Lisa Anne Varner, Rony Varner, Peggy Varner v. National Super Markets, Inc., Lisa Anne Varner, Rony Varner, Peggy Varner v. National Super Markets, Inc.

Citations: 94 F.3d 1209; 1996 U.S. App. LEXIS 23425; 71 Fair Empl. Prac. Cas. (BNA) 1367Docket: 95-3611

Court: Court of Appeals for the Eighth Circuit; September 9, 1996; Federal Appellate Court

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National Super Markets, Inc. appeals a district court ruling favoring Lisa Anne Varner in her Title VII and Missouri Human Rights Act claims. Varner, a 17-year-old floral worker, experienced repeated sexual harassment from Robert Edmiston, a 51-year-old produce worker, including graphic comments and physical assaults on two occasions in 1991. After the first incident, Varner's fiancé, Chris Pilch, reported Edmiston's actions to store manager Curtis Mason, who advised against formal reporting and failed to take action. Following a second assault, Pilch again informed Mason, who dismissed the incident. Varner eventually reported the assaults to police, leading to Edmiston's arrest; Mason acknowledged his prior knowledge of the incidents but insisted he could not act without Varner's direct report. Varner suffered significant psychological distress as a result, including post-traumatic stress syndrome. The court affirmed the district court’s judgment in favor of Varner.

National's sexual harassment policy instructs employees to report incidents of harassment to the Human Resources or Labor Relations Departments, with supervisors required to direct employees to these departments without taking personal action. Varner, a member of United Food Commercial Workers' Union, Local 655, did not utilize the grievance and arbitration processes provided in the collective bargaining agreement (CBA). She filed a complaint with the Missouri Commission on Human Rights and the Equal Employment Opportunity Commission on May 18, 1992, subsequently taking her case to Missouri state court, which was later removed to federal district court. A jury awarded her $30,000 in actual damages, and the district court denied National's motion for judgment as a matter of law (JAML).

On appeal, National contends that the district court erred in denying its JAML motion based on several arguments: Varner's exclusive remedy should be under Missouri workers' compensation law; she did not exhaust the grievance and arbitration remedies of the CBA; she failed to follow the reporting procedures of the sexual harassment policy; and her administrative complaint was not filed timely, barring claims related to incidents before November 22, 1991. Varner cross-appeals, claiming errors in jury instructions, evidence handling, and the failure to present her punitive damages claim to the jury.

The review of the JAML denial is de novo, favoring Varner in factual disputes. National argues a lack of subject matter jurisdiction based on the Missouri workers' compensation statute's exclusivity provision, which precludes other remedies for workplace injuries. However, prior rulings indicate that this provision does not override federal rights under Title VII or state claims under the Missouri Human Rights Act (MHRA), with courts not extending exclusivity to bar MHRA claims. The MHRA explicitly states that laws inconsistent with its provisions do not apply.

An award of damages under the Missouri Human Rights Act (MHRA) is permissible even if such damages could also be claimed under the Workers' Compensation Act, as established in Karcher. The Missouri Supreme Court clarified that plaintiffs are not required to exhaust administrative remedies prior to filing suit under the MHRA, reaffirming this principle in Green v. City of St. Louis. Additionally, the U.S. Supreme Court in Alexander v. Gardner-Denver Co. determined that pursuing a claim through grievance and arbitration under a collective bargaining agreement (CBA) does not preclude a civil suit under Title VII, which also applies to those who opt out of grievance procedures. Hence, National's argument for requiring exhaustion of grievance procedures before litigation is unfounded, and the district court's denial of National's motion for judgment as a matter of law (JAML) was correct.

Furthermore, National's assertion that Varner failed to utilize its sexual harassment reporting procedures was rejected. The critical issue is whether National was aware of the harassment and failed to act appropriately. Varner’s reports to Mason via Pilch sufficiently alerted National, as employer liability extends to agents of the employer. The court found that National's response to the reported incidents was inadequate, despite Mason's supervisory authority. Additionally, National's sexual harassment policy, while commendable, does not absolve it from liability; as determined in Meritor, a policy that does not encourage reporting does not protect the company from claims of harassment.

An employer's failure to implement a reporting procedure for supervisors aware of sexual harassment incidents may not absolve it of liability. Varner's claims against National include a challenge to the timeliness of her complaint regarding all but the November 22, 1991, harassment incidents. Under Title VII and the MHRA, a complaint must be filed within 300 days of the discriminatory act. Varner filed a complaint with the MCHR and EEOC on May 18, 1992, which included the November 22 incident within the limitations period, but earlier incidents of verbal harassment did not. The timeline for the initial touching incident remains ambiguous. Even if only the November 22 incident is considered timely, National's argument is undermined by the "continuing violation" doctrine, which allows for the entire course of conduct creating a hostile environment to be actionable based on the last act of discrimination.

Varner also cross-appealed regarding the district court's refusal to submit a punitive damages instruction to the jury. For punitive damages under the Civil Rights Act of 1991, she must demonstrate that National acted with malice or reckless indifference to her rights. Similar standards apply under the MHRA, requiring evidence of outrageous conduct. Varner failed to prove that National's actions met these standards, as mere duplicative actions of employees do not suffice for punitive damages. As such, the trial court's decision not to include a punitive damages instruction was upheld. The judgment was affirmed, and further claims by Varner were deemed unnecessary to address.