Graham v. Mechanics Laundry Supply Inc.

Full title: DAVID W. GRAHAM, MARILYN J. O'GARA, Plaintiffs, v. MECHANICS LAUNDRY…

Court: United States District Court, S.D. Indiana, Indianapolis Division

Date published: Jun 8, 2000

Cause No. IP98-0920-C-T/G (S.D. Ind. Jun. 8, 2000)

Opinion

Cause No. IP98-0920-C-T/G

June 8, 2000

ENTRY DISCUSSING PENDING MOTIONS

JOHN D. TINDER, Judge

This matter comes before the court on two motions: (1) a Motion for Summary Judgment filed by Defendants, Mechanics Laundry Supply Inc. of Indiana ("Mechanics") and Cintas Corporation ("Cintas"), seeking judgment as to all claims filed by Plaintiffs, David W. Graham and Marilyn J. O'Gara; and, (2) a Motion to Strike filed by Defendants, seeking to exclude some of the evidence Plaintiffs submitted in opposition to Defendants' summary judgment motion.

Defendants move for summary judgment as to each of Ms. O'Gara's three claims (each of which are brought pursuant to Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq.): hostile-environment sexual harassment, retaliatory demotion, and constructive discharge.¹ Defendants also move for summary judgment as to each of Mr. Graham's four claims: retaliatory demotion (brought pursuant to Title VII), retaliatory discharge (also brought pursuant to Title VII), breach of contract (brought pursuant to Indiana common law), and failure to pay wages when due (brought pursuant to an Indiana wage payment statute). In this Entry, the court first sets out the summary judgment standard-of-review and the factual background of Plaintiffs' claims, and then addresses each of the above-stated grounds for the summary judgment motion.

1 Defendants also moved for summary judgment as to Ms. O'Gara's "claim" of disparate-treatment sexual harassment. However, as discussed below, Ms. O'Gara responded that she is not asserting a disparate treatment claim. She offers "the evidence that all of the managers at Koweba were males and all of the management trainees were males in order to prove the totality of the circumstances of the sexual harassment and retaliation." (Pls.' Br. in Opp'n to Defs.' Mot. for Summ. J. at 22.)

I. Standard of Review

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A "material fact" is one that may affect the decision, so that the finding of that fact is relevant and necessary to the proceedings. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A "genuine issue" is shown to exist if sufficient evidence is presented such that a reasonable fact finder could decide the question in favor of the nonmoving party. See id.; Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994).

A party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has supported the motion as provided by Fed.R.Civ.P. 56(c), the party opposing the motion must come forward with evidence directed to specific facts showing that there is a genuine issue for trial. See Duff v. Marathon Petroleum Co., 51 F.3d 741, 744 (7th Cir. 1995). When considering a motion for summary judgment, the court must view the facts, and all the inferences drawn from those facts, in the light most favorable to the nonmovant. See Smith on Behalf of Smith v. Severn, 129 F.3d 419, 426 (7th Cir. 1997); Frey v. Fraser Yachts, 29 F.3d 1153, 1156 (7th Cir. 1994).

II. Facts ²

2 Many of the facts presented herein are subject to objections in Defendants' motion to strike. The court will note these objections with footnotes, as the facts are presented. Some of the objections will be ruled upon in the "Facts" section, while others will be simply noted in the "Facts" section and then addressed as appropriate in the later discussion.
The court notes that it does not specifically address all of the proffered facts in the parties' submissions pursuant to Southern District of Indiana Local Rule 56.1. The parties, and particularly the Plaintiffs (whose Local Rule 56.1 factual statements total 80 pages), submitted voluminous factual statements, ostensibly pursuant to Local Rule 56.1. As discussed at length in Pike v. Caldera, 188 F.R.D. 519 (S.D.Ind. 1999), such submissions are outside of the spirit, if not the text, of Local Rule 56.1. The court will not repeat its discussion in Pike here, but will simply state that if proffered facts are not discussed herein, the court deemed them to be either duplicative of included factual statements or irrelevant to the resolution of the pending summary judgment motion (i.e., not material at all).

Ronald Hardman began work for Mechanics in the mid-1980s. (Hardman Dep. at 21-22.) He became general manager of Progress Linen, a division of Mechanics, in about 1989. ( Id. at 15-25, 87; Peterson Dep. at 21.) In the late 1980s or early 1990s Donald Peterson, Executive Vice President of Mechanics, told Mr. Hardman that a female employee (at Progress Linen) had accused Mr. Hardman of sexual harassment. (Hardman Dep. at 79;³ Peterson Dep. at 14-15, 42.)⁴ Hr. Hardman admitted that he had a sexual affair with that employee for a short period of time when he was general manager of Progress Linen. (Hardman Dep. at 80-84, 86.)⁵ Mr. Peterson "probably" warned Mr. Hardman about his relationship with the employee, and after that, nothing else happened between Mr. Hardman and that employee. ( Id. at 81.)⁶ Mr. Hardman also testified that "the language was a little off-color many times" in that office. ( Id. at 88.)⁷

3 Mr. Hardman testified that: "Don Peterson said that Pam Straub accused me of sexual harassment." (Hardman Dep. at 79.) He then testified that, "I think what came out was, was I messing around with Pam Stroub. The accusation of sexual harassment I don't think came up." ( Id. at 80, 82-83.) To the extent these statements conflict, the court views the evidence in the light most favorable to the Plaintiffs and assumes that Mr. Peterson "said that Pam Straub accused [Mr. Hardman] of sexual harassment."

4 Defendants object that this fact is inadmissible because it is irrelevant pursuant to Rule 401 of the Federal Rules of Evidence. Defendants also object that it is inadmissible under Rule 403 because this alleged relationship occurred more than four years prior to Ms. O'Gara's alleged harassment.

5 Defendants again object that this evidence is inadmissible pursuant to Rules 401 and 403 of the Federal Rules of Evidence.

6 Defendants again object that this evidence is inadmissible pursuant to Rules 401 and 403 of the Federal Rules of Evidence.

7 Defendants again object that this evidence is inadmissible pursuant to Rules 401 and 403 of the Federal Rules of Evidence.

On April 30, 1990, Mechanics hired Plaintiff David Graham as General Manager of its Vermont Street plant in Indianapolis. (Graham Dep. at 206-07; Graham Aff. ¶¶ 2, 7.) Mr. Graham replaced Mr. Hardman, who had been the acting General Manager of the Vermont Street plant. (Hardman Dep. at 33.) After Mr. Graham worked at Vermont Street for two months, the Vermont Street plant was moved to the Koweba Lane location. (Graham Dep. at 206-07; Graham Aff. ¶ 7.) After approximately sixteen months at the Koweba plant, Mr. Graham was promoted by Mechanics to co-General Manager at the Fort Wayne, Indiana, plant. (Graham Dep. at 205-07; Graham Aff. ¶ 7.) In 1991 or 1992, Mr. Hardman was moved to the Fort Wayne plant, and he became co-General Manager with Mr. Graham. (Hardman Dep. at 28.)

At the time Mr. Graham was hired, he signed an employment agreement with Mechanics. (First Am. Compl., Ex.) In April of 1994, Mr. Graham signed an addendum to this agreement which contained a covenant not to compete for two years and severance pay in an amount equal to twenty-six weeks of base salary. (Graham Aff. ¶ 4.) The addendum was caused by the departure and subsequent competition by a former Mechanics employee named Mike Peele, so it was called the "Mike Peele" agreement. (Graham Aff. ¶ 5; Peterson Dep. at 108.) All managers at Mechanics were required to sign the "Mike Peele" agreement which contained the covenant not to compete and severance pay provision. (Graham Aff. ¶ 6; Phillip French Dep. at 59-60.)⁸

8 Defendants object that this evidence is inadmissible pursuant to Rule 401 of the Federal Rules of Evidence.

On May 26, 1993, Tom Miller, a plant manager in Fort Wayne, came to Mr. Graham telling him that multiple women had been complaining about having their breasts and buttocks rubbed by Mr. Hardman and that Mr. Hardman was having a sexual relationship with a female employee. (Graham Dep. at 257; Graham Aff. ¶ 8.)⁹ Mr. Graham spoke to Mr. Hardman about the complaints, and Mr. Hardman stated that he touched women only in an act of friendship and that there was never any sexual intention whatsoever. (Graham Dep., Ex. 48; Graham Aff. ¶ 9.)¹⁰ Mr. Hardman told Mr. Graham nervously and curtly that he had a sexual relationship with the female employee, but not anymore. (Graham Dep. Ex. 48; Graham Aff. ¶ 10.)¹¹

9 Defendants object that this evidence is inadmissible pursuant to Rules 401 and 403 of the Federal Rules of Evidence, because this alleged harassment occurred more than four years prior to Plaintiff O'Gara's alleged harassment.
Defendants also object that it is inadmissible hearsay. The court overrules the hearsay objection because the statements between Mr. Miller and Mr. Graham appear to be admissible as an admission by party-opponent. Rule 801(d)(2)(D) of the Federal Rules of Evidence provides that "a statement by the party's . . . servant concerning a matter within the scope of the . . . employment" is admissible if offered against the party. As the plant manager, it would appear to be one of Mr. Miller's duties to report allegations of sexual harassment to the plant's general manager, Mr. Graham.

10 Defendants again object that this evidence is inadmissible pursuant to Rules 401 and 403 of the Federal Rules of Evidence.

11 Defendants again object that this evidence is inadmissible pursuant to Rules 401 and 403 of the Federal Rules of Evidence.

Mr. Graham reported the complaints of sexual harassment to Mr. Peterson. Although Mr. Graham did not receive any response from Mr. Peterson, Mr. Peterson testified that he talked with Mr. Hardman, told him that he was on probation and probably would be terminated. (Graham Dep. at 257-58; Graham Dep. Ex. 48; Graham Aff. ¶ 12; Peterson Dep. at 34-36.)¹² Mr. Peterson also testified that he reported the matter to Darroll French, half owner of the company and CEO, and recommended that Mr. Hardman be terminated. (Peterson Dep. at 39.)¹³ However, Mr. Hardman was not terminated.¹⁴

12 Defendants again object that this evidence is inadmissible pursuant to Rules 401 and 403 of the Federal Rules of Evidence.

13 Defendants again object that this evidence is inadmissible pursuant to Rules 401 and 403 of the Federal Rules of Evidence.

14 Mr. Hardman testified to a somewhat different set of events; he stated that Mr. Peterson only told him that Mr. Peterson "got a complaint from a girl in Fort Wayne that I put my hand on her where I shouldn't have." (Hardman Dep. at 89.) Mr. Hardman testified that he offered to apologize, but Mr. Peterson told Mr. Hardman it was not necessary. ( Id. at 90.) He also testified that he did not receive any discipline as a result of the complaint of sexual harassment in Fort Wayne. ( Id. at 95.)

In the early 1990s, after about two years as co-general manager in Fort Wayne, Mr. Peterson moved Mr. Hardman to a staff position in the Indianapolis corporate office, where Mr. Hardman wrote a standard operating procedures manual for plant and stockroom operations which was distributed to all employees. (Hardman Dep. at 36-37, 42.) At first, Mr. Hardman reported directly to Darroll French, part-owner of Mechanics, but when Darroll's son Philip French began working full-time with Mechanics, Mr. Hardman reported directly to Philip. ( Id. at 40.)

In April of 1996, Mr. Graham resigned from Mechanics to take a position with another company. (Graham Aff. ¶ 14.) In June of 1996, Mr. Graham decided to leave that company, and Malcolm Wright, Senior Vice President of Mechanics, asked Mr. Graham to return to Mechanics to be general manager of the Koweba Lane plant in Indianapolis, and Mr. Graham agreed. (Graham Aff. ¶ 15; Graham Dep. at 163-64; Wright Dep. at 10, 88.) Mechanics offered Mr. Graham the same compensation package which Mr. Graham had before he left Mechanics, and Mr. Graham accepted. (Graham Aff. ¶ 16; Graham Dep. at 276-77; Wright Dep. at 91-93.) However, severance pay was not specifically mentioned as a part of that compensation package. (Peterson Dep. at 157-62.)

Later, Mr. Graham offered to sign an employment agreement which would have expanded the area covered by the restrictive covenant in the "Mike Peele" agreement. (Graham Aff. ¶ 17; Graham Dep., Exs. 26, 28.) In 1997, Mr. Graham mentioned a few times to Mechanics that he did not sign a new agreement and asked if they were just going to live off the old "Mike Peele" agreement. (Graham Aff. ¶¶ 18-21; Graham Dep., Ex. 50.) Because Mechanics did not respond, and because Mr. Graham thought all Mechanics managers were covered by employment agreements which contained covenants not to compete, Mr. Graham thought that the parties had decided to live according to the old, "Mike Peele" agreement. (Graham Aff. ¶¶ 22-24; Graham Dep. Ex. 50.) When Mr. Graham was later terminated by Mechanics in 1998, he felt that he was required to seek employment outside the area where Mechanics competed, and he did so, moving to North Carolina. (Graham Aff. ¶ 25.) However, Mr. Graham and Mechanics did not execute a severance agreement after Mr. Graham left Mechanics in 1996, and Mr. Peterson did not believe the parties came to a meeting of the minds on a severance agreement after that time. (Peterson Dep. at 157-62.) At no time after Mr. Graham left Mechanics in 1996, did anyone at Mechanics tell Mr. Graham that he was covered by any restrictions or covenant not to compete; by the same token, no one told him that he was not covered by an employment agreement containing a covenant not to compete. (Graham Aff. ¶ 26; Peterson Dep. at 107-08.)

Mr. Peterson testified that it was the policy of Mechanics to have all management employees under contract. (Peterson Dep. at 101.) Darroll French testified that all management people, including David Graham, were supposed to be under contract, which included an agreement not to compete. (Darroll French Dep. at 90-91.) Mr. Wright testified that at the time of the merger with Cintas in 1998, "I know that we had a covenant [not to compete] on David," that "it's part of the employment agreement," and that the covenant was the same or nearly the same as the covenants with the other Mechanics' managers. (Wright Dep. at 109-11.)

Mechanics treated some job positions as appropriate for men, such as the wash floor and the dock. (O'Gara Dep. at 241; Philip French Dep. at 90-91.)¹⁵ Mechanics treated some job positions as appropriate for women, such as the hanging line, roll towels, shop towels, and stockroom. (O'Gara Dep. at 241; Philip French Dep. at 90-91.)¹⁶ All of the management trainees were male, and Mechanics has never had a management trainee who was female. (Philip French Dep. at 88.)¹⁷ Phillip French testified that he could only recall two female managers, although there may have been more. ( Id. at 89-90.)¹⁸

15 Defendants object that this fact is inadmissible because it is irrelevant pursuant to Rule 401 of the Federal Rules of Evidence because Plaintiff O'Gara has not alleged disparate treatment.

16 Defendants again object that this fact is inadmissible pursuant to Rule 401 because Plaintiff O'Gara has not alleged disparate treatment.

17 Defendants again object that this fact is inadmissible pursuant to Rule 401 because Plaintiff O'Gara has not alleged disparate treatment.

18 Defendants again object that this fact is inadmissible pursuant to Rule 401 because Plaintiff O'Gara has not alleged disparate treatment.

Ms. O'Gara was hired by Mechanics on December 22, 1994. (Peterson Dep. Ex. 7.) Ms. O'Gara testified that in 1995, Carl Denton, general manager at the Koweba Lane plant, "would . . . come up [to Ms. O'Gara], give you a hug, pat you on your butt, [and] say lewd comments to you", such as, "`I'd love to see you with your shirt off.'" (O'Gara Dep. at 132-33.)¹⁹ The one time that Mr. Denton patted Ms. O'Gara on her buttocks, she told him not to do that. ( Id. at 133.)²⁰ Also in 1995, Brad Schneider, plant manager at the Koweba Lane plant, told Ms. O'Gara that he wished she was not married "because he'd sure jump in line," and he asked her what he could do to make her leave her husband. ( Id. at 104, 135-36.)²¹ In 1995 or 1996, Jeff Pont, a management trainee who was being trained for a plant manager position, made "lewd comments" to the female employees, including Ms. O'Gara. ( Id. at 134.)²² Ms. O'Gara testified that Mr. Pont made lewd comments to her every chance he talked to her, which was probably 15 to 20 times. ( Id.)²³ The managers at the plant referred to all female employees as "Bettys," and would say things like "You sure look fine, Betty" and "Boy, I'd sure like to get down with you, Betty." ( Id.)²⁴ On a couple of occasions, Mr. Pont hugged Ms. O'Gara, and on one occasion, Mr. Pont rubbed her shoulders. ( Id. at 133-34.)²⁵

19 Defendants object that these statements are inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment with the EEOC.

20 Defendants again object that this statement is inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment.

21 Defendants object that this statement is inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment.

22 Defendants object that this statement is inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment.

23 Defendants object that this statement is inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment.

24 Defendants object that this statement is inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment.
It is unclear from Ms. O'Gara's deposition testimony whether multiple managers made these comments, or whether only Mr. Pont made the comments. Viewing this testimony in the light most favorable to Ms. O'Gara, the court will assume that multiple managers made these comments. Moreover, in the Statement of Additional Material Facts, Plaintiffs present this testimony as standing for the proposition that "the managers" made these comments. In response to this submission, Defendants state that Plaintiffs' statement of this fact is "admitted." (Defs.' Reply to Pls.' Statement of Additional Material Facts at 23 (as noted above, while the Defendants "admit" this fact, they do challenge its admissibility on the grounds that it is time-barred).) Therefore, for this additional reason, the court will assume that the cited testimony indicates that multiple managers made these comments.

25 Defendants object that this evidence is inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment.

In 1996, Ms. O'Gara told John Mueller, a management trainee, about what she perceived to be sexual harassment by other Mechanics' managers. ( Id. at 137, 155.)

Also, Ms. O'Gara testified that "in [19]96, when [Mr. Hardman] started coming around to the Koweba facility [where Ms. O'Gara worked] more and more, . . . he would come up, nudge you, give you a little shoulder hug, say comments about how you look, things that made me feel very uncomfortable." ( Id. at 121, 205.)²⁶ As soon as Mr. Hardman made contact on these instances, Ms. O'Gara backed away. ( Id. at 126.)²⁷

26 Defendants object that this statement is inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment.

27 Defendants object that this evidence is inadmissible because the alleged conduct took place more than 300 days prior to Ms. O'Gara's filing her first charge of harassment.

In about January of 1997, Mechanics' employee Robin Fay, who worked in the Payroll Department, complained about sexual harassment by Mr. Hardman. (Hardman Dep. Ex. 29; Peterson Dep. at 43-44.)²⁸ Ms. Fay complained to Mike Pinnick, a staff accountant, who reported the matter to Mr. Peterson. (Peterson Dep. at 46-50.) Mr. Peterson wrote a memorandum to Mr. Hardman stating that Ms. Fay complained that Mr. Hardman was in payroll quite frequently and commenting how nice she looks, the way she dresses, and that at one point Mr. Hardman put his arm around her and kissed her on the head. (Hardman Dep., Ex. 29; Peterson Dep. at 43-44.)²⁹ Also in that memorandum, Mr. Peterson wrote that Ms. Fay was quite shocked and upset by Mr. Hardman's behavior, and that Mr. Peterson talked to Ms. Fay and told her that he would make sure that nothing of this nature would occur again and that Mr. Peterson would relay the information to Mr. Hardman. (Hardman Dep., Ex. 29.)³⁰ Mr. Peterson's memorandum noted that in a prior conversation between Mr. Peterson and Mr. Hardman, Mr. Hardman stated that he did not remember nor did he feel that he actually ever kissed her on the head, but they agreed that Mr. Hardman would not go into the payroll department in the future. ( Id.)³¹ Mr. Peterson also advised Mr. Hardman of the extreme importance of avoiding any action or conversation which would raise any question on the part of another employee. ( Id.)³² Mr. Peterson reported Ms. Fay's complaint to Philip French, because at the time Mr. Hardman was working for Philip French. (Peterson Dep. at 45.)³³

28 Defendants object that this fact is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401, and is inadmissible under Federal Rule of Evidence 403 because Ms. O'Gara was not affected by the incident.

29 Defendants again object that this fact is inadmissible pursuant to Federal Rules of Evidence 401 and 403.

30 Defendants again object that this fact is inadmissible pursuant to Federal Rules of Evidence 401 and 403.

31 Defendants again object that this fact is inadmissible pursuant to Federal Rules of Evidence 401 and 403.

32 Defendants again object that this fact is inadmissible pursuant to Federal Rules of Evidence 401 and 403.

33 Defendants again object that this fact is inadmissible pursuant to Federal Rules of Evidence 401 and 403.

On about August 1, 1997, Mr. Hardman entered a room wherein Ms. O'Gara was sitting alone, and put his hand on Ms. O'Gara's bare leg,³⁴ rubbed it from her ankle all the way up her thigh, and said, "Oh, soft." ( Id. at 120.) Ms. O'Gara told Mr. Hardman not to ever do that, that she was not that type of person, and that he cannot do that to her. ( Id. at 120.) Ms. O'Gara reported this incident to management trainee John Mueller. ( Id. at 120, 122).

34 Ms. O'Gara was wearing shorts.

After this incident, Ms. O'Gara felt that Mr. Hardman was trying to avoid her, and would not talk to her "[u]nless he absolutely had to." ( Id. at 206-07.) She noticed that if Mr. Hardman had something to do with the stockroom, he would not come to Ms. O'Gara (who was the stockroom manager), but rather, went to one of the management trainees, which Ms. O'Gara felt hindered her in her job, because if she did not know about the problem, she could not do her job. ( Id. at 206.) Because Mr. Hardman was in charge of telling people of the changes coming from Phil French, she felt that when Mr. Hardman avoided her, it hindered her in her job. ( Id. at 254.)

In October or November of 1997, Mr. Hardman came to Ms. O'Gara in the middle of the plant, with a tape measure in his hand. He put his hand on her right hip and said "Let me measure you from hip to toe." ( Id. at 127.) Ms. O'Gara, who felt "very uncomfortable", removed his hand from her hip with her hand, and told him that she could measure herself. ( Id. at 127-129.)

Other Mechanics' employees complained to Ms. O'Gara about Mr. Hardman. ( Id. at 130, 141.) A stockroom employee named Debra Davis complained that Mr. Hardman came up behind her and started rubbing her shoulders and back. ( Id. at 143.)³⁵ Another employee named Linda Navarro told Ms. O'Gara on multiple occasions in 1997 that when Ms. Navarro was sitting at her receptionist desk, Mr. Hardman would come up and comment on how she looked and would touch her on the shoulders and arm and make comments on her skirts. ( Id. at 143-45.)³⁶ Ms. O'Gara testified that "[i]t was common knowledge throughout the plant" that Mr. Hardman and a stockroom employee, Leah Anderson, were "having an affair." ( Id. at 163-64.)³⁷ At one point, when Mr. Hardman was talking to Ms. Anderson for an hour, during which time she had stopped working, Ms. O'Gara's other employees asked Ms. O'Gara, "[I]f she doesn't have to work for an hour, why do we?" ( Id. at 249.)³⁸

35 Defendants object that this statement is inadmissible hearsay. However, it appears that Ms. Davis reported this incident to Ms. O'Gara at least in part because Ms. O'Gara was a manager. (O'Gara Dep. at 130.) Therefore, Defendants' hearsay objection is overruled pursuant to Federal Rule of Evidence 801(d)(2)(D) (statement by Mechanics' employee within the scope of her employment).
Defendants also object that this fact is inadmissible pursuant to Federal Rule of Evidence 401, and under Rule 403 because Ms. O'Gara was not affected by the incident.

36 Defendants again object that this statement is inadmissible hearsay. Again, Defendants' hearsay objection is overruled pursuant to Federal Rule of Evidence 801(d)(2)(D) (statement by Mechanics' employee within the scope of her employment).
Defendants also again object that this fact is inadmissible pursuant to Federal Rule of Evidence 401, and under Rule 403 because Ms. O'Gara was not affected by the incident.

37 Defendants object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

38 Defendants again object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

Ms. O'Gara was very uncomfortable coming forward with the information about Mr. Hardman, who worked in the corporate office and was the assistant to Philip French, son of owner Darroll French. ( Id. at 162, 205; Graham Aff. ¶ 33.)³⁹

39 Defendants again object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

Mechanics did not conduct any education programs for its employees related to sexual harassment. (Peterson Dep. at 163.)⁴⁰ Darroll French, the owner and operator of the company, could not remember any policy on sexual harassment. (Darroll French Dep. at 89.)⁴¹ Ms. O'Gara testified that she had not seen a sexual harassment policy before Mr. Graham distributed one in January of 1998. (O'Gara Dep. at 146-47, 236-37.)

40 Defendants again object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

41 Defendants again object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

On January 8, 1998, Mr. Graham observed Mr. Hardman and Ms. Anderson leaving the plant together. (Graham Aff. ¶ 28; Graham Dep. at 233.)⁴² Because Mr. Graham felt that a sexual relationship between a male supervisor and a female subordinate indicated that Mechanics may have problems, the following day, January 9, 1998, Mr. Graham asked Ms. O'Gara, Ms. Anderson's supervisor, if there was a relationship. (Graham Aff. ¶¶ 30-31; O'Gara Dep. at 140-141.) Ms. O'Gara told him that the relationship was well known in the plant, and she also proceeded to tell Mr. Graham about Mr. Hardman rubbing her leg. (Graham Aff. ¶ 31; O'Gara Dep. at 140-41.) Ms. O'Gara also told Mr. Graham about the above-described incidents involving her and Mr. Hardman, Mr. Denton, Mr. Pont, and Mr. Schneider. (O'Gara Dep. at 141.) She also reported to Mr. Graham about the other employees who had complained to her about Mr. Hardman (as described above). ( Id. at 130, 141.)

42 Defendants again object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

On January 12, 1998, Mr. Graham called Mechanics' Human Resources Manager about the above facts, and the Human Resources Manager recommended that Mr. Graham contact Mr. Peterson. (Graham Aff. ¶ 34.) Mr. Graham did so, and on January 15, 1998, he told Mr. Peterson about the incidents Ms. O'Gara related to Mr. Graham about Mr. Hardman. (Graham Aff. ¶ 39; Peterson Dep. at 55.)

Mr. Peterson interviewed Ms. O'Gara and Ms. Navarro on January 15, 1998, and they reported the above-described incidents involving Mr. Hardman. (Graham Aff. ¶ 42; Peterson Dep. at 67.) Mr. Peterson also talked to another female stockroom employee who complained that Mr. Hardman "was hanging around close to her and making her feel uncomfortable." (Peterson Dep. at 59-60.)⁴³ Mr. Peterson told Ms. O'Gara and Mr. Graham that he was going to talk to Philip French about the reported incidents. (O'Gara Dep. at 256.) Mr. Peterson also talked to Mr. Hardman about the complaints of Ms. O'Gara, Ms. Davis, and Ms. Navarro. (Hardman Dep. at 100-05.)

43 The cited deposition pages were not included in any parties' evidentiary submissions. However, this fact is admitted without objection by Defendants, so the court will consider it.

At his deposition, Mr. Hardman admitted that while employed at Mechanics, he frequently hugged female employees. ( Id. at 109.) Mr. Hardman also stated that he had no reason to doubt Ms. Fay's statement that he kissed her, but he stated that he did not remember kissing her. ( Id. at 110.)⁴⁴ Of the three employees with whom he was accused of having sexual affairs, Mr. Hardman denied having sex with two of them, including Ms. Anderson. ( Id. at 92, 110, 126; Graham Dep., Ex. 48.)⁴⁵

44 Defendants object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

45 Defendants again object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

Mr. Peterson testified that although Mr. Hardman would not admit the affair with Ms. Anderson, based on his interview with him, Mr. Peterson felt that Mr. Hardman did have an affair with Ms. Anderson. (Peterson Dep. at 121.)⁴⁶ Mr. Peterson did not interview Ms. Anderson. ( Id.)⁴⁷ Mr. Peterson talked to Philip French about whether to terminate Mr. Hardman, but they did not do so, because they were in negotiations to sell the company to Cintas and they did not want to disrupt any key management unless they had to. ( Id. at 71-72.)

46 Defendants again object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

47 Defendants again object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

On January 16, 1998, the day after Mr. Graham reported the alleged sexual harassment by Mr. Hardman, Philip French told Mr. Graham that he knew about Mr. Graham's "conversation with Peterson on the personnel issues." (Graham Aff. ¶ 43.) Philip French then criticized Mr. Graham's work performance and took away his responsibility for the operation of the plant and stockroom. ( Id.; Graham Dep. at 259-60; Hardman Dep. at 52; Peterson Dep. at 78.) Mr. Hardman replaced Mr. Graham as the general manager of the Koweba plant. (Philip French Dep. at 73, 99; Wright Dep. at 94-95.) Mr. Graham was assigned to be responsible for sales and service of contracts, and to spend time with financial statements identifying cost savings for the Koweba plant. (Philip French Dep. at 99; O'Gara Dep. at 188.)

The criticism which Mr. Graham received from Philip French on that day was of an unusual nature in that Mr. Graham had not experienced such criticism before that time. (Graham Aff. ¶¶ 44, 49.)⁴⁸ Also, prior to that time, Mr. Graham had received no discipline of any kind, or taking away of responsibilities. (Graham Aff. ¶ 46.) Indeed, before that time, Mr. Graham's performance with Mechanics was always rated by Mechanics as excellent and Mr. Graham had consistently received promotions from Mechanics. (Graham Aff. ¶ 47.)

48 Defendants "deny" this assertion. But on summary judgment, it is irrelevant that Defendants deny Plaintiffs' proffered facts. The inquiry is only whether Plaintiffs produce admissible evidence which supports their asserted statements of fact and whether this proffered evidence creates a genuine issue of material fact. Mr. Graham's affidavit is sufficient to create an issue of fact as to whether he ever received such criticism before Philip French criticized Mr. Graham's performance in January 1998.
The court notes that Defendants' evidence in opposition to Mr. Graham's statement consists of the following: a memo written by Mr. Graham in 1996 reiterating Mr. Graham's earlier criticism of a "Corporate directive" (Graham Dep., Ex. 41; Graham Dep. at 217-19); a document dated February 20, 1998, indicating that Mr. Graham would receive no bonus for the last quarter of 1997 due to poor profits during that time (Graham Dep., Ex. 30); and deposition testimony from Philip French indicating the he had problems with Mr. Graham's performance in January 1998 and thereafter. (French Dep. at 72-83, 99, 115-16.) None of this evidence shows that Mr. Graham ever received criticism from anyone at Mechanics (other than perhaps himself — Graham Dep., Ex. 41) before January 1998.

Mr. Graham blames the poor profits of the Koweba plant (which was the primary focus of Philip French's criticisms) on the fact that it was an "experimental plant" in which Philip French, Mr. Hardman, and Darroll French were "constantly making changes and doing construction, which caused disruption." (Graham Aff. ¶¶ 50, 52; Hardman Dep. at 74; Wright Dep. at 84, 104-05.) Also, the Koweba plant was given a large distribution area by upper management (Graham Aff. ¶ 51), which "maybe" was too broad and too long. (Wright Dep. at 90.)⁴⁹ Numerous problems existed at the Koweba plant for a "number of years" before David Graham became general manager: the plant never made its profit budget, the stockroom did not run efficiently, merchandise cost was high, and there was high labor turnover. (Hardman Dep. at 53-54, 58-60.)

49 Defendants object that this statement is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

According to Mr. Wright, Mechanics' Senior Vice-President, because of the "disruptions" at the Koweba plant, Mechanics "couldn't have held [Mr. Graham] responsible to make the exact numbers that had been projected in [Mechanics'] budget," which led Mechanics to provide Mr. Graham with a guaranteed bonus (for the third quarter of 1997) in January 1998. (Wright Dep. at 104-05.) However, a week after Mechanics gave Mr. Graham this guaranteed bonus, Philip French took away Mr. Graham's responsibilities for the plant operation and stockroom operation at the Koweba plant. (Graham Aff. ¶¶ 54-55.)⁵⁰

50 Defendants object that this fact is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401, as well as Federal Rule of Evidence 602 because Plaintiff failed to establish the proper evidentiary foundation of personal knowledge of such facts.
With respect to the latter objection, Defendants fail to specify which portion of the proffered statement they contend Mr. Graham lacks personal knowledge on which to testify. Mr. Graham surely has personal knowledge of what his bonus was and what responsibilities were taken away from him. He also would appear to have personal knowledge of the timing of these events. With respect to the guaranteed bonus, the earlier cited testimony from Mr. Wright confirms the fact that it was guaranteed in January 1998 because Mr. Graham "couldn't have [been] held . . . responsible to make the exact numbers that had been projected in [the] budget." (Wright Dep. at 104-05.) And the fact that Philip French took away Mr. Graham's responsibilities for the plant operation and stockroom operation at the Koweba plant is established by numerous cited sources. (Graham Dep. at 259-60; Hardman Dep. at 52; Peterson Dep. at 78.) Therefore, Defendants' Rule 602 objection is overruled.

On January 16, 1998 (the day after Ms. O'Gara was interviewed by Mr. Peterson about the alleged sexual harassment, and the same day Mr. Graham was demoted), Philip French told Mr. Graham that Ms. O'Gara was demoted immediately from stockroom manager to lead operator. (Graham Aff. ¶ 57.)⁵¹ Ms. O'Gara was told that Will Horn, a management trainee with very little stockroom experience, was the new stockroom manager, and Ms. O'Gara's job was to teach Mr. Horn to be a stockroom manager. (O'Gara Dep. at 176.)⁵² In Ms. O'Gara's view, she "had no defined job duties" after the demotion ( id. at 168), although she also testified that she never had "a written job description that defined [her] duties" during her entire tenure at Mechanics. ( Id. at 169.) Mr. Graham testified that after Ms. O'Gara was demoted, she did not have the authority necessary to do her job. (Graham Aff. ¶¶ 58, 63.)⁵³ Philip French did not consider Ms. O'Gara's change in job title and job responsibility to be a "demotion", but "just a clarification of responsibilities." (Philip French Dep. at 83.) After the change, Ms. O'Gara's pay remained the same. ( Id.)

51 Defendants "deny" this fact, arguing that "[t]here was never a demotion, only a clarification of responsibilities. O'Gara's title should have been lead operator. . . ." (Defs.' Reply to Pls.' Statement of Additional Material Facts at 46 (citing French Dep. at 83).) However, for the purposes of their summary judgment motion, "Defendants do not challenge [Ms. O'Gara's] claim that she was Stockroom Manager at Koweba." (Br. in Supp. of Defs.' Mot. for Summ. J. at 2.) Moreover, Plaintiffs have produced sufficient evidence to create an issue of fact as to whether Ms. O'Gara's job title was that of Stockroom Manager, before it was changed back to Lead Operator in January 1998. (O'Gara Dep. at 261; Graham Aff. ¶ 60.)
And regardless of whether, in actuality, this change in job title constituted a "demotion" or not, the cited portion of Mr. Graham's affidavit reports that "Philip French told me that Ms. O'Gara was demoted immediately from stockroom manager to lead operator." (Graham Aff. ¶ 57.) This evidence (which is not the subject of any objection by Defendants) is sufficient to create an issue of fact as to whether Philip French made that statement.

52 Defendants object that this fact is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

53 Mr. Graham also testified that Ms. O'Gara "tried to do [her job] to the best of her ability." (Graham Aff. ¶ 58.) Defendants objection to this statement is sustained; he has not established how he is competent to testify as to what Ms. O'Gara's ability was, or whether she actually performed her job to the best of that ability.

On January 23, 1998, in a meeting of managers, Philip French stated to everyone present that Mr. Graham was no longer responsible for the plant operations and stockroom. (Graham Aff. ¶ 59.) At the same meeting, Philip French stated to everyone present that Ms. O'Gara "was no longer stockroom manager, that she was only a lead operator, that she was no better than Fanny or Myrtle, who were lower employees, and that she was to report to Will Horn." (Graham Aff. ¶ 60; O'Gara Dep. at 180.)⁵⁴ Philip French told Ms. O'Gara that she was to teach Mr. Horn everything that he needed to know to be stockroom manager. (O'Gara Dep. at 180.) At that meeting, Ms. O'Gara questioned Philip French as to why a person with so little experience was being placed in the stockroom manager position, and Mr. French stated that was "the way it was going to be" and "this is how I am to structure my business." (Graham Aff. ¶ 61; Graham Dep. at 275; O'Gara Dep. at 180.)

54 Defendants object that Mr. Graham does not have personal knowledge of whether "Fannie" and "Myrtle" were "lower employees". The court construes Mr. Graham's statement to mean that Philip French was indicating that Ms. O'Gara did not hold a higher (or supervisory) position over the two named employees, who presumably were lead operators. Mr. Graham, as the former general manager of the entire plant (having been demoted the prior week), would seem to be competent to testify about the positions of his former subordinates in the plant.

Philip French testified when he made these statements, "[Ms. O'Gara] had a look on her face like somebody had just pulled her heart out." (Philip French Dep. at 82.) Ms. O'Gara testified that she felt "humiliated, embarrassed, and demeaned." (O'Gara Dep. at 171, 260.) At some point in February 1998, Ms. O'Gara missed two or three days of work because of the humiliation she felt. ( Id. at 171.) Ms. O'Gara testified that despite her demotion, she was "going to . . . still do the best job that [she] could possibly do," but when she heard that Mr. Horn "went to the stockroom employees and told them that he has [Ms. O'Gara's] job now, so they no longer needed to come to [her] for anything," she felt that "management [was] working against [her]," and therefore felt that she had to resign. ( Id. at 262-63.) She also testified that she felt forced to resign from Mechanics because of Mr. Hardman's refusal to tell her information from Philip French. ( Id. at 267-69.)⁵⁵ When Ms. O'Gara gave her two-week notice in late-February 1998, none of the owners or members of the executive committee asked her to stay or asked why she was leaving. (Graham Aff. ¶ 69; O'Gara Dep. at 266-67.)⁵⁶

55 Mr. Graham also testified as to what he thought the reasons were for Ms. O'Gara's resignation (Graham Aff. ¶ 67), but he failed to support his opinion with a foundation for how he has personal knowledge of Ms. O'Gara's reasons for resigning, and therefore, Defendants objection to that testimony is sustained.

56 Defendants object that this fact is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

Defendants indicate that Ms. O'Gara was demoted from stockroom manager to lead operator because "[t]hroughout the time that O'Gara managed the stockroom, problems abounded" (Defs.' Local Rule 56.1 Statement of Material Facts at 4 (citing Graham Dep. at 217-19, Ex. 41; O'Gara Dep., Exs. 66-76)), and "O'Gara's poor performance [as stockroom manager] is well documented." (Defs.' Reply to Pls.' Statement of Additional Material Facts at 55 (citing O'Gara Dep., Exs. 66-76).) However, the cited materials do not support these statements. For example, Graham Deposition Exhibit 41 is a 1996 memorandum to two members of upper management (including Mr. Peterson) from Mr. Graham. In the memo, Mr. Graham criticizes the method of incentive pay calculation for stockroom workers. It is clear from the memo that the method was implemented by upper management, over Mr. Graham's objections, during the previous year. The implementation of the method occurred prior to Ms. O'Gara's promotion from lead operator to stockroom manager (Graham Aff. ¶¶ 76-79), and indeed, the only reference to Ms. O'Gara's job performance in that memo is exculpatory in nature: "[Ms. O'Gara] has been doing only that which she has received directions to do." (Graham Dep., Ex. 41.) In his deposition, Mr. Graham clarified that what he meant by this statement was that Ms. O'Gara had been doing what "prior management" (i.e., those in charge before Mr. Graham took over) had directed the stockroom manager to do. (Graham Dep. at 218.) Therefore, this evidence only supports Plaintiffs' assertions that the "problems in the Koweba stockroom . . . had been [present] for years before Ms. O'Gara became the stockroom manager and the problems continued after Ms. O'Gara was removed as stockroom manager" (Graham Aff. ¶ 74), and, those "problems in the stockroom were not the fault of Ms. O'Gara, but rather, were problems with the systems used by upper management." (Graham Aff. ¶ 75.)⁵⁷

57 Defendants object that the latter statement (i.e., Graham Aff. ¶ 75) is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401. The court notes however, that in Defendants' Statement of Material Facts, they cite to evidence purporting to show that "[t]hroughout the time that O'Gara managed the stockroom, problems abounded" (Defs.' Local Rule 56.1 Statement of Material Facts at 4), and imply that these problems led to Ms. O'Gara's demotion from stockroom manager to lead operator. Given Defendants' injection of this issue in the case as their legitimate reason for Ms. O'Gara's demotion, Plaintiffs' rebuttal evidence concerning these stockroom problems becomes relevant.
Defendants also object to the latter statement (i.e., Graham Aff. ¶ 75) on the grounds that Mr. Graham has not established a sufficient foundation for showing that he has personal knowledge that the "problems in the stockroom were not the fault of Ms. O'Gara, but rather, were problems with the systems used by upper management." This objection is also overruled because during the relevant time, Mr. Graham oversaw the operation of the stockroom. Indeed, in the sentence preceding Defendants' objection, Defendants state that "O'Gara's poor performance [as stockroom manager] is well documented," and in support, Defendants cite to eleven memos-ten of which were written by Mr. Graham, and the other was copied to Mr. Graham. (Defs.' Reply to Pls.' Statement of Additional Material Facts at 55 (citing O'Gara Dep., Exs. 66-76).) In other words, basically the Defendants' only source of evaluation of Ms. O'Gara's performance as a stockroom manager is Mr. Graham. Because of this reliance on Mr. Graham's memos, Defendants cannot succeed in denying that Mr. Graham has the personal knowledge necessary to evaluate Ms. O'Gara's performance and the cause of the problems in the stockroom.

The other materials relied upon by Defendants to support its assertion that Ms. O'Gara performed poorly as stockroom manager are eleven memos. (Defs.' Reply to Pls.' Statement of Additional Material Facts at 55 (citing O'Gara Dep., Exs. 66-76).) These memos, dated between August of 1997 and February of 1998, all contain directives as to various details in the stockroom. However, only two of the memos contain anything that could be fairly construed as criticism.⁵⁸ One memo, from Mr. Graham to Ms. O'Gara, indicates that there was a "variance in reported garment cost vs. actual cost in December," which Mr. Graham attributed to someone in the stockroom failing to make the proper notations for new business. (O'Gara Dep., Ex. 67.) He stated, "I am ultimately responsible and you are directly responsible for this." ( Id.) He also noted that the next month's notations "look good." ( Id.) The other memo, from Mr. Graham to Ms. O'Gara and another individual, indicate that the "quick turn orders" were not being completed fast enough, and concludes, "We need to execute better." (O'Gara Dep., Ex. 74 (emphasis in original).) Although both of these memos contain at least a degree of criticism of Ms. O'Gara, neither of them purport to evaluate Ms. O'Gara's overall performance.

58 The other nine memos contain simple directives of things to do in the future, without any accompanying criticism of what Ms. O'Gara (or anyone else) had been doing in the past.

Plaintiffs counter with six exhibits which show that Ms. O'Gara was rated as an "excellent employee" throughout her tenure at Mechanics by Mr. Graham, as well as by her previous supervisors. (Peterson Dep., Exs. 4-10.) For instance, one exhibit, a "salary increase request form" completed by Mr. Graham states that Ms. O'Gara should be given a raise in part because "[s]ecurity of this person is vital to insure continuity in a stockroom that has improved in every facet since she took charge on 7-8-96." (Peterson Dep., Ex. 6.) Mr. Graham also testified that "Ms. O'Gara was one of the hardest working and best performing employees at the Koweba plant." (Graham Aff. ¶ 73.) Even Philip French testified that Ms. O'Gara "was always a very good employee." (Philip French Dep. at 67, 82.)

Mechanics reported to Cintas (with whom Mechanics was in negotiations) in February or March that Mechanics had a possible liability relating to Mr. Graham's threat of a lawsuit over his demotion, which he claimed was due to his reporting of Mr. Hardman's alleged sexual harassment. (Peterson Dep. at 72-73.)⁵⁹

59 Defendants object that this information is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

Mechanics terminated Mr. Graham on April 1, 1998, the day before Cintas (which was planning purchase Mechanics' operations) was scheduled to interview with Mr. Graham. (Graham Aff. ¶ 84; Wright Dep. at 100.) Philip French and Darroll French decided to terminate Mr. Graham from Mechanics because they "were not happy with the overall performance . . . [of] the Koweba plant." (Wright Dep. at 100-02.) Philip French also heard that Mr. Graham was interviewing with other employers⁶⁰ and was telling other management employees that Mechanics was going to be brought by another corporation and that they should also begin interviewing with other employers. (French Dep. at 102-06, 108-09.) Philip French believed this information, and therefore felt that Mr. Graham lied when he told Mr. Wright that he was not interviewing elsewhere. (French Dep. at 102-03.) Mr. Wright voted against Mr. Graham's termination because of the timing, since Mechanics was selling the company. (Wright Dep. at 106.

60 In fact, Mr. Graham had begun interviewing with other employers. He used two business days in March 1998 to interview in Georgia and Minnesota with competitors of Mechanics. (Graham Dep. at 31, 37-38.)

Philip French and Mr. Wright went to the Koweba plant on April 1, 1998 and informed Mr. Graham that his services were going to be terminated. (Wright Dep. at 101; Graham Aff. ¶ 89.) Philip French waived his finger in Mr. Graham's face and said that he "could have humiliated Mr. Graham even more at the January 23 meeting", but he did not. (Graham Aff. ¶ 90; Graham Dep. at 272.)⁶¹

61 Defendants object that this statement is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

Philip French was aware that another Mechanics employee, Eric Brenner, actively sought employment elsewhere at the time of the sale of Mechanics to Cintas, but Mr. Brenner was not terminated or disciplined by Mechanics. (Graham Aff. ¶¶ 91-92; Philip French Dep. at 112.)

Mr. Graham was not paid vacation pay when it was due, and Mr. Graham had to ask more than once before it was paid to him late. (Graham Aff. ¶ 119; Peterson Dep. at 152.)⁶²

62 Defendants deny Mr. Graham's assertion that Mr. Graham had to ask for his overdue vacation pay more than once before it was paid to him. As support, they point to Mr. Peterson's testimony that although Mr. Graham's vacation pay "was not paid when it should have been, . . . when [Mr. Graham] told me [that the vacation pay was not paid when due], we paid it." (Peterson Dep. at 152-53.) However, on summary judgment, it is irrelevant that Mr. Peterson disputes Mr. Graham's assertion that Mr. Graham had to ask for his overdue vacation pay more than once. Defendants do not claim that Mr. Graham's assertion that he asked more than once is inadmissible, and therefore it is sufficient to create an issue of fact on this point.

Mechanics also did not pay any severance pay to Mr. Graham. (Graham Aff. ¶¶ 114, 120.) As a part of the merger of Mechanics with Cintas, Mechanics was required to disclose potential liabilities to Cintas. (Graham Aff. ¶ 111.) The disclosure statement for April 30, 1998 also states that the Mechanics "[b]alance sheet reflects accrual of twenty-six weeks of severance pay to Graham which amount may be subject to contest and is subject to offset against note receivable from Graham with current principal balance of $6,480.00." (Graham Aff. ¶ 113; Darroll French Dep. at 93-94.)

Other than Mr. Hardman being told by Mr. Peterson that he "might lose his job," Mechanics (and after the sale of Mechanics in April or May of 1998, Cintas) took no action against Mr. Hardman because of the above-stated complaints. (Peterson Dep. at 72; Graham Aff. ¶ 65; Wright Dep. at 34; Hardman Dep. at 126.) Philip French discussed the situation with Mr. Peterson and determined that no further action should be taken against Mr. Hardman. (Philip French Dep. at 46-47.) Mechanics did not tell Mr. Graham, Ms. O'Gara, or any of the other complainants of any investigation, response, or corrective action to their complaints. (Peterson Dep. at 144; Graham Aff. ¶ 66.)⁶³

63 Defendants object that this fact is inadmissible because it is irrelevant pursuant to Federal Rule of Evidence 401.

The employees at the Koweba plant, including Mr. Hardman, were automatically hired by Cintas, when Cintas purchased Mechanics in April or May of 1998. (Hardman Dep. at 44-47; Graham Aff. ¶ 86.) Mr. Hardman continued to work for Cintas, until December of 1998, when Philip French hired him to work for Philip French's new employer, Progress Linen. (Hardman Dep. at 76.)

In 1998, both Mr. Graham and Ms. O'Gara filed charges of discrimination with the EEOC against Mechanics and Cintas. (Graham Aff. ¶¶ 115-17; O'Gara Dep. at 118, 184, 186.) This lawsuit followed.

III. Direct Claims Against Cintas

Defendants argue that while Cintas has successor-in-interest responsibility for Mechanics' actions towards Plaintiffs, Cintas should have no liability greater than that of Mechanics. Neither Plaintiff ever worked for Cintas nor applied for a position with Cintas; prior to the time Cintas bought Mechanics, Ms. O'Gara resigned and Mr. Graham was fired.

Plaintiff's respond by arguing that Cintas not only has successor-in-interest liability, but also liability for failing to take appropriate remedial action after taking over Mechanics. There is no evidence that once Cintas took over, Cintas investigated the Plaintiffs' allegations or took any action against Mr. Hardman. And Darroll French testified that he did nothing about Ms. O'Gara's EEOC charge because "[t]he company was sold. It's a Cintas problem." (Darroll French Dep. at 81.)

However, the Seventh Circuit has held that "failure to correct a violation of federal law is not itself a violation of that law." Librizzi v. Children's Mem'l Med. Ctr., 134 F.3d 1302, 1306 (7th Cir. 1998) (citing Lever v. Northwestern Univ., 979 F.2d 552, 557 (7th Cir. 1992)); see also Speer v. Rand McNally Co., 123 F.3d 658, 664 (7th Cir. 1997) ("[A]n employer's refusal to undo a discriminatory decision is not a fresh act of discrimination.") (quoting Graehling v. Village of Lombard, 58 F.3d 295, 296-97 (7th Cir. 1995)). Therefore, to the extent Plaintiffs claim that Cintas is independently liable for failing to take remedial action, Defendants' motion for summary judgment as to that claim will be GRANTED.

IV. Ms. O'Gara's Sexual Harassment Claim

Defendants contend that summary judgment is appropriate for Ms. O'Gara's sexual harassment claim because the conduct to which she was subjected does not constitute actionable sexual harassment. However, before determining whether Ms. O'Gara was subjected to a hostile environment, the court must first decide which factual allegations should be considered.

Ms. O'Gara claims that she suffered various acts of harassment for a period of between two and three years (from sometime in 1995 through late-1997). Defendants seek to exclude evidence of the majority of those acts because of the requirement that a plaintiff file a charge with the EEOC within 300 days of an alleged act of harassment, discrimination or retaliation.

A. 300-Day Limitations Period

A prerequisite to suit under Title VII is the filing of a charge with the EEOC. See, e.g., Galloway v. General Motors Serv. Parts Operations, 78 F.3d 1164, 1166 (7th Cir. 1996). In a "deferral state," such as Indiana, a plaintiff usually must file this charge within 300 days of the occurrence of the event that forms the basis of the Title VII complaint. See 42 U.S.C. § 2000e5(e)(1); Doe v. R.R. Donnelley Sons Co., 42 F.3d 439, 445 (7th Cir. 1994) (Indiana case).

Ms. O'Gara filed her first EEOC charge against Mechanics on April 28, 1998. (O'Gara Dep. at 118.) Three hundred days prior to the filing of that charge was July 2, 1997. Thus applying the general rule, Ms. O'Gara may not seek relief for alleged harassment/discrimination/retaliation that occurred before July 2, 1997. However, there is one exception to this general rule which operates to toll the 300-day limitations period: the "continuing violation" theory.

B. Continuing Violation Theory

In United Air Lines, Inc. v. Evans, 431 U.S. 553, 558 (1971), the Supreme Court held that a Title VII plaintiff may recover for acts barred by the statute of limitations if she can show a "continuing violation." The Seventh Circuit has defined a "continuing violation" as "one that could not reasonably have been expected to be made the subject of a lawsuit when it first occurred because its character as a violation did not become clear until it was repeated during the limitations period."⁶⁴ See Dasgupta v. University of Wisc. Bd. of Regents, 121 F.3d 1138, 1139 (7th Cir. 1997). "The clearest examples [of "continuing violations"] involve sexual harassment, where . . . duration is often necessary to convert what is merely offensive behavior, and therefore not actionable under Title VII into an actionable alteration in the plaintiff's working conditions." Id. (citations omitted). "Under the continuing violation doctrine, a consistent pattern of harassment is treated as `one continuous act that ends within the limitations period.'" Wilson v. Chrysler Corp., 172 F.3d 500, 510 (7th Cir. 1999) (quoting Selan v. Kiley, 969 F.2d 560, 564 (7th Cir. 1992)). The rationale for the theory is that "it would be unreasonable to require the plaintiff to sue separately where it is the cumulative effect of a series of violations that renders her working conditions intolerable." See id. (citing Malhotra v. Cotter Co., 885 F.2d 1305, 1310 (7th Cir. 1989)); see also Hardin v. S.C. Johnson Son, Inc., 167 F.3d 340, 344 (7th Cir. 1999) (noting that the continuing violation "doctrine . . . may be used when, after an initial incident of discrimination, a plaintiff does not feel `sufficient distress to . . . mak[e] a federal case.'") (quoting Galloway, 78 F.3d at 1166)). But even with the operation of the continuing violation theory, "the plaintiff must sue `as soon as the harassment becomes sufficiently palpable that a reasonable person would realize she had a substantial claim under Title VII.'" See id. (citing Galloway, 78 F.3d at 1166). The Galloway court discussed the proper use of the continuing violation theory as follows:

64 The Seventh Circuit has discussed three applications of the continuing violation theory: (1) cases typically involving hiring or promotion practices, where an employer's decision-making process occurs over a period of time; (2) cases where an employer has an express policy alleged to be discriminatory; and, (3) cases involving an ongoing, "serial violation", "evidenced only by a series of discrete, allegedly discriminatory acts." Selan v. Kiley, 969 F.2d 560, 565 (7th Cir. 1992) (quoting Stewart v. CPC Int'l, Inc., 679 F.2d 117, 121 (7th Cir. 1982)); see also Jones v. Merchants Nat'l Bank Trust Co. of Indianapolis, 42 F.3d 1054, 1058 (7th Cir. 1994). Only the third application of the doctrine is applicable to the instant action.

Sexual harassment serious enough to constitute unlawful discrimination on grounds of sex is often a cumulative process rather than a one-time event. In its early stages it may not be diagnosable as sex discrimination, or may not cross the threshold that separates the nonactionable from the actionable, or may not cause sufficient distress to be worth making a federal case out of, or may not have gone on long enough to charge the employer with knowledge and a negligent failure to take effective remedial measures. (And such knowledge and such failure normally are prerequisites to the employer's being made liable for the harassment.) We do not want to encourage premature or precipitate litigation. If the victim of sexual harassment sues as soon as the harassment becomes sufficiently palpable that a reasonable person would realize she had a substantial claim under Title VII, then she sues in time and can allege as unlawful conduct the entire course of conduct that in its cumulative effect has made her working conditions unbearable. We emphasize the bearing on this principle of the safe harbor that we created in Baskerville [ v. Culligan Int'l Co., 50 F.3d 428 (7th Cir. 1995)] for employers accused of failing to prevent low-level harassment. The effect of that decision is that victims of harassment will often be required to wait and see whether the harassment persists or escalates to a level at which the ship leaves the harbor.

78 F.3d at 1166.

In order for there to be a continuing violation, as a threshold matter, at least one of the allegedly wrongful acts must occur within the 300-day limitations period, thus serving as an anchor that brings the plaintiff's otherwise-untimely allegations within the limitations period. See Selan, 969 F.2d at 564; see also Speer v. Rand McNally Co., 123 F.3d 658, 663 (7th Cir. 1997). In the present case, two of the alleged incidents occurred within the 300-day period: on August 1, 1997, Mr. Hardman rubbing his hand from Ms. O'Gara's ankle to her upper thigh, saying, "Oh, soft" (O'Gara Dep. at 120); and, in October or November of 1997, Mr. Hardman putting his hand on Ms. O'Gara's hip and saying, "Let me measure you from hip to toe." ( Id. at 127.)

Also, for the continuing violation doctrine to apply, there must be a "sufficiently close nexus" between and among the allegedly discriminatory acts in order for there to be a continuing violation, rather than "merely discrete, isolated, and completed . . . individual violations." Doe, 42 F.3d at 446 (quotation and citation omitted). In Selan, the Seventh Circuit listed three factors to consider in determining whether a nexus is sufficiently close to justify extending the limitations period. See Selan, 969 F.2d at 565. The first factor relates to subject matter: "Do the alleged acts involve the same type of discrimination, tending to connect them in a continuing violation?" Id. The second factor relates to frequency: "Are the alleged acts recurring . . . or more in the nature of an isolated work assignment or employment decision?" Id. And the third factor relates to permanence: "Does the act have the degree of permanence which should trigger an employee's awareness of and duty to assert his or her rights . . .?" Id.; see also Filipovic v. K R Exp. Sys., Inc., 176 F.3d 390, 397 (7th Cir. 1999) ("[I]m making th[e] determination [of whether "the allegedly discriminatory acts which occurred outside the limitations period were related closely enough to constitute a continuing violation with those occurring within the limitations period",] courts consider whether the acts involve the same subject matter, the frequency at which they occur, and the degree of permanence of the alleged acts of discrimination.") (citing Selan, 969 F.2d at 565).

In the present case, Ms. O'Gara argues that the following acts constitute a continuing hostile-environment sexual-harassment violation:

The complaint in the late 1980s or early 1990s against Mr. Hardman by Pam Stroub, a Mechanics employee, alleging sexual harassment.

— The Fort Wayne plant manager's statement on May 26, 1993, that multiple women had complained to him about having their breasts and buttocks rubbed by Mr. Hardman and that a female employee and Mr. Hardman were having a sexual relationship.

— In 1995, Carl Denton, general manager at the Koweba Lane plant, "would . . . come up [to Ms. O'Gara], give [her] a hug, pat [her] on [her] butt, [and] say lewd comments to [her]", such as, "`I'd love to see you with your shirt off.'" (O'Gara Dep. at 132-33.)

— Also in 1995, Brad Schneider, plant manager at the Koweba Lane plant, told Ms. O'Gara that he wished she was not married "because he'd sure jump in line," and he asked her what he could do to make her leave her husband. ( Id. at 104, 135-36.)

In 1995 or 1996, Jeff Pont, a management trainee, made "lewd comments" to the female employees, including Ms. O'Gara. ( Id. at 133-34.) He made these comments to her every chance he talked to her, which was probably 15 to 20 times. ( Id. at 134.) Also, on a couple of occasions, Mr. Pont hugged Ms. O'Gara, and on one occasion, Mr. Pont rubbed her shoulders. ( Id. at 133-34.)

During Ms. O'Gara's tenure at Mechanics, the managers referred to all female employees as "Bettys," and would say things like "You sure look fine, Betty" and "Boy, I'd sure like to get down with you, Betty." ( Id.)⁶⁵

Ms. O'Gara testified that "in [19]96, when [Mr. Hardman] started coming around to the Koweba facility [where Ms. O'Gara worked] more and more, . . . he would come up, nudge you, give you a little shoulder hug, say comments about how you look, things that made me feel very uncomfortable." ( Id. at 121, 205.)

— Mechanics' employee Robin Fay complained to Mike Pinnick and Mr. Peterson in about January of 1997, that Mr. Hardman commented on how nice she looked, the way she dressed, and that at one point, put his arm around her and kissed her on the head.

On about August 1, 1997, Mr. Hardman entered a room where Ms. O'Gara was sitting alone, and put his hand on Ms. O'Gara's bare leg (she was wearing shorts), rubbed it from her ankle all the way up her thigh, and said, "Oh, soft." ( Id. at 120.)

— After the August 1, 1997 incident (and Ms. O'Gara's subsequent rebuke), Mr. Hardman avoided Ms. O'Gara, and arguably interfered with her job as a manager by not telling her the directives coming from Philip French.

— In October or November of 1997, Mr. Hardman put his hand on Ms. O'Gara's right hip and said "Let me measure you from hip to toe." ( Id. at 127.)

— Debra Davis, a stockroom employee, complained to Ms. O'Gara that Mr. Hardman came up behind Ms. Davis and started rubbing her shoulders and back.

— Linda Navarro, another Mechanics employee, complained to Ms. O'Gara that on multiple occasions in 1997, Mr. Hardman commented on her skirts and how she looked, and would touch her on her shoulders and arm.

— In 1997, Mr. Hardman would talk to one of Ms. O'Gara's employees at length in an "overly-friendly manner," and at one point, when Mr. Hardman had been talking to her for an hour, Ms. O'Gara's other employees asked Ms. O'Gara, "[I]f she doesn't have to work for an hour, why do we?" ( Id. at 249.)

65 As indicated earlier, it is unclear from Ms. O'Gara's deposition testimony whether multiple managers made these comments, or whether only Mr. Pont made the comments. The court will assume that multiple managers made these comments since the court must view the evidence in the light most favorable to Ms. O'Gara, and since Defendants "admit" that the cited testimony supports that proposition. (Defs.' Reply to Pls.' Statement of Additional Material Facts at 23.)

As an initial matter, the complaints in the late 1980s and up to May 1993 against Mr. Hardman clearly cannot be said to be part of a continuing violation with the subsequent events. After the complaints on May 26, 1993, there is no record of any sexually harassing activity by any Mechanics employee until 1995. Such a gap in time strains Selan's frequency requirement to the point of breaking. See Filipovic, 176 F.3d at 397 ("[A] two-year gap between allegedly discriminatory incidents `weighs heavily against finding a continuing violation.'") (quoting Selan, 969 F.2d at 567); Garrison v. Burke, 165 F.3d 565, 570 (7th Cir. 1999) (same).

More importantly, any alleged incidents occurring prior to 1994 are simply irrelevant to Ms. O'Gara's sexual harassment claim because there is no evidence that these incidents could have altered Ms. O'Gara's conditions of employment (which, as will be discussed shortly, is a requirement for recovery under Title VII). Ms. O'Gara was hired by Mechanics on December 22, 1994. (Peterson Dep. Ex. 7.) There has been no showing that Ms. O'Gara knew about these incidents in her capacity as a Mechanics employee, and moreover, the incidents occurred in a different city (Fort Wayne) than the one where Ms. O'Gara spent her career with Mechanics. See Pryor v. Seyfarth, Shaw, Fairweather Geraldson, ___ F.3d ___, No. 99-2280, 2000 WL 568330, at *1 (7th Cir., May 11, 2000) ("Insofar as Woodford harassed other employees, and did so without (so far as appears) [plaintiff's] knowledge, it could not have altered her conditions of employment, and so she could not complain about that harassment under Title VII. At argument her lawyer told us that Woodford had leered at her without her knowing it, and he adduced this as evidence that Woodford's harassment was `pervasive.' It was actually irrelevant.") (emphasis in original) (citations omitted).

So the incidents occurring before Ms. O'Gara's employment with Mechanics are irrelevant because they "could not have altered her conditions of employment."⁶⁶ Id. It appears that the complaint by Mechanics' employee Robin Fay in January of 1997 (that Mr. Hardman commented on how nice she looked, the way she dressed, and that at one point, put his arm around her and kissed her on the head) is also irrelevant for the same reason. There is no evidence that Ms. O'Gara had any knowledge of the complaint or the alleged incident(s) on which the complaint was based. The complaint was made to Mike Pinnick and Mr. Peterson and Ms. Fay worked in a different department than Ms. O'Gara.

66 It is conceivable that early complaints of sexual harassment against Mr. Hardman to Mechanics' upper management would be relevant to rebut a defense by Mechanics it had no knowledge of Mr. Hardman's behavior. But first of all, Defendants would have to assert such a defense. (On summary judgment, Defendants do not.) And moreover, such a defense would not be applicable if Mr. Hardman were considered to be higher than Ms. O'Gara in the Mechanics' supervisory chain (as appears to be the case). This is because pursuant to Faragher v. City of Boca Raton, 524 U.S. 775, 806-08 (1998), an employer is subject to vicarious liability for a supervisor's sexual harassment (subject to certain defenses which do not appear to be asserted by Defendants here). Therefore, it seems unlikely that these early complaints would be admissible in a trial in this case.
Although Plaintiffs do not argue this point, it is worth noting that these pre-1995 complaints do not appear to be relevant to Mr. Graham's claims either. There is no indication that Mr. Hardman's alleged acts of harassment in the late 1980s and early 1990s (or Mr. Graham's involvement in the subsequent complaints about them) played any role in the alleged retaliation against Mr. Graham in 1998.

But with respect to the remainder of the above-listed incidents, it appears that the application of the continuing violation doctrine is appropriate. As the court in Galloway stated:

If the victim of sexual harassment sues as soon as the harassment becomes sufficiently palpable that a reasonable person would realize she had a substantial claim under Title VII, then she sues in time and can allege as unlawful conduct the entire course of conduct that in its cumulative effect has made her working conditions unbearable. We emphasize the bearing on this principle of the safe harbor that we created in Baskerville for employers accused of failing to prevent low-level harassment. The effect of that decision is that victims of harassment will often be required to wait and see whether the harassment persists or escalates to a level at which the ship leaves the harbor.

Galloway, 78 F.3d at 1166 (emphasis added) ("In its early stages [sexual harassment] . . . may not cross the threshold that separates the nonactionable from the actionable, or may not cause sufficient distress to be worth making a federal case out of. . . .") (citing Baskerville, 50 F.3d at 431). The court assumes that a "substantial claim" means something approximating an actionable claim. So, for example, if Ms. O'Gara had pursued a lawsuit against Mechanics in 1995, after Mr. Denton first hugged Ms. O'Gara, patted her on her buttocks, and said, "I'd love to see you with your shirt off," her claim would have no hope of surviving summary judgment. See, e.g., Adusumilli v. City of Chicago, 164 F.3d 353, 357 (7th Cir. 1998) (as a matter of law, teasing plaintiff, staring at her breasts, and four isolated incidents in which co-worker briefly touched plaintiff's arm, fingers or buttocks fall within the "safe harbor for employers"); Saxton v. American Tel. and Tel. Co., 10 F.3d 526, 534-35 (7th Cir. 1993) (as a matter of law, supervisor's rubbing his hand along plaintiff's thigh, forcibly kissing her, and lurching at her from behind bushes did not create actionable sexual harassment); Weiss v. Coca-Cola Bottling Co. of Chicago, 990 F.2d 333, 337 (7th Cir. 1993) (as a matter of law, holding plaintiff's claims — supervisor repeatedly asked about her personal life, told her how beautiful she was, asked her on dates, called her a dumb blonde, put his hand on her shoulder at least six times, placed "I love you" signs in her work area, and tried to kiss her once at a bar and twice at work — were not sufficient for actionable sexual harassment).

The issue is when, and/or whether, a reasonable person would have concluded that Ms. O'Gara had a "substantial claim." First of all, no one alleged instance of harassment that occurred prior to July 2, 1997 (which is three hundred days prior to the filing of her EEOC charge) could support a Title VII claim — the allegations made by Ms. O'Gara constitute the kind of "low-level" harassment referenced in Galloway. See Perry v. Harris Chernin, Inc., 126 F.3d 1010, 1013 (7th Cir. 1997) ("Not every unpleasant workplace is a hostile environment. The `occasional vulgar banter, tinged with sexual innuendo, of coarse or boorish workers' would be neither pervasive nor offensive enough to be actionable. The workplace that is actionable is the one that is `hellish.'") (quoting Baskerville, 50 F.3d at 430). Whether the cumulative effect of the alleged harassment prior to July 1997 constituted an actionable Title VII claim is a more difficult determination.

In making this determination, the court focuses on "the totality of the circumstances." Rodgers v. Western-Southern Life Ins. Co., 12 F.3d 668, 674 (7th Cir. 1993) (quotation omitted). Furthermore, "[w]ithin the totality of circumstances, there is neither a threshold `magic number' of harassing incidents that gives rise, without more, to liability as a matter of law nor a number of incidents below which a plaintiff fails as a matter of law to state a claim." Id. (citation omitted). Viewing the facts in the light most favorable to Ms. O'Gara, she was reasonable to assume that she did not have a "substantial claim" under Title VII until after July 1995. Given the controlling Seventh Circuit caselaw (such as the cases cited above), one or two years of lewd comments and relatively mild incidents of touching would still subject Ms. O'Gara's claim to a substantial risk of losing on summary judgment. Moreover, Ms. O'Gara's claim fits the model profile of a continuing violation because probably the most serious incident (and therefore the event most likely to independently trigger Ms. O'Gara's awareness that she had a substantial Title VII claim), Mr. Hardman rubbing his hand along the length of Ms. O'Gara's bare leg, occurred within the 300-day limitations period.

The court still must determine whether the continuing violation theory is `otherwise-appropriate' to these facts-more specifically, whether there exists a "sufficiently close nexus" between and among the allegedly discriminatory acts. See Doe, 42 F.3d at 446. A useful framework for this analysis is the three-factor test enunciated in Selan, quoted above. The first factor is whether the subject matter of the acts before the limitations period is related to the subject matter of the acts within the period. See Selan, 969 F.2d at 565. In Ms. O'Gara's case, the alleged acts of harassment (both toward Ms. O'Gara and others⁶⁷) are all very similar in character. They are either comments of a sexual nature or uninvited physical contact of an overly-familiar (if not overtly sexual) nature. The vast majority of these acts were allegedly done by small handful of Mechanics managers, most notably, Mr. Hardman. Thus, this first factor militates in favor of finding a continuing violation.

67 The court considers the allegations of sexual harassment directed toward female Mechanics employees other than Ms. O'Gara, provided there is a showing that Ms. O'Gara was aware of those incidents. "Such incidents-directed at others and not the plaintiff-do have some relevance in demonstrating the existence of a hostile work environment. However, . . . the impact of `second-hand harassment' is obviously not as great as the impact of harassment directed at the plaintiff." Gleason v. Mesirow Fin., Inc., 118 F.3d 1134, 1144 (7th Cir. 1997) (citations omitted).

The second Selan factor relates to the frequency of the conduct. See id. ("Are the alleged acts recurring . . . or more in the nature of an isolated work assignment?"). The court in Selan stated that a gap of almost two years between acts weighed heavily against finding a continuing violation. See id. at 567. In the present case, there are no such gaps-the entire relevant period of all of the alleged incidents could be as short as two years. However, there is a gap of many months between alleged incidents of a Mechanics manager touching Ms. O'Gara (i.e., Mr. Pont and Mr. Hardman each allegedly hugged/touched Ms. O'Gara while making "lewd comments" on multiple occasions in 1996, and then Ms. O'Gara was not touched in such a way by a manager again until August of 1997 when Mr. Hardman allegedly rubbed his hand on her leg). But, viewing the facts in the light most favorable to Ms. O'Gara (as the court is required to do on summary judgment), during that gap in time, Mechanics managers referred to all female employees as "Bettys," and would say things like "You sure look fine, Betty" and "Boy, I'd sure like to get down with you, Betty." Also roughly during this period (Ms. O'Gara was not very specific about dates), Ms. O'Gara received complaints from other female Mechanics employees about Mr. Hardman's unwanted touching and comments. Also during this time, she had to deal with complaints from her employees about Mr. Hardman's personal relationship with one of Ms. O'Gara's female employees. None of these alleged incidents (which at least arguably occurred in 1997) are particularly serious, but for the purposes of the continuing violation theory, they do suffice to fill the many-month gap between alleged incidents of a Mechanics manager touching Ms. O'Gara. The court finds therefore, that this second factor weighs in favor of finding a continuing violation.

The Selan court said the third factor, degree of permanence, is "perhaps of most importance." Id. at 565. "Permanence focuses on whether the defendant's act has the degree of permanence that should trigger an employee's awareness of and duty to assert her rights." Reinhard v. Clark Prods. Inc., No. 96 C 4784, 1997 WL 786667, at *5 (N.D.Ill. Dec. 12, 1997). In Selan, the complained-of conduct prior to the limitations period included the plaintiff being transferred to a different facility with a lower-ranking position. The court called this transfer/demotion "precisely the type of major, permanent change in employment status that should trigger an employee's awareness of the need to assert — or else lose — his rights." Selan, 969 F.2d at 567. In contrast, the complained-of conduct in this case, especially before Mr. Hardman's rubbing of his hand along Ms. O'Gara's leg in 1997, consists of a string of primarily low-level harassment. None of the alleged harassment exhibited the degree of permanence discussed in Selan. "Permanence is generally not found in hostile environment sexual harassment claims, where each individual act may not trigger the employee's awareness of illegal discrimination." Reinhard, 1997 WL 786667, at *5; see also Galloway, 78 F.3d at 1167 (Co-worker's "repeated `sick bitch' comment . . . [was] just the kind of verbal conduct that it would not be reasonable to expect an employee to base suit on the first time it occurred. . . . But if the comment were repeated daily over a period of years its cumulative effect would be much greater."); Van Jelgerhuis v. Mercury Fin. Co., 940 F. Supp. 1344, 1356-57 (S.D.Ind. 1996) ("[N]one of the harassing acts described by either [plaintiff, consisting of comments about their weight and their sex lives], was of such a permanent nature that their hostile work claims ought to have been triggered at a particular point significantly earlier than the 300-day period prior to their EEOC-filing dates."). This third factor also militates in favor of finding a continuing violation.

Thus, after examining the facts in the light most favorable to Ms. O'Gara, each of the Selan factors militates in favor of finding a continuing violation. Therefore, the court finds that there exists a "sufficiently close nexus" between and among the allegedly discriminatory acts, such that the finding of a continuing violation is appropriate. Ms. O'Gara has demonstrated a genuine issue of material fact as to whether the alleged acts of harassment, beginning in 1995, were part of a continuing violation. While evidence at trial, and/or subsequent rulings, may change this conclusion, Ms. O'Gara will be permitted to pursue her claim under a continuing violation theory. Accordingly, to the extent Defendants have moved to strike otherwise-admissible evidence of events occurring prior to July 2, 1997 because it is time-barred, that motion is denied.⁶⁸

68 In their reply brief, Defendants make a one-sentence argument that the allegations of harassment in 1995 and 1996 should be disregarded because they were not raised in Plaintiffs' Amended Complaint. (Defs.' Reply Br. in Supp. of Defs.' Summ. J. Mot. at 4.) To the extent that this argument has not been waived by Defendants' cursory presentation in a reply brief, the court rejects it. The Amended Complaint alleges that Ms. O'Gara began working at Mechanics on December 22, 1994, and then alleges generally that "Ms. O'Gara was sexually harassed by male employees of Mechanics." (Am. Compl. ¶¶ 18, 24.) The Amended Complaint then gives examples of Mr. Hardman's alleged acts of harassment. Although this is far from a model of good pleading, under the modern notice-pleading rules, these allegations are sufficient. This is especially true given that Defendants do not even attempt to make a showing that they were prejudiced by Plaintiffs' failure to specifically allege the 1995 and 1996 acts of harassment.

C. Ms. O'Gara's Hostile Environment Claim

Now that the court has determined what the relevant time period is for Ms. O'Gara's sexual harassment claim, the court may now determine whether Defendants' summary judgment motion as to that claim should be granted.

Ms. O'Gara claims that Defendants should be liable under Title VII because the actions of Mr. Hardman and other Mechanics' managers created a hostile work environment, as enunciated in Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 66 (1986): "[A] plaintiff may establish a violation of Title VII by proving that discrimination based on sex has created a hostile or abusive work environment."⁶⁹ For harassment to be actionable, "it must be sufficiently severe or pervasive to alter the conditions of [the victim's] employment and create an abusive working environment." Id. at 67; see also Faragher v. City of Boca Raton, 524 U.S. 775, 786 (1998) ("[Only] sexual harassment so severe or pervasive as to alter the conditions of the victim's employment and create an abusive working environment violates Title VII.") (quotations omitted); Smith v. Sheahan, 189 F.3d 529, 533 (7th Cir. 1999); Cowan v. Prudential Ins. Co. of Am., 141 F.3d 751, 755-56 (7th Cir. 1998). The court should employ both a subjective and an objective test: the conduct must "adversely affect the work performance and the well-being of both a reasonable person and the particular plaintiff bringing the action." Cowan, 141 F.3d at 756 (quoting Brooms v. Regal Tube Co., 881 F.2d 412, 419 (7th Cir. 1989) (emphasis in original)); see also Harris v. Forklift Sys., Inc., 510 U.S. 17, 20-22 (1993). Whether a particular work environment is sufficiently "hostile" is a determination that involves many factors and necessarily involves looking at all the circumstances. See Harris, 510 U.S. at 24 ("This is not, and by its nature cannot be, a mathematically precise test . . . but we can say that whether an environment is `hostile' or `abusive' can be determined only by looking at all the circumstances."). Harris emphasizes that while all of the circumstances should be considered and no factor should be required, a court must be particularly concerned with "the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance." Harris, 510 U.S. at 23; see also Smith, 189 F.3d at 534.

69 Ms. O'Gara alleges hostile work environment harassment and makes no accusations of quid pro quo harassment. Quid pro quo harassment occurs when "the receipt of benefits or the maintenance of the status quo is conditioned on acquiescence to sexual advances." Mary M. v. North Lawrence Community Sch. Corp., 131 F.3d 1220, 1226 n. 7 (7th Cir. 1997) (citing Kinman v. Omaha Pub. Sch. Dist., 94 F.3d 463, 467 (8th Cir. 1996)); see also Meritor Sav. Bank, FSB, 477 U.S. at 65. Ms. O'Gara makes no allegations that sexual favors were requested of her in exchange for benefits or to maintain the status quo. Thus, she has no quid pro quo claim.
Also, the court notes that in their summary judgment submissions, Defendants do not dispute that the alleged harassment was "based on sex" and that "there is a basis for employer liability." Parkins v. Civil Constructors of Ill., Inc., 163 F.3d 1027, 1032 (7th Cir. 1998) (noting that these are elements of a hostile work environment claim).

In Baskerville, the Seventh Circuit expounded:

The concept of sexual harassment is designed to protect working women from the kind of male attentions that can make the workplace hellish for women. . . . It is not designed to purge the workplace of vulgarity. Drawing the line is not always easy. On one side lie sexual assaults; other physical contact, whether amorous or hostile, for which there is no consent express or implied; uninvited sexual solicitations; intimidating words or acts; obscene language or gestures; pornographic pictures. On the other side lies the occasional vulgar banter, tinged with sexual innuendo, of coarse or boorish workers. We spoke in Carr [ v. Allison Gas Turbine Division, 32 F.3d 1007 (7th Cir. 1994)] of `the line that separates the merely vulgar and mildly offensive from the deeply offensive and sexually harassing.' It is not a bright line, obviously, this line between a merely unpleasant working environment on the one hand and a hostile or deeply repugnant one on the other. . . .

50 F.3d at 431 (citations omitted). A review of the holdings of a few Seventh Circuit cases will help further define the line between an environment that a reasonable jury could find is objectively hostile and an environment which, as a matter of law, is not objectively hostile.

In Adusumilli v. City of Chicago, 164 F.3d 353 (7th Cir. 1998), the court held that, as a matter of law, plaintiff's work environment was not objectively hostile when co-workers teased plaintiff, stared at her breasts, and touched her arm once, her buttocks once, and twice "poked at [her] fingers." Id. at 357-58. The main perpetrator was "a co-worker with whom [plaintiff] had minimal contact." Id. at 357. The court stated that the plaintiff's case fits "precisely" within the Supreme Court's caution in Faragher that "`simple teasing, offhand comments, and isolated incidents (unless extremely serious) will not amount to discriminatory changes in the terms and conditions of employment.'" Id. at 361 (quoting Faragher, 524 U.S. at 788) (internal quotations omitted). The Seventh Circuit then noted that "the most serious misconduct, the unwanted touching of [plaintiff's] buttocks, took the relatively mild form of a poke and occurred only once." Id. at 362. The court then concluded that:

[i]t is well established in this Circuit that there is a `safe harbor for employers in cases in which the alleged harassing conduct is too tepid or intermittent or equivocal to make a reasonable person believe that she has been discriminated against on the basis of her sex.' [Plaintiff's] allegations clearly fall within this safe harbor.

Id.

Similarly, in Saxton v. American Telephone and Telegraph Co., 10 F.3d 526 (7th Cir. 1993), while at a nightclub, plaintiff's supervisor rubbed his hand along plaintiff's thigh and forcibly kissed her, and then three weeks later, he "lurched" at her from behind bushes. After plaintiff rebuffed her supervisor's advances on both occasions, her supervisor either refused to speak to her or treated her in a condescending manner, although he gave her a more rewarding work assignment. The court stated:

Although [the supervisor's] conduct was undoubtedly inappropriate, it was not so severe or pervasive as to create an objectively hostile work environment. Certainly any employee in [plaintiff's] position might have experienced significant discomfort and distress as the result of her superior's uninvited and unwelcome advances. At the same time, [the supervisor's] offensive behavior was relatively limited, presumably because [plaintiff] was forthright and persistent in making clear that the advances were unwelcome. And although there were two instances of sexual misconduct rather than one, it simply did not rise to the level of pervasive harassment as that term has been defined by this court. . . . Indeed, after the ["lurching"], [the supervisor] made no further advances toward [plaintiff]. Moreover, even if we assume that [the supervisor] turned a particularly cold shoulder to [plaintiff] after she rebuffed his advances, the evidence does not suggest that this behavior rendered her environment hostile. [Plaintiff] has offered no evidence that [the supervisor's] conduct was frequent or severe, that it interfered with her work, or that it otherwise created an abusive work environment.

Id. at 534-35 (citing, inter alia, Weiss v. Coca-Cola Bottling Co. of Chicago, 990 F.2d 333, 337 (7th Cir. 1993) (no actionable harassment where plaintiff's supervisor asked plaintiff out on dates, called her a "dumb blond," placed his hand on her shoulder at least six times, placed "I love you" signs in her work area, and attempted to kiss her on one or more occasions)).

On the other side of the line is Dey v. Colt Construction Development Co., 28 F.3d 1446 (7th Cir. 1994), where, in a two-and-a-half year period, the plaintiff (who was defendant's bookkeeper) alleged that defendant's general counsel did the following acts: (1) made a lewd remark about another woman to plaintiff; (2) suggested that plaintiff spent a week's vacation "on her back in bed"; (3) told plaintiff that he "would eat [plaintiff] no matter how [she] smelled"; (4) unzipped and zipped his slacks while he and plaintiff were alone in an elevator; and, (5) told someone on the telephone that "there is a girl in my office going down on me" as plaintiff leaned down to put some documents on his floor. Id. at 1449-50. Although these comments and actions were the most severe, plaintiff also alleged that the general counsel subjected her to comments, gestures, and innuendo which she took to be sexually suggestive on a "limited, daily" basis whenever he was in town (which was at least a majority of the time). The court noted that "[the supervisor's] comments were overtly sexual, and most were directed specifically at [plaintiff]," and further noted that all of the incidents should be viewed as a whole rather than in isolation. Id. at 1456-57. The court then held that there existed an issue of fact as to whether plaintiff's work environment was objectively hostile, thus precluding summary judgment.

In Doe v. R.R. Donnelley Sons Co., 42 F.3d 439 (7th Cir. 1994), plaintiff's supervisor allegedly did the following during a four-year period: (1) commented on plaintiff's clothing; (2) asked plaintiff what she wore to the gym and at home and how she looked in the clothing; (3) commented that plaintiff looked attractive and had lost weight; (4) patted plaintiff's buttocks on two occasions; and, (5) told plaintiff at her annual evaluation never to have an affair at Donnelley because "it's not worth it; someone will always get burned." The court stated:

In the view of the district court, [the supervisor's] conduct did not rise to the level of a violation of Title VII. Upon review of the caselaw of the circuit, it appears that the nature of the incidents alleged here, at least when viewed in isolation, is similar to the type that we have held not sufficient to support a cause of action under Title VII for sexual harassment. However, the summary judgment record before us suggests that the conduct persisted for a lengthy period of time and that, during that period, was a pervasive aspect of the plaintiff's employment. We therefore have serious reservations as to whether it was appropriate for the district court to hold as a matter of law that [the supervisor's] conduct was not actionable. As in the case of racial harassment in the workplace, there is no `magic number' of incidents that give rise to a cause of action. As Justice O'Connor admonished in Harris, the matter is simply not susceptible to a mathematically precise test.

Id. at 445 (citation omitted)⁷⁰; see also Carr v. Allison Gas Turbine Div., 32 F.3d 1007 (7th Cir. 1994) (where the plaintiff was the target of a series of sexual pranks, was routinely the target of sexually-tinged verbal abuse, and where a man twice exposed his penis to her, "the district judge was surely correct that the words and deeds of [plaintiff's] male coworkers crossed the line that separates the merely vulgar and mildly offensive from the deeply offensive and sexually harassing. . . . [T]he words and acts of which she complains were . . . targeted on her, and it is a lot more uncomfortable to be the target of offensive words and conduct than to be merely an observer of them.").

70 The court went on to affirm the grant of summary judgment on other grounds.

Although the facts of Ms. O'Gara's case is very close to the line between actionable and nonactionable harassment, a reasonable jury could find that the managers at Mechanics had created an objectively hostile environment for Ms. O'Gara. The alleged conduct was quite frequent: throughout a two-to-three year period, Mechanics managers subjected Ms. O'Gara to a stream of "lewd comments", sexual solicitations (even if some were made in a teasing manner), and repeated incidents of uninvited touching (ranging from hugs and shoulder rubs to Mr. Hardman touching her hip and rubbing his hand along the length of her bare leg). Beyond these incidents, she fielded multiple complaints from two other female Mechanics employees about Mr. Hardman's alleged harassing conduct toward them.⁷¹ The frequency of this alleged conduct far eclipses that in Adusumilli, Saxton, and Weiss. Cf. Chalmers v. Quaker Oats Co., 61 F.3d 1340, 1345 (7th Cir. 1995) ("Common to both Saxton and Weiss is an emphasis on the frequency of the offensive behavior. Though sporadic behavior, if sufficiently abusive, may support a Title VII claim, success often requires repetitive misconduct.").

71 As indicated above, the court considers this "second-hand harassment" in making its decision, although the court is mindful that its impact is less than harassment witnessed by, and directed at, Ms. O'Gara. See Gleason v. Mesirow Fin., Inc., 118 F.3d 1134, 1144 (7th Cir. 1997) ("Such incidents — directed at others and not the plaintiff — do have some relevance in demonstrating the existence of a hostile work environment. However, . . . the impact of `second-hand harassment' is obviously not as great as the impact of harassment directed at the plaintiff.") (citations omitted).

Another important factor is that the alleged conduct at issue includes conduct that was "physically threatening or humiliating, [rather than] a mere offensive utterance." Smith, 189 F.3d at 534 (quoting Harris, 510 U.S. at 23). Uninvited hugs and shoulder rubs can qualify as humiliating when done in the workplace, to someone who already contends with sexual solicitations, lewd comments and being referred to (along with all of the other women) as a "Betty." On the heels of this conduct, Mr. Hardman's act of approaching Ms. O'Gara while she was sitting alone in a room, and rubbing his hand along her bare leg, could reasonably be termed as either "physically threatening or humiliating." Cf. Dey, 28 F.3d at 1456 ("[T]he incident on the elevator [where plaintiff's supervisor unzipped and zipped his pants] . . . would no doubt be even more frightening to a reasonable woman in [plaintiff's] position who, prior to that incident, had endured more than two years of verbal harassment.") (citing, inter alia, King v. Hillen, 21 F.3d 1572, 1581 (Fed. Cir. 1994) ("[B]y viewing each incident in isolation, as if nothing else had occurred, a realistic picture of the work environment was not presented. . . . It is the overall, composite effect on the terms, conditions, and privileges of employment that is the focus of the law, whose target is workplace discrimination. When there are multiple incidents and victims, it is the cumulative effect of the offensive behavior that creates the working environment.") (citations omitted)).

In addition to the physical conduct, the majority of the verbal conduct at issue was directed specifically at Ms. O'Gara, and multiple uninvited sexual solicitations were made to her. This also weighs significantly in favor of finding that her work environment was objective hostile. Cf. Baskerville, 50 F.3d at 430-31 (noting that summary judgment was appropriate in part because the alleged harasser "never touched the plaintiff. He did not invite her, explicitly or by implication, to have sex with him, or to go out on a date with him."); Dey, 28 F.3d at 1456 (summary judgment inappropriate in part because the alleged harasser's "comments were overtly sexual, and most were directed specifically at [plaintiff].").

A final factor the court considers is "whether [the alleged conduct] unreasonably interferes with an employee's work performance." Smith, 189 F.3d at 534 (quoting Harris, 510 U.S. at 23). "Title VII does not require proof that the harassment interfered with the plaintiff's work performance." Saxton, 10 F.3d at 534 n. 14 (citation omitted). Instead, "[i]t suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to make it more difficult to do the job." See id. (quotation omitted). The alleged acts of overt sexual harassment discussed above were of sufficient severity and frequency that a reasonable jury could find that they "so altered [Ms. O'Gara's] working conditions as to make it more difficult to do the job." Moreover, Ms. O'Gara testified that because of Mr. Hardman's refusal to tell her directives from Philip French (after Ms. O'Gara's rebuke following the leg-rubbing incident), her ability to do her job (which included implementing Philip French's directives) was impaired. Further, because of Mr. Hardman's alleged conduct toward others, Ms. O'Gara needed to deal with the complaints of sexual harassment from Ms. Davis and Ms. Navarro, and she also had to deal with the complaints from multiple stockroom employees upset by Mr. Hardman's extended intimate conversations with another stockroom employee.

After considering all of the factors and circumstances, the court finds that, although Ms. O'Gara's case is a close one, a jury could reasonably find that she was subjected to an objectively hostile work environment.

Defendants also argue that Ms. O'Gara has not shown that she subjectively considered the managers' actions to create a hostile environment. Ms. O'Gara testified that the alleged incidents made her "feel very uncomfortable." (O'Gara Dep. at 121, 128.) She also testified that when Mr. Hardman rubbed her leg, she rebuked him sternly, left the room, and went directly to her office. ( Id. at 120, 122.) A management trainee noticed that she was upset and inquired about what was happening. ( Id. at 122.) In response to the trainee's statement that she should sue Mechanics, Ms. O'Gara stated that, "I just want to do my job without somebody coming up and touching me or saying something to me." ( Id.) When Mr. Hardman touched her on the hip and stated that he was going to measure her, she removed his hand and again told him that he could not do that. ( Id. at 127-28.) When the managers hugged her, rubbed her shoulders, or patted her on the buttocks, she told them not to touch her. ( Id. at 133-34.) On the occasions when Mr. Hardman would hug her and say "rude" comments to her, she backed away. ( Id. at 126, 205.) Although she initially did not complain to any member of management (other than Mr. Mueller, a management trainee ( id. at 122)) for fear of retaliation ( id. at 205), she did finally complain to Mr. Graham, her supervisor, after he asked about Mr. Hardman's behavior and on the same day that Mechanics (through Mr. Graham) first distributed a sexual harassment policy. ( Id. at 130-31, 146-47, 236-37.) This evidence is sufficient to create a factual issue on the question of whether Ms. O'Gara subjectively perceived her work environment to be hostile and abusive. See Dey, 28 F.3d at 1454-55 (issue of fact as to whether plaintiff subjectively perceived the work environment to be hostile when, inter alia, plaintiff "stated that the conduct . . . made her feel uncomfortable"; the harasser's "comments caused her to walk out of his office"; and "[a]lthough she tolerated the conduct for over two years because she feared for her job, [plaintiff] also indicated that she just wanted the comments to stop. Moreover, once a friend told [plaintiff] that there was some legal recourse available to her, [plaintiff] complained both to her immediate supervisor, who indicated that she was visibly upset at the time, and to [the harasser] himself").

Therefore, as to Ms. O'Gara's hostile environment sexual harassment claim, Defendants' summary judgment motion is DENIED.

D. Ms. O'Gara's Disparate Treatment "Claim"

Defendants move for summary judgment as to Ms. O'Gara's disparate treatment claim. In the Amended Complaint, Ms. O'Gara alleges that all of the management trainees were male. (Am. Compl. ¶ 22.) She further alleges that she requested to be a management trainee but Mechanics refused on the grounds that she did not have a college education, despite the fact that Mechanics allowed a male without a college education to be a management trainee. ( Id. ¶ 23.) Defendants perceive these allegations to form a disparate treatment claim.

In response to the summary judgment motion, Plaintiffs state, "Plaintiffs do not make a separate claim of disparate treatment of Ms. O'Gara, but rather, offer the evidence that all of the managers at Koweba were males and all of the management trainees were males in order to prove the totality of the circumstances of the sexual harassment and retaliation." (Pls.' Br. in Opp'n to Defs.' Mot. for Summ. J. at 21-22.)

Given the Plaintiffs' response, the court will assume that Plaintiffs do not intend to press a disparate treatment claim. Therefore, to the extent that the Amended Complaint states a disparate treatment claim, Defendants' summary judgment motion as to that claim will be GRANTED.

The court notes that evidence that all of the managers (other than Ms. O'Gara) and management trainees at the Koweba Lane plant were male is irrelevant to Ms. O'Gara's hostile environment claim. Ms. O'Gara has failed to demonstrate how this fact tends to show that Ms. O'Gara's work environment was either subjectively or objectively hostile. "The totality of the circumstances" is only relevant insofar as those circumstances shed light on whether the plaintiff's work environment was hostile or abusive. See, e.g., Wilson v. Chrysler Corp., 172 F.3d 500, 510 (7th Cir. 1999) (citing Harris, 510 U.S. at 21). Therefore, to the extent that Defendants object that the "disparate treatment" evidence is irrelevant, that objection is sustained.

V. Ms. O'Gara's Retaliatory Demotion Claim

Defendants move for summary judgment as to Ms. O'Gara's claim that she was demoted on January 16, 1998, in retaliation for complaining about the alleged sexual harassment. Defendants argue that summary judgment is appropriate because Ms. O'Gara cannot show that the demotion was a materially adverse action, or that Mechanics' proffered reason for the demotion was pretext.⁷²

72 Ms. O'Gara does not present direct evidence of a retaliatory motive, but instead relies upon the McDonnell Douglas burden-shifting analysis. In order to state a prima facie case of retaliation under Title VII, a plaintiff must show that "(1) she engaged in statutorily protected expression; (2) she suffered an adverse action by her employer; and (3) there is a causal link between her protected expression and the adverse action." Sweeney v. West, 149 F.3d 550, 555 (7th Cir. 1998) (citation omitted). If the plaintiff makes that showing, the employer has the burden of producing a legitimate, nondiscriminatory reason for her discharge; if the employer meets that burden, the plaintiff then bears the burden of showing that the employer's proffered reason(s) is pretextual. See Dey, 28 F.3d at 1457, 1460-61. Pretext is established if the plaintiff can show that the defendant's proffered reason(s) is either a lie or completely lacking in factual basis. See Mills v. Health Care Serv. Corp., 171 F.3d 450, 458 (7th Cir. 1999) (citations omitted).

"No actionable claim for retaliation or discrimination will lie unless the plaintiff has suffered some adverse employment action." Ribando v. United Airlines, Inc., 200 F.3d 507, 510 (7th Cir. 1999) (citing Cheek v. Peabody Coal Co., 97 F.3d 200, 204 (7th Cir. 1996); Smart v. Ball State Univ., 89 F.3d 437, 440 (7th Cir. 1996)). The Seventh Circuit has stated:

Although we have defined the term broadly, the adverse job action must be `materially' adverse, meaning more than a mere inconvenience or an alteration of job responsibilities. We have explained, `a materially adverse change might be indicated by a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices that might be unique to a particular situation.'

Id. at 510-11 (quotation omitted; citing Burlington Indus. v. Ellerth, 524 U.S. 742, 761 (1998) ("A tangible employment action 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.")).

Ms. O'Gara has created an issue of fact as to whether her demotion was a materially adverse action. As set forth in the factual recitation above, she has produced evidence that on January 16, 1998, Ms. O'Gara "was demoted immediately from stockroom manager to lead operator." (Graham Aff. ¶ 57; Graham Dep. at 260; O'Gara Dep. at 261.) The demotion resulted in the loss of her supervisory authority over the stockroom employees. (Graham Aff. ¶ 60; O'Gara Dep. at 180, 262-63.) Indeed, after the demotion, she had no defined duties. (O'Gara Dep. at 168.) The Seventh Circuit has held that "a less distinguished title," "terminating supervisory authority over other employees," and "significantly diminished material responsibilities" could each constitute a materially adverse employment action. Fortier v. Ameritech Mobile Communications, Inc., 161 F.3d 1106, 1111-12 n. 7 (7th Cir. 1998) (citations omitted). Here, there is an issue of fact as to all three.

In their original brief, Defendants made a brief argument that Ms. O'Gara cannot show a causal connection between her sexual harassment complaints and the demotion. Defendants appear to abandon this argument in their reply brief. Plaintiffs' evidence shows that Philip French demoted Ms. O'Gara the day after she complained of sexual harassment. See Sweeney v. West, 149 F.3d 550, 557 (7th Cir. 1998) ("A `telling temporal sequence' can establish the required nexus [between the protected activity and the adverse action], but by `telling' we mean that the employer's adverse action follows fairly soon after the employee's protected expression.") (citing, inter alia, Johnson v. Sullivan, 945 F.2d 976, 980 (7th Cir. 1991) (protected activity one day before discharge "supports an inference that the two are causally connected"); Holland v. Jefferson Nat'l Life Ins. Co., 883 F.2d 1307, 1315 (7th Cir. 1989) (one week between protected activity and adverse activity is enough to support inference of a causal link)); McClendon v. Indiana Sugars, Inc., 108 F.3d 789, 797 (7th Cir. 1997) ("We have found the causal nexus sufficiently demonstrated when the time period between the filing of a complaint and the adverse action was one day or one week. Similarly, in this case we must conclude that the sequence of events over the 2-3 day period between Mr. McClendon's filing of his complaint and his termination has established a prima facie case of retaliation.") (citations omitted). Moreover, just before Philip French told Mr. Graham that he was demoting Ms. O'Gara, Philip French said that he had talked to Mr. Peterson about "those personnel issues that you discussed with Peterson yesterday" (Mr. Graham reported the sexual harassment allegations to Mr. Peterson on that day) and then criticized Mr. Graham and demoted him. (Graham Dep. at 259-60; Graham Aff. ¶¶ 42-43, 57.) This arguable reference to the sexual harassment complaints in the same breath as Mr. Graham's and Ms. O'Gara's demotions only heightens the inference of a causal link. Therefore, the court finds that Ms. O'Gara has created an issue of fact as to whether there is a causal link between her sexual harassment complaint and her demotion.

Defendants also argue that summary judgment is appropriate because Ms. O'Gara cannot show that Mechanics' proffered reason for the demotion was pretextual. Mechanics states its proffered reason for the demotion as follows: "O'Gara's work performance was unsatisfactory, as evidenced by the September 1996 stockroom audit and the flood of counseling memoranda relating to the stockroom." (Br. in Supp. of Defs.' Mot. for Summ. J. at 14.) In the "Facts" section of this Entry, the court examined Defendants' evidence offered to support its proffered reason (Graham Dep. at 217-19, Ex. 41; O'Gara Dep., Exs. 66-76), and found that the evidence does adequately support the proffered reason. For instance, the only evidence of the "September 1996 stockroom audit," which "showed a deficiency in the way [Mechanics] was calculating incentive pay" (Graham Dep. at 218-19), is a memorandum written by Mr. Graham, which makes clear that the deficient method of calculating pay was implemented by upper management (rather than Ms. O'Gara) before Ms. O'Gara became stockroom manager, over the objections of Mr. Graham. (Graham Dep., Ex 41; Graham Aff. ¶¶ 74, 77.) The only specific mention in the memo of Ms. O'Gara's role is: "Marilyn has been doing only what she has received directions to do." (Graham Dep., Ex. 41.) Defendants offer no evidence indicating that Mr. Graham's assessment of the situation was incorrect. (Indeed, basically the only evidence they offer concerning Ms. O'Gara's performance came from Mr. Graham.)

Also as discussed in the "Facts" section above, Defendants' evidence of a "flood" of critical memos actually amounts to two memos written by Mr. Graham containing at most mild criticism of two specific performance areas of the stockroom. (O'Gara Dep., Ex. 67, 74.) Although both of these memos contain a degree of criticism of Ms. O'Gara, neither of them purport to evaluate Ms. O'Gara's overall performance.

As detailed above, Ms. O'Gara counters with six exhibits which show that Ms. O'Gara was rated as an "excellent employee" by Mr. Graham, as well as by her previous supervisors. (Peterson Dep., Exs. 4-10.) For instance, one exhibit, a "salary increase request form" completed by Mr. Graham states that Ms. O'Gara should be given a raise in part because "[s]ecurity of this person is vital to insure continuity in a stockroom that has improved in every facet since she took charge on 7-8-96." (Peterson Dep., Ex. 6.) Mr. Graham also testified that "Ms. O'Gara was one of the hardest working and best performing employees at the Koweba plant." (Graham Aff. ¶ 73.) And even Philip French testified that Ms. O'Gara "was always a very good employee." (Philip French Dep. at 67, 82.)

Given this evidence, a reasonable jury could find that Mechanics' explanation for demoting Ms. O'Gara is not credible, and is merely a pretext for discrimination. This conclusion is only bolstered by the fact that Defendants do not even offer evidence from any decision-maker indicating that Mechanics took Ms. O'Gara's performance into account when it decided to demote her. (As mentioned above, Defendants' only evidence that Ms. O'Gara's performance was poor comes from Mr. Graham who played no part in the decision to demote Ms. O'Gara.) Indeed, the evidence indicates that there was only one decision-maker-Philip French. (Graham Aff. ¶ 57.) Yet Defendants do not point to any complaint Philip French had with Ms. O'Gara's performance; indeed, he testified that Ms. O'Gara "was always a very good employee." (Philip French Dep. at 67, 82.)

In conclusion, Defendants' motion for summary judgment as to Ms. O'Gara's claim that she was demoted in retaliation for complaining about the alleged sexual harassment is DENIED.

VI. Ms. O'Gara's Constructive Discharge Claim

Defendants move for summary judgment as to Ms. O'Gara's claim that she was constructively discharged.

"The term `constructive discharge' refers to the situation in which an employee is not fired but quits, but in circumstances in which the working conditions have made remaining with this employer simply intolerable." Lindale v. Tokheim Corp., 145 F.3d 953, 955 (7th Cir. 1998) (citations omitted). Courts treat a "plaintiff's resignation [a]s not truly voluntary if quitting was the only way she could extricate herself from the intolerable conditions." Perry v. Harris Chernin, Inc., 126 F.3d 1010, 1015 (7th Cir. 1997). "[T]he test for intolerable working conditions is whether a reasonable employee would have concluded that the conditions made remaining in the job unbearable." Lindale, 145 F.3d at 955 (citations omitted); see also Rabinovitz v. Pena, 89 F.3d 482, 489 (7th Cir. 1996) ("To state a claim for constructive discharge, a plaintiff needs to show that his working conditions were so intolerable that a reasonable person would have been compelled to resign.") (citations omitted).

Defendants' sole argument for summary judgment on this claim rests upon a statement in some Seventh Circuit cases that "unless conditions are beyond `ordinary' discrimination, a complaining employee is expected to remain on the job while seeking redress." Perry, 126 F.3d at 1015 (citing Rabinovitz, 89 F.3d at 489); see also Darnell v. Target Stores, 16 F.3d 174, 177 (7th Cir. 1994) ("[A]n employee must seek legal redress while remaining in his or her job unless confronted with an `aggravated situation' beyond `ordinary' discrimination.") (citing Rodgers v. Western-Southern Life Ins. Co., 12 F.3d 668, 677 (7th Cir. 1993); Brooms v. Regal Tube Co., 881 F.2d 412, 423 (7th Cir. 1989)). They argue that Ms. O'Gara's working conditions were simply "ordinary" discrimination and therefore, she was obligated to remain on the job while seeking redress. Recently, however, the Seventh Circuit clarified this "dicta" in its cases. In Lindale, Judge Posner wrote:

[The employer] argues that a precondition to claiming constructive discharge is that the employee show that before quitting she had (unless in some imminent peril) sought legal redress for the condition that drove her to quit. Some cases say this (though none holds it), but these dicta cannot be taken literally. For if they were, it would mean that in order to sue for constructive discharge, one would first have to bring a separate lawsuit challenging the condition that made one want to quit. [The employer] acknowledges as it must the exception (to any requirement of seeking legal redress) for cases of imminent peril-what the cases call `aggravated circumstances.' But in making this concession it comes close to throwing in the towel, by conceding the existence of a class of constructive discharges in which the circumstances are not aggravated.

Lindale, 145 F.3d at 955 (citing Darnell, 16 F.3d at 177, 179; Rodgers, 12 F.3d at 677; Brooms, 881 F.2d at 423). Then, after explaining that "the test for intolerable working conditions is whether a reasonable employee would have concluded that the conditions made remaining in the job unbearable," Judge Posner continued:

In some situations, the standard of reasonableness will require the employee who wants to make a successful claim of constructive discharge to do something before walking off the job. The reason is not that there is a doctrine of exhaustion of remedies, which would, as we said, mean that the employee might have to sue twice to preserve his right to sue at all. The reason, rather, is that passivity in the face of working conditions alleged to be intolerable is often inconsistent with the allegation. The significance of passivity is thus evidentiary. Suppose a worker has just been assigned to a job that he believes to be dangerous to his health, but the work force is unionized and he can file a grievance complaining about the assignment. His failure to do so may be compelling evidence that he, or a reasonable person in his situation, would not actually have found conditions in his new assignment unbearable. And likewise if, in a nonunionized shop, he is given an unreasonable order by his foreman and instead of complaining to the foreman's superior walks off the job and claims he was constructively discharged. Failure to exhaust may show that the employee didn't really consider his working conditions intolerable or may deny the employer a reasonable opportunity to correct the situation without facing a lawsuit. But if neither condition is fulfilled, exhaustion is not required.

Id. at 955-56.

In this case, in contrast to the examples given in Lindale, Ms. O'Gara did complain about the alleged harassment while she was on the job. She reported it to her boss, Mr. Graham, who then reported it to upper management. She was immediately interviewed by a member of upper management (Mr. Peterson). Then, the next day, both she and Mr. Graham were demoted. These were the only managers who complained about harassment, and these were the only managers who were demoted, despite the fact that Defendants now claim that there were rampant problems at the Koweba plant (which, presumably, implicated other Koweba managers). So far as she knew, nothing was done to punish any of the alleged harassers. (Defendants claim that Mr. Peterson told Mr. Hardman that he could be fired, but Defendants never informed Ms. O'Gara of this alleged conversation.) Indeed, the worst harasser, Mr. Hardman, was assigned to replace Mr. Graham as general manager of the plant after Mr. Graham was demoted, thereby giving him direct supervisory authority over Ms. O'Gara and Mr. Graham. A week after the demotion, Philip French announced the demotions in a meeting of managers in what a jury could view as a demeaning manner (for instance, Philip French made a point of stating that Ms. O'Gara "was no better than Fanny or Myrtle, who were lower employees, and that she was to report to [a management trainee with far less experience than her]" (Graham Aff. ¶ 60; O'Gara Dep. at 180.)). She was not given defined duties in her new job, other than to train her replacement. And Mr. Hardman continued his practice of refusing to tell Ms. O'Gara about directives coming from Philip French. (O'Gara Dep. at 268.) And finally, the management trainee who became her boss told the stockroom employees that he "has [Ms. O'Gara's] job now, so they no longer needed to come to [Ms. O'Gara] for anything." ( Id. at 262.)

Considering the response that Ms. O'Gara received from her first attempt to complain to upper management about the alleged harassment, a jury could reasonably find that continuing her employment with Mechanics while she sought legal redress would have been futile. Based upon these facts, a jury could reasonably find that Mechanics had no intention of taking meaningful action to stem the alleged harassment, and, arguably, Mechanics was in the process of phasing her out of her job because she had complained of harassment. Ms. O'Gara has demonstrated sufficiently that her decision to quit does not mean that she "didn't really consider h[er] working conditions intolerable" or "den[ied] the employer a reasonable opportunity to correct the situation without facing a lawsuit." Therefore Ms. O'Gara was not required to exhaust her legal remedies before quitting. See Lindale, 145 F.3d at 955-56 ("Failure to exhaust may show that the employee didn't really consider his working conditions intolerable or may deny the employer a reasonable opportunity to correct the situation without facing a lawsuit. But if neither condition is fulfilled, exhaustion is not required.").

Defendants' sole argument concerning Ms. O'Gara's constructive discharge claim is rejected, and therefore, Defendants' motion for summary judgment as to that claim is DENIED.

VII. Mr. Graham's Retaliatory Demotion Claim

Defendants next move for summary judgment as to Mr. Graham's claim that he was demoted on January 16, 1998, in retaliation for complaining on behalf of Ms. O'Gara about the alleged sexual harassment. Defendants argue that summary judgment is appropriate because Mr. Graham cannot show a causal connection between the demotion and his complaints, or that Mechanics' proffered reason for the demotion was pretextual.

As was the case with Ms. O'Gara's retaliatory demotion claim, in their reply brief, Defendants appear to abandon their argument that Mr. Graham cannot show the required causal connection between his complaints and the demotion. To the extent that Defendants still press the argument, the court rejects it for the same reasons that it rejected the argument in Ms. O'Gara's case. Mr. Graham complained about the alleged harassment at the same time as Ms. O'Gara, and was then demoted the next day under the same circumstances as Ms. O'Gara. See Sweeney v. West, 149 F.3d 550, 557 (7th Cir. 1998) ("A `telling temporal sequence' can establish the required nexus, but by `telling' we mean that the employer's adverse action follows fairly soon after the employee's protected expression.") (citing, inter alia, Johnson v. Sullivan, 945 F.2d 976, 980 (7th Cir. 1991) (protected activity one day before discharge "supports an inference that the two are causally connected"); Holland v. Jefferson Nat'l Life Ins. Co., 883 F.2d 1307, 1315 (7th Cir. 1989) (one week between protected activity and adverse activity is enough to support inference of a causal link)). As discussed above, in the same conversation that Philip French told Mr. Graham that he was being demoting, Philip French (at least arguably) made reference to the sexual harassment complaints. This only heightens the inference of a causal link. Therefore, the court finds that Mr. Graham has created an issue of fact as to whether there is a causal link between his sexual harassment complaints on behalf of Ms. O'Gara and his demotion.

Defendants also argue that summary judgment is appropriate because Mr. Graham cannot show that Mechanics' proffered reason for the demotion was pretextual. Mechanics states that it "demoted [Mr.] Graham solely because of his facility's poor performance." (Br. in Supp. of Defs.' Mot. for Summ. J. at 16.) Mechanics produces evidence that when Mechanics demoted Mr. Graham, the Koweba plant's performance was "poor." (Philip French Dep. at 73.)

In response, Mr. Graham produces evidence that the poor profits of the Koweba plant was due to the fact that it was an "experimental plant" in which Philip French, Mr. Hardman, and Darroll French were "constantly making changes and doing construction, which caused disruption." (Graham Aff. ¶¶ 50, 52; Hardman Dep. at 74; Wright Dep. at 84, 104-05.) Also, the Koweba plant was given a large distribution area by upper management (Graham Aff. ¶ 51), which "maybe" was too broad and too long. (Wright Dep. at 90.) Numerous problems existed at the Koweba plant for a "number of years" before David Graham became manager: the plant never made its profit budget, the stockroom did not run efficiently, merchandise cost was high, and there was high labor turnover. (Hardman Dep. at 53-54, 58-60.)

Despite this long history of problems at the Koweba plant, Mr. Graham had received no discipline of any kind, or taking away of responsibilities until the day after he brought Ms. O'Gara's complaint. (Graham Aff. ¶ 46.) Indeed, before that time, Mr. Graham's performance with Mechanics was always rated by Mechanics as excellent and Mr. Graham had consistently received promotions from Mechanics. (Graham Aff. ¶ 47.)

Further, a week before Mechanics demoted Mr. Graham, purportedly because of the poor performance of the Koweba plant, Mechanics paid him a substantial bonus. (Graham Aff. ¶ 55.) According to Mr. Wright (the Senior Vice President of Mechanics), this bonus was "guaranteed" to Mr. Graham "because of all of the construction and everything that was going on [at the plant]. We couldn't have held him responsible to make the exact numbers that had been projected in our budget, because of the disruption." (Wright Dep. at 104-05.) A week later, however, without any prior warning or criticism, Mechanics apparently determined that he could be held responsible for the poor performance, and demoted him. A jury could reasonably find that the reason for Mechanics' sudden change in philosophy was Mr. Graham's complaints of harassment the day before the demotion.⁷³

73 Mechanics notes that the bonus that he was paid in January 1998 was for the third quarter of 1997. Mr. Graham was not paid a bonus for the fourth quarter of 1997. However, it is undisputed that any bonus for the fourth quarter would not have been due before Mr. Graham was demoted on January 16, 1998. (Graham Aff. ¶ 56.) Further, the only evidence that performance at Koweba was poor for the fourth quarter of 1997 is a "bonus calculation worksheet" dated February 20, 1998 — over a month after Mr. Graham was demoted. (Graham Dep., Ex. 30.) Defendants produce no evidence showing that Mechanics was aware of the poor financial numbers for the fourth quarter prior to this time.

In conclusion, Defendants' motion for summary judgment as to Mr. Graham's claim that he was demoted in retaliation for complaining about the alleged sexual harassment of Ms. O'Gara is DENIED.

VIII. Mr. Graham's Retaliatory Discharge Claim

Defendants also move for summary judgment as to Mr. Graham's claim that he was discharged on April 1, 1998, in retaliation for complaining about the alleged sexual harassment on behalf of Ms. O'Gara. Defendants argue that summary judgment is appropriate because Mr. Graham cannot show a causal connection between the discharge and his complaints, or that Mechanics' proffered reasons for the discharge was pretext.

The evidence and arguments that sufficed to establish a causal link between Mr. Graham's complaints and his demotion do not apply with the same strength to his discharge. While the demotion occurred the day after his initial complaints of harassment, his discharge occurred two-and-a-half months after those complaints. "As the period of time separating the [complaints and the adverse action] lengthens, the hint of causation weakens." Davidson v. Midelfort Clinic, Ltd., 133 F.3d 499, 511 (7th Cir. 1998) (citation omitted). For instance, in Filipovic v. K R Express Systems, Inc., 176 F.3d 390 (7th Cir. 1999), the court held that a delay of four months was "[a] substantial time lapse between the protected activity and the adverse employment action" which operated as "counter-evidence of any causal connection." Id. at 399 (quotation omitted). The court has not located any Seventh Circuit case indicating that a delay of over two months can alone be sufficient to create an issue of fact as to a causal link, although it has also found no case with the opposite holding.

However, Mr. Peterson testified that at some point in February or March 1998, Mr. Graham threatened to file a lawsuit against Mechanics for being, as he saw it, wrongfully demoted in retaliation for reporting the sexual harassment. (Peterson Dep. at 72-74.) Although no evidence further specifies when Mr. Graham's threats were made, viewing the evidence in the light most favorable to Mr. Graham, those threats may be enough to create an issue of fact as to the causal link element of the prima facie case. However, the court need not decide the issue because Mr. Graham fails to create an issue of fact as to pretext.

In addition to arguing that Mechanics discharged Mr. Graham's because his alleged poor work performance continued after his demotion, Defendants argue that Mechanics discharged Mr. Graham because Philip French heard that Mr. Graham was interviewing with other employers⁷⁴ and was telling other management employees that Mechanics was going to be brought by another corporation and that they should also begin interviewing with other employers. (Philip French Dep. at 102-06, 108-09.) Philip French believed this information, and therefore felt that Mr. Graham lied when he told Mr. Wright that he was not interviewing elsewhere. ( Id. at 102-03.)

74 Mr. Graham admits that this was true; he used two business days in March 1998 to interview in Georgia and Minnesota with competitors of Mechanics. (Graham Dep. at 31, 37-38.)

Mr. Graham does not dispute that Philip French heard this information and believed it (for pretext purposes, it does not matter if the information was actually true, see Jordan v. Summers, 205 F.3d 337, 344 (7th Cir. 2000) ("[E]ven assuming that their ratings were horrendously inaccurate, Jordan does not come close to showing pretext with this argument. Pretext is a lie, not merely a mistake.")); instead, Mr. Graham argues that this stated reason for his discharge is pretextual because Philip French was aware that another Mechanics employee, Eric Brenner, actively sought employment elsewhere at the time of the sale of Mechanics to Cintas, but Mr. Brenner was not terminated or disciplined by Mechanics. (Graham Aff. ¶¶ 91-92; Philip French Dep. at 112.) However, there is no evidence that Mr. Brenner was urging other Mechanics' managers to leave the company as well. Philip French's deposition testimony clearly indicates that Mr. Graham's urging other managers to leave was Mr. Graham's most egregious offense. (Philip French Dep. at 101-13.) For instance, he testified that while he was traveling to all of Mechanics' 17 plants with the President of Cintas, "on our due diligence" before the sale, the general manager of the Fort Wayne plant told Philip French that he had heard from a handful of people that Mr. Graham had been urging them to leave the company. ( Id. at 108-09.) Given the pending sale of the company, Philip French felt that Mr. Graham's "contacting people [and] recommending that they interview [elsewhere] . . . absolutely was undermining . . . what we warranted . . . to Cintas as to how we were going to deliver the company." ( Id. at 109.) Since there is no evidence that Mr. Brenner recommended to others that they leave the company (and, in contrast to Mr. Graham, Mr. Brenner frankly discussed his concerns about Cintas and his desire to leave the company with Mr. Wright ( id. at 112)), the fact that Mr. Brenner also interviewed with other employers does not show that Mechanics' stated reason for terminating Mr. Graham was pretextual.

Mr. Graham also emphasizes that he was fired the day before he was scheduled to interview with Cintas. From this fact, Mr. Graham assumes that Mechanics discharged him in order to prevent him from telling Cintas about the harassment. Besides the speculative nature of this assumption (unaccompanied as it is by substantiating evidence), the assumption is undercut by the fact that when Mr. Graham threatened to file a suit against Mechanics for retaliatory demotion in February or March of 1998, Mechanics immediately reported to Cintas Mr. Graham's threat (that "he was wrongfully [demoted] as retaliation for reporting sexual harassment by Hardman") as a possible liability. (Peterson Dep. at 72-74.) Since Mechanics explained Mr. Graham's threat to Cintas in February or March, Mechanics would have no reason to fire Mr. Graham in April in order to prevent him from telling his story to Cintas-Cintas already was alerted to the matter.

Finally, Mr. Graham argues that the fact that Mechanics was on the verge of selling the company to Cintas when it fired him is evidence that Mechanics' stated reasons for firing him were pretextual. He points to Mr. Wright's testimony that he was not in favor of firing Mr. Graham since Cintas was on the verge of taking over the operations. (Wright Dep. at 106.) However, the fact that Philip French did not concur does not make Philip French's stated reasons pretextual. Indeed, the fact that the sale — which Mechanics was trying to "protect" ( id.) — was nearing completion, only lends credence to Philip French's testimony that he felt Mr. Graham's actions, which "absolutely w[ere] undermining . . . what we warranted . . . to Cintas as to how we were going to deliver the company" (Philip French Dep. at 109), merited immediate discharge.

Since Mr. Graham relies upon the indirect (or burden-shifting) method of attacking a summary judgment motion, his failure to cast doubt on one of Defendants' stated reasons for his discharge is fatal to his retaliatory discharge claim. See Ghosh v. Indiana Dep't of Envtl. Management, 192 F.3d 1087, 1091-92 (7th Cir. 1999) ("When the defendant offers multiple reasons for its employment decision, the plaintiff must show that all of the proffered reasons are pretextual in order to reverse the district court's grant of summary judgment. Ghosh's failure to address one of IDEM's proffered reasons is fatal to his claim.") (citing Mills v. Health Care Serv. Corp., 171 F.3d 450, 459 (7th Cir. 1999)). Therefore, Defendants' motion for summary judgment as to Mr. Graham's claim that he was discharged in retaliation for complaining about the alleged sexual harassment of Ms. O'Gara will be GRANTED.

IX. Mr. Graham's Breach of Contract Claim

Defendants next move for summary judgment as to Mr. Graham's claim that Mechanics failed to pay him any severance pay, thereby breaching his employment contract. Defendants argue that the undisputed evidence shows that there was no contract for severance pay between Mr. Graham and Mechanics on April 1, 1998, the date of Mr. Graham's termination.⁷⁵

75 Under Indiana law, the essential elements of a breach of contract action are the existence of a contract, the defendant's breach thereof, and damages. See White v. State Farm Mut. Auto. Ins. Co., 709 N.E.2d 1079, 1082 (Ind.Ct.App. 1999) (citation omitted). Only the first element is at issue here.

At the time Mr. Graham was hired in 1990, he signed an employment agreement with Mechanics. In April of 1994, Mr. Graham signed an addendum to this agreement which contained a covenant not to compete for two years and severance pay in the amount equal to twenty-six weeks of base salary. (Graham Aff. ¶ 4.) As discussed in the "Facts" section above, the addendum was called the "Mike Peele" agreement, and all Mechanics managers were required to sign it. (Graham Aff. ¶¶ 5-6; Peterson Dep. at 108; Phillip French Dep. at 59-60.)

As discussed above, in April 1996, Mr. Graham voluntarily resigned from Mechanics. When Mr. Graham was rehired by Mechanics in July 1996, he and Mechanics never signed a new non-competition/severance agreement. However, when Mechanics offered to rehire Mr. Graham, the company offered him "the same compensation package" which Mr. Graham had before he left Mechanics, and Mr. Graham accepted. (Graham Aff. ¶ 16; Graham Dep. at 276-77; Wright Dep. at 91-93.) In 1997, Mr. Graham mentioned a few times to Mechanics that he did not sign a new non-competition/severance agreement and asked if they were just going to live off the old "Mike Peele" agreement. (Graham Aff. ¶ 18; Graham Dep., Ex. 50.) Because Mechanics did not send Mr. Graham a new agreement after his May 11, 1997 letter, and because Mr. Graham thought all Mechanics managers were covered by employment agreements which contained covenants not to compete, Mr. Graham thought that the parties had decided to live according to the old agreement. (Graham Aff. ¶¶ 22-24; Graham Dep. Ex. 50.)

Mr. Peterson testified that he did not believe the parties came to a meeting of the minds on a severance agreement after Mr. Graham left Mechanics in 1996. (Peterson Dep. at 157-62.) However, Darroll French testified that all management people, including Mr. Graham, were supposed to be under contract, which included an agreement not to compete. (Darroll French Dep. at 90-91.) Mr. Wright, the Senior Vice President of Mechanics, testified that at the time of the merger with Cintas in 1998, "I know that we had a covenant [not to compete] on David," that "it's part of the employment agreement," and that the covenant was the same or nearly the same as the covenants with the other Mechanics' managers. (Wright Dep. at 109-11.)

According to Indiana law,

where the existence . . . of a contract . . . is the point in issue, and the evidence is conflicting or admits of more than one inference, it is for the jury to determine whether a contract in fact exists. Under the law of contracts, the intention of the parties is a factual matter to be determined by the trier of fact from all of the circumstances.

City of Indianapolis v. Twin Lakes Enters., Inc., 568 N.E.2d 1073, 1079 (Ind.Ct.App. 1991) (citations omitted). In this case, a jury could reasonably infer, based upon the testimony of Mr. Graham and Mr. Wright, that Mechanics came to a meeting of the minds after Mr. Graham returned to Mechanics in 1996, agreeing to operate pursuant to the terms of the "Mike Peele" non-competition/severance agreement. The evidence demonstrates that Mechanics used a severance package as consideration for its employees' assent to a covenant not to compete. Therefore, when Mr. Wright testified, "I know that we had a covenant [not to compete] on [Mr. Graham]," then a jury could infer that Mechanics also had a severance agreement with Mr. Graham.

Therefore, Defendants' motion for summary judgment as to Mr. Graham's breach of contract claim is DENIED.

X. Mr. Graham's Claim of Failure to Pay Wages When Due

Finally, Defendants move for summary judgment as to Mr. Graham's claim that Mechanics violated Indiana Code §§ 22-2-5-1, -2 by failing to pay his accrued vacation pay and severance pay.

Indiana courts have held that Indiana Code § 22-2-5-1, et seq., sometimes referred to as the "wage payment statute," contains three distinct regulations: "(1) employee's wages must be paid in money; (2) if requested, employers must pay employees semi-monthly or bi-weekly; and (3) employees, upon separation from employment, must be paid the amount due them at their next and usual payday (unless their whereabouts are unknown)." Indiana Heart Assocs., P.C. v. Bahamonde, 714 N.E.2d 309, 311 (Ind.Ct.App. 1999) (quoting Huff v. Biomet, Inc., 654 N.E.2d 830, 835 (Ind.Ct.App. 1995)). The third regulation is the only one applicable to this case. Vacation pay constitutes deferred compensation in lieu of wages and is thus subject to the provisions of the statute. See id. (citing Jeurissen v. Amisub, Inc., 554 N.E.2d 12, 13 (Ind.Ct.App. 1990)).

Defendants claim that Mr. Graham's statutory claim for failing to timely pay his accrued vacation pay fails for two reasons: (1) the wage payment statute only applies to employees who voluntarily terminate their employment; and, (2) the evidence shows that Mechanics paid the accrued vacation pay after Mr. Graham requested it, as per the requirements of the Statute.

Defendants first argue that summary judgment is appropriate because, by its terms, Indiana Code § 22-2-5-1 only applies when an employee leaves voluntarily.⁷⁶ However, the statute's plain language does not support this interpretation. The first part of section 22-2-5-1 applies in any instance when an employer fails to pay an employee within the time limits provided in that section. The statute requires semi-monthly payment regardless of whether the employee is continuously employed throughout that period, is terminated during that period, or leaves voluntarily. The second part of the statute recognizes a partial exception to the general rule when an employee leaves voluntarily. Nothing in the second part of the statute forecloses its application when an employee does not leave voluntarily. Indeed, the portion of the statute discussing voluntary termination begins with the word "however", thus signaling that what follows is an exception to the general rule. The section then provides that should an employee leave voluntarily, the employer is not required to pay the employee any amount due him until the next regular payday (thus preventing an employee from demanding full payment immediately upon his resignation, even if he resigns in the middle of the pay period), and further provides that if the employer does not know the whereabouts of an employee who left voluntarily, the employer does not become obligated until the employee makes a demand for his unpaid wages and makes his address known to his former employer. Thus, this portion of the statute does not state that the statute is only applicable in cases of voluntary termination; instead, it provides that the statute's scope is limited in cases of voluntary termination. See Duke v. Norman Equip. Co., No. S87-625 (RLM), 1992 WL 206298, at *3 (N.D.Ind. Feb. 28, 1992) ("The [wage payment] statute's structure and plain language do not support an interpretation that limits the application of the entirety of Ind. Code 22-5-2-1 only to cases in which an employee leaves voluntarily.").

76 Indiana Code § 22-2-5-1 provides:

(a) Every person, firm, corporation, limited liability company, or association, their trustees, lessees, or receivers appointed by any court, doing business in Indiana, shall pay each employee at least semimonthly or biweekly, if requested, the amount due the employee. The payment shall be made in lawful money of the United States, by negotiable check, draft, or money order, or by electronic transfer to the financial institution designated by the employee. Any contract in violation of this subsection is void.

(b) Payment shall be made for all wages earned to a date not more than ten (10) days prior to the date of payment. However, this subsection does not prevent payments being made at shorter intervals than specified in this subsection, nor repeal any law providing for payments at shorter intervals. However, if an employee voluntarily leaves employment, either permanently or temporarily, the employer shall not be required to pay the employee an amount due the employee until the next usual and regular day for payment of wages, as established by the employer. If an employee leaves employment voluntarily, and without the employee's whereabouts or address being known to the employer, the employer is not subject to section 2 of this chapter until:

(1) ten (10) days have elapsed after the employee has made a demand for the wages due the employee; or

(2) the employee has furnished the employer with the employee's address where the wages may be sent or forwarded.

Indiana Code § 22-2-5-2 provides:

Every such person, firm, corporation, limited liability company, or association who shall fail to make payment of wages to any such employee as provided in section 1 of this chapter shall, as liquidated damages for such failure, pay to such employee for each day that the amount due to him remains unpaid ten percent (10%) of the amount due to him in addition thereto, not exceeding double the amount of wages due, and said damages may be recovered in any court having jurisdiction of a suit to recover the amount due to such employee, and in any suit so brought to recover said wages or the liquidated damages for nonpayment thereof, or both, the court shall tax and assess as costs in said case a reasonable fee for the plaintiff's attorney or attorneys.

Moreover, in Osler Institute, Inc. v. Inglert, 558 N.E.2d 901 (Ind.Ct.App. 1990), aff'd, 569 N.E.2d 636 (Ind. 1991), the Indiana Supreme Court held that the trial court did not err in awarding damages under the wage payment statute despite the trial court's finding that the plaintiff had been terminated from her employment. Although the court did not expressly hold that the wage payment statute applies to involuntary terminations, the court assumed it. And cases decided after Osler have also assumed that Indiana Code §§ 22-2-5-1 and -2 applies to involuntary terminations. See Indiana Heart Assocs., 714 N.E.2d at 311; Stampco, Inc. v. Guffey, 572 N.E.2d 510, 514 (Ind.Ct.App. 1991); New Frontiers v. Goss, 580 N.E.2d 310 (Ind.Ct.App. 1991). In contrast, Defendants point to no cases which have held that the wage payment statute does not apply to involuntary terminations. The court concludes that Mr. Graham can avail himself of the wage payment statute regardless of whether he resigned or was fired.

Defendants next argue that summary judgment is appropriate because the evidence shows that Mechanics paid Mr. Graham's accrued vacation pay after Mr. Graham requested it. This argument fails as a factual matter. Mr. Graham testified that he was not paid his vacation pay when it was due, and he had to ask more than once before it was paid to him late. (Graham Aff. ¶ 119.) As discussed in the "Facts" section above, Defendants deny Mr. Graham's assertion that he had to ask for his overdue vacation pay more than once before it was paid to him. As support, they point to Mr. Peterson's testimony that although Mr. Graham's vacation pay "was not paid when it should have been, . . . when [Mr. Graham] told me [that the vacation pay was not paid when due], we paid it." (Peterson Dep. at 152-53.) To the extent Mr. Peterson's testimony conflicts with Mr. Graham's, on summary judgment, it is irrelevant that Mr. Peterson disputes Mr. Graham's assertion that Mr. Graham had to ask for his overdue vacation pay more than once.

Moreover, as a legal matter, it does not appear that Mr. Graham was required to make a specific demand for his vacation pay after he was terminated. The wage payment statute is interpreted by Indiana courts to mean that "employees, upon separation from employment, must be paid the amount due them at their next and usual payday (unless their whereabouts are unknown)." Indiana Heart Assocs., 714 N.E.2d at 311 (quotation omitted). In other words, "[n]o demand to be paid semi-monthly or bi-weekly is necessary to activate the sanctions set forth in Ind. Code 22-2-5-1 where an employer violates the third regulation by failing to pay amounts due an employee upon separation." Duke, 1992 WL 206298, at *2 (citing Fardy v. Physicians Health Rehabilitation Servs., 529 N.E.2d 879, 882 (Ind.Ct.App. 1988); Baesler's Super-Valu v. Indiana Commissioner of Labor, ex rel. Bender, 500 N.E.2d 243, 249 (Ind.Ct.App. 1986)).

Defendants also move for summary judgment as to Mr. Graham's claim that Mechanics violated the wage payment statute by failing to pay him severance pay. Defendants argue that since Mr. Graham "cannot succeed on his breach of contract claim, Mechanics owed him no severance." (Defs.' Reply Br. in Supp. of Defs.' Summ. J. Mot. at 15.) This argument is rejected because the court has already found that Mr. Graham has created a genuine issue of material fact as to his breach of contract claim (seeking severance pay).

For all of the above-stated reasons, Defendants' motion for summary judgment as to Mr. Graham's claim that Mechanics violated the wage payment statute is DENIED.

XI. Conclusion

As discussed throughout this Entry, Defendants' Motion to Strike various evidentiary materials submitted by Plaintiffs is GRANTED in part and DENIED in part.

Ms. O'Gara has demonstrated a genuine issue of material fact as to whether the alleged acts of harassment, beginning in 1995, were part of a continuing violation. Based upon these alleged acts, a jury could reasonably find that Ms. O'Gara was subjected to a hostile work environment. Therefore, as to Ms. O'Gara's hostile environment sexual harassment claim, Defendants' Motion for Summary Judgment is DENIED.

To the extent that the Amended Complaint states a disparate treatment claim, Defendants' Motion for Summary Judgment as to that claim will be GRANTED.

As to Ms. O'Gara's retaliatory demotion claim, Defendants' Motion for Summary Judgment is DENIED.

As to Ms. O'Gara's constructive discharge claim, Defendants' Motion for Summary Judgment is also DENIED.

As to Mr. Graham's retaliatory demotion claim, Defendants' Motion for Summary Judgment is DENIED.

As to Mr. Graham's retaliatory discharge claim, Defendants' Motion for Summary Judgment will be GRANTED.

As to Mr. Graham's breach of contract claim, Defendants' Motion for Summary Judgment is DENIED.

And as to Mr. Graham's "wage payment statute" claim, Defendants' Motion for Summary Judgment is DENIED.

No final judgment will be issued at this time because the majority of Plaintiffs' claims remain pending.

ALL OF WHICH IS ORDERED.