleading with him to stop.

Q. You kept saying stop?

A. Please stop. And trying to push him off of me. The more I tried to push him off and I was turning my head from side to side to try to keep him from kissing me, the more persistent he became.

[4] Because we conclude that the plaintiff has made out a case of quid pro quo harassment under the second subsection, we need not consider whether she has also made out such a claim under the first. Lynch v. Nat'l Acceptance Co. of Chicago, 329 Mich. 615, 46 N.W.2d 403 (1951).

This Court generally does not make this sort of factual determination, such determinations being in the province of the factfinder. However, given defendant's admissions both in the courts below and in this Court, we find that no reasonable juror could disagree with our conclusion that plaintiff has satisfied the second requirement.

[5] As previously noted, even without the discharge, the decision to rape was, in all respects, "a decision affecting [Ms. Champion's] employment" taken in response to her refusal to submit to Mr. Fountain's sexual requests. It can hardly be disputed that, even if Ms. Champion had returned to work, the rape would have "affected" her employment in some way.

[6] See Restatement Agency, 2d, § 219(2)(d), p 481 (the master is liable for the tort of his servant if the servant "was aided in accomplishing the tort by the existence of the agency relation").

[7] In fact, an employer rarely authorizes an agent to break the law or otherwise behave improperly; yet, liability is frequently imputed to an employer for such conduct. For example, employers can be held liable for abusive work environment discrimination where agents have had a hand in creating or adding to the abuse, even if the employer expressly forbids the conduct. See, Sumner v. Goodyear Tire & Rubber Co., 427 Mich. 505, 542, 398 N.W.2d 368 (1986); Langlois v. McDonald's Restaurants of Michigan, Inc., 149 Mich.App. 309, 385 N.W.2d 778 (1986).

[8] Karibian v. Columbia Univ, 14 F.3d 773 (C.A.2, 1994); Kauffman v. Allied Signal, Inc., supra; Horn v. Duke Homes, 755 F.2d 599 (C.A.7, 1985); Craig v. Y & Y Snacks, Inc., 721 F.2d 77 (C.A.3, 1983); Katz v. Dole, 709 F.2d 251 (C.A.4, 1983); Henson v. City of Dundee, supra; Miller v. Bank of America, 600 F.2d 211 (C.A.9, 1979).