Petition for Writ of Certiorari — Hertzberg v. SRAM Corp.

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Supreme Court of the United States

JULIE K. HERTZBERG,

Petitioners,

versus

SRAM CORPORATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES CouRT OF APPEALS

FOR THE SEVENTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

SUZANNE McCarTHY Davip L. LEE

60 E. 42™ Street Counsel of Record

Suite 1022 Law Offices of David L. Lee

New York, NY 10165 53 W. Jackson Boulevard

(212) 986-3434 Suite 660

Chicago, IL 60604

~ (312) 437-4400

Attorneys for Petitioner

QUESTION PRESENTED

Where a plaintiff pleads sexual harassment and a jury finds

for the plaintiff on that basis and awards all the types of

damages that are before it, may a judge award the equitable

remedies of backpay and frontpay without the necessity of

plaintiff's explicitly having to plead a constructive

discharge.?

Whether Petitioner is precluded from an award of backpay

solely because she did not prevail on her retaliation claim

where she prevailed on her sexual harassment (hostile work

environment) claim and stated in her complaint and in her

testimony at trial that she was terminated by Respondent.

Julie K. Flamini respectfully request the Court to

issue a writ of certiorari to review the judgment of the United

States Court of Appeals for the Seventh Circuit which

reversed the order of the United States District Court for the

Northern District of Illinois awarding her front and back pay.

TABLE OF CONTENTS

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APPENDIX

CIRCUIT COURT OPINION OF AUGUST 2, 2001 ..........000000 la

DISTRICT COURT OPINION OF JANUARY 31, 2000.......... 23a

DISTRICT COURT OPINION OF MARCH 3, 2000.............. 3la

DISTRICT COURT OPINION OF DECEMBER 23, 1996....... 55a

lil

TABLE OF AUTHORITIES

CASES

BENNETT V. SCHMIDT, 153 F.3D 516, 518 (7TH CIR. 1998). 19

CONLEY V. GIBSON, 355 U.S. 41, 47 (1967).....c.ceccecccsesseeees 18

HERTZBERG V. SRAM, 261 F.3D 651 (7TH Cir. | |

LEATHERMAN V. TARRANT COUNTY NARCOTICS

INTELLIGENCE AND COORDINATION UNIT, 507 U.S. 163

(RS EERAEEE. SUP SSS cn ace i ea a 18

MCDONNELL DOUGLAS Corp. V. GREEN, 411 U.S. 792

SOE REE UE EE SR Cae (he a ea a 19

ORTEZ V. WASHINGTON COUNTY, 88 F.3D 804, 808 (9TH Cir.

RN EIS ee DOU Ce ee ea 20

REEVES V. SANDERSON PLUMBING PRODUCTS, INC., 530 U.S.

ENE SESERE cs aa c 20

RING V. FIRST INTERSTATE MORTGAGE, INC., 984 F.2D 924,

I 20

SCHEUER V. RHODES, 416 U.S. 232, 236 ae 18

SPARROW V. UNITED AIR LINES, INC., 216 F.3D 111 1,1113

Sa REDS AE i Sa 19

WILLIAMS V. PHARMACIA, INC., 137 F.3D 944, 952 (7TH CIR.

SR ESSE TRIAGE oR at de es ae Oe ee 11

STATUTES

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OPINIONS BELOW

The district cour ver Shadur, Milton I.) December

23, 1996 opinion repora : 1996 U.S. Dist. LEXIS 19210

striking Respondent’s affirmative defenses and answer to

certain averments.

The district court’s (per Shadur, Milton I.) opinion

reported at 2000 U.S. Dist. LEXIS 926, 82 Fair Empl. Prac.

Cas. (BNA) 412 (January 31, 2000) awarding Petitioner

backpay and frontpay on her claim of sexual harassment (the

jury having awarded petitioner $20,000 in punitive damages

in that respect).

The district court’s (per Shadur, Milton I.) March 3,

2000 entry of judgment for back and front pay and punitive

damages and memorandum opinion. The opinion is

unreported. It is reproduced in the Appendix at App. 31la-

53a.

The opinion of the United States Court of Appeals for

the Seventh Circuit is reported at Hertzberg v. SRAM, 261

F.3d 651 (7th Cir. 2001).

JURISDICTION

The Court of Appeals entered its judgment on August

2, 2001. App. at la. the jurisdiction of this Court is

conferred by 28 U.S.C. § 1254(1).

STATEMENT OF THE CASE

Petitioner, Julie K. Flamini, sued her former

employer, respondent, SRAM Corporation (“SRAM”), on

claims of sexual harassment based on a hostile work

environment theory in violation of Title VII of the Civil

Rights Act of 1991, 28 U.S.C. § 1343, 28 U.S.C. § 1331 and

42 U.S.C. §§ 2000e, et seqg.. Petitioner also claimed that she

was unlawfully discharged in retaliation for her complaints

about sexual harassment of her co-worker and her

supervisors. Prior to her discharge, Petitioner advised

Respondent’s plant manager that she was not prepared to

remain at SRAM unless her sexual harassment grievance was

addressed satisfactorily.

A. Course of Proceedings Below.

The jury found in favor of Flamini on her sexual

harassment (hostile environment) claim and was awarded

punitive damages. The jury rendered a verdict in favor of

SRAM on her retaliatory discharge claim. The district court

denied Respondent’s motion for judgment as a matter of law.

Final judgment was entered on March 3, 2000 in the amount

of $71,829.18 (comprised of the jury’s verdict of $20,000 and

the district court’s lost pay award of $51,829.18).

Although Respondent’s appeal did not seek to upset

the jury’s finding of liability on Petitioner’s sexual

harassment claim, respondent sought to take away the

monetary award by the jury for punitive damages and the

monetary lost pay award by the district court based on the

jury’s finding in Petitioner’s favor on her sexual harassment

claim.

42 U.S.C. §2000e-5(g)(1) provides: —

If the court finds that the respondent has

intentionally engaged in . . . an unlawful

employment practice charged in _ the

complaint, the court may . . . order such

affirmative action as may be appropriate,

which may include, but is not limited to,

reinstatement or hiring of employees, with or

without back pay (payable by the employer,

employment agency, or labor organization, as

the case may be, responsible for the unlawful

employment practice), or any other equitable

relief as the court deems appropriate.

“The final decision that terminated her employment was a

decision made by SRAM. And that therefore, in the straight

but-for and proximate cause concept, supports the idea that

lost wages are placed squarely on SRAM’s doorstep.” App.

43a-44a. [District court’s 12/16/99 tr. at 8-9) attached to

district court’s 3/2/00 opinion].

B. Statement of Facts.

The statement of facts in the opinions below are

adequately stated in the opinions of the District Court and the

Court of Appeals reproduced in the prior sections.

By the time Petitioner began working for respondent

at its Elk Grove facility when she was age 22, she already

had six years of bicycle industry experience with the same

employer. Respondent manufactures gear shifts for bicycles.

In 995 when Petitioner began working for SRAM there were

approximately 125 employees in the Elk Grove Village

facility and some 300 people worldwide and $65 million in

revenues. By 1997, respondent had grown to 1500

employees worldwide. Petitioner began work on November

6, 1994 as their shipping coordinator until her termination in

February 1995. Shortly thereafter, she found a new job as an

administrative assistant and by the time of trial she had

worked continuously for the same employer for four and one-

half years.

Brian Lester, who became her direct supervisor, and

George Margelos, the plan supervisor, interviewed Petitioner

for her job. She was hired right away as the shipping

coordinator. Lester had previously worked with Margelos at

another job and began working for respondent in October

1994. Lester testified that he had a small amount of input on

hiring decisions and that Margelos made the hires.

Petitioner’s overall job performance was good. Three weeks

after Petitioner began working, Manuel Loayza was hired.

Her difficulties began. Loayza constantly told Petitioner that

because she was a woman she could not do her job as well as

a man and he told her that more than 100 times. Petitioner’s

job as shipping coordinator changed. Loayza assumed the

role of calling the trucks and getting them ready for

transporting the products while Petitioner continued to be

responsible for all the inventory control and preparing the

shipments themselves.

Respondent had a policy handbook which was given

to Petitioner on her first day of work. She was told to take it

home that night, read it and return it the next day. The

receptionist gave her a form to sign to show that she had

taken it home to read it. The receptionist took the policy

handbook from Petitioner and she never saw it again.

Lester testified that respondent did not provide any

management level training about its policies or practices for

employees when they were hired at management level.

Margelos was the general manager and took care of Human

Resources. Lester testified that he never knew of Petitioner's

complaint to Margelos about the behavior of Loayza.

After Loayza made the remarks about women not

being able to do their job as well as men, Petitioner

complained several times to her supervisor Lester, to the

plant manager Margelos, and to Dee Whatmore, who was

doing the payroll and some personnel duties. Petitioner told

Lester that Loayza’s comments were degrading and she

needed Lester to take care of it. Loayza’s comments,

however, did not stop, nor did she perceive that Loayza’s

treatment of her had changed in any way since she

complained to Lester. The second time she complained to

Lester about Loayza’s comments and how upsetting they

were to her, Lester told her “You are being too emotional,

just like a woman.” Petitioner last complained to Lester

about Loayza in a meeting in Lester’s cubicle in mid-January

1995. She told him she couldn’t take it anymore. He had to

do something about Loayza’s constant comments. It was

degrading and put her down, making her feel inferior because

she was a woman. Lester responded by putting his hand on

her thigh, telling her he would take care of everything.

Petitioner was surprised and “mortified” by Lester’s touching

her; she stood up and walked away. Afterwards, Petitioner

talked at lunch with Ms. Whatmore about what Lester had

just done, and the problem of Loayza’s continuing remarks

that because she was a woman she could not do her job as

well as a man. After lunch, Whatmore went with Petitioner

to Margelos’s office to talk about Loayza’s improper

comments and Lester’s improper touching. Whatmore told

Petitioner that Lester had also improperly touched her when

she was new to the company on an occasion when Margelos

was also present. Whatmore was uneasy around Lester ever

since.

Okay. When I was in George’s office, Brian

came in and George introduced me. And

Brian reached over to grab my neck or put his

arm around my shoulder. And shrugged it off

and told him, you know—I extended my hand

and said you can shake my hand. And you

know, he looked at me with a smirk and he

showed me his two hands and said with these

two hands I can twist and break your neck.

And then he smirked. And I looked at him

and I looked at George and I was shocked.

Margelos seemed to shrug off the complaint but advised that

he would look into things and get back to them. Whatmore

testified that she did not know that under respondent’s

procedures she was supposed to go to the president of the

company.

After the meeting with Margelos, the relations with

Loayza did not improve. Petitioner again talked to Margelos,

the relations with Loayza did not improve. She again talked

to Margelos about Loayza’s continuing refrain that because

Petitioner was a woman she could not do her job as well as a

man. She told Margelos that if he could not stop Loayza’s

constant harping on her inadequacies because she was a

woman she would be forced to resign.

Petitioner talked to Whatmore about whether there

might be other jobs that she could work or apply for within

the company. Petitioner liked working for respondent and

did not want to leave. Whatmore told her to talk to the

customer service and accounting managers who usually had

openings. She also told Whatmore that if things did not get

better with Loayza and Lester, she would have to leave

respondent. Whatmore testified that to the best of her

knowledge, Petitioner never notified respondent that she was

quitting. Dee Whatmore telephoned Petitioner on the

morning of her deposition. When Petitioner advised her that

SRAM’s attorneys had said that she had resigned, Whatmore

laughed and told Petitioner that it was ridiculous.

With this meeting with Margelos, Petitioner ceased

going to Lester about her complaints, he having been of no

help. On February 6, 1995, three days after she and

Whatmore met with Margelos, Lester told Petitioner that she

was being too disruptive with all of her complaints, and that

she was being terminated. Petitioner telephoned her husband

and then telephoned Andy Carren, Respondent’s employee

who got her the interview at the company, to advise that she

had been fired. He said that he would look into it and would

call her back. She never heard from him again. Roger

Hertzberg testified that Petitioner telephoned him on the cell

phone from her car driving home that Brian Lester had fired

her. She told him that Lester told her she was being let go

because she was being too disruptive because of her

complaints about Loayza. The following Monday she also

telephoned Dee Whatmore to tell her she had been fired. As

soon as she hung up the telephone, she went to see Margelos

to ask whether he knew that Petitioner had been fired.

Loayza testified that Lester talked to him in January

1995 about firing Petitioner. Lwoayza testified that he was

present at a meeting in which Lester admitted that he had

improperly touched Dee Whatmore and Petitioner.

Loayza testified that he knew Petitioner was offended

because he would say things about women not being able to

do their jobs. Loayza also stated that Margelos never talked

to him about it.

Margelos testified that respondent’s written policy on

harassment was to first talk to your supervisor, then if you are

not happy with the results, you keep moving it up the chain

of command, all the way up to Stan Day, the president.

Margelos didn’t know if he had told that to Petitioner.

Although Margelos testified that Petitioner had come to him

on a number of occasions complaining about Loayza (during

the three months that Petitioner worked at respondent, he

testified there were two or three complaints repeated over an

interval of every two or three weeks). Margelos only wrote

up one of the complaints. He never wrote up the one where

Petitioner complained that Lester touched her even though he

testified that she was upset and agitated and Whatmore was

concerned enough to come to the meeting with her. He never

wrote down any of Petitioner’s complaints about Loayza’s

comments that she couldn’t do her job as well as a man

because she was a woman. He didn’t know that he was

supposed to fill out a form. Although Margelos documented

one of Petitioner’s complaints in a December 15, 1994

memorandum that Loayza had taken her procedure book

home for the weekend to review and had never brought it

back, and Margelos wrote a follow-up memorandum on

December 20, 1994 stating he talked with Petitioner

regarding that complaint and she said things were fine, he

also later testified that he knew after he wrote the December

20, 1994 memorandum that things were not fine. Margelos

testified that primarily Petitioner’s complaint was Loayza

talked to her in a demeaning way: she couldn’t do things

because she was a woman. Margelos did not write those

incidents up. He did not write up Petitioner’s complaints

about Loayza’s comments. Margelos also did not write up

the complaint made by Petitioner and Whatmore about Lester

touching her knee, even though it was improper and not

something he would do. At trial, Margelos first testified that

he did talk to Loayza, but recanted that testimony, standing

by his deposition testimony in July 1997 that he was not sure

that he talked to Loayza directly, but through Lester and he

let Lester run his own shop.

Question: Did you view the remarks as

derogatory or bad when Manuel Loayza

would tell her that because she was a woman

she couldn’t do her job correctly?

Answer: -Yeah, I though that was. He

shouldn’t say that, and I told him so. I may

not have told him so directly. I may have

done it through Brian.

Question: Did you work through Brian? Did

you ever tell Brian to do things where you

wouldn’t address it yourself?

Answer: It depends on his day-to-day

relationship with the people. You know, I

really kind of made sure that I didn’t—I

really—didn’t really get in the way. I just let

Brian run his organization without a lot of

interference. That’s pretty much how I ran the

whole thing.

Margelos testified that he was aware that Petitioner

wanted to get away from working with Loayza because she

had talked to him about transferring out of the department.

Margelos talked about Petitioner’s request with Jeff Shupe,

respondent’s vice-president of manufacturing, and whether

the transfer could happen and Margelos made the decision

not to let her. Petitioner testified that Lester told her

specifically that she was terminated. Lester testified that he

never talked to her but that she had tendered her resignation

to Margelos. Margelos testified that Plaintiff tried to rescind

her resignation and that he made the decision not to let her.

Loayza testified that he knew that Lester terminated

Petitioner.

Petitioner liked her job with respondent, that it was a

growing company, and loved the bike industry. After being

fired, she wrote to the President of respondent, Stan Day.

She told him in the letter that she was terminated over

problems with her boss and her coworker, including her

telephone number so that he could call her if he had any

questions. She wanted to summarize some things that had

happened, that she was having problems with Loayza and

that Lester knew of the problems but did not take care of

them. Petitioner wanted to write a letter that would hopefully

spark his curiosity so that he would call her back. She asked

in the letter that if he had any further questions to please call

her, hoping that he would so that she could elaborate on the

problems she had at SRAM. She never received a response

from Day.

Later, Petitioner spoke with Whatmore. Whatmore

suggested that Petitioner file a charge with the Equal

Employment Opportunity Commission and gave her a

lawyer’s name. After Petitioner received the papers, she met

with Whatmore who reviewed the charge with her, and told

Petitioner that she could use her as a witness. Whatmore

testified that Petitioner had complained to her about Loayza

some 10 to 12 times, that he was picking on her by telling her

what he could do her job better because he’s a guy and she’s

just a girl. Whatmore had told Petitioner to present her

complaints to her manager, Brian Lester. The procedure for

making complaints at respondent was to go to your

immediate manager, in Petitioner’s case, Brian Lester. If she

didn’t get anywhere with Lester, she was to see the plan

manager George Margelos, who was supposed to handle it.

Under the procedures that existed in 1995, Whatmore

testified that Petitioner had done everything that she was

required to do. In 1998, Whatmore was promoted to Human

Resources manager. Whatmore testified that after she

became human resources manager in 199, for the first time

she became aware of other requirements in order to file a

complaint: an employee should fill out a three-ply form, see

the plant manager and if there were any further problems see

the vice president of the factory. She testified that the

manager and his subordinate were to fill out the form. Then

it would be shown to the HR person to be witnessed. It

would then be noted and placed in the person’s file.

Whatmore testified that she had occasion to look at

Petitioner’s file before Petitioner left respondent and there

was no such form in it. Whatmore testified that Petitioner

complained to her about Brian Lester, her manager.

Petitioner had scheduled a lunch with her in order to talk to

her about him. Petitioner told her that she had gone to Lester

to make her complaint about Loayza just as Whatmore had

told her to do.

After leaving respondent, Petitioner ran into Loayza

at a show sponsored by the Chicago Area Bike Dealers

Association. He told Petitioner that he had resigned from

respondent and that respondent’s lawyers had coached them

[Lester, Margelos and Loayza] on what to say regarding her

case. Loayza testified that Lester started crying at the

meeting with the lawyer and Stan Day.

The District Court Proceedings

After resolution of Petitioner’s legal claim by the

jury, the district court resolved Petitioner’s equitable claim in

light of the determination of the jury and awarded Petitioner

$51,829.18 of front pay in lieu of reinstatement as an

equitable remedy following Williams v. Pharmacia, Inc., 137

F.3d 944, 952 (7th Cir. 1998). The district court concluded

that it could take into account the fact that Petitioner was no

longer working at respondent in fashioning equitable relief in

accordance with the jury’s finding.

Respondent argued that because Petitioner did not

prevail on her retaliatory discharge claim and her case was

not tried before the jury on a constructive discharge theory,

Petitioner could not seek an award of any monetary damages.

The district court ruled against respondent.

As this Court has already ruled orally, a portion of

SRAM’s numerous conceptually unsound submissions during

the course of this litigation—in this instance, opposing any

backpay or frontpay award at all—is premised on the

fallacious assertion that the case was not tried by Hertzberg

on a constructive discharge theory.

That is really a red herring. Here the obvious reality is

that Hertzberg’s statement that she was not prepared to

remain at SRAM unless her sexual harassment grievance

were to be addressed satisfactorily flowed directly from the

harassment itself, the existence of which has been confirmed

by the jury verdict. And when Hertzberg almost immediately

asked SRAM to reconsider its treatment of her statement to

that effect as the equivalent of her having quit her job, her

request was refused by SRAM without any reason other than

it would not entertain any such reconsideration. As this

Court has previously ruled, under those circumstances the

necessary proximate causal connection links up the jury-

confirmed sexual harassment with the adverse employment

action of Hertzberg’s loss of employment at SRAM.

The district court addressed SRAM’s reliance that Petitioner

could only recover money damages in the form of backpay

and frontpay if she had pled and proved constructive

discharge. The district court determined that the jury finding

that respondent’s conduct reflected its malice or reckless

indifference to Petitioner’s rights, included an award of

punitive damages and entitles Petitioner to equitable relief

flowing from the conduct based on the jury’s finding, not on

how plaintiff posed her claim in her complaint and at trial.

The district court had concluded that because the jury ruled

against her on her retaliatory discharge claim and a question

that the jury asked while deliberating, that meant that she

quit, respondent failed to rehire her, and her equitable relief is

reinstatement.

* * *

First, as to the jury’s award of punitive damages,

SRAM itself characterizes the conduct to which Hertzberg

was subjected as ‘very close tc the (admittedly amorphous)

line between actual sexual harassment and non-actionable

offensive conduct’ (Mem.4). Even were that so (and that of

course reflects SRAM’s self evaluation, scarcely that of an

unbiased source), the resolution of which side of the line the

conduct occupied—importantly, including the question of

SRAM’s intention—would have presented a classic situation

for jury resolution. It was well within the jury’s province,

having heard the testimony, to make the necessary credibility

determinations (which are solely the jury’s prerogative) and

to find SRAM’s failure to respond appropriately to the

complained of—conduct reflected its ‘malice or reckless

indifference’ to Hertzberg’s rights to an extent that was

sufficient to support a punitive damages award. That facet of

the SRAM Motion is denied.

As to the lost pay award, SRAM builds its Motion on

a false foundation. It speaks of the ‘jury’s conclusion that

Plaintiff's discharge was not unlawful’ (Mem.5) and goes on

to say that Hertzberg’s ‘potential entitlement to backpay was

extinguished when the jury found that her discharge from

SRAM was valid and not unlawful’ (id) That however,

mischaracterizes the record. Here is the portion of the jury

instructions (part of SRAM’s Instruction No. 1) that

described Hertzberg’s claim on which the jury ultimately

ruled against her and in SRAM’s favor:

In addition, it is unlawful under Title VII for

an employer to terminate an employee for

complaining about sexual harassment.

Plaintiff claims that her employment with

Defendant was terminated because of her

complaints about sexual harassment.

Defendant also denies this claim.

And attached to this memorandum order as

Ex. 2 is the instruction that set out the

elements Hertzberg was required to prove to

prevail on that claim. That instruction, though

labeled ‘Court’s Instruction 12 and SRAM’s

proposed instructions 4 and 5, all of which

spoke of ‘adverse employment action’ in

terms of ‘termination of employment.’

There of course is no way to determine

precisely which one or more of the elements

of Hertzberg’s unlawful retaliation claim the

jury found she had failed to establish. Nor is

that answer definitively provided by any

necessary infers from the jury’s question on

that score or from this Court’s response to that

question (which, as always, was decided after

conferring with counsel for both parties). But

it is fair to conclude that the jury decided that

what might reasonably be viewed as

Hertzberg’s termination under either side’s

scenario—that is, SRAM’s refusal to permit

Hertzberg to withdraw her resignation or her

stated intention to resign—was not in

retaliation for her complaints of sexual

harassment. That after all is clearly the effect

of the jury’s verdict on Hertzberg’s unlawful

retaliation claim.

That however was no the question that this

Court, as contrasted with the jury, was called

to resolve. Remember that it is for this Court

and not the jury to have decided on the

recoverable compensatory damages stemming

from SRAM’s unlawful sexual harassment,

which the jury did find to have occurred (in

that respect, see attached transcript of this

Court’s oral ruling of December 16, 1999).

And in that regard, this Court’s December 16

oral ruling also expressed the basis on which

Hertzberg’s lost income is a_ proper

component of her damages on her proved

sexual harassment claim, rather than being

negated by the adverse jury verdict on the

unlawful retaliation claim. {Footnote 2: As

these references to the December 16 ruling

indicate, for the most part SRAM’s current

Motion advances contentions that it has made

before and that this Court has previously

found wanting. This is equally true of the

objections referred to in the next paragraph of

the text.] " |

**%

So I am not going to speculate—that maybe

they could have given plaintiff the benefit of

that one and nevertheless rejected the

retaliation. The two factors that control are

one, that giving you the best read, and I think

probably the fair one given their question—

the jury determined that in fact Ms. Hertzberg

had quit. And because the retaliation claim

was framed to them in terms of terminations

versus quit, they ruled in your favor on that

one. But the thing that you are missing is the

other part of what the jury did—and that is,

the jury expressly had to find in order to

award punitive damages that your client had

conducted itself with malice and deliberate

indifference. I can’t ignore that. And then

tells us, you see that when the plaintiff had at

that stage was that she quit. She asked to

come back. She had to come back in an

environment that the jury found had been

maliciously created or created with deliberate

indifference to her right not to discriminate

against.

Emphasis in the original.

Seventh Circuit

The Seventh Circuit affirmed the judgment with

respect to the award of punitive damages and ruled that the

district court did not err when it failed to grant respondent’s

motion for judgment as a matter of law on Petitioner’s

punitive damage claim. The Seventh Circuit reversed that

portion of the district court’s judgment awarding front and

back pay because plaintiff had not alleged constructive

discharge or did not advance any other theory of

discriminatory discharge to the jury, finding “But in the

absence of constructive discharge, a plaintiff subjected to

sexual harassment, no matter how egregious, is not “made

whole” by the equitable remedy of back pay.” App. at 12a.

The Seventh Circuit erred in requiring that the

complaint explicitly plead constructive discharge. First, it is

wrong because constructive discharge is not a cause of

action. The cause of action is sex discrimination under Title

VII. Second, notice pleading does not require that

constructive discharge be pled. To the extent that the

Seventh -Circuit required that Petitioner plead and prove

something separate and apart from sex discrimination, that is

wrong because constructive discharge is not the cause of

action. As the district court noted, Petitioner did establish a

but for determination between her discrimination and her

becoming unemployed.

The Seventh Circuit erroneously concluded from the

record that Petitioner made no claim for failure to promote.

Id. at 12a. However, Dee Whatmore testified at trial that

Petitioner asked to be transferred so that she could work in

respondent’s Chicago office and there were jobs in customer

service and accounting that were always available and

Petitioner was qualified to do the work. Margelos testified

that he made the decision that she could not be transferred

after speaking with respondent’s vice-president of operations,

Jeff Shupe. The Seventh Circuit concluded, possibly from

the erroneous statements made in respondent’s reply brief on

appeal, that Petitioner made no claim for failure to promote

or discriminatory discharge, and consequently Petitioner was

not entitled to backpay because she did not advance any other

theory of constructive discharge. Although Petitioner did not

prevail on her claim for retaliatory discharge under Count II

of her complaint, her failure to prevail on that claim did not

mean that respondent did not discriminatorily fire her

because the two elements, firing and retaliation, are

intertwined. Furthermore, Count I of her complaint in which

she alleges sexual harassment (hostile work environment),

Petitioner claims that Lester terminated her in violation of

Title VII. That allegation in her complaint, which she

testified to at trial, was sufficient for her to obtain an award

of backpay. Therefore equitable relief, including backpay,

could be awarded to Petitioner. Petitioner did advise

Margelos that if the problem was not addressed, she would

have to leave. Margelos, apparently, took that to mean that

Petitioner was resigning. He also testified that he made the

decision that she could not come back. Margelos also

testified that he left things to Brian to handle. Petitioner

stated in her complaint and at trial that Lester told her she

was fired. Loayza also testified at trial that he knew that

Lester fired her and that Lester talked to him about firing her

at one point even though Loayza told him that there was

plenty of work for both he and Petitioner to do.

REASON FOR GRANTING THE WRIT

1. THE UNITED STATES SUPREME

COURT HAS RECENTLY ACCEPTED

CERTIORARI IN SWIERKIEWICA V.

SOREMA AND DISPOSITION OF THAT

CASE WILL HAVE BEARING ON THE

ISSUES IN THIS CASE.

In Swierkiewicz v. Sorema, N.A., an unreported

decision of the Second Circuit, the entire issue is how

specific must a complaint be in order to proceed to trial. The

Seventh Circuit erroneously concluded that Petitioner had not

alleged a failure to promote claim or any theory of

discriminatory discharge for sexual harassment under Title

VII that would entitle her to an award of backpay, given the

standard of notice pleading in federal court and post-

complaint “discovery and the other pretrial procedures

established by the Rules to disclose more precisely the basis

of both claim and defense and to define more narrowly the

disputed issues of fact. Conley v. Gibson, 355 U.S. 41, 47

(1967). Seventeen years later, in Scheuer v. Rhodes, 416

U.S. 232, 236 (1974), another civil rights action, the Court

again cautioned the lower federal courts that “the complaint

should be construed favorably to the pleader,” id. and

allowed to proceed through discovery and then through

summary judgment or trial. /d. at 250. Despite the holdings

in Conley and Scheuer, a number of lower federal courts

continued to hold civil rights plaintiffs to a higher pleading

standard than otherwise required by Rule 8(1)(2). In 1993,

the Court held that any such heightened pleading requirement

was improper. Leatherman v. Tarrant County Narcotics

Intelligence and Coordination Unit, 507 U.S. 163 (1993).

“We think it is impossible to square the ‘heightened pleading

standard’ . . . with the liberal system of ‘notice pleading’ set

up by the Federal Rules.” /d. at 168. In Swierkiewicz, the

Second Circuit chastised Mr. Swierkiewicz for his

“conclusory” allegations, App. at 3a, which, it held, were

insufficient to “raise an inference of [national original and

age] discrimination.” Jd. at 3a-4a. The District Court also

rebuked Mr. Swierkiewicz for the same alleged defects Jd. at

7a (dismissing the amended complaint for alleging “in a

conclusory fashion that he was terminated as a result of his

age and national origin.”) These rulings were clearly

improper. Swierkiewicz amended his complaint five times

and pled that he was fired by Sorema on account of his

national origin and his age. Under the notice pleading

practice of the Federal Rules, that was sufficient to take his

case past the pleadings stage and on to either summary

judgment or trial. Accord Scheuer v. Rhodes, 416 U.S. at

250.

While Swierkiewicz was disposed of by the court on a

motion to dismiss, the principles are the same to Hertzberg.

Petitioner brought her claim for sexual harassment (hostile

work environment) in which she claimed that she was

discriminatorily discharged by respondent. She introduced

evidence at trial that she was fired. She introduced evidence

at trial that she was not transferred to available positions in

respondent’s Chicago office. She introduced evidence at trial

that Margelos discriminated against her by taking her

statement that she would have to leave if he did not address

her concerns about sexual harassment as a quit, and then

determined that he would not rehire her. Respondent was put

on notice of her claims from her well-pled complaint, through

discovery and at trial. The jury only decided that she was not

retaliated against by respondent as a result of her claimed

discharge. The jury made no determination that she was not

fired. Therefore, the district court was free to apply the

equitable relief from the jury’s determination from the

evidence and Petitioner’s claim and award her backpay and

other equitable relief it specified.

Swierkiewicz sought a writ of certiorari on the basis

that only the Second Circuit has held that an employment

discrimination plaintiff must plead the elements of a

McDonnell Douglas prima facie case to withstand a defense

motion to dismiss under Rule 12(b)(6) of the Federal Rules of

Civil Procedure. Swierkiewicz claims that there are five other

courts of appeals, including the Seventh, that have held that

the McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)

regimen is an evidentiary standard to be used at the summary

judgment or trial stage of a discrimination case. See, e.g.

Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C.

Cir. 2000) (“Sparrow did not have to make out a prima facie

case of discrimination in his complaint”);Weston v.

Commonwealth of Pennsylvania, 2001 U.S. App. LEXIS

10514 at *22 (3d Cir. 2001) (‘eschewing any reugirment of

fact pleading and holding that “[d]iscrimination and other

civil rights claims are clearly subject to notice pleading”);

Bennett v. Schmidt, 153 F.3d 516, 518 (7" Cir. 1998)

(complaint need not set out the elements of a prima facie

case): “I was turned down for a job because of my race is all

a complaint has to say”) (internal quotations omitted); Ring v.

First Interstate Mortgage, Inc., 984 F.2d 924, 926 (8th Cir.

1993) (“the prima facie case . . . analysis is an evidentiary

standard—it defines the question of proof plaintiff must

present to create a rebuttable presumption of discrimination .

. . Under the Federal Rules of Civ! Procedure, an evidentiary

standard is not a proper measure of whether a complaint fails

to state a claim”) (emphasis in original); and Ortez v.

Washington County, 88 F.3d 804, 808 (9th Cir. 1996) (“A

plaintiff need not make a prima facie showing to survive a

motion to dismiss provided he otherwise sets forth a short

and plain statement of his claim showing he is entitled to

relief.”). The Court’s decision in Reeves v. Sanderson

Plumbing Products, Inc., 530 U.S. 133 (2000) confirms that

McDonnell Douglas was intended as a means (though not the

only means) for assessing whether a plaintiff has enough

evidence to take his case to a verdict at trial. However, the

Seventh Circuit in Hertzberg has, at the trial phase,

retrospectively imposed higher standards on what must be

alleged in a complaint than what this Court has stated notice

pleading must provide. The decision in the pending case of

Swierkiewicz would support remand to the Seventh Circuit.

Petitioner has clearly put respondent on notice of both a

claim of sexual harassment, discriminatory discharge, and

failure to promote in violation of Title VII in Count I of her

complaint. Notice pleading only requires that, and Petitioner

was free to develop her case through discovery and at trial.

During cross examination, Margelos admitted that he made

the decision that she could not be transferred and made the

decision that she could not be rehired as he took her

statement that she would have to leave if things did not get

better as a quit and then decided she could not be rehired. As

he also testified that he left everything to Brian Lester to

handle and Petitioner testified that she was fired by Brian

Lester, it is a logical extension of her complaint and the

evidence she introduced at trial that the jury’s award of

punitive damages supported her claim of discriminatory

discharge. If the Seventh Circuit requires that the complaint

explicitly plead constructive discharge, it is wrong because

constructive discharge is net the cause of action; sex

discrimination is the cause of action. Second, notice pleading

does not require that constructive discharge be pled in order

for Petitioner to receive an award of frontpay and backpay.

The district court correctly determined that Petitioner

established a but for determination between her

discrimination and her becoming unemployed to which she

was entitled to the equitable relief he awarded.

CONCLUSION

For the reasons stated, the petition for writ of

certiorari should be granted.

Respectfully submitted,

David L. Lee

Counsel of Record

Law Offices of David L. Lee

53 W. Jackson Boulevard

Suite 660

Chicago, IL 60604

(312) 437-4400

No. 00-1825

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

JULIE K. HERTZBERG, Plaintiff-Appellee,

Vv.

SRAM CORPORATION,

Defendant-Appellant.

February 23, 2001, Argued

August 2, 2001, Decided

PRIOR HISTORY:

Appeal from the United States District Court for the Northern

District of Illinois, Eastern Division. No. 96 C 6944. Milton

I. Shadur, Judge.

DISPOSITION:

AFFIRMED IN PART; REVERSED IN PART.

COUNSEL:

For JULIE K. HERTZBERG, Plaintiff - Appellee: Suzanne

McCarthy, Chicago, IL USA.

For SRAM CORPORATION, Defendant - Appellant: Neal F.

Perryman, LEWIS, RICE & FINGERSH, St. Louis, MO

USA.

JUDGES:

Before FLAUM, Chief Judge, and RIPPLE and WILLIAMS,

Circuit Judges.

OPINION BY:

RIPPLE

OPINION:

RIPPLE, Circuit Judge. Julie Hertzberg brought this

action against her former employer, SRAM Corporation

("SRAM"), for sexual harassment and retaliatory discharge.

A jury returned a verdict in favor of Ms. Hertzberg on her

sexual harassment claim and awarded her $ 20,000 in

punitive damages. However, the jury returned a verdict for

SRAM on the retaliatory discharge claim. The district court

nevertheless granted Ms. Hertzberg equitable relief in the

form of back and front pay. On appeal, SRAM challenges all

of these awards. For the reasons set forth in the following

opinion, we affirm in part and reverse in part the judgment of

the district court.

I é

BACKGROUND

A. Facts

In November 1994, SRAM, a manufacturer of bicycle

components, hired Ms. Hertzberg as a shipping coordinator in

its Elk Grove Village, [Illinois warehouse. Almost

immediately, Ms. Hertzberg experienced difficulties with

Manuel Loayza, a co-worker. On numerous occasions,

Loayza told Ms. Hertzberg that she was not as qualified as

he, that women could not perform shipping responsibilities as

well as men and that he would take over -her job. -Ms.

Hertzberg also had disagreements with Loayza about

shipping procedures and about a book that Loayza had failed

to return to Ms. Hertzberg.

Ms. Hertzberg was upset by Loayza's comments and,

according to her testimony, complained to her immediate

supervisor, Brian Lester, on at least three occasions.’ During

one of their meetings concerning Loayza, Lester told Ms.

Hertzberg that she was "being too emotional, just like a

woman.” R.68 at 34. The last time that Ms. Hertzberg spoke

to Lester concerning Loayza's remarks, Lester put his hand

on Ms. Hertzberg’s knee and told her he would take care of it.

Ms. Hertzberg perceived that Lester was unable or unwilling

to curb Loayza's behavior. Consequently, she ceased bringing

her complaints to Lester.

On the advice of another SRAM employee, Dee

Whatmore, Ms. Hertzberg complained to plant manager

George Margelos concerning Lester's and Loayza's behavior

toward her. Whatmore accompanied Ms. Hertzberg to

Margelos’ office; there, Ms. Hertzberg reported Lester's

actions, as well as detailed the problems that she had been

experiencing with Loayza. According to Ms. Hertzberg,

Margelos "seemed to shrug . . . off" her concerns. R.68 at 54.

Following this meeting, Margelos had at least one discussion

~ with Lester concerning the propriety of Lester's touching Ms.

Hertzberg. Ms. Hertzberg apparently did not have any further

difficulties with Lester. The record is inconsistent regarding

the actions Margelos took with respect to Loayza. Margelos

testified to at least one conversation with Loayza about his

comments that occurred shortly after Ms. Hertzberg's

complaint; Loayza remembered this conversation, too, but

believed that it occurred after Ms. Hertzberg's departure had

become a fait accompli. Loayza apparently never was warned

formally or disciplined for his comments, and, despite Ms.

Hertzberg's repeated complaints to Margelos, the comments

continued unabated until her departure from SRAM. |

Ms. Hertzberg's employment with SRAM ended on

February 6, 1995, although how it ended is not clear. Ms.

Hertzberg testified that she was terminated from her

employment by Lester because she was being "too

disruptive." Id. at 55. Ms. Hertzberg's ex-husband and

Whatmore both confirmed that Ms. Hertzberg had told them

that she was fired. Lester and Margelos, however, denied

terminating Ms. Hertzberg. They testified that Ms. Hertzberg

gave two weeks’ notice. Shortly thereafter, she informed

Lester that she was reconsidering. Margelos told Lester,

however, that they were going to hold firm to her

resignation.”

After leaving SRAM, Ms. Hertzberg wrote to SRAM's

president, Stan Day. In the letter, she related her history of

problems with Loayza, that she had voiced concerns about

"certain procedures Manuel was using" and that she did not

believe Loayza was a "team player." Def.'s Ex. 1. She also

told Day that she had not intended to resign, but only had

wanted her concerns addressed. She did not request any

action from Day, but provided her number to him "if [he]

would like to respond." Jd. Ms. Hertzberg did not state that

she had been the victim of sexual harassment, nor did she

inform Day that her discharge was motivated by her

harassment-related complaints.

During the time that Ms. Hertzberg was employed at

SRAM, SRAM had in place a sexual harassment policy. The

policy required that complaints be made through the chain of

command, all the way to Day. Ms. Hertzberg had seen the

employment manual containing the sexual harassment policy

on only one occasion; she did not have a personal copy of the

employment manual and, therefore, was not familiar with the

requirements of the policy. Margelos testified that he was

familiar with the policy and that the policy stated that SRAM

did not tolerate sexual harassment. Lester had the same

understanding of the policy. Neither individual, however, had

received training in harassment issues or how to conduct a

sexual harassment investigation.

B. District Court Proceedings

After pursuing her claims through administrative

channels, Ms. Hertzberg filed a two-count complaint in

district court. In her complaint, Ms. Hertzberg first alleged

that she had been sexually harassed by Loayza and Lester.

The second count of her complaint alleged that SRAM had

fired her in retaliation "for having opposed and complained

about the hostile and offensive work environment." R.1 at 5.

Ms. Hertzberg's complaint did not include a claim for

discriminatory discharge, only retaliatory discharge. Ms.

Hertzberg did not allege, either as part of count one or as a

separate count, that she was constructively discharged -- that

her working conditions were so intolerable that she was

forced to resign. Ms. Hertzberg's claims proceeded to trial.

After the close of Ms. Hertzberg's case, and again at the end

of all of the evidence, SRAM moved for judgment as a matter

of law on all aspects of Ms. Hertzberg's claims, including the

availability of punitive damages. The district court reserved

ruling on the motion. The jury then was instructed on Ms.

Hertzberg's claims of sexual harassment and retaliatory

discharge. These were the only two bases of recovery

submitted to the jury. The jury returned a verdict for Ms.

Hertzberg on the sexual harassment claim for which it

awarded her $ 20,000 in punitive damages.’ The jury,

however, returned a verdict for SRAM on the retaliatory

discharge claim.

Ms. Hertzberg then sought equitable relief from the

district court in the form of back pay and front pay. She

claimed that she was entitled to approximately $ 56,000 in

back pay and ten years’ front pay based on her actuary's

testimony. Ms. Hertzberg did not file a supporting

memorandum with the district court detailing why she was

entitled to lost wages in the absence of a jury finding that she

had endured a discriminatory discharge, actual or

constructive.

In response, SRAM argued that back and front pay were

available to Title VII plaintiffs only when they had proven

discriminatory discharge. Because Ms. Hertzberg never had

claimed that she was constructively discharged, and because

| 6a

the jury rejected her retaliatory discharge claim, SRAM

maintained that lost pay was not available to Ms. Hertzberg.’

The district court disagreed. It found that there was a "but

for" relationship between Ms. Hertzberg's departure and the

sexual harassment. Tr. of Dec. 16, 1999, at 9. Therefore, even

though Ms. Hertzberg had not suffered a constructive

discharge, she could still receive damages for lost pay.

Ruling on SRAM's motion for judgment as a matter of law,

the district court also upheld the jury's punitive damages

award. Consequently, it entered a final judgment of

$66,829.18 in Ms. Hertzberg’s favor; the sum represented

$20,000 in punitive damages awarded by the jury, and

$44,112.18 in back pay and $ 7,717 in front pay awarded by

the court. SRAM timely appealed.

DISCUSSION

SRAM now seeks review of the district court's post-trial

rulings. SRAM first submits that the district court should not

have awarded back pay and front pay to Ms. Hertzberg.

Second, SRAM contends that the district court erred in its

calculation of the lost pay award. Finally, SRAM argues that

the district court should not have left the jury's punitive

damage award undisturbed.

A. Lost Pay

SRAM maintains that the district court should not have

awarded lost pay because Ms. Hertzberg did. not plead or

prove a cause of action that entitled her to back or front pay.

Whether lost pay is available as a remedy for a statutory

violation is a question of law that we review de novo. See

Selgas v. Am. Airlines, Inc., 104 F.3d 9, 12 (Ist Cir. 1997)

("Our review of the district court's decision that both front

pay and reinstatement could be awarded together as part of

Si lll

the remedies available to a Title VII plaintiff is de novo, as

we review for legal error."). The district court's decision to

award lost pay and the amount of that award, assuming

Statutory authorization, is reviewed only for an abuse of

discretion. See Downes v. Volkswagen of Am., Inc., 41 F.3d

1132, 1141 (7th Cir. 1994) ("The statute also affords the

court discretion to award front pay according to the

circumstances of each case.").

In its decision to award lost pay, the district court

acknowledged that it was bound by the jury's verdict on the

retaliation claim. It also acknowledged that constructive

discharge had not been submitted to the jury or proven.

Nevertheless, it decided that back pay and front pay could be

awarded because "but for" SRAM's harassment Ms.

Hertzberg would not have left her employment. We believe

that the district court's approach blurs the distinction between

hostile work environment and constructive discharge cases,

and between monetary damages and equitable relief.

It is well established that Title VII encompasses a cause

of action for sexual harassment. We have held that a cause of

action for sexual harassment arises when the conduct has "the

purpose or effect of unreasonably interfering with an

individual's work performance or creating an intimidating,

hostile, or offensive work environment." Wolf v. Northwest

Ind. Symphony Soc'y, 250 F.3d 1136, 1143 (7th Cir. 2001)

(internal quotation marks and citations omitted). Further, the

conduct at issue must be sufficiently severe or pervasive that

a reasonable person would find it hostile and that the victim

subjectively sees it as abusive. See Murray v. Chicago

Transit Auth., 252 F.3d 880, 889 (7th Cir. 2001).°

In addition to defining actionable sexual harassment, our

case law has distinguished "ordinary" sexual harassment

from "aggravated" sexual harassment. Rodgers v. Western-

Southern Life Ins. Co., 12 F.3d 668, 677 (7th Cir. 1993). In

the "ordinary" case, the employer engages in or condones

hostile conduct that interferes with the employee's ability to

perform his or her job. See Wolf, 250 F.3d at 1143. In such

circumstances the employee "is expected to remain on the job

while seeking redress" of the harassment. /d. (internal

quotation marks and citations omitted). In the "aggravated"

case, the employer not only interferes with the employee's

performance, but "makes an employee's working conditions

so intolerable that the employee is forced into an involuntary

resignation." Saxton v. Am. Tel. & Tel. Co., 10 F.3d 526,

536-37 (7th Cir. 1993) (quoting Weihaupt v. Am. Med. Ass'n,

874 F.2d 419, 426 (7th Cir. 1989) (emphasis in original)).

When working conditions reach these depths, an employee

need not remain on the job, but may resign and seek his or

her remedies in court. See Chambers v. Am. Trans Air, Inc.,

17 F.3d 998, 1005 (7th Cir. 1994) ("Thus, courts have said

that where conditions are so intolerable that a reasonable

person would feel compelled to resign, a plaintiff may do

that, and then sue for reinstatement and back pay.").

The distinction between "ordinary" and "aggravated"

harassment is not one merely of semantics; whether

harassment is ordinary or aggravated affects the damages

available to the plaintiff. A brief history of damages under

Title VII is helpful in understanding this distinction. Before

Congress enacted the Civil Rights Act of 1991 ("the 1991

Act"), Title VII allowed for only equitable remedies, such as

reinstatement, back pay in lieu of reinstatement and

injunctive relief.’ In response to this limitation, courts

developed the constructive discharge doctrine. See

Chambers, 17 F.3d at 1005. "Thus, courts . . . said that where

conditions are so intolerable that a reasonable person would

feel compelled to resign, a plaintiff may do that, and then sue

for reinstatement and back pay." /d However, the

constructive discharge doctrine did not assist those whose

working conditions were unreasonable, but not intolerable.

Indeed, one congressional report noted that "back pay as the

exclusive monetary remedy under Title VII has not served as

an effective deterrent, and, when back pay is not available, as

in the case where a discrimination victim remains on-the-job

or leaves the workplace for reasons other than discrimination,

there is simply no deterrent." H.R. Rep. No. 102-40 (I), at

154 (1991). Consequently, in the 1991 Act, Congress

expanded the types of remedies available to Title VII

plaintiffs to compensate those left unaided by the original

statute. See H.R. Rep. 102-40 (II), at § 8 (1991) (establishing

the need for expanded remedies in light of the examples of

women who were severely harassed but received little or no

relief).

The new damage provisions of the 1991 Act are codified

at 42 U.S.C. § 1981a, which states:

In an action brought by a complaining party . .

. against a respondent who engaged in

unlawful intentional discrimination (not an

employment practice that is unlawful because

of its disparate impact) . . . the complaining

party may recover compensatory and punitive

damages as allowed in subsection (b) of this

section, in addition to any relief authorized by

section 706(g) of the Civil Rights Act of 1964

[ 42 USC. § 2000e-5(g)], from the

respondent.

42 USC. § 198la(a(1). In adopting this language,

"Congress sought to expand the available remedies by

permitting the recovery of compensatory and punitive

damages in addition to previously available remedies, such as

front pay." Pollard v. E.I. du Pont de Nemours & Co., 150 L.

Ed. 2d 62, 121 S. Ct. 1946, 1952 (2001). Thus, the 1991 Civil

Rights Act addressed the disparity in treatment by providing

additional remedies; it left undisturbed the equitable remedies

available under Title VII. Indeed, Congress explicitly

10a

provided that the new remedy provisions did not subsume the

old Title VII remedies. See 42 U.S.C. § 198]a(b)\(2). Section

1981a (b)(2) states: "Compensatory damages awarded under

this section shall not include backpay, interest on backpay, or

any other type of relief authorized under section 706(g) of the

Civil Rights Act of 1964." 42 U.S.C. § 198]la (b){(2).

More important for our purposes, the 1991 Act also left

undisturbed the showing that a plaintiff must make to obtain

equitable relief: A victim of discrimination that leaves his or

her employment as a result of the discrimination must show

either an actual or constructive discharge in order to receive

the equitable remedy of reinstatement, or back and front pay

in lieu of reinstatement. In the absence of such a showing, a

plaintiff's exclusive remedies are those set forth in 42 U.S.C.

§ 198la.

We are not alone in reaching this conclusion. Two

circuits that have faced this issue have held that back pay and

front pay may not be recovered in the absence of a finding of

discriminatory discharge. See Mallinson-Montague v.

Pocrnick, 224 F.3d 1224 (10th Cir. 2000); Caviness v.

Nucor-Yamato Steel Co., 105 F.3d 1216 (8th Cir. 1997). In

Pocrnick, a district court had rejected the plaintiffs’ plea for

front and back pay following a jury's determination that they

had not suffered constructive discharges. See 224 F.3d at

1226. The plaintiffs cross-appealed on this basis, but the

Tenth Circuit stated:

Because the remedies available under §

1981a do not displace or alter the remedies

available under pre-1991 Title VII law, but

instead merely supplement those remedies,

and because § 198la(b)(2) specifically

precludes the award of back pay as part of the

new compensatory remedies provided therein,

the district court concluded that "there is

lla

nothing in the 1991 Amendments to suggest

that the case law applying those prior

remedies is abrogated. Instead, it appears that

those prior remedies, and the case law

applying those remedies remain intact.”

Accordingly, the district court further

concluded that the Plaintiffs’ entitlement to

back pay was controlled exclusively by §

2000e-5(g) and the case law interpreting it and

not by the separate, supplemental remedies set

out in § 1981a.

224 F.3d at 1237 (footnotes omitted). The appellate court

adopted this reasoning and upheld the judgment.

The Eighth Circuit held similarly in Caviness. There, the

jury had awarded the plaintiff $ 51,000 in damages on her

sexual harassment claim. The defendant argued that the

award must be vacated because the actions occurred pre-1991

and, therefore, only equitable remedies were available to the

plaintiff. The district court recognized that the plain tiff was

limited to pre-1991 Act remedies; nevertheless, it upheld the

award and recharacterized it as back pay. The defendant

appealed, and the Eighth Circuit reversed. In resolving the

issue, the court first noted that "the recovery of monetary

damages by successful plaintiffs on claims of discrimination

under Title VII before the 1991 Act was limited to equitable

forms of relief, such as back pay, and the circumstances

under which such monetary equitable relief was available

were likewise limited." /d. at 1219. Consequently, even

"if unlawful discrimination was proved, under

prior [pre-November 1991] law a Title VII

plaintiff could not recover monetary relief

unless the discrimination was also found to

have some concrete effect on the plaintiff's

12a

employment status, such as a denied

promotion, a differential in compensation, or

termination." Sexual harassment occurring

before November 1991 ordinarily does not

have the sort of concrete economic effect

required for the recovery of money damages

under Title VII. The exception would be

sexual harassment that resulted in constructive

discharge . . . . In that case, back pay (and

front pay) would be potential remedies. But in

the absence of constructive discharge, a

plaintiff subjected to sexual harassment, no

matter how egregious, is not "made whole" by

the equitable remedy of back pay.

Id. (quoting Landgraf v. USI Film Prods., 511 U.S. 244, 254,

128 L. Ed. 2d 229, 114 S. Ct. 1483 (1994)) (alteration in

original). Because, the plaintiff had not alleged constructive

discharge, and because no other theory of discriminatory

discharge was submitted to the jury, the Eighth Circuit

reversed the back pay award. See id.

The requirement that a plaintiff establish a discriminatory

discharge in order to receive lost pay precludes such a

recovery for Ms. Hertzberg in the present case. We agree

with the district court that Ms. Hertzberg's lawyers, "in the

nature of their presentation, may have shot themselves or

their client in the foot on the retaliation claim by the

instruction that limited adverse employment action to a

termination of plaintiffs employment by defendant," Tr. of

Dec. 16, 1999, at 6-7; that is, Ms. Hertzberg may well have

convinced a jury that she had been constructively discharged.

However, Ms. Hertzberg presented only two bases of relief to

the jury: sexual harassment and retaliatory discharge. The

jury rejected Ms. Hertzberg’s retaliatory discharge claim.

Consequently, there was no discriminatory discharge on

13a

which the award of lost pay could be based, and we must

reverse the lost pay award.

B. Punitive Damages

SRAM also contends that the district court erred when it

failed to grant SRAM's motion for judgment as a matter of

law on Ms. Hertzberg's punitive damage claim. We review

the denial of a motion for judgment as a matter of law de

novo. See Emmel v. Coca-Cola Bottling Co., 95 F.3d 627,

629 (7th Cir. 1996). In addressing the issue, we ask "whether

the evidence presented, combined with all reasonable

inferences permissibly drawn therefrom, is sufficient to

support the verdict when viewed in the light most favorable

to the party against whom the motion is directed," here, Ms.

Hertzberg. Tapia v. City of Greenwood, 965 F.2d 336, 338

(7th Cir. 1992).

SRAM first argues that Ms. Hertzberg did not suffer

severe sexual harassment. SRAM also maintains that nothing

in the record suggests that SRAM's management knew that

its actions with respect to Ms. Hertzberg might violate federal

law. Finally, SRAM contends that punitive damages should

be foreclosed to Ms. Hertzberg because she did not utilize her

last avenue of redress under SRAM's harassment policy -- an

appeal to SRAM's president. Consequently, SRAM believes,

Ms. Hertzberg cannot establish punitive damages as a matter

of law.

We believe these arguments must be rejected in the wake

of Kolstad v. American Dental Association, 527 U.S. 526,

144 L. Ed. 2d 494, 119 S. Ct. 2118 (1999). In Kolstad, the

Supreme Court set forth the elements that a plaintiff must

establish in order to receive punitive damages under the 1991

Act. According to the statute, stated the Court, the employer

must act with malice or reckless indifference to the plaintiff's

federally protected rights. "The terms ‘malice’ or ‘reckless

indifference’ pertain to the employer's knowledge that it may

l4a

be acting in violation of federal law, not its awareness that it

is engaging in discrimination." Kolstad, 527 U.S. at 535.

Restating the standard in a slightly different formulation, the

Court held: "An employer must at least discriminate in the

face of a perceived risk that its actions will violate federal

law to be liable in punitive damages." /d at 536.

Consequently, although the egregiousness of the conduct

might support an inference that the employer acted with the

requisite state of mind, a showing of egregiousness is not an

independent requirement of a punitive damages award. See

id. at 537-38.

This court applied the Kolstad standard in Bruso v.

United Airlines, Inc., 239 F.3d 848 (7th Cir. 2001). In Bruso,

we discussed CKolstad’s “three-part framework for

determining whether an award of punitive damages is proper

under the statutory standard." 239 F.3d at 857. The first step

requires the plaintiff to "demonstrate that the employer acted

with the requisite mental state." Jd. However, we continued,

the employer need not be aware that it is

engaging in discrimination. Instead, it need

only act in the face of a perceived risk that its

actions will violate federal law. A plaintiff

may satisfy this element by demonstrating that

the relevant individuals knew of or were

familiar with the antidiscrimination laws and

the employer's policies for implementing

those laws.

Id. at 85 7-58 (internal quotation marks and citations

omitted).” Once the plaintiff has met this burden, the plaintiff

"must demonstrate that the employees who discriminated

against him are managerial agents acting within the scope of

their employment." Jd. However, even if the plaintiff meets

these burdens, "the employer may avoid liability for punitive

15a

damages if it can show that it engaged in good faith efforts to

implement an antidiscrimination policy." /d.

We believe that the evidence, together with the

reasonable inferences that the jury was entitled to draw from

that evidence, were sufficient to allow a jury to resolve these

issues in favor of Ms. Hertzberg. With respect to the first

element, there was evidence that both Lester and Margelos

"knew of . . . the antidiscrimination laws and the employer's

policies for implementing those laws." Jd at 858.

Specifically, Lester testified that SRAM had a sexual

harassment policy and, although he could not remember the

specifics of the policy, he believed it required an

investigation and an attempt to reach a resolution between the

parties. Furthermore, when asked about his response to Ms.

Hertzberg's complaint about Loayza, Mr. Lester replied: "I

spoke with Manuel. I told him that Julie thought his jokes

were inappropriate and so did I. And that he should stop

doing that immediately. It was incorrect behavior in the

workplace." R.68 at 119. Consequently, Lester's knowledge

of the existence of SRAM's policy is undisputed.

Furthermore, a jury reasonably could infer from Lester's

statements to Loayza that Loayza's comments were

"inappropriate" and "incorrect" because they were illegal. See

Alexander v. Fulton County, 207 F.3d 1303, 1338 n.28 (11th

Cir. 2000) (holding that sheriff's testimony that he "would

never assert" that it was "okay to fire someone because of

their race" was sufficient to establish that he acted with the

requisite mental state); cf Ogden v. Wave Works, Inc., 214

F.3d 999, 1010 (8th Cir. 2000) (holding that the combination

of familiarity with company policy and training in

harassment issues was sufficient evidence from which a jury

could conclude that a managerial employee acted in the face

of a perceived risk that his actions violated federal law).

The same is true of Margelos. When asked about SRAM's

policy on sexual harassment, Margelos responded: "Well,

certainly it's not tolerated. If we're made aware of any issues,

16a

we would address them immediately." R.68 at 248.

Furthermore, when detailing his discussions with Lester

regarding Lester's touching Ms. Hertzberg, Margelos stated:

1 told Brian [Lester] exactly what Julie

[Hertzberg] and Dee [Whatmore] had told me.

And that Julie felt that it was inappropriate. |

told Brian, you know, that kind of behavior,

regardless of what, you know, might be just

incidental contact or whatever can be

misinterpreted by other people and it's very

offensive.

R.68 at 256. Margelos, therefore, like Lester, expressly

testified to knowledge of SRAM's- policy. Furthermore, like

Lester, the jury reasonably could conclude that Margelos

understood that certain conduct that was “inappropriate” or

“offensive” might be illegal. See Alexander, 207 F.3d at

1338. Consequently, we do not believe that we can reverse

the jury's verdict of punitive damages with respect to Ms.

Hertzberg's showing on this first element.

As stated above, however, our inquiry does not end here.

Ms. Hertzberg also must show that either Lester or Margelos

was a "managerial agent . . . acting within the scope of [his]

employment.” Bruso, 239 F.3d at 858. This is "necessarily a

fact-intensive inquiry" driven by "the kind of authority the

employer has given the employee, the amount of discretion

given to the employee in executing his job duties, and the

manner in which those duties are carried out." Jd.

Although the evidence in the record concerning Lester is

sparse, it does not appear from the evidence that Lester's

responsibilities rendered him a managerial agent. There is

little evidence in the record concerning Lester's day-to-day

authority in overseeing the shipping department. However,

there was testimony from both Lester and Margelos that

17a

Lester had little discretion in hiring, disciplining or

terminating employees that reported to him. According to

Lester, he had only a "small amount" of input in hiring those

who would work under him. R.68 at 116. Furthermore, Lester

had no power to terminate employees without Margelos'

approval. Because the little evidence presented suggests that

Lester's authority and discretion was limited, we do not

believe a jury reasonably could conclude that Lester was

SRAM's managerial agent. Cf Lowery v. Circuit City Stores,

Inc., 206 F.3d 431, 447 (4th Cir. 2000) (holding that a

supervisor was a managerial agent because she “had the

authority to make personnel decisions . . . without guidelines

or review, and thus was able to make personnel decisions

without any objective criteria or accountability"), cert.

denied, 531 U.S. 822, 121 S. Ct. 66, 148 L. Ed. 2d 31 (2000);

EEOC v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1247 (10th

Cir. 1999) (holding that employees with the ability to

suspend, hire and fire subordinates occupied management

positions for purposes of imposing punitive damages).

We cannot reach the same conclusion with respect to

Margelos. Margelos was plant manager at the Elk Grove

Village facility and "general manager for [SRAM's] U.S.

operations.” R.68 at 243. He hired the staff for the Elk Grove

Village plant, he took care of personnel issues and he had the

authority to discipline and terminate the employment of those

who worked for him, directly or indirectly. We believe this

evidence provides a sufficient basis from which a jury could

conclude that Margelos was SRAM's "managerial agent

acting within the scope of [his] employment" for purposes of

addressing Ms. Hertzberg's complaints about Loayza. Bruso,

239 F.3d at 858.

The issue then becomes whether a reasonable jury could

conclude that SRAM failed to make "good faith efforts to

implement an antidiscrimination policy." /d. "Although the

implementation of a written or formal antidiscrimination

policy is relevant to evaluating an employer's good faith

18a

efforts at Title VII compliance, it is not sufficient in and of

itself to insulate an employer from a punitive damages

award." Jd. at 858. Teken in the light most favorable to Ms.

Hertzberg, the evidence establishes a lack of a good faith

effort to insulate Ms. Hertzberg from Loayza's harassment.

The testimony of Lester and Margelos established that Ms.

Hertzberg complained about Loayza's gender-based

harassment. See R.68 at 119 (testimony of Lester that he

"recalled that Julie said that Manuel was making jokes about

women"); id. at 278 (testimony of Margelos characterizing

Hertzberg's complaints as concerning Loayza's "demeaning

and patronizing" attitude). Furthermore, Ms. Hertzberg

testified that Loayza would make gender-related comments to

her constantly -- "at least over 100 times” during the course

of her four-month employment. Jd at 62. When Ms.

Hertzberg reported these incidents to Lester, she was told she

was being "too emotional." /d. at 34. When she proceeded

through the chain of command and went to Margelos, he

"seemed to shrug it off," id. at 54; indeed, both managers

were ineffective in addressing the problem because Loayza's

badgering did not stop. See Bruso, 239 F.3d at 861 (finding

this element of Kolstad met .because Bruso introduced

evidence at trial that suggested that United's top management

officials disregarded its zero-tolerance policy by turning a

blind eye to the harassment that they knew was occurring);

Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 188 F.3d

278, 286 (Sth Cir. 1999) (considering management's failure

to respond effectively to complaints as evidence of lack of

good faith).'° There also was evidence that Margelos failed to

follow SRAM's procedure for receiving complaints because

he did not put them in writing. Finally, although SRAM

argues that Ms. Hertzberg did not make an appeal to the

company president (as allowed by its policy), there is

evidence in the record that SRAM did not provide its

employees ready access to its sexual harassment policy, nor

did a management employee inform Ms. Hertzberg of this

avenue of redress. Cf Faragher v. City of Boca Raton, 524

19a

U.S. 775, 809, 141 L. Ed. 2d 662, 118 S. Ct. 2275 (1998)

(holding that city could not establish affirmative defense to

sexual harassment complaint -- that it took reasonable care to

prevent and correct harassing behavior -- in light of

"complete failure” to promulgate sexual harassment policy).

Given the constant nature of the harassment and SRAM's

lack of managerial response to the problem, we believe a jury

was entitled to conclude that SRAM did not make good faith

efforts to implement its sexual harassment policy.

Consequently, because a reasonable jury could have found

that Ms. Hertzberg met her burden with respect to punitive

damages, we shall not disturb its verdict.

Conclusion

For the foregoing reasons, we reverse that portion of the

district court's judgment awarding front and back pay, and we

affirm the judgment with respect to the award of punitive

damages. The parties shall bear their own costs in this court.

AFFIRMED IN PART; REVERSED IN PART

20a

Footnotes

' Lester, who also was Loayza's immediate supervisor,

testified that he recalled only one complaint from Ms.

Hertzberg, that he spoke to Loayza and that he told Loayza

that the comments were inappropriate.

? At some point after Ms. Hertzberg resigned, SRAM

made the decision simply to pay Ms. Hertzberg her remaining

salary without having her finish out her last two weeks.

> Compensatory damages were foreclosed to Ms.

Hertzberg as a result of her discovery responses. During

discovery, SRAM queried Ms. Hertzberg concerning her

damages from the alleged harassment. In response to a

discovery request, Ms. Hertzberg itemized only lost wages as

her damages. SRAM also asked Ms. Hertzberg at her

deposition about her damages. Ms. Hertzberg responded that

she only had lost pay damages. These responses prompted

SRAM to file a motion in limine to preclude Ms. Hertzberg

from introducing any evidence at trial concerning

compensatory damages for emotional distress. Relying on

Ms. Hertzberg's discovery responses, the district court

granted SRAM's motion in limine. Consequently, the issue of

compensatory damages was not submitted to the jury. The

fact that Ms. Hertzberg did not recover compensatory

damages does not affect the jury's award of punitive

damages. See Timm v. Progressive Steel Treating, Inc., 137

F.3d 1008, 1010 (7th Cir. 1998) (holding that there was "no

legal flaw" in a jury's award of punitive damages in the

absence of a compensatory damage award). ,

* SRAM also took issue with the amount of lost wages

Ms. Hertzberg claimed. According to SRAM, the testimony

of Ms. Hertzberg’s actuary rested on the faulty assumption

that she would have worked ten hours of overtime per week

for ten years. Furthermore, SRAM objected to any back or

front pay that extended beyond May 1998, the time when

2la

SRAM's Elk Grove Village facility closed.

* Additionally, the district court rejected many of

SRAM's arguments regarding the speculative nature of an

extended front pay award. The court stated: "Finally,

SRAM's several objections to the quantification of that lost

income recovery do not rise above the level of captiousness.

For one thing, it was SRAM's misconduct that created any

difficulty in proving such damages with precision." R.57 at 5.

create an objectively hostile or abusive work environment --

an environment that a reasonable person would find hostile or

abusive -- is beyond Title VII's purview." Harris v. Forklift

Sys., Inc., 510 U.S. 17, 21, 126 L. Ed. 2d 295, 114 S. Ct. 367

(1993).

” See Tobey v. Extel/JWP, Inc., 985 F.2d 330, 332 (7th

Cir. 1993) ("Although sexual harassment is a form of sex

discrimination forbidden by Title VII, damages are not

available under that statute for sexual harassment as such --

because Title VII is not a damages statute.") (citations

omitted); King v. Bd. of Regents of the Univ. of Wis. Sys., 898

F.2d 533, 537 (7th Cir. 1990) ("“Compensatory, nominal, and

punitive damages are not available under Title VII.").

® Some circuits have crafted a narrow exception to this

general rule for failure-to-promote cases. In a failure to

promote case, a plaintiff may seek back pay for periods -

beyond the employee's voluntary resignation "when the

employee was preparing to enter an entirely different career

with the same employer." Odima v. Westin Tucson Hotel, 53

F.3d 1484, 1495 (9th Cir. 1995) (internal quotation marks

and citations omitted). In Odima, the court stated:

An employee who has been discriminatorily

denied an opportunity for a promotion

ordinarily may not collect backpay for periods

22a

beyond that employee's voluntary resignation

unless the employee demonstrates that she

was constructively discharged by the

employer. That doctrine does not apply,

however, when the employee was preparing to

enter an entirely different career with the same

employer.

Id. In these cases, "an employer's discriminatory denial of the

employee's opportunity to enter an entirely different career

constitutes a refusal to hire; thus, the limitation on backpay in

promotion cases does not apply." Jd; cf Wells v. North

Carolina Bd. of Alcohol Control, 714 F.2d 340, 342 (4th Cir.

1983) (holding that back pay was available to stock clerk

who, but for the company's discrimination, would have been

promoted to a sales clerk position and consequently would

not have suffered a back injury that resulted in his leaving his

stock clerk position). Ms. Hertzberg, however, has made no

claim for failure to promote. Consequently, even if we were

to adopt our colleagues’ reasoning, the exception is

inapplicable to the case now before us.

* Another way a plaintiff may meet this burden is "by

showing that the defendant's employees lied, either to the

plaintiff or to the jury, in order to cover up their

discriminatory actions." Bruso v. United Airlines, Inc., 239

F.3d 848, 858 (7th Cir. 2001).

'© Although Margelos and Lester testified that they spoke

with Loayza, and that Ms. Hertzberg reported no further

complaints (indeed, that she had told them that the situation

was improving), the jury was entitled to credit -Ms.

Hertzberg's version of events. See, e.g., Europlast, Lid v.

Oak Switch Sys., Inc., 10 F.3d 1266, 1275 (7th Cir. 1993)

(allowing that a jury may credit the testimony of one witness

over another).

23a

No. 96 C 6944

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT

OF ILLINOIS, EASTERN DIVISION

JULIE K. HERTZBERG, Plaintiff,

v. |

SRAM CORPORATION, Defendant.

January 31, 2000, Decided

February 1, 2000, Docketed

COUNSEL:

For JULIE K HERTZBERG, plaintiff: Candace H Gorman,

Law Office of H. Candace Gorman, Chicago, IL.

For JULIE K HERTZBERG, plaintiff: Suzanne McCarthy,

Attorney at Law, Chicago, IL.

For SRAM CORPORATION, defendant: David Brian Ritter,

Janet M. Kyte, Altheimer & Gray, Chicago, IL.

For SRAM CORPORATION, defendant: Neal F. Perryman,

Robert J. Golterman, Lewis, Rice & Fingersh, St. Louis, MO.

JUDGES:

Milton I. Shadur, Senior United States District Judge.

OPINION BY:

Milton I. Shadur

24a

OPINION:

MEMORANDUM

At this point the parties have (at last) completed their

submissions that are intended to enable this Court to make

the equitable determination of back pay and front pay to be

awarded to plaintiff Julie Hertzberg ("Hertzberg") in

consequence of the jury verdict that was rendered in her favor

and against defendant SRAM Corporation ("SRAM") on her

claim of sexual harassment (the jury having awarded

Hertzberg $ 20,000 in punitive damages in that respect). As

this Court has already ruled orally, a portion of SRAM's

numerous conceptually unsound submissions during the

course of this litigation--in this instance, opposing any

backpay or frontpay award at all--is premised on the

fallacious assertion that the case was not tried by Hertzberg

on a constructive discharge theory.

That is really a red herring. Here the obvious reality is

that Hertzberg's statement that she was not prepared to

remain at SRAM unless her sexual harassment grievance

were to be addressed satisfactorily flowed directly from the

harassment itself, the existence of which has been confirmed

by the jury verdict. And when Hertzberg almost immediately

asked SRAM to reconsider its treatment of her statement to

that effect as the equivalent of her having quit her job, her

request was refused by SRAM without any reason other than

that it would not entertain any such reconsideration. As this

Court has previously ruled, under those circumstances the

necessary proximate causal connection links up the jury-

confirmed sexual harassment with the adverse employment

action of Hertzberg's loss of employment at SRAM.

This memorandum will not dwell further on the

deficiencies in SRAM's presentations, except to point out in

what follows the instances where this Court's damage

determinations are based on what will be referred to in

25a

shorthand terms as the "Second Premise." By the same token,

what follows will also reflect any deficiencies in Hertzberg's

submissions by what will be characterized as the "First

Premise." By way of explanation, the "First Premise" is that

the burden of proof on damages by a preponderance of the

evidence generally rests on Hertzberg. By way of limitation

of the "First Premise," the "Second Premise" is the familiar

doctrine that goes as far back, in this Court's recollection, as

the holding in Bigelow v. RKO Radio Pictures, Inc., 327 U.S.

251, 264-65, 90 L. Ed. 652, 66 S. Ct. 574 (1946) that where it

is a defendant's wrongdoing that makes plaintiff's precise

proof of damages more difficult, the risk of any uncertainty

in calculation must be borne by the defendant wrongdoer and

not the plaintiff victim. '

To turn to the components of the award of back pay and

front pay, Hertzberg's counsel have represented that they

have the damage calculations computerized in such manner

that they can swiftly plug in any replacement numbers to

produce a bottom line result. This Court will therefore not

take on the onerous burden (which is really the responsibility

of prevailing counsel) of converting the substantive

determinations that are reflected here into the actual numbers

needed for the entry of judgment. And because this Court

perceives the delay in responding with the necessary grist for

the damages mill to be primarily (though certainly not

exclusively) that of Hertzberg's counsel (who, representing

the prevailing party, have the laboring oar), and because of

this Court's desire to maximize the incentive for swift

resolution by the actual entry of judgment, prejudgment

interest will be allowed only to February 1, 2000.

This memorandum will refer to the just-received Joint

Statement (Amended) of Agreed and Disputed Facts and

Assumptions Pertaining to Front and Back Pay simply as

"Joint Statement." And in that regard, the Hertzberg tables

attached to the Joint Statement are plainly in error because

they treat each month as comprising exactly four weeks--

26a

essentially creating a 48-week year. That of course is wrong:

Months average out to 4-1/3 weeks.

What is set out here therefore reflects this Court's

determinations, to be converted by Hertzberg's counsel into

calculations based on the weeks involved, as to the

components that enter into quantifying Hertzberg's

recoverable back pay (including any overtime) and front pay,

stemming from the fact that Hertzberg’s weekly

compensation at SRAM at the time of her termination was $

791.36 (40 hours at $ 10.75 per hour plus 10 hours at $ 16.13

per hour):

1. Period of Hertzberg's unemployment

(February 17 to March 30, 1995): 6.6 weeks at

$ 791.30 per week.

2. Initial period of Hertzberg's 30-hour

work week at Land Planning Services ("LPS")

(March 30 to April 14, 1995): 2.4 weeks at $

491.30 per week ($ 791.30 less $ 300 [30

hours at $ 10 per hour]).

3. Period of Hertzberg's 35-hour work

weeks at LPS (April 17, 1995 to July 12,

1996”): xxxx weeks’ at $ 441.30 per week ($

791.30 less $ 350).

4. Next period of Hertzberg's 30-hour

work weeks at LPS (September 8, 1996

through December 1997*): xxxx weeks at $

146.50 per week.°

5. Continued period of Hertzberg's 30-

hour work weeks at LPS (January through

July 1998): xxxx weeks at $ 156.50 per week.°

6. Beginning period of Hertzberg's 40-

hour work weeks at LPS (August through

December 1998): xxxx weeks at $ 36 per

week.’

27a

7. Continued Hertzberg 40-hour work

weeks at LPS for all of 1999: 52 weeks at $

38.80 per week.®

As for front pay, the uncontroverted testimony during

trial as to the continued availability of comparable

employment at SRAM's local headquarters after the Elk

Grove facility was closed calls for the rejection of SRAM's

stonewall position that no such award is called for. Nor has

SRAM offered anything to indicate why that should no

longer continue to be the case, again bringing into play the

Second Premise.

Hence Hertzberg’s prayer for a five-year frontpay award,

which this Court might otherwise perhaps deem to be

speculative in light of her short-term employment by SRAM,

is accepted as reasonable in light of (1) the absence of any

suggested predicate for a lack of such continuity in

Hertzberg's employment, other than the sexual harassment of

which she was the victim, (2) Hertzberg's knowledgeable

background and interest in the field of SRAM's business and

(3) Hertzberg's youthfulness, such that no departure from the

workforce for that or any other reason presents itself as a

possibility. And as for the pay differential for the five-year

frontpay period, the same ratio of $ 10.75 (the SRAM hourly

rate at Hertzberg's termination) to $ 10.00 (Hertzberg's

starting rate of pay at LPS) should be continued throughout,

but it will be applied to presumed future annual increases at

the same annual compound interest rate that would equate to

Hertzberg's having received an aggregate increase from $ 10

to $ 12.90 in her initial 3-3/4 year period of employment at

LPS.

Finally, because the reality is that Hertzberg will not have

received her damages award ratably over the years to which

the lost income was and will be attributable, but will rather

obtain her recovery in a lump sum in the current year, the

calculation of the impact on FICA and Social Security

28a

benefits must be made in terms of that reality--rather than the

false premise that the amounts should be attributed to the

years in which the damages were incurred and will continue

to be incurred. Because that is also a matter of plugging in

the appropriate numbers, Hertzberg's counsel will be

responsible for submitting those revised calculations as well.

As stated earlier, this Court looks forward to the swiftest

possible submission of the revised figures by Hertzberg's

counsel (remembering again that prejudgment interest will

run only to February 1, 2000). Absent any objection by

SRAM's counsel based on the accuracy of the calculations

(and not on any disagreement with the principles reflected in

this memorandum) within two working days after that

submission, this Court will cause a judgment to be entered

promptly.

Milton I. Shadur

Senior United States District Judge

Date: January 31, 2000

29a

Footnotes

' One of Hertzberg's memoranda points even farther back,

to Story Parchment Co. v. Paterson Parchment Paper Co.,

282 U.S. 555, 563-64, 75 L. Ed. 544, 51 S. Ct. 248 (1931).

2 This stopping point takes account of the fact that

Hertzberg did not work during the period from July 12 to

September 8, 1996 because of the birth of her daughter.

> From here on out this Court has not calculated the

specific number of weeks involved in the various periods.

That will be left to Hertzberg's counsel's computerized

calculations.

* This reference to 30-hour work weeks is not simply a

matter of claimed waiver on SRAM's part. On the record,

Hertzberg's testimony as to such a reduction in her weekly

hours at LPS was uncontroverted--and this conclusion is

further buttressed by the Second Premise.

> This, like all further determinations, reflects a

differential based on the assumption that Hertzberg's base

pay at SRAM would have increased from time to time in the

same percentages as her base pay at LPS, a reasonable

assumption on its own that is also bolstered substantially by

the Second Premise. In this instance that would have

involved a 12.5% increase from the original SRAM base pay

of $ 10.75 to a new base pay of $ 12.10, with no SRAM

overtime being taken into account from here on out. So

Hertzberg's presumed lost SRAM weekly compensation for a

40-hour week would be $ 484, a figure to be reduced by the

actual LPS pay of $ 337.50.

° This differential is arrived at on the comparable

assumption (see n.5) that Hertzberg's base pay at SRAM

would have increased to $ 12.95 per hour (a 20.5% increase

over Hertzberg’s SRAM base pay at the time of her

termination), or $ 518 for a 40-hour week, with her

30a

corresponding actual weekly pay at LPS being $ 361.50 (30

hours at $ 12.05 per hour).

” Here the same assumed $ 518 weekly pay at SRAM (see

n.6) exceeds by only the much smaller $ 36 figure, as

referred to in the text, Hertzberg's actual weekly pay of $ 482

at LPS (40 hours at $ 12. 05 per hour).

® With Hertzberg's compensation at LPS having risen to $

12.90 per hour, or $ 516 per week (an increase of 29% over

her starting pay rate of $ 10), an assumed corresponding 29%

increase over Hertzberg's $ 10.75 base pay scale at SRAM

would have come to $ 13.87 per hour, or $ 554.80 for the 40-

hour work week.

* That compound interest rate is readily calculable.

3la

No. 96 C 6944

UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF

ILLINOIS, EASTERN DIVISION

JULIE K. HERTZBERG,

Plaintiff,

Vv.

SRAM CORPORATION,

Defendant.

Docketed March 3, 2000

MEMORANDUM ORDER

SRAM Corporation (“SRAM”) has tendered a Motion

for Judgment as a Matter of Law and To Reconsider Lost Pay

Award, coupied with a supporting brief (cited “Mem.—‘),

both to be presented on March 2, 2000. For the reasons

briefly stated here, the Motion is granted to the limited extent

to which SRAM’s counsel--in the best professional

tradition—-have pointed out an error in calculation that

would otherwise have benefited their client, but the Motion is

denied in all other respects.

As to the first item, the Motion accurately points out a

clerical error (correctible under Fed. R. Civ. P. (“Rule”)

60(a)) in this Court’s addition of the several components

making up the judgment in favor of Julie Hertzberg

(“Hertzberg”) and against SRAM: Instead of $66,829.18

as reflected in the February 10 Judgment Order, the total

should be $71,829.18.' That being the case, the Judgment

32a

Order is amended so that the first sentence of its final

paragraph reads:

Accordingly final judgment is ordered to be

entered in favor of Julie Hertzberg and against

SRAM Corporation in the aggregate sum of

$71,829.18.

As for the rest, however, the Motion fails. Its several

aspects may be dealt with quite briefly.

First, as to the jury’s award of punitive damages,

SRAM itself characterizes the conduct to which Hertzberg

was subjected as “very close to the (admittedly amorphous)

line between actual sexual harassment and non-actionable

offensive conduct” (Mem. 4) Even were that so (and that of

course reflects SRAM’s self-evaluation, scarcely that of an

unbiased source), the resolution of which side of the line the

conduct occupied--importantly, including the question of

SRAM’s intention--would have presented a classic situation

for jury resolution. It was well within the jury’s province,

having heard the testimony, to make the necessary credibility

determinations (which are solely the jury’s prerogative) and

to find that SRAM’s failure to respond appropriately to the

complained-of conduct reflected its “malice or reckless

indifference” to Hertzberg’s rights to an extent that was

sufficient to support a punitive damages award. That facet of

the SPAM Motion is denied.

As to the lost pay award, SRAM builds:its Motion on

a false foundation. It speaks of “the jury’s conclusion that

Plaintiff's discharge was not unlawful” (Mem. 5) and goes on

to say that Hertzberg’s “potential entitlement to back pay was

extinguished when the jury found that her discharge from

SRAM was valid and not unlawful” (id.). That, however,

mischaracterizes the record. Here is the portion of the jury

33a

instructions (part of SRAM’s Instruction No. 1) that described

Hertzberg’s claim on which the jury ultimately ruled against

her and in SRAM’s favor:

In addition, it is unlawful under Title VII for

an employer to terminate an employee for

complaining about sexual harassment.

Plaintiff claims that her employment with

Defendant was terminated because of her

complaints about sexual harassment.

Defendant also denies this claim.

And attached to this memorandum order as Ex. 2 is the

instruction that set out the elements Hertzberg was required

to prove to prevail on that claim. That instruction, though

labeled "Court’s Instruction No. 17,” was drawn from

Hertzberg’s proposed Instruction 12 and SRAM’s proposed

Instructions 4 and 5, all of which spoke of "adverse

employment action” in terms of "termination of

employment.”

There is of course no way to determine precisely

which one or more of the elements of Hertzberg’s unlawful

retaliation claim the jury found she had failed to establish.

Nor is that answer definitively provided by any necessary

inferences from the jury’s question on that score or from this

Court’s response to that question (which, as always, was

decided upon after conferring with counsel for both parties).

But it is fair to conclude that the jury decided that what might

reasonably be viewed as Hertzberg’s termination under either

side’s scenario--that is, SRAM’s refusal to permit Hertzberg

to withdraw her resignation or her stated intention to resign—

-was not in retaliation for her complaints of sexual

harassment. That after all is clearly the effect of the jury’s

verdict on Hertzberg’s unlawful retaliation claim.

34a

That however was not the question that this Court, as

contrasted with the jury, was called on to resolve. Remember

that it is for this Court and not the jury to have decided on the

recoverable compensatory damages stemming from SRAM’s

unlawful sexual harassment, which the jury did find to have

occurred (in that respect, see the attached transcript of this

Court’s oral ruling of December 16, 1999). And in that

regard, this Court’s December 16 oral ruling also expressed

the basis on which Hertzberg’s lost income is a proper

component of her damages on her proved sexual harassment

claim, rather than being negated. by the adverse jury verdict

on the unlawful retaliation claim.’

Finally, SRAM’s several objections to the

quantification of that lost income recovery do not rise above

the level of captiousness. For one thing, it was SRAM’s

misconduct that created any difficulty in proving such

damages with precision. If anything, this Court’s calculations

were more generous to SRAM, rather than less so, in using

Hertzberg’s new employment as the yardstick for what

should have been her continued employment at SRAM. After

all, Hertzberg’s background with bicycles would most

reasonably have been expected to create greater incremental

enhancements of her value to SRAM than were recognized

by the raises that she earned in her new employment--in what

SRAM correctly identifies as “a different industry altogether”

(Mem. 7). And there is surely nothing unreasonable in

accepting the notion that but for the unlawful sexual

harassment, Hertzberg’s employment at SRAM would have

continued for the long term, as this Court’s memty 31, 2000

memorandum spoke of.

Conclusion

It should be unnecessary to repeat analyses that this

Court has already articulated in response to earlier objections

that are largely repeated in SRAM’s current Motion. As

35a

stated earlier, the Motion is denied in all respects save one---

correction of the clerical error referred to at the outset.

Milton I. Shadur

Senior United States District Judge

Date: March 2, 2000

36a

COMPRISE CAN SURPRISE

Comprise means “to contain or embrace.” A unit comprises,

or “is made up of” the elements of which it is composed. The

elements, on the other hand, constitute, or “make up,” the

unit: “The estate comprises a manor house, two guest houses,

and a stable.” "The book cornprises five chapters and a

bibliograph."

Unfortunately, considering how often it is improperly

employed, comprise seems to thrive on misuse. For example,

“Many counties comprise the state of Ohio” needs correcting,

for it is the state of Ohio that comprises many counties. "He

listed the elements that comprise the crime” is not right

either. The crime comprises the elements.

Whenever doubtful about the correct use of comprise, the

safest move is to replace it with “consists of’ or “be

composed of” which is what comprise means: “The estate

consists of. . . .“ “The book is composed of. . . . Even

avoiding comprise entirely would be no loss. It is such a

starchy word that something simpler, the word has, for

example, would be a welcome relief: “The state of Ohio has

(instead. of comprises) many counties.” But because the

whole comprises the parts, the passive voice “is comprised

of” may not be used.

One caveat: Include is not a precise synonym for cornprise

despite such a listing by some dictionaries. What follows

comprise is a complete list; what follows inctud2 is, or

should be, only a partial one. For instancé, “The book

includes five chapters, a bibliography, and an index of

subjects” means that the book has more than the sections

mentioned. if comprise were the verb, the sentence would

mean that the book contained only those segments, and

nothing more. With include, more is to come; with comprise,

all has been said.

37a

Your verdict must be for Plaintiff and against

Defendant on Plaintiffs claim of unlawful retaliation if

Plaintiff proves all of the following essential elements by a

preponderance of the evidence:

First, Plaintiff engaged in protected

expression; and

Second, Plaintiff suffered an adverse

employment action by Defendant; and

Third, there was a causal link between the

protected expression and the adverse

employment suffered by Plaintiff.

For these purposes, “protected expression” means a

stated opposition by Plaintiff to conduct that is prohibited by

Title VII, including unlawful sexual harassment. To establish

such "protected expression” Plaintiff must demonstrate that

she had a reasonable belief that she opposed conduct

prohibited by Title VIlI--and for that purpose, it is not

necessary that Plaintiff was correct in that belief so long as

she reasonablys believed it was so. In the context of this case,

H adverse employment action” means a termination of

Plaintiffs employment by Defendant. Finally, to establish a

“causal link” between the protected expression and the

adverse action, Plaintiff must show that even if she had not

engaged in the protected expression and if everything else

had been the same, she would not have suffered the adverse

employment action.

If Plaintiff has not proved any of the three

elements of this claim by a preponderance of the evidence,

your verdict must be for Defendant on this claim.

38a

December 16, 1999

TRANSCRIPT OF PROCEEDINGS BEFORE THE

HONORABLE MILTON I. SHADUR, Judge

(Whereupon the following proceeding were had in part via a

telephone conference.)

THE CLERK: 96 C 6944, Hertzberg

vs. SRAM.

THE COURT: Counsel, we have

counsel here in court and also out in telephone land. So if we

could first have the appearances reflected of counsel on the

phone, ard then counsel will do the same here in court.

MR. GOLTERMAN: Robert GOLTERMAN:

and Neal Perryman for the defendant.

MS. McCARTHY: Suzanne McCarthy.

MS. GORMAN: Candace Gorman for

the plaintiff. :

THE COURT: I'll bet you couldn’t

hear them talking, could you?

MR. GOLTERMAN: We could not, your

Honor.

THE COURT: Okay. So they are going

to have to speak up as well.

I appreciate your making yourselves available,

because I have indeed reviewed the submissions on both

sides here.

39a

THE CLERK: I think local counsel is

here.

MS. KYTE: Good morning. Janet

Kyte of Altheimer & Gray.

THE COURT: Good morning. It seems

to me that there are some respects in which each side has

fallen somewhat short of what’s necessary in order to resolve

this remaining issue, the one that is before me. Both sides of

course have agreed --and we did this before we started with

the jury that the issues of back pay and front pay, that is the

issues affecting a claim of lost earnings, are a subject for the

Court and not for the jury to determine. And | gather that

that’s not something that either side is retreating from at this

point. So I suppose I ought to pose that first, because that’s

obviously the basic premise from which I proceed. That’s

fair, is it not, and continues to be a fair characterization of the

plaintiff's position, right?

MS. GORMAN: Correct, your Honor.

THE COURT: And of the defendant’s

position?

MR. GOLTERMAN: That’s correct, your

Honor.

THE COURT: You have got to tell me

since both of you are out there on the phone, why don’t you

tell me who is speaking before you make any statement? So

who was it that spoke up at that point?

MR. GOLTERMAN: That was Golterman.

THE COURT: Now what flowed from

that of course, although nobody really focused on it entirely,

is that the record in the jury trial, because the question of lost

40a

earnings wasn’t before the jury for decision even as an

advisory matter, as you know is sometimes done in

employment discrimination cases, didn’t necessarily provide

all of the evidence that was relevant to the issue.

Now in this instance, as | started out by

saying, it strikes me that both sides have been somewhat

deficient in the analysis. Let me begin with SRAM’s

mistaken emphasis on the fact that Ms. Hertzberg I will refer

to her just as “Hertzberg,” with no disrespect intended. That’s

my usuai practice in written opinions, and orally as well. It’s

not a chauvinist usage at all. So I am going to do that just as I

refer to SRAM for shorthand reference.

As I was saying, the fact that Hertzberg didn’t

assert any claim of constructive discharge really is not

relevant, because to frame the thing in that way is to make

what is a purely semantic and not a real characterization.

After all, in the law you know the term “constructive” is

simply a term for something that doesn’t necessarily equate

to some legal concept though it satisfies that legal concept as

a matter of law.

All of us know from other areas of the law

about the term “constructive eviction.” What “constructive

eviction” means is not really eviction, but something that the

law treats as eviction because other circumstances satisfy

that. What we have then is a kind of fiction that is legally

harmless, as long as we know what it means in the same way

that quasi contract is not really a contract. When we see the

word “quasi” our antenna goes up, because we know that we

are also dealing with a fiction.

Now in this instance, remember that Hertzberg

claimed that she was terminated by SRAM. AH you havé to

do is look at her EEOC charge that I have got here, Plaintiff's

Exhibit 23, in which she -- that was Exhibit H to SRAM’s

December 2d brief that objects to the lost pay claim, in which

what she says here is in paragraph | of the EEOC charge:

4la

“On February 6th ‘95 I was

discharged from my position of

shipping coordinator.”

And two, she says:

“The reasons given for the

discharge by my supervisor,

Brian Lester, were job

elimination and that I was being

_ disruptive. The reason given by

Mr. Lester for the difference in

treatment was, ‘Well, you are a

woman.”

In that regard there was a dispute in the

testimony, of course, on that score. According to Hertzberg,

she told Mr. Margelos that if the situation with Manuel

Loyaza, that is if his claimed sexual harassment, didn’t get

better, she might have to resign. And then within a day |

guess or thereabouts, Margelos, termed her as too disruptive.

Whereas according to Mr. Margelos what happened instead

was that Hertzberg said she was resigning. And then when

she sought to recant and wanted to stay, he decided not to

accept, very much like the situation: “You’ve made your bed,

now you lie in it.”

Now it may well be that Hertzberg’s lawyers,

in the nature of their presentation, may have shot themselves

or their client in the foot on the retaliation claim by the

instruction that limited adverse employment action to a

termination of plaintiff's employment by the defendant. If

you look at that instruction, that’s how it read. So that if the

jury accepted SRAM’s version as to the tendered resignation

and then the refused recantation, if it believed that wasn’t a

“termination” in that sense, it would rule against Hertzberg

on that claim.

42a

But having said that, and by the way, as you

know one of the questions that came out from the jury was

one that really talked about that, and that of course had to be

responded to as I did in terms of the instruction. I was not in

a position to be changing an instruction that had been given

to the jury.

But if you look at the matter and accept for a

moment SRAM’s version: She resigned. And then she very

quickly, without you know any material change in the

employment relationship, said, “Wait a minute. I have

changed my mind. Take me back” or “Keep me.” And the

response was “No way. You have tendered a resignation.”

That’s why I hesitate to put it in offer and acceptance terms,

because as all of us know, under contract law it might get a

different answer. But the point is that it is certainly fairly to

be considered the equivalent of a termination -- that is, a

firing -- because she wanted to continue the employment

relationship and SRAM didn’t want to. In that sense it’s fair

to characterize her wish to remain despite tendering her

resignation, but SRAM’s refusal, as what might fairly be

called a “constructive discharge.” And I am not talking now

about the magic terms, you know, for purposes of what’s

necessary to state a claim (an actionable claim) for

employment law purposes, but rather the fact that under

either party’s version of the events Hertzberg’s departure was

equivalent to a termination, where the final decision to sever

employment was SRAM’s and not Hertzberg’s.

Now what the jury did decide, and what

therefore binds me in my decision as to the entitlement or

disentitlement to the recovery of lost wages, is that what may

reasonably be viewed as Hertzberg’s termination under either

side’s scenario was not in retaliation for her complaints of

sexual harassment. But even a minute’s thought: tells us that

the right question to ask in determining whether lost wages

are recoverable is not that, but rather the simple and familiar

question of causation -- that is, whether the employer

43a

SRAM’s unlawful conduct, which we know is unlawful from

the jury's determination, in which the jury went on to find

definitively was either malicious or involved deliberate

indifference to Hertzberg and to her rights, whether that

caused that component of damages.

Now it seems to me that if you understand that

perspective, which I think is the obvious one in this lawsuit,

it is also painfully obvious that the termination would not

have taken place but for Manuel’s harassment and SRAM's

adjudicated malice or deliberate indifference. There was no

other reason at all that accounted for what, even accepting

SRAM’s version of events, was Hertzberg’s a statement that

she was resigning. There isn’t anything else. That was it.

Now remember that in the frequently

encountered retaliation claim -- that is, with a straighout-out

quitting by the employee ... the thing that may be necessary

to convert that quitting into a constructive termination is a

hostile environment such that no reasonable employee could

be expected to stand it. And therefore that ‘s why the

employee left. But that’s of course because in that situation

the final decision was the employee’s decision. The

employee left. And in order for the employee to say, “Well,

even though I went, and even though | made the final

decision, it was essentially because I was forced to,” that’s

what’s meant by constructive discharge in that situation,

because there you have to have an intolerable environment in

order to convert that into a action by the employer.

But here again there isn’t any gainsaying that

the final decision was SRAM’s, not Hertzberg’s, whichever

party’s view of events is to prevail. And so even if you were

to assume that Hertzberg was not subjected to so hostile an

environment by Loyaza’s conduct, and by the single incident

with Brian Lest:er Chat she testified to, that she was forced to

quit, what can’t be disputed here is that the final decision that

terminated her employment with SRAM was a decision made

by SRAM. And that therefore, in the straight but-for and

proximate cause concept, supports the idea that the lost

44a

wages are placed squarely on SRAM’s doorstep.

Now what about the objection to quantifying

those damages? First of all, from my view of the evidence

here and the presentations of the parties, the objection that’s

framed to overtime for the entire period is entirely valid. On

the evidence, there would be no need for overtime once the

plant opened in Ireland, or more accurately I should say

maybe once that plant was up and running, so that the

European market no longer had to be handled out of the Elk

Grove operation.

Now unfortunately all I have got on that score

— and I searched through my notes, and I didn’t have Jesse

write up the transcript, but my notes are pretty thorough ... all

I have, and also the exhibits as well -- all I have on that score

is that occurred sometime in 1996. But obviously I don't want

for this purpose to rely on the general proposition that is in

part advanced by Hertzberg, that inferences are drawn against

the wrongdoer who has made the ascertaimnent of damages

more difficult. That’s what the Supreme Court wrote in

Bigelow against RKO Pictures, which I think was 1945 or

‘46 and is still good law ... that’s what happens when you

have a situation in which the quantification of damages and

the uncertainty of it is created by the conduct of the

wrongdoer. This one doesn’t fit that doctrine in that sense.

That ia, I think what we have is an ascertainable date, but

simply that the record that’s been put before me up to now

doesn’t demonstrate what it is.

So I would really guess I may be asking the

parties ... maybe I’ve missed something, but I didn’t note that

there was anything in the record that would give that date,

which I would think, as I say, should be readily ascertainable.

And if it’s not in the record now, given the fact that this is

after all a bench review of an issue that’s reserved for the

bench, I am prepared to entertain evidentiary submissions

from both SRAM and Hertzberg, or maybe you can simply

get together and ascertain that to avoid any improperly

adverse inference. As I say, I don’t think that component

45a

calls for the application of that doctrine. It's something that

people really just didn't focus on under the circumstances.

MS. GORMAN: Could I say something

now?

THE COURT: Sure.

MS. GORMAW: I believe Mr. Margelos

testified that the plant opened just before he was fired. I

believe the date of his firing is in the record.

THE COURT: I don’t know. Wait a

minute. Let me see it I have got ... I have got my notes on the

testimony. Let me see here. Well, unfortunately all I have are

a couple of notes at the very end of his direct examination

that say that after Hertzberg left he had no recollection

whether another manager or replacement was hired. Arid my

note then says, “New plant, Ireland, handled the European

market.” But I wasn't attempting at that point, as you might

guess, to reflect verbatim what it is.

But if that’s the thing that you are referring to,

Jesse | am sure could track it down, because this was literally

the very end of his direct examination, which was in the

afternoon of November 3d. So I can listen to that. But in the

meantime both sides can go back and. see if you can provide

me with that information. Because again that strikes me as

the appropriate predicate for saying up until that time, with

the reasonable inferences that are called for there, it’s

reasonable to say that the expectations of continued overtime

would function, but that thereafter they would not.

MS. GORMAN: Your Honor, are you

saying that at the time of the opening or could we argue that

it would be sometime after, because there would be a

transition involved?

46a

THE COURT: Well, I think some

limited period of time, obviously for them to - - that ‘s why I

say to be up and running so that they are handling it. So that’s

something that you can look into. Okay?

Second thing that I wanted to say is that based

on the evidence, I find it reasonable for Hertzberg to claim

that her continued employment should include time after the

closing of the Elk Grove Village plant, when according to the

evidence there was a transfer to the local facility handling the

same shipping and receiving functions, and indeed the

availability of employment in the downtown Chicago office,

as to which I found the testimony of Ms. Whatmore to be

credible about that availability.

The next point is that SRAM’S brief over here

at page 13 appears to be correct in disputing the late assertion

of less, than 35 hours of work at this Land Planning Services

for any time after the first couple of weeks. And accordingly

I expect that the calculation is going to be based, not on any

drop down to the 30 hour thing, which really was a late

suggestion. So I am going to find it in terms of the straight

35, you know, and not the drop down, after the first couple of

weeks, as I recall.

The next item ‘is that the assumption as to

corresponding increases in compensation as between SRAM

and the new job that was acquired by Hertzberg is legitimate,

particularly given the fact that any other premise would

necessarily result in undercompensating somebody. That is, it

seems that it is a reasonable predicate to treat the hypothetical

continuation with SRAM to which she was entitled as

basically marching in lockstep, so far as increases are

concerned, with those that she derived in that new

employment. And that it is also I think in this instance the

date of ... the actual date of the salary increase in her new job,

even though originally it had been thought there was a

different date involved. There was one as to which there was

a disparity between the original calculation based on one date

in what was it, in ‘96 and the other date. So the actual date is

47a

what is going to control.

Next thing is that a prejudgment interest rate

of 5 percent, which is what was involved in the calculation, is

both reasonable and conservative. You know that the Seventh

Circuit has, in addition to its holding beginning in that, what

was it, that Gorenstein case that said that federal question

claims carry with them presumptively prejudgment interest;

the later Seventh Circuit cases have held, as I, recalled, as I

started to write this, that the prime rate was basically a

realistic rate and in candor tends to be conservative. But I

think that the 5 percent rate, which is what was adopted in the

calculations here, is something that | am accepting for that

purpose.

The last item that I wanted to mention is that

as far as this fight about FICA, any component of damages

that includes or does not include FICA, should basically put

the employee in the same position as if there been no

violation of law by SRAM -- in other words, to the extent

that SRAM will not at this point contribute to FICA because

of a lump sum current payment:, and the fact that she is not

now an employee. And I am not commenting on it. That’s

really a question of law as to how FICA operates in those

terms, and also taking into account her income level, because

as you know compressing several years into the same time

can push you over the top as far as FICA contributions is

concerned.

What I am saying is that Hertzberg is entitled

to be put into exactly the same position economically, so far.

as FICA contributions are concerned, as if she had stayed in

the job. And that I think should be a calculation that should

not be difficult, you know, once it’s placed in terms of what

the facts are. But I don’t have those facts. So you see what it

comes down to is that that I really need added proof to enable

me to make the calculation.

Now this again, I recognize that you may

think of this as being post closing of proofs. But it’s really

not, given the fact that the jury was not asked ... and properly

48a

was not asked ... to decide this issue. So it’s really a matter of

proof before me, as though this were a bench trial limited to

the lost wages issues.

Now having said all of this, and recognizing

that you are going to have to go back and get some factual

information for presentation, as well as massaging the

numbers, what’s everybody’s judgment about how soon you

could provide that to me so that we can end up with a final

judgment on the case as a whole?

MS.McCARTHY: Your Honor, that will

be my task to work with. I can ... I am leaving to go out of

town today, but I will be still working. So if I could have

through next week. The problem that I have is whether the

people that I used to crunch numbers are going to be

available, given the holidays coming up.

THE COURT: But are you also going

to be able to get some of this factual information that’s

needed before the numbers can be crunched?

MS. McCARTHY: Sure. Because the very

same people are very familiar with all of the ... what we have

to do is break down the components of how social security

benefits are calculated. We already have spreadsheets. They

have it on their computer. So.... --

THE COURT: But you also need the

information, for example, about the plant in Ireland. And they

have got to do a total recalculation on the overtime, dropping

it out of the period... now dropping it out is not going to be a

problem. The problem is going to be identifying the

breakpoint. Okay.

MS. McCARTHY: All right.

THE COURT: I am not sure that your

49a

people are in a position to do that. That’s something that the

parties are going to have to look into.

MS. MCCARTHY: As soon as we have an

agreement, we have a lot of this on Lotus spreadsheets. All

we have to do is drop in the numbers and recalculate

everything out.

THE COURT: Okay.

MS. McCARTHY: _ So the timing from my

standpoint, after we have an agreement about when overtime

stops -- and I gues= because I don’t anticipate that we are

going to reach an agreement amongst ourselves, since we

have never been able to reach an agreement on anything, I

would suggest that we make a submission about what it is

that we think and have the Court rule. And once you issue a

ruling, I can promise to do that posthaste.

THE COURT: But wait. The only

thing that needs to be resolved, as I understand it, other than

working the numbers, is to ascertain that one date.

MS. GORMAN: I have one idea. They

have a web page. I believe, because I looked like at it before

this trial, they have a calendar on their web page. So that ‘s

one place I am going to go. | don’t know if it does it by

months. But remember they announced on the web page the

opening of the facility in Ireland. I don’t now anticipate that

will be very hard to ascertain, either through the help of

defense counsel or else calling Ms. Whatmore, who might be

familiar with the date too.

THE COURT: You also remember we

will need something -- I don’t know how they function

internally ... but you are quite right in pointing out that for a

plant to get up to speed in terms of the actual handling of the

50a

shipment aspects, that’s something that doesn’t occur

instantaneously with breaking a bottle of champagne over the

hull of the plant, you know

MS.McCARTHY: I can get Mr.

Hertzberg's testimony, who is familiar with SRAM’s

operation, because there was testimony that indeed in fact

there was ... they continued to ship out of Illinois for their

worldwide. So we can get some additional information. So all

I am suggesting is that once we get the date of the closing ...

or of the opening ... of this Ireland plant, I belive you told

Ms. Gorman there might be some period of time thereafter

which is going to be the up-to-speed part. So all I am

suggesting is that once we agree on whatever that date is, as

far as getting the rest of the analysis, I don’t anticipate that it

will take me very long to do.

THE COURT: Suppose that ... how

long are you going to be out of commission?

MS. Mc CAR THY: I live in New Jersey.

THE COURT: Okay.

MS. MCCARTHY: And I commute here

every week. I am going to be working out of the home.

THE COURT: Okay. Suppose I shoot

for a submission to me by a week from Tuesday ... that is, the

28th. Do you think that you would be able to hit that? MS.

McCARTHY: Yes.

THE COURT: If so, then _ the

calculation of interest -- for all of the calculations, for

example, the interest would be as of December 31st. Because

what I will then do is I will enter the order basically on that

premise.

S5la

Now obviously what you will want to do,

given that, is probably to make that calculation and then

include a per diem provision, so that you know if we miss the

target we don't have to go back to the computer again. Okay?

Now is there any misunderstanding about

what I have dealt with today?

MR. GOLTERMAN: Your Honor, this is

Robert Golterman. In terms of additional information for the

record relating to the Ireland plant --

THE COURT: Yes.

MR. GOLTERMAN: -- we can certainly, and

we will work with counsel for Ms. Hertzberg, and we can

certainly provide by affidavit something from the President

of the company saying when the plant opened, and even look

at the amount of shipping that occurred in the first few

months in that plant. ear:

THE COURT: Or what I think is

sensibly suggested is at the same time look at the impact on

shipping in the Elk Grove facility. Because that then will also

give you a good handle on what ‘s an appropriate time for the

presumption that I think is the reasonable presumption: that

the work pattern would have continued in much the same

fashion at the Elk Grove plant. And by the way, I recognize

in what I have suggested and indicated as my rulings this

morning, there is force in the notion that there was need for a

heavier workload while Elk Grove’s whole pattern was

building up as well. But it seems to me that’s quite a

reasonable mesh with the fact that the workload would also

be expected to drop down once you got the second facility in

place. So I don’t really have to separate those two concepts,

as I understand the record as I had it on my own review of the

testimony.

52a

But you are quite right that obviously I want

to have not just the calculations of record, but I want to have

a record to support the idea of picking the particular date for

purposes of the calculations. So you are absolutely right on

that.

MR. GOLTERMAN: The only other thing |

wanted to mention is that with respect to all of these issues,

obviously our papers contain all of our positions. But just for

the record, I would certainly object at this point: to any

testimony by affidavit or otherwise from, for example, the

former Mr. Hertzberg regarding any issues about shipping

out of Chicago or worldwide. I think that’s way beyond the

scope of what the Court would get at this point to make a

decision on overtime.

THE COURT: - Well, now wait a

minute. | don’t know what has to be done in terms of factual

presentations. All | am interested in, as I have indicated, is a

factual submission that is appropriately supportable that deals

with what that transition date should be.

Now I am not ... certainly not ... encouraging

what amounts to narrative testimony or evidence from an

outside observer who is just basing something on general

recollections. | am not encouraging that at all. But I am

anticipating that we will have enough from you people to

provide an objective answer to the question that I have put. If

that’s so, as far as I am concerned, that will be it. Okay.

MR. GOLTERMAN: Okay. ‘

THE COURT: Thank you all. I

appreciate it. I will look forward to get the submissions.

Okay?

(WHICH WERE ALL OF THE PROCEEDINGS HAD AT

THE HEARING OF THE ABOVE — ENTITLED CAUSE

ON THE DAY AND DATE AFORESAID.)

53a

CERTIFICATE

I HEREBY CERTIFY that the foregoing is a true and correct

transcript from the report of proceedings in the above-entitled

cause.

JESSE ANDREWS, CSR

OFFICIAL COURT REPORTER

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

DATED: February 28, 200

Footnotes

‘In that respect, it is puzzling why Motion 45 has put

quotation marks around the word "comprises.” On that score

the Judgment Order uses that word in just the right way, as

meaning "is made up of.” See attached page 4 from Morton

Freeman, The Grammatical Lawyer (ALI-ABA 1979),

explaining the common misuse of the word that is reflected in

the frequently—seen incorrect usage under which

“comprises” is used to connote “is comprised of .. . .”

As these references to the December 16 ruling indicate, for

the most part SRAM's current Motion advances contentions

that it has made before and that this Court has previously

found wanting. That is equally true of the objections referred

to in the next paragraph of the text.

54a

No. 96 C 6944

UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF

ILLINOIS, EASTERN DIVISION

JULIE K. HERTZBERG,

Plaintiff,

SRAM CORPORATION,

Defendant.

Docketed March 3, 2000

AMENDED JUDGMENT IN A CIVIL CASE —

Jury Verdict. This action came before the Court for a

trial by jury. The issues have been tried and the jury

rendered its verdict.

Decision by Court. This action came to trial or

hearing before the Court. The issues have been tried

or heard and a decision has been rendered.

IT IS HEREBY ORDERED AND ADJUDGED that final

judgment is entered in favor of Julie Hertzberg and against

SRAM Corporation in the aggregate sum of $71,829.18.

55a

No. 96 C 6944

UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF

ILLINOIS, EASTERN DIVISION

JULIE K. HERTZBERG,

Plaintiff,

Vv.

SRAM CORPORATION,

Defendant.

December 23, 1996, Decided

December 24, 1996, DOCKETED

COUNSEL:

For JULIE K HERTZBERG, plaintiff: Suzanne McCarthy,

Chuhak & Tecson, P.C., Chicago, II.

For SRAM CORPORATION, defendant: David Brian Ritter,

Janet M. Kyte, Altheimer & Gray, Chicago, IL. Neal F.

Perryman, Robert J. Golterman, Lewis, Rice & Fingersh, St.

Louis, MO.

JUDGES:

Milton I. Shadur, Senior United States District Judge

OPINION BY:

Milton I. Shadur

OPINION:

MEMORANDUM OPINION AND ORDER

56a

SRAM Corporation ("SRAM") has filed its Answer and

Affirmative Defenses ("ADs") to the employment

discrimination Complaint brought against it by its ex-

employee Julie Hertzberg ("Hertzberg"). This sua sponte

opinion is occasioned by aspects of SRAM's responsive

pleading that are in some instances unacceptable, and in

others merely dubious.

In response to Hertzberg's allegations as to Jurisdiction

(Complaint P1) and venue (Complaint P2), SRAM's counsel

have answered respectively that Hertzberg "seeks to invoke

the jurisdiction of this court" and "seeks venue in this

division of this court," then going on to continue in each

answering paragraph:

Except as specifically admitted herein,

defendant denies the allegations contained in

Paragraph --.

At a minimum Answer P2 in that form must be stricken, and

SRAM owes a better explanation as to Answer P1.

As for Answer P2, it is clear from SRAM's express —

admissions of Answer PP3, 4, 7 and 8 that, as Complaint P2

alleges but Answer P2 purports to deny:

The acts complained of and the events at issue

all took place in this district.

Unless there is considerably more here than meets the eye

(and than SRAM has itself said), SRAM's denial is no better

than frivolous--and Answer P2 is therefore stricken.

As for Answer P1, both that paragraph and two of

SRAM's ADs (Answer PP27 and 28) challenge this Court's

jurisdiction. It appears from Answer P27 that SRAM's

contention in that respect stems entirely from Hertzberg's

57a

claimed "failure to satisfy all the jurisdictional prerequisites

to filing suit in federal district court under 42 US.C. §

2000e, et seq."

But Hertzberg has attached EEOC's right-to-sue letter as

her Complaint Ex. 1, and Complaint P6 affirmatively alleges

her fulfillment of all conditions precedent to bringing this

action, including her timely filing of a charge of

discrimination. And in terms of filing suit, this action was

brought well within 90 days after the EEOC letter. Because

SRAM's counsel must return to the drawing board in any

event, it will be necessary for them to flesh out their claim of

the absence of subject matter jurisdiction (an issue that, if

challenged in bona fide terms, this Court must of course

confront at the outset).

Another impermissible portion of the responsive pleading

is found in Answer P5, as to which SRAM begins by stating:

Paragraph 5 contains a legal conclusion to

which no response is required.

That of course is simply wrong--nothing entitles counsel for a

pleader to decide for himself or herself that "no response is

required" because an averment is considered a "legal

conclusion." Quite to the contrary, no less an authority than

the Supreme Court has made it plain that legal conclusions

play a recognized role in the notice pleading regime that is

embodied in the Federal Rules of Civil Procedure ("Rules")--

see Neitzke v. Williams, 490 U.S. 319, 325, 104 L. Ed. 2d

338, 109 S. Ct. 1827 (1989)(emphasis added), quoted again

Denton v. Hernandez, 504 U.S. 25, 31, 118 L.

Ed. 2d 340, 112 8. Ct. 1728 (1992):

By logical extension, a complaint, containing as

it does both factual allegations and legal

58a

conclusions, is frivolous where it lacks an

arguable basis either in law or in fact.

And Rule 8(b) requires that a litigant respond to every

averment (by definition including what the litigant may

regard as “legal conclusions") in a complaint. If SRAM really

denies its own status as an "employer" within the Title VII

definition, again it must explain why in its amended pleading

that is required by this opinion.

Finally, four of SRAM's six ADs are also problematic.

Rule 8(c) embodies the AD concept as essentially akin to the

common law plea in confession and avoidance: It admits all

of the allegations of a complaint, but then goes on to advance

a reason why defendant is not liable to plaintiff anyway (or,

as in the case of comparative negligence, may be liable to

plaintiff for less than plaintiff claims). See this Court's

discussion of Rule 8(c) in Bobbitt v. Victorian House, Inc.,

532 F. Supp. 734, 736-37 (N.D. Ill. 1982), a decision

approved in Heller Financial, Inc. v. Midwhey Powder Co.,

883 F.2d 1286, 1294 (7th Cir. 1989).

In those terms:

1. Answer PP27 and 28 have already been

revealed as directly contrary to the allegations —

of Complaint P6. That being so, SRAM's denial

of those allegations in Answer P6 puts those

matters at issue, and the ADs are accordingly

stricken.

2. Answer P26 is the equivalent of a Rule

12(b)(6) motion, asserting that "the Complaint -

fails to state a claim upon which relief can be

- granted." But accepting Hertzberg's Complaint

allegations as gospel, as this Court must do in

evaluating a Rule 12(b)(6) challenge and as

SRAM must do under Rule 8(c), that assertion

of legal insufficiency is a loser.

59a

3. Answer P31 says that Hertzberg

"voluntarily resigned her position with

defendant"--a statement at direct odds with

Complaint P16, and hence also required to be

stricken as an AD.

Accordingly Answer PP26-28 and 31 are stricken and are not

to be included in the Amended complaint required in the

following paragraph.

Because a material part of the Answer and ADs must thus

be discarded, all parties would be best served by SRAM's

filing of a self-contained Amended Answer and Affirmative

Defenses to replace the present pleading. And because the

errors identified here clearly appear to be lawyer-generated,

SRAM's counsel are directed not to impose the cost of any

attorneys’ fees and out-of-pocket expenses on their client in

connection with this second pleading go-round.

Milton I. Shadur

Senior United States District Judge

Date: December 23, 1996

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.