Brandi M. Dearth, a former administrative assistant at InfoPro Group, Inc., filed a lawsuit against the company and its president, Richard L. Collins, alleging sexual harassment in violation of Title VII of the Civil Rights Act of 1964. The district court granted summary judgment to the defendants. The court noted that Title VII permits claims only against employers, not individual employees, a principle established in prior cases such as Hinson v. Clinch County Bd. of Educ. and Busby v. City of Orlando. Dearth contended that this precedent should not apply to private employers and sought to hold Collins individually liable. However, the court rejected this argument, affirming that Title VII’s liability limitations apply universally to both public and private sector employers. Dearth also proposed that Collins should be deemed an alter ego of InfoPro, allowing for individual liability. The court did not accept this reasoning, emphasizing that the corporate structure protects individuals from such claims under Title VII.
Dearth's argument for individual liability under Title VII through the alter ego doctrine is rejected for two main reasons. First, Title VII does not support imposing individual capacity liability based on the alter ego theory, as established in Worth v. Tyer and EEOC v. AIC Security Investigations, Ltd., where the Seventh Circuit found no basis for individual liability under the ADA, even if an individual is an alter ego of the corporation. The court emphasized that the issue of whether the corporate veil can be pierced is distinct from the question of individual liability under Title VII. Moreover, there is no claim that InfoPro is insolvent or unable to pay any judgment, reinforcing the conclusion that the alter ego doctrine does not create an exception to individual employee liability under Title VII.
Second, Dearth failed to demonstrate that Collins is InfoPro's alter ego according to Georgia corporate law, which protects individual shareholders and officers from liability unless there is evidence of fraud or abuse of the corporate form. To pierce the corporate veil under the alter ego doctrine, three criteria must be met: (1) the corporation was used solely as a tool for personal affairs; (2) there is a unity of interest and ownership such that the corporation and owners' separate identities are non-existent; and (3) adhering to the corporate entity would result in injustice or fraud protection. Dearth provided no evidence that Collins misused InfoPro’s corporate form or commingled funds. Additionally, there is no indication that disregarding the corporate form is necessary to satisfy any potential Title VII judgment against InfoPro. The court concluded that the alter ego theory unjustly seeks to impose liability on shareholders without adequate evidence of fraud or injustice, leading to the rejection of Dearth's claims against Collins individually. The district court also granted InfoPro's motion for summary judgment on two alternative grounds.
The district court granted summary judgment in favor of InfoPro, concluding that Dearth did not provide sufficient evidence to demonstrate that Collins's alleged sexual harassment was severe or pervasive enough to create a hostile work environment or alter her employment conditions. Even assuming Dearth established a prima facie case of sexual harassment, the Faragher-Ellerth affirmative defense applied, barring her claims. The court found that InfoPro had reasonable measures in place to prevent and address harassment, evident from its sexual harassment policy and prompt investigation once notified of Dearth's claims, which arose only after her termination was communicated.
Although Dearth argued that her termination resulted from her refusal of Collins's advances, this wrongful termination claim was not protected by the Faragher-Ellerth defense. However, InfoPro successfully demonstrated that Dearth's termination was due to documented complaints about her job performance and behavior, rather than the alleged harassment. The increase in complaints from other employees and the prior intention to terminate Dearth further supported InfoPro's position. Consequently, Dearth’s claims were classified as hostile work environment sexual harassment, which were properly dismissed under the Faragher-Ellerth doctrine. The court affirmed the district court’s decision to grant summary judgment to Collins and InfoPro.
