Appendix — Hetreed v. Allstate Insurance

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APPENDIX A — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE SEVENTH CIRCUIT

DATED AND DECIDED APRIL 12, 2001

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

CHICAGO, ILLINOIS 60604

Submitted March 16, 2001*

Decided April 12, 2001.

Before

Hon. HARLINGTON Woop, Jr., Circuit Judge

Hon. FRANK H. EASTERBROOK, Circuit Judge

Hon. ILANA DIAMOND Rovner, Circuit Judge

No. 00-1787

Mary ANN HETREED,

Plaintiff-Appellant,

v.

ALLSTATE INSURANCE COMPANY,

Defendant-Appellee.

* After an examination of the briefs and the record, we have

concluded that oral argument is unnecessary, and the appeal is

submitted on the briefs and the record. See Fed. R. App. P. 34(a);

Cir. R. 34(f).

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Appendix A

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 96 C 2021.

James B. Zagel, Judge.

Order

After our prior opinion in this case, see Hetreed v.

Allstate Insurance Co., 135 F.3d 1155 (7th Cir. 1998), the

district judge granted summary judgment to Allstate on two

of Hetreed’s claims: sex discrimination and intentional

infliction of emotional distress. Hetreed’s claim that her

discharge was an act of retaliation for her complaints (the

principal subject of the prior appeal) was tried to a jury, which

returned a verdict in Allstate’s favor. Hetreed appeals from

the final decision.

One aspect of the appeal must be dismissed for want of

appellate jurisdiction. Hetreed asks us to set aside the district

court’s award of costs in Allstate’s favor. But she did not

file a notice of appeal directed to the award of costs, which

was made approximately seven months after the decision on

the merits. The award of costs therefore is not before us.

Wielgos v. Commonwealth Edison Co., 892 F.2d 509,

511-12 (7th Cir. 1989); cf. Lentomyynti Oy v. Medivac, Inc.,

997 F.2d 364, 366-38 (7th Cir. 1993).

A second issue also has not been properly presented.

Hetreed contends that the district court should not have

barred certain proposed expert witnesses, but her half-page

argument (Br. 25) is so cursory that we cannot tell what

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Appendix A

experts she believes should have been allowed to testify on

what subjects. A litigant who wants appellate review of a

subject over which the district court has discretion, and on

which appellate review is deferential, see General Electric

Corp. v. Joiner, 522 U.S. 136 (1997), must do more than

simply state her disagreement with the judge’s disposition,

which is all Hetreed does. Because we have no reason to

think that the district judge abused his discretion in the

conduct of the trial, the jury’s verdict must stand.

Hetreed contends that she suffered sex discrimination

because a male supervisor induced her to engage in sexual

relations over .a four-year period between 1991 and early

1995. (Allstate believes that these relations were consensual

and that Hetreed rather than the supervisor was the initiator,

but given the posture of the case the district judge properly

assumed that Hetreed’s version is correct.) The grant of

summary judgment was based on Burlington Industries, Inc.

v. Ellerth, 524 U.S. 742 (1998), and Faragher v. Boca Raton,

524 U.S. 775 (1998). These cases hold that when a supervisor

sexually harasses a subordinate, the employer is not held

responsible for the supervisor’s acts if the employee did not

suffer any “tangible employment action” and the employer

demonstrates:

(a) that the employer exercised reasonable care

to prevent and correct promptly any sexually

harassing behavior, and (b) that the plaintiff

employee unreasonably failed to take advantage

of any preventive or corrective opportunities

provided by the employer or to avoid harm

otherwise.

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Appendix A

Ellerth, 524 U.S. at 765. The district court concluded that

Hetreed did not suffer any tangible employment action

because she had received all raises and promotions that were

her due, and that Allstate exercised reasonable care by putting

in place a system for making complaints — a system that

Hetreed did not use until half a year after the supervisor in

question retired. Moreover, the court observed, when Hetreed

did complain, Allstate took the only action available to it:

it withheld any discretionary increase in the ex-supervisor’s

retirement benefits. Hetreed contends on appeal that there

were material disputes of fact, but she does not identify any.

Her contention that sexual relations are “tangible

employment actions” is at variance with the definition given

in Faragher and Ellerth, which used that phrase to refer to

wages, promotions, and other acts that may be viewed as the

official acts of the employer within the scope of Title VII

(which deals with wages and other conditions of

employment); a supervisor’s sexual activity is not attributed

to the firm unless it fails to take preventive or responsive

steps within its power. Hetreed essentially disagrees with

Ellerth_-and-Faragher. She says, for-example, that-women—

should not be required to complain because of the possibility

of retaliation. But if that bare possibility were enough, the

defense identified in Ellerth and Faragher would be a dead

letter. Retaliation, if it does occur, can be penalized. Hetreed

failed to prove that retaliation ensued; an unfounded

suspicion that retaliation might occur does not deprive an

employer of the defense identified by the Supreme Court.

Two remaining arguments require only brief comment.

Hetreed contends that Allstate violated the Americans

with Disabilities Act, but her brief does not explain how,

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Appendix A

since the firm retained (and promoted) her right up until a

discharge that the jury evidently determined was attributable

to Hetreed’s misconduct. (Our prior opinion describes the

circumstances.) Hetreed does not contend that she was

disabled; to the contrary, she says that she could perform

every task. Although, as her brief contends, depression can

be disabling, her brief does not relate this to any adverse

action taken by Allstate.

Finally, Hetreed’s objection to the district court’s

decision that the workers’ compensation laws foreclose her

state-law claims against Allstate is unavailing given what

happened in the rest of the case. Hetreed wants to apply the

label “intentional infliction of emotional distress” to the

discrimination and retaliation of which she complains. But

given that Allstate prevailed on these claims, it also would

prevail even if it were possible to disregard the workers’

compensation bar to state-law theories. (Hetreed’s assertion

that she “has a valid [state-law] claim without the allegations

of sexual harassment and retaliation” (Br. 27) is unelaborated,

—and we do not see how such a claim could survive. See Smith ~~

v. Chicago School Reform Board of Trustees, 165 F.3d 1142,

1151 (7th Cir. 1999).)

AFFIRMED

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APPENDIX B — MEMORANDUM OPINION AND

ORDER OF THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS,

EASTERN DIVISION DATED MAY 11, 1999

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Case No. 96 C 2021

Judge James B. Zagel

MARY ANN HETREED,

Plaintiff,

v.

ALLSTATE INSURANCE CoO.,

Defendant.

MEMORANDUM OPINION AND ORDER

This employment dispute is as bitter as they come.

Plaintiff Mary Ann Hetreed (“Hetreed”) worked at defendant

Allstate Insurance Company (“Allstate” or “company”) in

the internal audit department for nearly ten years, until she

was terminated from her position as Audit Manager in May

1997. At the core of the dispute are twelve to sixteen sexual

encounters Hetreed had with one of her supervisors, George

McGann, from July 1991 to May 1995. According to Hetreed,

none of the encounters were consensual or welcomed;

according to McGann, the first was consensual but the others

he participated in under threat of disclosure. Regardless,

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Appendix B

neither of them told anyone at Allstate about the sex, except

a junior employee, until September 1995 when Hetreed told

Benjamin Tarver, director of Allstate’s corporate security

department, that she had been harassed. Starting that very

day, Tarver conducted a full investigation of Hetreed’s

allegations, and in March 1996, the company sanctioned

McGann for his conduct by not granting him a discretionary

post-retirement bonus. Pursuant to the company’s early

retirement program, McGann had stopped working on May

30, 1995, before Hetreed complained, and stopped drawing

a salary on November 30, 1995.

Allstate expressly prohibits sexual harassment, and its

Human Resources Policy Guide for Management provides a

four-step procedure for handling complaints. Steps 1 and 2

require that the employee report any incident of harassment

to the human resources manager, or to line management, who

should then inform human resources. Step 3 calls for human

resources to conduct an investigation with the assistance of

department management, and step 4 calls for the company

to take any necessary corrective measures, which could

include counseling, reprimand or dismissal. Although not

outlined in the manual, Allstate requires that human resources

notify the corporate security department of any complaint

involving a bonus-level employee (which Hetreed was after

1992). Allstate also had a general employee grievance

mechanism called the We Care program in place, although

there is conflicting evidence about the program’s

effectiveness at handling sexual harassment complaints.

At least as early as 1992, Hetreed had a copy of the human

resources policy guide. She attended sexual harassment

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Appendix B

training in that year as well. From 1992 on, she served as

manager in charge of the audit department’s administrative

functions and spent 90 percent of her time on human

resources work. In this capacity, she headed up the 1994

internal audit of the human resources department.

In 1993, Hetreed complained to Dean Bahrman, her

immediate supervisor, that a coworker, Dave Williams, was

making inappropriate comments to her and that she felt

sexually harassed. Hetreed states that she told no one in

management about McGann’s harassment during the nearly

four years in which it occurred, because she thought they

already knew about the relationship and because she feared

retaliation.

As support for her first belief — that management

already knew about the harassment — Hetreed points to a

statement by Bahrman to her to: “Keep the big guy happy,

no matter what it takes,” and to the fact that he once

questioned her about McGann’s whereabouts when McGann

missed a meeting. Bahrman denies having had any

knowledge of the relationship, let alone the harassment. Other

supervisors — Marge Kellen and Craig Barber — also deny

any knowledge of the sexual encounters or the harassment

and testified that they noticed nothing unusual about Hetreed

and McGann’s interaction.

In support for her second belief — that she would suffer

retaliation if she told someone about the harassment —

Hetreed points to the following incidents. First, in 1991, she

asked her then supervisor, Ken Sichz, what the company

would do if it discovered that an officer were having

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Appendix B

sex with a subordinate. To which, Hetreed says Sichz replied

that the company’s reaction would depend on the

subordinate’s rank and that the company would be more

likely to interfere in the case of a secretary. Second, Hetreed

believes that management retaliated against another

employee, Bob Biancalana, who filed a 1992 discrimination

complaint with the We Care program, because he left Allstate

employ in the next year. Biancalana states that he suffered

absolutely no repercussions or retaliation from his use of

the program and that the situation was resolved to his

satisfaction. Third, when in 1993 Hetreed told Bahrman that

Williams sexually harassed her, Bahrman reported the

incident to McGann, his supervisor, but did not report it to

human resources or to corporate security. McGann spoke to

the employee’s supervisor, who in turn spoke to Williams

directly about the incident, which did not occur again. Fourth,

in May 1995, Hetreed asked George Kashmar, the audit

department human resources representative, about sexual

harassment generally, and he replied that sexual harassment

complaints were “nothing but a scam.” Finally, in July 1995,

Hetreed believes Bahrman criticized her performance

unfairly and removed certain of her work responsibilities in

retaliation for her challenging his decision to hire a particular

employee.

Hetreed filed a complaint with the EEOC on December

29, 1995, alleging sexual harassment by McGann. On April

8, 1996, she filed suit in this court for sexual harassment by

McGann, as well as retaliation by Allstate, in violation of

Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e

et seq., for what she believes was a campaign of retaliation

against her that started after her September 1995 internal

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Appendix B

complaint. On April 16, 1997, she amended both complaints,

expanding her retaliation claim and charging discrimination

under the Americans with Disabilities Act (ADA), 42 U.S.C.

§ 12101 et seq.

Hetreed’s retaliation claim asserts that Allstate began

taking adverse actions against her soon after she complained

about McGann in September 1995, culminating in her

termination from the company in May 1997.' To support this

claim, Hetreed points to the following series of events. First,

in the fall of 1995, Dean Bahrman informed her that she

would no longer have sole responsibility for running

department communications meetings. Second, rumors

circulated around the company about her in January 1996,

in part because a secretary in the human resources department

with access to Hetreed’s EEOC complaint told two

non-management employees about it, one of whom passed

on the information to several others. Third, in early 1996,

management created a new director position in the audit

department at a level between Bahrman and Heireed and

appointed Dave Williams to fill it, effective August 1996.

Fourth, Hetreed’s overali merit rating dropped from

“Exceeds” to “Meets Expectations” on her November 1996

mid-year performance review. Fifth, Bahrman removed her

from leading the 1996 internal human resources audit in

December of that year at the request of the human resources

department, who became uncomfortable with some of

Hetreed’s inquiries. Sixth, Allstate refused initially, pursuant

to its policy not to compensate employees for time spent on

1. In evaluating the retaliation claim, I exclude all acts that

occurred prior to September 1995 when Hetreed reported McGann’s

conduct to corporate security.

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Appendix B

personal lawsuits, to pay Hetreed for time spent at a

deposition it had requested in this case. Seventh, the company

suspended her in February 1997, with pay, pending an

investigation into a possible breach of her ethical duty as an

auditor and cut off her phone and computer access during

the suspension. Eighth, when issuing her suspension, two

managers escorted her out of the building without allowing

her time to collect her personal belongings. Finally, the

company terminated her in March 1997.

Hetreed’s ADA claim charges that Allstate discriminated

against her by failing to accommodate changes to her work

assignments and environment she requested after developing

post-traumatic stress disorder, major depression, and irritable

bowel syndrome. Two doctors testified that they diagnosed

Hetreed with post-traumatic stress disorder, as a result of

the harassment, and major depression, and that they

prescribed medication to treat the disorders.

Hetreed told Dean Bahrman about her conditions at her

March 1996 performance review. At that time, she told him

that she could-not perform unstructured tasks, citing the audit

department’s control self-assessment project that she had

been asked to head as an example, and that she had trouble

understanding his instructions. In response to these requests,

Bahrman took her off the control self-assessment project and

told her to tell him anytime she did not understand his

instructions. Hetreed also requested that she be able to limit

her hours to a normal 40-hour workweek, even though

departmental changes meant that after September 1995, she

did not work more than five days a week, usually from about

7:30am to 5:00 or 5:30pm. After she told Bahrman about

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Appendix B

limiting her hours, he would reassign any work she could

not finish. In August 1996, Hetreed told Bahrman that she

did not want to work under Dave Williams in light of his

past behavior and in January 1997, her doctor requested that

she limit her time with him. To smooth Williams’s transition

and as a matter of course, Bahrman continued to actively

supervise Hetreed and another manager through their

February 1997 performance appraisals.

On October 11, 1996, Hetreed gave Bahrman an

“Allstate FMLA [Family Medical Leave Act] Designation

Form” designating October 4 and October 7 as FMLA

absences. Attached to the form was a “Certification of Health

Care Provider” form signed by Hetreed’s psychiatrist,

certifying her diagnoses of post-traumatic stress disorder and

major depression. In response to questions posed on the form,

the doctor indicated that Hetreed was not presently

incapacitated, but that it would be necessary for her to work

“only intermittently or to work on less than full schedule as

a result of the condition.” To clarify exactly what Hetreed

sought, Bahrman asked her on November 8, 1996 to provide

him with more information from her doctor regarding her

specific needs. On January 17, 1997, Hetreed gave Bahrman

an additional letter from her doctor stating that her contact

with her supervisor should be restricted as much as possible.

On February 11, 1997, Sammis wrote a letter to Hetreed

asking for further clarification. In the letter, Sammis wrote,

in relevant part:

I note that you submitted an FMLA Certification

form from your therapist in October, 1996 which

indicates that you may require an intermittent

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Appendix B

leave of absence or other reduced work schedule

for a period of one year (5.b). More recently, you

submitted a letter from your therapist indicating

that you are unable to work under your current

supervisors, Dean and Dave Williams, because

of your need for a work environment with minimal

stress. Since the only type of accommodation you

have ever discussed with Dean is the job

assignment proposal discussed above, it is not

clear to us whether you are actually seeking a

leave of absence/reduced work schedule, or

whether the one-year period recommended by

your therapist is intended to refer to the period

of time you wished to have your job duties

restructured. ... Alternatively, if what you are

requesting is to have your supervisors changed,

your only option is to explore other job

opportunities outside the Audit Department.

Under the current organizational structure of the

Audit Department, there is no alternative

reporting relationship available to someone at

your level.

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Hetreed responded to the letter in a memorandum she sent a

few days later to Bahrman, in which she stated that due to

what “appears to be considerable misunderstanding of both

my health situation and the requirements of the Family

Medical Leave Act,” her attorney would communicate

directly with the company.

Allstate moves for summary judgment on each of the

three counts. I will grant summary judgment if, drawing all

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Appendix B

inferences in the light most favorable to Hetreed, “there is

no genuine issue as to any material fact and . . . the moving

party is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322,

106 S. Ct. 2548, 2552 (1986). This standard should be applied

“with added rigor in employment discrimination cases, where

intent and credibility are crucial issues.” Courtney v.

Biosound, Inc., 42 F.3d 414, 418 (7th Cir. 1994).

Count I: Sexual Harassment

Hetreed’s sexual harassment case against Allstate rests

on defendant’s vicarious liability for the discriminatory acts

of one of its supervisors. Assuming for purposes of this

motion that McGann’s behavior constitutes actionable sexual

harassment, Allstate asserts that it cannot be held vicariously

liable as a matter of law as it is entitled to the affirmative

defense recognized by the Supreme Court in Burlington

Indus., Inc. v. Ellerth, _U.S. __, 118 S. Ct. 2257 (1998)

and Faragher v. City of Boca Raton, _U.S.__, 118S. Ct.

2275 (1998). Allstate believes it is entitled to the defense

because Hetreed suffered no tangible employment action as

a result of the alleged harassment, and both elements of the

defense are satisfied, i.e. (1) Allstate exercised reasonable

care to prevent and correct any sexual harassment, and

(2) Hetreed unreasonably failed to take advantage of the

preventive and corrective opportunities provided by the

company or otherwise to avoid harm. See Faragher, 118

S. Ct. at 2292-93; Ellerth, 118 S. Ct. at 2270.

Hetreed counters that Allstate is not actually entitled to

the affirmative defense, because it is available only in cases

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Appendix B

of hostile environment sexual harassment, not to the

quid pro quo harassment she asserts she suffered. The defense

is not limited in that way. In Ellerth, the Supreme Court

stated that the terms quid pro quo and hostile work

environment are still helpful when there is a threshold

question whether a plaintiff can prove actionable

discrimination. See 118 S. Ct. at 2265. If discrimination 1s

assumed, however, as it is here, the Court stated explicitly

that it is “the factors we discuss below, and not the categories

quid pro quo and hostile work environment, [that] will be

controlling on the issue of vicarious liability.” Jd.

Hetreed next argues that Allstate is not entitled to the

affirmative defense because she did, in fact, suffer a tangible

employment detriment as a result of the harassment: she had

to endure repeated, coerced sexual encounters with her boss

in return for “reasonably appropriate future evaluations,

compensation (including bonuses and pay raises),

responsibilities, and other job-related treatment.” Hetreed’s

argument in essence is that because she submitted to

McGann’s sexual advances only because of his ability to

affect the terms and conditions of her employment, having

to endure the harassment itself constituted an employment

detriment. But, that is not the balance the Supreme Court

struck in Faragher and Ellerth. Rather, it recognized the

effects of the supervisor-subordinate power differential but

rejected it as reason to apply automatic liability, see Ellerth,

118 S. Ct. 2269, choosing instead to allow employers the

affirmative defense in cases where no tangible employment

action is taken. Thus, the harassment itself does not constitute

tangible employment action; there must be something more.

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Appendix B

A tangible employment action is one that “constitutes a

significant change in employment status, such as hiring,

firing, failing to promote, reassignment with significantly

different responsibilities, or a decision causing a significant

change in benefits.” Ellerth, 118 S. Ct. at 2268. It requires

an official act of the enterprise, a company act, and in most

cases inflicts direct economic harm. See id. at 2269. Hetreed

did not suffer any sort of negative repercussions from Allstate

or McGann as a result of the harassment; to the contrary,

she received promotions and bonuses throughout her time

there, and her ultimate termination was unrelated to the

harassment itself. Accordingly, Allstate is entitled to assert

an affirmative defense to its liability for McGann’s

harassment.

To prevail at this stage, Allstate must prove each element

by a preponderance of the evidence on the material

undisputed facts. See Faragher, 118 S. Ct. at 2279. On the

first element, Allstate points to the preventive and corrective

action it took with regard to sexual harassment, in general,

and Hetreed’s case, in particular. The company had a detailed

sexual harassment policy in place at all relevant times,

notified its employees of the program, provided managers

(including Hetreed) with manuals outlining the policy and

with sexual harassment training. It also points to the

immediate corrective action it took in Hetreed’s case as soon

as it had actual notice: it launched an investigation the same

day, ensured that McGann and Hetreed had no further

contact, and elected not to give McGann a discretionary

bonus, one of the only ways it could punish a retired

employee.

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Appendix B

Hetreed asserts that there are genuine issues of material

fact as to the reasonableness of Allstate’s preventive and

corrective action. Specifically, while she does not dispute

the existence of the policies and the training, she in effect

argues that they were ineffective in practice because

management didn’t follow the procedures when she

complained about Williams in 1993. She also asserts that

the corrective action taken by the company was ineffective

first, in light of the fact that high-ranking officials must have

known of the sexual harassment at a much earlier date (and

McGann himself definitely did), and second, that Allstate

could have punished McGann more severely.

First, I find that Allstate’s anti-harassment policies are

sufficiently structured, detailed, and publicized to constitute

a reasonable preventive measure. While the mere existence

of a policy is not enough to establish adequate preventive

action, there is no evidence in the record to indicate that this

one was ineffective. Hetreed’s evidence that Bahrman strayed

from the letter of the policy when addressing her complaint

about Williams is not enough to create a genuine issue of

material fact as to the reasonableness of the preventive

measures, when management acted promptly to meet with the

subject of the complaint and the behavior ceased thereafter.

Notwithstanding the existence of policies themselves,

if management had actual knowledge of the harassment prior

to September 1995 and failed to take appropriate action, it

would not satisfy the first element of the affirmative defense.

Hetreed presents no evidence of actual knowledge of the

harassment, however. At best, her evidence (the comments

and questioning by Bahrman) builds a circumstantial case

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Appendix B

that Bahrman suspected McGann and Hetreed of having a

sexual relationship. Knowledge of a sexual relationship

between two managers is not the same as actual knowledge

of sexual harassment. I also refuse to impute McGann’s

actual knowledge of his actions to Allstate, as doing so would

render the affirmative defense moot.

Finally, when Allstate did gain actual knowledge of the

harassment in September 1995, it acted immediately to

investigate Hetreed’s allegations fully, to insure that McGann

and Hetreed had no further contact, and to punish McGann.

Thus, the first element of the affirmative defense is satisfied

as a matter of law.

To prevail on the second element, Allstate must prove

that Hetreed acted unreasonably in not reporting the

harassment until she did. The company argues that given

the anti-harassment policies in place, Hetreed’s actual

knowledge of them at least as early as 1992, her familiarity

with human resources due to her specific responsibilities

within the audit department and the training she received,

and her professional access to managers due to her own high

rank within the company, it was unreasonable for her to wait

more than four years to tell someone about McGann’s actions

towards her. I agree.

Hetreed counters that a jury could find her decision not

to keep quiet reasonable, in light of her evidence that

management “must have known” about the sexual

relationship and her fear that she would suffer retaliation if

she spoke up. If Hetreed did believe that other managers knew

about the sexual relationship, it is unreasonable for her to

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Appendix B

believe that they definitely knew it was unwanted on her

part. Also, in light of her knowledge of the mechanisms in

place to handle sexual harassment complaints, it was

unreasonable for her to rest on this belief, rather than

affirmatively to tell someone. Finally, as a matter of law,

her fear of retaliation, even if credited, is not a valid reason

for not reporting the harassment, for it prevents the defendant

company from taking corrective action. See Fierro v. Saks

Fifth Ave., 13 F. Supp. 2d 481, 492 (S.D.N.Y. 1998)

(“generalized fears [of retaliation] can never constitute

reasonable grounds for an employee’s failure to complain to

his or her employer” because doing so would eviscerate

affirmative defense). Thus, as Hetreed did not act reasonably

in waiting four years to report the harassment, the second

element of the affirmative defense is established.

Accordingly, I grant Allstate’s motion for summary

judgment as to count I.

Count IT: Retaliation

In her retaliation claim, Hetreed asserts that Allstate took

a series of actions against her after she complained about

McGann’s conduct, each of which adversely affected her

ability to perform her job and which, taken together,

constitute evidence of retaliation. Under Title VII, it is

unlawful for an employer to discriminate against an employee

because she has made a charge under the subchapter.

See 42 U.S.C. § 2000e-3(a). A plaintiff may prove a violation

by presenting direct or indirect evidence of discriminatory

intent. See Oates v. Discovery Zone, 116 F.3d 1161,

1169-70 (7th Cir. 1997).

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Appendix B

As Hetreed has presented no direct evidence that Allstate

acted with discriminatory intent, she must proceed under the

burden-shifting analysis established in McDonnell Douglas

Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817 (1973). Under

this well-established formula, to defeat the defendants’

motion for summary judgment, Hetreed must establish a

prima facie case of discrimination by a preponderance of

evidence.’ Specifically, she must show: (1) that she engaged

in statutorily protected expression, i.e. reporting or otherwise

opposing conduct prohibited by Title VII; (2) that she

suffered an adverse employment action after or

contemporaneous with the protected activity; and (3) that

there is a causal link between the two. See Pafford v. Herman,

148 F.3d 658, 670 (7th Cir. 1998). If she does this, Allstate

must offer “evidence which, taken as true, would permit the

conclusion that there was a nondiscriminatory reason for the

adverse action.” Oates, 116 F.3d at 1170 (quoting St. Mary's

Honor Ctr. v. Hicks, 509 U.S. 502, 509, 113 S. Ct. 2742,

2748 (1993)). The burden then shifts back to Hetreed to

demonstrate that the company’s proffered explanation is

merely a pretext for retaliation. See id.

Allstate concedes that Hetreed has satisfied the first

prong of the prima facie case, but argues that she fails on

the second, because none of the cited incidents, except the

termination, constitutes a negative employment action.

Adverse employment actions are defined broadly in this

Circuit, see Smart v. Ball State Univ., 89 F.3d 437, 441 (7th

Cir. 1996), but must materially affect the employee’s job.

2. Hetreed argues that each of these incidents are direct

evidence of retaliation. They are not, but I am considering them as

indirect evidence.

2la

Appendix B

See Rabinovitz v. Pena, 89 F.3d 482, 489 (7th Cir. 1996).

While an adverse action is not limited solely to loss or

reduction of pay or monetary benefits, see id. (citing Collins

v. State of Illinois, 830 F.2d 692, 703 (7th Cir. 1987)), neither

does it include everything that makes an employee unhappy.

See Smart, 89 F.3d at 441.

With respect to the pre-termination treatment, Hetreed’s

argument is that Allstate took a series of antagonistic and

adverse steps against her that over time materially

disadvantaged her. The Williams promotion by itself rises

to the level of material adversity, because placing an

individual, whom Hetreed had previously accused of sexual

harassment and with whom she wanted no contact, in the

position of her immediate supervisor arguably would make

it much more difficult for her to do her job.’ Additionally,

being removed from the human resources audit and the

suspension both adversely affected her employment. The

human resources audit incident hurt her, because by putting

her in a position in which she had a serious and blatant

conflict of interest and then stripping her of that appointment

when she made routine inquiries, Allstate damaged Hetreed’s

professional credibility. Likewise, suspension under

suspicion of misappropriation of documents would have

damaged the professional reputation of a senior auditor.

By contrast, the remaining actions cited by Hetreed —

the spreading of information by non-management employees,

3. This would not be true in every case, however, and I do not

mean to suggest that it is always impermissible for a person to be

supervised by an individual against whom he or she once lodged a

complaint.

22a

Appendix B

the company’s initial refusal to pay her for time spent at her

deposition, the November 1996 performance review, and

forcing her to leave the office immediately pending her

suspension — simply are not adverse actions, even when

viewed as part of the whole. First, absent evidence that

management instructed the secretaries to leak information

about Hetreed’s claim or knowingly disregarded an established

pattern of such conduct, the disclosures cannot be imputed

to the company. Second, as it is undisputed that the company

ultimately allowed her to use paid time to attend her

deposition in this case, its initial refusal simply does not

constitute an adverse action. Third, as the lower performance

rating that Hetreed received on her November 1996 mid-year

review did not affect her responsibilities or compensation,

and especially in light of the high rating she received on her

two other post-complaint reviews (her November 1995 mid-

year and March 1996 annual review), I find that it did not

affect her adversely. See Rabinovitz, 89 F.3d at 488-89.

Fourth, forcing Hetreed to vacate the premises immediately

after issuing her suspension did not adversely affect her

ability to perform her job; the suspension itself did that.

For the four adverse actions taken by Allstate — the

Williams appointment, removal from the human resources

audit, the suspension and the termination — Hetreed still

must establish a causal link between her complaint and the

company’s acts. To satisfy this element, she must

demonstrate that Allstate would not have taken the adverse

action “but for” the protected expression. See McKenzie v.

Illinois Dept. of Transp., 92 F.3d 473, 483 (7th Cir. 1996).

A telling temporal sequence, in which the employer’s adverse

action follows fairly soon after the employee’s protected

23a

Appendix B

expression, can establish the required nexus. See Sweeney v.

West, 149 F.3d 550, 557 (7th Cir. 1998). Hetreed first

complained to Tarver in September 1995, filed her EEOC

complaint in December 1995, and filed this lawsuit in April

1996. Each of the incidents happened within a year of the

filing of the lawsuit, and most within a year after she filed

her EEOC complaint. While the causal connection could be

more immediate, in light of Hetreed’s ongoing complaints

about her harassment, I find that the time is not so distant as

to preclude a reasonable inference that Allstate’s actions were

linked to Hetreed’s complaint.

The burden thus shifts to Allstate to present legitimate,

non-discriminatory reasons for each of its actions, which

Hetreed must then demonstrate are pretextual. With regard

to the Williams appointment, Allstate asserts that Williams

was the only qualified employee available to fill the position.

According to Bahrman, the position was created as a

developmental one, in order to “bring somebody in from another

area that would give that individual an opportunity to see and

develop business knowledge about other specific operating areas

in the company.” As evidence of pretext, Hetreed points to

evidence showing that Williams was the only one interviewed

for the position and that several other members of the auditing

department thought the appointment surprising because

Williams had no auditing experience. As it is unusual for a

company to place an employee with no auditing experience

in a supervisory position over a management-level employee

with eight years of auditing experience, and it is undisputed

that Bahrman knew about Hetreed’s history and present

concerns about Williams at the time of the appointment,

Hetreed has satisfied her burden in this case.

24a

Appendix B

Allstate explains its actions with regard to the human

resources audit as follows. It trusted that Hetreed would not

allow her personal issues to interfere with her work, and that

it was only after she breached that duty by making what it

considered to be inappropriate inquiries that it transferred

her off the audit. Specifically, it considered her request for

listings of ledgers on special retirees to be so far outside the

scope of the audit as to actually be a terminable offense.

Hetreed presents evidence that that was a routine inquiry in

such an audit. In light of Allstate’s questionable judgment

in placing her on the audit in the first place, that is enough

to satisfy her burden to show pretext.

Allstate says it suspended Hetreed pending the

investigation of her request for information about fees the

company paid to the law firm it had hired to defend itself in

the instant suit, as well as her decision to give the fee

information to her personal attorney. When Hetreed would

not provide an immediate explanation — whatever the reason

why — the company suspended her, with pay, pending the

outcome of the investigation. It is reasonable for a company

with reason to doubt the ethics of one of its high-ranking

auditors to deny that person access to company files while it

investigates. Hetreed has presented no evidence to cast doubt

on Allstate’s stated reason for the suspension, and thus fails

to satisfy her burden to show pretext.

Finally, Allstate states that it terminated Hetreed after

conducting its internal investigation into the breach, hearing

her testimony at the March 7, 1997 preliminary injunction

hearing, and because of additional documents she produced

at the hearing. Hetreed testified that in requesting the fee

information, she was “doing the company a service by

25a

Appendix B

making sure they were using competent counsel.” She also

produced a copy of the 1995 version of something called the

“3000 ledger,” a general ledger of fees paid by Allstate,

which Allstate says she should not have taken off company

premises. According to Allstate, it fired her for abusing her

privileged position to access and disclose confidential

information, and for lying about it under oath and during an

internal investigation. Hetreed argues that Allstate was wrong

to terminate her because her actions actually were reasonable

and justified. Unfortunately for Hetreed, her disagreement

with Allstate’s business judgment about what constitutes

unethical behavior on the part of its auditors is not the issue.

See Hetreed v. Allstate Ins. Co., 135 F.3d 1155 (7th Cir.

1998). Hetreed has presented no evidence that Allstate’s

reasons to terminate her were pretextual, or that the company

has or would have excused similar lapses by an employee

who had not filed suit against the firm. See id. at 1157-58.

As such, she has not satisfied her burden.

Accordingly, I grant Allstate’s motion for summary

judgment on count II in part and deny it in part.

Count III: ADA Failure to Accommodate

Hetreed contends that Allstate discriminated against her

in violation of the Americans with Disabilities Act (“ADA”)

for failing to reasonably accommodate her disability. Title I

of the ADA proscribes discrimination against a “qualified

individual with a disability” because of said disability “in

regard to job application procedures, the hiring, advancement,

or discharge of employees, employee compensation, job

training, and other terms, conditions, and privileges of

employment. See 42 U.S.C. § 12112(a) (1994). To overcome

26a

Appendix B

Allstate’s motion for summary judgment, Hetreed must show

that there is a genuine issue of material fact with respect to

whether she is disabled, whether she is a qualified individual,

and whether Allstate knew about the disability and failed to

reasonably accommodate her. See Baert v. Euclid Beverage

Ltd., 149 F.3d 626, 629 (7th Cir. 1998); Baulos v. Roadway

Express, Inc., 139 F.3d 1147, 1151 (7th Cir. 1998).

Allstate’s first argument is that Hetreed is not disabled

under the ADA, which defines “disability” as (a) a physical

or mental impairment that substantially limits one or more

of the major life activities of an individual; (b) a record of

such an impairment; or (c) being regarded as having such an

impairment. 42 U.S.C. § 12102(2). Hetreed asserts that she is

disabled under subsection (a) because she suffers from medically

diagnosed post-traumatic stress disorder (PTSD) and major

depression,‘ which substantially limit her ability to work.

While Hetreed’s recent medical diagnoses are enough

to show that she suffers from a mental impairment for ADA

purposes, they are not enough alone to establish a substantial

limitation on her ability to work. See Hoeller v. Eaton Corp.,

149 F.3d 621, 625 (7th Cir. 1998) (diagnosed bipolar

affective disorder not disability under ADA because no

substantial limitation on employment generally); Patterson

v. Chicago Assoc. for Retarded Citizens, 150 F.3d 719,

725-26 (7th Cir. 1996) (diagnosed paranoia not disability

4. Plaintiff also asserts, based on her own testimony, that she

has been diagnosed with irritable bowel syndrome. That testimony

alone is insufficient to establish that she suffers from a physical

impairment under the ADA. Further, she fails even to argue how

that condition, even if proved, would affect her ability to work.

27a

Appendix B

under ADA because no substantial limitation on employment

generally). Rather, being substantially limited in the major

life activity of working requires that a person be “significantly

restricted in the ability to perform either a class of jobs or a

broad range of jobs in various classes as compared to the

average person having comparable training, skills and

abilities.” 29-C.F.R. § 1630.2(j)(3)(i); Patterson, 150 F.3d

at 725. An inability to perform a particular job for a particular

employer is not sufficient; rather, the impairment must

substantially limit employment generally. See id.

Allstate points to Hetreed’s own testimony that her

impairments imposed only moderate limitations on her daily

activities and imposed no appreciable limitations on her

ability to work as an auditor and argues that she is not

substantially limited in her work. That argument misses the

mark, however, for Hetreed’s testimony with regard to her

ability to work was based on her ability while medicated, and

she expressly said she did not know what would happen if she

was taken off the medication. This distinction is important,

because the Seventh Circuit has instructed that in assessing

the impact of an individual’s impairments on his or her major

life activities, I am to examine the extent of the impairment

without regard to the availability of mitigating measures such

as medicines. See Baert, 149 F.3d at 629.

It is Hetreed’s burden to come forward with facts

sufficient to show that she could meet her ultimate burden

of showing an ADA-recognized disability, see DePaoli v.

Abbott Lab., 140 F.3d 668, 671 (7th Cir. 1998), which in

this case means showing that without her medication, her

mental conditions substantially limit her ability to work either

28a

Appendix B

at Allstate or as an auditor generally. See Patterson, 150

F.3d at 725-26 (plaintiff's complete inability to work at her

present teaching job due to her mental illness did not

substantially limit her ability to work generally, because she

could teach non-special educational students at a different

school). The problem is that Hetreed has presented no

evidence on this point. Neither of Hetreed’s treating doctors,

Drs. Lammers and Kepler, expressed an opinion as to the

effect Hetreed’s illness, if left untreated, would have on her

ability to work.° Dr. Conroe, who is defendant’s expert,

confirmed the diagnosis of major depression and discussed

general symptoms of the illness, which can include a

difficulty to focus on work or daily activities and the

impairment of a person’s judgment and ability to make

decisions, but did not discuss Hetreed’s ability to work.

Hetreed herself testified that there are no work-related

auditing activities that she could not do as a result of her

illnesses and that she simply did not know what would

happen were she to stop taking the medication.

While I recognize that it is difficult for Hetreed to prove

what effect her untreated illness would have on her ability

to work, it is possible to do so either by showing her

symptoms before she went on medication (or between

5. In fact, Dr. Kepler said nothing about the effect of Hetreed’s

illnesses on her capacity to work. Dr. Lammers testified that Hetreed

was not incapacitated, assuming a definition of incapacity as “an

inability to work.” While he did answer “yes” to a question on

Hetreed’s FMLA form inquiring whether she would need intermittent

time off due to her illness, when asked in January 1997 to clarify

any accommodations she required, he recommended only that her

exposure to her supervisor be limited.

29a

Appendix B

regimens) or through medical testimony, and that is what

the ADA requires. Hetreed simply has not done this. I find

that she is not disabled under the ADA, and therefore is not

entitled to its protections.°

Accordingly, I grant Allstate’s motion for summary

judgment on count III.

Conclusion

For the foregoing reasons, I grant summary judgment

for Allstate on counts I and III in their entirety and on

count I] in part.

ENTERED:

s/ [copy]

James B. Zagel

United States District Judge

DATE: 5/11/99

6. I note, in the alternative, that even if Hetreed is disabled

under the ADA, she has not established a genuine issue of material

fact as to Allstate’s failure to reasonably accommodate her needs.

She did not work on the control self-assessment project, she did not

have to work more than five days a week or evenings and Bahrman

reassigned work she was unable to do to help make sure that that

happened. Allstate engaged in a process to clarify her request to

limit her exposure to her supervisor, which it reasonably decided

could only be accommodated by moving her out of the department,

see Weiler v. Household Finance Corp., 101 F.3d 519, 526 (7th Cir.

1996), and it is Hetreed, rather than Allstate, who cut off that interactive

process in her memorandum to Bahrman in February 1997.