In the
United States Court of Appeals
For the Seventh Circuit

No. 99-1155

Equal Employment Opportunity Commission,

Plaintiff-Appellee,

v.

Indiana Bell Telephone Co., Inc., d/b/a
Ameritech Indiana, and Ameritech Corp.,

Defendants-Appellants.



Appeal from the United States District Court
for the Southern District of Indiana,
Indianapolis Division.
No. IP-95-217-C M/S--Larry J. McKinney, Judge.


Argued November 12, 1999--Decided May 26, 2000



  Before Flaum, Ripple, and Rovner, Circuit
Judges.

  Flaum, Circuit Judge. The defendants,
Indiana Bell Telephone Co., doing
business as Ameritech Indiana, and
Ameritech Corp. (collectively referred to
as "Ameritech") appeal the judgment
entered against them following a jury
trial in the United States District Court
for the Southern District of Indiana. The
defendants contend that the evidence
presented at trial was insufficient to
support the jury’s verdict. In addition,
the defendants allege various errors by
the district court concerning the
admission of evidence and the jury
instructions. For the reasons stated
below, we reverse and remand this case to
the district court for further
proceedings consistent with this opinion.

I.   Facts
A.
  This appeal arises out of a suit brought
by the Equal Employment Opportunity
Commission ("EEOC" or "Commission") on
behalf of the claimants alleging that
Ameritech engaged in unlawful employment
discrimination in violation of Title VII
of the Civil Rights Act of 1964, 42
U.S.C. sec. 2000e et seq. The sexual
harassment claims upon which the EEOC’s
suit is based stem from a course of
sexually offensive conduct that former
Ameritech employee Gary Amos directed at
several of his female co-workers.
Although only those incidents that
occurred after November 21, 1991 can
serve as a basis for holding Ameritech
liable for Amos’s actions, all of the
incidents are relevant to Ameritech’s
knowledge of Amos’s propensity to harass
women and to the reasonableness of
Ameritech’s response./1 As such, it is
necessary to recount the entire series of
incidents constituting Amos’s allegedly
offensive conduct.

  In 1975, Amos was employed in
Ameritech’s coin center with Barbara
Huckeba. At trial, Huckeba testified that
Amos exposed himself to her on three
separate occasions. Huckeba also stated
that she reported these incidents to her
supervisor. Ameritech discharged Huckeba
on October 24, 1975, citing her problems
with Amos and its belief that Huckeba, as
a white female, could more readily find
another job than Amos, a black male. All
of the complaints surrounding Huckeba’s
encounters with Amos were expunged from
Amos’s employment record, but two
complaints about Amos’s behavior during
1975 were not expunged. These complaints
indicate that Amos brushed one co-
worker’s buttocks as she bent over, and
that Amos partially exposed his penis to
another co-worker.

  In February 1988, Amos engaged in
conduct that Jacquelyn Stine, a co-worker
with whom he was training to be a
customer service representative, found
offensive. Stine testified that this
conduct included telling Stine he was in
love with her, smelling Stine’s hair and
telling her it was beautiful, and running
a strand of Stine’s hair through his
mouth. During Stine’s last encounter with
Amos, Amos pushed himself against Stine
as she stood at a vending machine and
Stine noticed that Amos had an erection.
As a result of these problems with Amos,
Stine left the customer service training
program and returned to her previous job
as an operator. A copy of Stine’s
complaint against Amos was placed in his
file, but Ameritech did not discipline
Amos at this time.
  An Ameritech report indicates that on
July 18, 1989, Amos continued his
offensive conduct by partially exposing
his penis to a co-worker while seated in
the back of a van. Janie Kern, the co-
worker involved in this incident,
reported Amos’s conduct to Ameritech. At
this point, Ameritech warned Amos that he
would be disciplined if he were found at
fault in any future allegations of sexual
harassment.

  In 1990, six female Ameritech employees
formally complained to Ameritech about
Amos’s conduct in the small business
office where he worked. Of these six
women, five indicated that Amos had
rubbed his penis against them. Ameritech
investigated these complaints and
suspended Amos for two weeks. In
addition, Ameritech stripped Amos of a
sales award and informed him that he
faced termination for any such future
incidents. At the time the decision to
suspend Amos was made, Ameritech did not
review Amos’s personnel files, nor were
any of the supervisors involved in the
decision aware of Amos’s past history of
misconduct.

  Despite the two-week suspension, Amos
continued his harassing behavior. In
early 1991, Debbie Murray, one of Amos’s
co-workers in the small business office,
asked to move to a different desk because
Amos was making improper comments. These
comments included inviting Murray over to
his house and asking her whether she ate
breakfast alone. That same year,
Ameritech received an anonymous letter
claiming that Amos was still sexually
harassing women in the workplace. In the
investigation that followed, at least
three women confirmed that Amos was still
engaging in sexually harassing conduct.

  In February 1992, Jennifer Rice, another
employee in Ameritech’s small business
office, complained about Amos’s conduct.
Rice stated that Amos rubbed himself
against her, rubbed her neck, and made
inappropriate comments about her body. In
response to Rice’s complaint, Brian
Bauer, the direct supervisor of both Amos
and Rice, and Darlene Olberding, who was
in charge of the managers in the small
business office, met with Amos. Amos was
informed that he could not have any
physical contact with anyone in the
office, and that further misconduct could
result in his suspension or termination.
Amos expressed interest in moving out of
the small business office, but Bauer told
him that a transfer would not be the
answer.

  One of the claimants in this case,
Debbie Wentland, was also employed in the
small business office and was seated in a
four-person cubicle directly across the
aisle from Amos’s cubicle. Initially,
Amos and Wentland engaged in only
innocuous conversations, but during one
encounter Amos walked behind Wentland’s
chair and placed his hands on her
shoulders. Wentland also testified that
Amos rubbed and touched his crotch area
on a daily basis. At various times, Amos
would approach Wentland and touch her,
including standing close enough to her
desk that their legs touched and rubbing
his hand up and down her back. Wentland
asked Amos to stop touching her. She
complained to Bauer in November 1992
after an incident in which Amos patted
her stomach and said "Oh, so you are
going to be a mom," and then followed her
to her desk where he continued to talk to
her while rubbing his erect penis through
his pants.

  Bauer met with Wentland on November 25,
1992 and informed her that he would
forward her complaint to Monica Sharp,
Ameritech’s Equal Employment Opportunity
("EEO") Coordinator. Sharp first met with
Wentland to discuss Amos’s conduct, and
then met with Amos on two occasions.
Sharp informed Amos that he had violated
the previous warning not to touch anyone
in the office. On December 18, 1992,
Sharp recommended that Amos be terminated
based on her conclusion that Amos "d[id
not] seem able to control himself at
Indiana Bell." After forwarding this
recommendation to Ameritech’s legal
department, Sharp went on vacation.

  On December 28, 1992, Labor Relations
manager Joyce Leck returned from vacation
and, after reviewing Sharp’s
recommendation that Amos be terminated,
noticed that the thirty-day period for
disciplinary action provided for in the
collective bargaining agreement had
expired. Because Ameritech missed the
deadline for disciplining Amos, the
company did not take any action against
him. However, Sharp did meet with Leck
and an official from Ameritech’s legal
department. They agreed that the next
complaint against Amos would result in an
immediate suspension pending
investigation in order to avoid missing
any deadlines./2 Amos was then informed
that he was not being disciplined because
of an administrative error, but that any
further misconduct could result in his
suspension or termination.

  In January 1993, Sharp began an
investigation to determine whether Amos
was continuing to harass Wentland or any
of the other service representatives.
While Wentland stated that Amos had not
harassed her again, she did recommend
that Sharp speak to Lori Everts or
Patricia Black. Everts, a chief union
steward and a claimant in this case,
refused to talk to Sharp because she
regarded it as a conflict of interest to
assist the company in investigating a
member of the union. After an
unproductive meeting with Black, during
which a union steward continually
interrupted the interview, Sharp became
angry at what she regarded as union
interference with the investigation.
Sharp informed Leck, Ameritech’s Labor
Relations manager, of her concerns. Leck
then informed the union president that
the company intended to hold the union
liable if it were sued as a result of
Amos’s conduct.

  On April 15, 1993, Everts filed a charge
with the EEOC based on Amos’s conduct. In
her charge, Everts stated that Amos
walked around the office with his hands
in his pockets fondling his genitalia.
Everts also testified that Amos began
directing his behavior toward her in
February 1993 by brushing up against her
with his penis erect. Everts stated that
at different times Amos brushed his hand
over her buttocks, grabbed her waist, and
stared at her and stuck out his tongue.
Despite the filing of the EEOC charge
Amos’s misconduct continued, including
tapping his fingers on Everts’s back,
placing his hand on her back as she
walked down the hall, and yelling out to
her that her legs looked nice.

  When Ameritech received notice of
Everts’s EEOC complaint, it acted
according to established company
procedures for handling external
complaints and referred the matter to
Ameritech’s legal department. Ameritech
did not investigate the complaint, but
rather cooperated with the EEOC
investigation. Because Everts had refused
to cooperate in Sharp’s investigation,
Leck believed that the complaint was in
response to the company’s threat to hold
the union liable. An attorney in
Ameritech’s legal department ultimately
concluded that Everts’s charge had no
merit. Amos was not disciplined as a
result of the Everts complaint.

  In June 1993, Patricia Wolter, a
supervisor in the small business office,
found a note on her desk that read:
"Patti, you look so sexy today." Wolter
was upset by the note, and she asked Amos
if he was the author. Amos admitted
having written the note, but he claimed
that it was just a joke. Wolter reported
the incident to Carol Merriwether, who
was serving as EEO Coordinator while
Sharp was out of the office. As a result
of this incident, Ameritech suspended
Amos for thirty days.

  Wendy Pollard, the third claimant in
this case, began working with Amos in the
small business office in November 1993.
After approximately one month in the
office, Amos began touching and grabbing
Pollard’s hair and shoulders when he
passed. Amos also frequently stared at
Pollard while she was working, often with
his belt unbuckled. One afternoon, after
overhearing a conversation about
Pollard’s new jeans, Amos stood up,
stared at Pollard’s crotch, and said
"Wendy, I think you are right, those
jeans are a little too tight." In other
incidents, Amos told Pollard that he
would try to stop touching her hair but
that he was obsessed, and brought in
pictures of topless women and women in
lingerie to show Pollard and another
female co-worker.

  The final incident during Amos’s tenure
at Ameritech occurred on March 7, 1994.
While Pollard was moving her belongings,
she looked over the partition next to her
new desk and saw Amos sitting in a chair
masturbating. Pollard reported the
incident to Ameritech’s EEO Coordinator.
Ameritech suspended Amos pending
investigation and it terminated his
employment later that month.

B.
  On February 21, 1995, the EEOC filed a
complaint in federal district court
against Ameritech. The Commission alleged
that Ameritech violated Title VII of the
Civil Rights Act of 1964, 42 U.S.C. sec.
2000e et seq., by subjecting Everts and
other similarly situated females to
sexual harassment. The EEOC sought both
compensatory and punitive damages.

  Before the trial on the sexual
harassment claims against Ameritech
began, the district court considered
whether to allow Ameritech to present
evidence at trial related to its
collective bargaining agreement with
Amos’s union. Ameritech wanted to present
evidence that its decision regarding the
timing of Amos’s discharge was influenced
by management’s concern that if Amos were
discharged in violation of the "just
cause" provision of the collective
bargaining agreement, Amos would have
filed a union grievance, prevailed on
that grievance, and been reinstated by an
arbitrator.

  After hearing argument on the issue, the
district court excluded testimony
relating to Ameritech’s concern that Amos
might be reinstated under the "just
cause" standard. As the court read the
relevant law, Title VII required
Ameritech to "act adequately and
reasonably to end the harassment." The
district court found that
Ameritech’scollective bargaining
agreement, or its fears that an
arbitrator might reinstate Amos, were not
relevant in determining the
reasonableness of Ameritech’s actions
under Title VII.

  The district court reaffirmed its
evidentiary ruling as to the collective
bargaining agreement and the arbitration
evidence in a written order dated
September 15, 1997. In that order, the
court stated that "any concerns by an em
ployer that an arbitrator might undo the
discipline it has meted out for
misconduct does not excuse taking no, or
very little, action when [Title VII]
requires them [sic] to act promptly to
halt any violations of its provisions."
The court also noted its fear that if an
employer was entitled to delay taking
action against an employee because of the
risk of arbitration, employment
discrimination law would be subject to
"the vagaries of collective bargaining
and negotiated grievance and arbitration
procedures."

  During the course of trial, Ameritech
moved for judgment as a matter of law as
to punitive damages. Ameritech argued
that the EEOC had presented no evidence
that would support an award of such
damages. The district court denied
Ameritech’s motion, and held that it
would instruct the jury on punitive
damages. The court’s decision with regard
to this instruction was based on the
understanding that punitive damages are
available if "an employer exhibits a
consistent attitude of indifference to
the protected rights of the claimant in
the face of evidence indicating that
corrective action that has already been
taken has not stopped the harassment."
The court further stated that the EEOC
would have to establish Ameritech’s
reckless indifference to the claimants’
Title VII rights by clear and convincing
evidence.

  Near the close of trial, and again at
the end of trial, Ameritech renewed its
motion for judgment as a matter of law.
Ameritech argued that the evidence
presented by the EEOC did not establish a
hostile working environment or liability
on the part of Ameritech, and further
contended that the evidence failed to
show damages in connection with Everts’s
claim. The district court denied both of
these motions and the case went to the
jury.

  The jury returned a verdict for the EEOC
in the following amounts: $10,000 in
compensatory damages and $500,000 in
punitive damages on Wentland’s claim; $0
in compensatory damages and $50,000 in
punitive damages on Everts’s claim; and
$5,000 in compensatory damages and
$500,000 in punitive damages on Pollard’s
claim. Ameritech immediately moved for
judgment notwithstanding the verdict and
remittitur and the district court took
both of these motions under advisement.

  On October 3, 1997, the district court
entered judgment in favor of the
Commission. The court ordered that
damages be paid to the claimants in the
following amounts: $10,000 in
compensatory damages and $290,000 in
punitive damages to Wentland; $0 in
compensatory damages and $0 in punitive
damages to Everts; and $5,000 in
compensatory damages and $295,000 in
punitive damages to Pollard. The court
then denied a motion by the Commission to
amend the judgment, and denied
Ameritech’s motions for judgment
notwithstanding the verdict, new trial,
and remittitur beyond the reduction in
damages reflected in the court’s order.
Ameritech filed a notice of appeal with
this Court, and the Commission cross-
appealed. The two appeals were
consolidated for argument.

  On October 27, 1998, the district court
issued an order indicating it was
inclined to grant the Commission’s motion
to reconsider the issue of Everts’s
damages. The case was then remanded to
the district court for modification of
final judgment. Upon remand, the district
court reinstated the jury’s verdict
awarding $50,000 in punitive damages to
Everts. Ameritech now appeals from the
district court’s amended judgment of
December 22, 1998.


II.   Analysis
A.

  We review the district court’s denial of
Ameritech’s motions for judgment as a
matter of law de novo. See Emmel v. Coca-
Cola Bottling Co. of Chicago, 95 F.3d
627, 629 (7th Cir. 1996). Our review is
limited to "whether all evidence
presented, ’combined with all reasonable
inferences that may be drawn from it, is
sufficient to support the verdict when
viewed in the light most favorable to the
party winning the verdict.’" Hennessy v.
Penril Datacomm Networks, Inc., 69 F.3d
1344, 1354 (7th Cir. 1995) (quoting
Mathewson v. National Automatic Tool
Corp., 807 F.2d 87, 90 (7th Cir. 1986)).
As to punitive damages, we ask only if "a
reasonable jury could have awarded
punitive damages against [Ameritech]."
Tincher v. Wal-Mart Stores, Inc., 118
F.3d 1125, 1132 (7th Cir. 1997).

  Ameritech first contends that the
district court erred in denying its
motion for judgment as a matter of law as
to the issue of punitive damages because
the evidence presented at trial did not
support a punitive damages award.
Punitive damages "require more than . . .
’intentional unlawful discrimination.’"
Tincher, 118 F.3d at 1133 (quoting Emmel,
95 F.3d at 636). The EEOC must also
"prove that the defendant employer
engaged in the discriminatory practice
’with malice or reckless indifference to
the federally protected rights of the employee.’"
Emmel, 95 F.3d at 636 (quoting 42 U.S.C.
sec. 1981a(b)(1)). A showing of "malice
or reckless indifference" under 42 U.S.C.
sec. 1981a requires proof "that the
defendant almost certainly knew that what
he was doing was wrongful and subject to
punishment."/3 Soderbeck v. Burnett
County, Wis., 752 F.2d 285, 291 (7th Cir.
1985).

  In evaluating Ameritech’s insufficiency
of the evidence claim as to punitive
damages, we must consider the evidence in
light of the entire record to determine
whether a reasonable jury could have
determined that Ameritech acted with
"malice or reckless indifference" to the
claimants’ Title VII rights. See Emmel,
95 F.3d at 636. When examined against the
backdrop of Amos’s past history, it is
apparent that a reasonable jury could
have concluded that Ameritech acted with
"malice or reckless indifference." In
this regard, it is significant that by
November 21, 1991, Ameritech had
accumulated a history of complaints
against Amos going back to 1975.
Ameritech had received at least eleven
complaints against Amos indicating a
pattern and history of misconduct
directed at women. These complaints, and
Ameritech’s disciplinary actions in
response, indicate that as of November
21, 1991, Ameritech was on notice of
Amos’s recurring problems with female co-
workers. See Jonasson v. Lutheran Child &
Fam. Serv., 115 F.3d 436, 439 (7th Cir.
1997) (stating that although incidents
prior to November 21, 1991 cannot serve
as a basis for employer liability, they
may be used to provide the jury a context
for evaluating the reasonableness of the
employer’s response).

  Despite its knowledge of Amos’s
misconduct and the futility of its prior
disciplinary efforts, Ameritech continued
to allow Amos to work in the small
business office where ninety percent of
the employees were female. Even after the
company learned in February 1992 that
Amos had sexually harassed Jennifer Rice,
the company issued another warning to
Amos and refused his request to be
transferred out of the small business
office. Furthermore, after Wentland
complained to Ameritech about Amos’s
conduct and a subsequent investigation
found that Amos sexually harassed
Wentland, Ameritech did not discharge
Amos within the thirty-day limit for
disciplinary action imposed by the
collective bargaining agreement. In
addition, Ameritech concluded that
Everts’s EEOC charge had no merit and
thereby failed to act on it, and
repeatedly refused to discipline Amos on
other occasions. This Court has
previously held that the failure of an
employer to act to remedy an employee’s
misconduct, when coupled with the
employer’s knowledge of that conduct, can
be sufficient to justify an award of
punitive damages. See Jonasson, 115 F.3d
at 438. While the evidence in this case
may not compel the conclusion that
Ameritech acted with "malice or reckless
indifference" to the claimants’ Title VII
rights, it certainly provides a
sufficient basis for a reasonable jury to
find in favor of the Commission.

  In addition to its claims as to the
insufficiency of the evidence on punitive
damages, Ameritech also contends that the
evidence presented by the EEOC was
insufficient to support a conclusion that
Ameritech was negligent, or that the
claimants suffered a hostile work
environment. However, given our
conclusion that the record supports an
award of punitive damages against
Ameritech, we find the company’s
additional insufficiency of the evidence
arguments to lack merit. First, any
question as to the sufficiency of the
evidence on negligence, and consequently
as to Ameritech’s liability, see Perry v.
Harris Chernin, Inc., 126 F.3d 1010, 1013
(7th Cir. 1997) ("[E]mployers are liable
only when they have been negligent either
in discovering or remedying the
harassment."), is necessarily answered by
our discussion of punitive damages.
"Malice or reckless indifference"
establishes a higher standard than
negligence, so evidence supporting the
former supports the latter. Similarly, we
conclude that the evidence in this case
was sufficient to establish the existence
of a hostile work environment. All of the
claimants experienced various incidents
with Amos involving suggestive comments,
inappropriate touching, or indecent
exposure. Furthermore, all of the
claimants testified that they were
disturbed by this conduct. There is no
question that the evidence presented by
the EEOC was enough to establish a
hostile work environment from both an
objective and a subjective perspective,
see id., and that the evidence presented
was sufficient to justify an award of
both compensatory and punitive
damages./4


B.

  With regard to Ameritech’s evidentiary
challenges, we review the rulings of the
district court for an abuse of
discretion. See Buckner v. Sam’s Club,
Inc., 75 F.3d 290, 292 (7th Cir. 1996).
"[T]he relevant inquiry is not how the
reviewing judges would have ruled if they
had been considering the case in the
first place, but rather whether any
reasonable person could agree with the
district court." Geitz v. Lindsey, 893
F.2d 148, 150 (7th Cir. 1990). If we
determine that the district court has
abused its discretion in making an
evidentiary ruling, we nonetheless affirm
the district court if the erroneous
ruling is determined to be harmless. See
Holmes v. Elgin, Joliet & E. Ry. Co., 18
F.3d 1393, 1397 (7th Cir. 1994).

  Ameritech challenges the district
court’s decision to exclude evidence
regarding Ameritech’s obligations under
its collective bargaining agreement and
the effect those obligations had on the
timing of Amos’s dismissal. The district
court held that such evidence was "not
relevant to a determination of the
reasonableness of an employer’s response
to sexual harassment in the workplace."
According to Ameritech, the district
court’s ruling in this regard was
erroneous as a matter of law. The
reasonableness of Ameritech’s response
should be determined according to whether
it was "’reasonably calculated to prevent
further harassment under the particular
facts and circumstances of the case at
the time the allegations were made.’"
McKenzie v. Illinois Dep’t of Trans., 92
F.3d 473, 480 (7th Cir. 1996) (quoting
Brooms v. Regal Tube Co., 881 F.2d 412,
421 (7th Cir. 1989)). Ameritech contends
that its obligations under its collective
bargaining agreement were part of the
facts and circumstances that informed
Ameritech’s judgment as to Amos’s
discipline, and as such they are relevant
to a jury’s determination of the
reasonableness of its response.

  Ameritech also argues that the exclusion
of the arbitration evidence was erroneous
in light of the punitive damages
instruction given to the jury, and the
large punitive damages awards that were
returned. As has been previously
discussed, in order to receive an award
of punitive damages the EEOC must show
that Ameritech acted with "malice or
reckless indifference" to the claimants’
Title VII rights. Emmel, 95 F.3d at 636.
According to Ameritech, it acted not out
of "malice or reckless indifference," but
rather out of concern for its obligations
under the collective bargaining agreement
and its fear that Amos would be
reinstated by an arbitrator if he were
fired. By excluding evidence of the
collective bargaining agreement and the
possibility of reinstatement, the
district court precluded Ameritech from
presenting what Ameritech contends was
important evidence that would go toward
proving it did not act with the state of
mind necessary for the imposition of
punitive damages.

  In evaluating the district court’s
decision excluding evidence of the
collective bargaining agreement and the
potential outcome of arbitration
proceedings, we must first determine what
the district court meant when it stated
that the evidence in question was
irrelevant. As we understand it, the
district court was not considering the
question as a matter of logical
relevance; the district court did not
mean that this evidence was not useful in
assessing the probability that Ameritech
acted with "malice or reckless
indifference." Fed.R.Civ.P. 401. Nor did
the district court indicate that "the
probative value [of the evidence was]
substantially outweighed" by other
considerations. Fed.R.Civ.P. 403. Rather,
the district court stated that "an
employer is subjected to separate duties
under a positive law, such as Title VII,
and under a [collective bargaining
agreement]," and when those duties
conflict "the positive law controls." In
essence, the district court held that as
a matter of law, Ameritech’s obligations
under the collective bargaining agreement
and its fears as to the possible outcome
of arbitration could not be introduced in
the face of conflicting duties under
Title VII.

  To the extent the district court’s
ruling reflects the idea that Title VII
always trumps the provisions of a
collective bargaining agreement, that
ruling is erroneous as a matter of law.
While it is true that employers cannot
use collective bargaining agreements to
contract around anti-discrimination laws
like Title VII, see Trans World Airlines,
Inc. v. Hardison, 432 U.S. 63, 79 (1977)
("[A] collective-bargaining contract . .
. may [not] be employed to violate the
statute."), that principle is not
applicable to this case. The EEOC does
not allege that Ameritech negotiated for
the thirty-day limit on disciplinary
action in order to avoid Title VII
obligations, nor is there any evidence in
the record to that effect. Furthermore,
this is not a situation where Ameritech
is seeking to use its obligations under
the collective bargaining agreement as an
affirmative defense precluding liability
under Title VII./5 Rather, Ameritech
seeks only to introduce evidence as to
its collective bargaining agreement, and
its concern over the possible outcome of
arbitration, to demonstrate that it did
not act with the state of mind necessary
for an award of punitive damages and to
show that its response to Amos’s
misconduct was reasonable. See Deneen v.
Northwest Airlines, Inc., 132 F.3d 431
(8th Cir. 1998) (holding that proof of
discrimination offered by the plaintiff
was insufficient to support a punitive
damages award in light of the employer’s
belief that its actions were required by
a collective bargaining agreement). In
this context, the district court erred in
finding that evidence of Ameritech’s
collective bargaining agreement was
irrelevant as a matter of law.

  The relationship between an employer’s
obligations under its collective
bargaining agreement and potentially
conflicting obligations under an anti-
discrimination statute like Title VII is
more complex than the district court’s
decision indicates. Title VII and
collective bargaining agreements/6 each
represent important congressional
policies: preventing discrimination in
the workplace, and "effecting workable
and enforceable agreements between
management and labor," Trans World
Airlines, 432 U.S. at 79. Given the
important national policies underlying
both Title VII and collective bargaining
agreements, it is incorrect to hold, as
the district court did, that obligations
under Title VII always trump obligations
that exist under valid labor agreements.
See id. (holding that an agreed-upon
seniority system did not "give way" to an
employer’s duty to "reasonably
accommodate" religious observance under
Title VII); Eckles v. Consolidated Rail
Corp., 94 F.3d 1041, 1051 (7th Cir. 1996)
(holding that a collectively-bargained
seniority system was not trumped by the
duty to "reasonably accommodate" the
disabled under the Americans With
Disabilities Act). Because the district
court based its decision to exclude the
disputed evidence on an error of law,
that decision constitutes an abuse of
discretion./7 See Waid v. Merrill Area
Pub. Sch., 130 F.3d 1268, 1273 (7th Cir.
1997).

  While the EEOC concedes that the
district court may have been mistaken
about the legal relationship between
collective bargaining agreements and
Title VII, it contends that any such
mistake was harmless. We disagree.
Although the EEOC correctly points out
that Ameritech was able to present
evidence as to the thirty-day limit on
disciplinary action under the collective
bargaining agreement, Ameritech employees
were prevented from testifying about the
facts and circumstances surrounding the
timing of their decision to terminate
Amos. Ameritech was also precluded from
presenting evidence that it failed to
discharge Amos after the Wentland
incident because of concerns about
violating the collective bargaining
agreement. Furthermore, Ameritech could
not present evidence as to the
likelyoutcome of arbitration, and its
decisionmakers’ fears that Amos would be
reinstated were he to be discharged in
violation of the collective bargaining
agreement. As we have previously noted,
this was potentially significant evidence
as to Ameritech’s state of mind and to
the reasonableness of Ameritech’s
actions, and we cannot say that the
outcome of the trial would have been the
same had the jury been permitted to hear
this evidence. See United States v.
Stefonek, 179 F.3d 1030, 1036 (7th Cir.
1999) ("A ’harmless error’ as the term is
used in law is a trial error that does
not alter the trial’s outcome."); Collins
v. Kibort, 143 F.3d 331, 339 (7th Cir.
1998) (stating that an error is not
harmless when "a significant chance
exists" that the error "affected the out
come of the trial").

  Our conclusion that this evidence was
not harmless is bolstered by the nature
of the jury verdict in this case. In the
case of all three claimants, the punitive
damages awards rendered by the jury far
surpassed the awards given for
compensatory relief. When punitive
damages are such an important part of a
jury award, the defendant’s state of mind
is a central issue. See Kolstad v.
American Dental Ass’n, 119 S.Ct. 2118,
2125-26 (1999) ("Most often . . .
eligibility for punitive awards is
characterized in terms of a defendant’s
motive or intent."); Ortiz v. John O.
Butler Co., 94 F.3d 1121, 1127 (7th Cir.
1996) (stating that the "requisite
showing for punitive damages necessarily
focuses upon the defendant’s state of
mind"). By precluding the disputed
evidence, the district court deprived
Ameritech of potentially valuable
evidence that would have allowed it to
counter the jury’s impression that it
acted negligently or with "malice or
reckless indifference" to the claimants’
Title VII rights. The sheer size of the
jury’s verdict in this case, when viewed
in relation to the amount of compensatory
damages awarded, supports our conclusion
that the district court’s erroneous
preclusion of the arbitration evidence
was not harmless.

III.   Conclusion

  Because we have determined that the
evidence was sufficient to support the
jury’s verdict, we decline to enter
judgment on behalf of Ameritech. However,
in light of our ruling that the district
court erred in excluding evidence of
Ameritech’s collective bargaining
agreement and its concern about the
outcome of arbitration, we REVERSE the
judgment of the district court and REMAND
this case for further proceedings
consistent with this opinion.


/1   Both parties agree that November 21, 1991 is
the relevant date for purposes of determining
Ameritech’s liability for punitive damages be-
cause that is the date on which 42 U.S.C. sec.
1981a was enacted. That statute, which provides
for punitive damages under Title VII, is not
retroactive. See Landgraf v. USI Film Prod., 511
U.S. 244, 281 (1994). Similarly, the district
court correctly determined that compensatory
damages could not be awarded based on emotional
distress for conduct before November 21, 1991.
Recovery of compensatory damages was added by 42
U.S.C. sec. 1981a, and that provision is non-
retroactive as well. Landgraf, 511 U.S. at 281-
83.

/2 Under the terms of the collective bargaining
agreement, Ameritech could have terminated Amos
outside the thirty-day window for disciplinary
action if it had suspended Amos before the thir-
ty-day limit expired.

/3 The district court properly instructed the jury
that in order to hold Ameritech liable for puni-
tive damages, it would have to find that in
dealing with Amos after November 21, 1991 Amerit-
ech: (1) was motivated by malice ("ill will, or
spite, or grudge") toward Wentland, Pollard, and
Everts, or toward female employees as a class; or
(2) acted with both "a high degree of awareness
that its conduct would violate Title VII" and
"consistent disregard for such a violation."

/4 Ameritech also contends that the punitive damages
awards in this case were clearly excessive. In
support of this contention, Ameritech points out
that two of the punitive damages awards, $290,000
to Wentland and $295,000 to Pollard, were near
the statutory maximum of $300,000 established by
42 U.S.C. sec. 1981a (b)(3)(D). According to
Ameritech, Hennessey v. Penril Datacomm Networks,
Inc., 69 F.3d 1344 (7th Cir. 1995), held that
awards at or near the statutory maximum should be
reserved for the most egregious of cases, and
that this is not an appropriate case for such a
large award.

  We believe Ameritech has misread our holding in
Hennessey, which reduced an award at the statuto-
ry maximum. Id. at 1355-56. Although Hennessey
provides support for the idea that punitive
damages awards can be excessive, and that awards
at or near the statutory maximum should be re-
served for egregious cases, the Court in that
case limited the decision to its facts and did
not purport to establish a per se rule about the
availability of punitive damages at or near the
statutory maximum. It is well-recognized that the
amount of damages is largely within the province
of the jury, and that its determination should
not generally be disturbed. See EEOC v. AIC
Security Investigations, Ltd., 55 F.3d 1276, 1287
(7th Cir. 1995) ("[T]he primary responsibility
for deciding the appropriate amounts of [puni-
tive] damages rests with the jury."). Here, a
jury could well have determined that Ameritech’s
conduct was egregious and warranted a large
punitive damages award, and the district court’s
award of punitive damages at or near the statuto-
ry maximum was not in error.

/5 In response to the dissent, we want to emphasize
that our opinion should not be read to imply that
Ameritech, or any employer, can use a provision
in its collective bargaining agreement to shield
itself from liability under Title VII. An employ-
er has a clear responsibility under Title VII to
act reasonably to end sexual harassment and to
protect its employees from harassing behavior,
see Brooms v. Regal Tube Co., 881 F.2d 412, 421
(7th Cir. 1989) (recognizing "that an employer is
liable for an employee’s action if the employer
knew or should have known about an employee’s
acts of harassment and fails to take appropriate
remedial action"), and Ameritech’s obligations in
that regard remain unchanged. However, Ameritech-
’s obligation to end sexual harassment, and
consequently its vicarious liability for the
actions of non-supervisory employees, is not
absolute. See Meritor Savings Bank, FSB v. Vin-
son, 477 U.S. 57, 72 (1986) (stating that there
are "some limits on the acts of employees for
which employers under Title VII are to be held
responsible"); Juarez v. Ameritech Mobile Comm.,
Inc., 957 F.2d 317, 320 (7th Cir. 1992) ("Employ-
ers are not strictly liable under Title VII for
sexual harassment engaged in by their employ-
ees."). Under Title VII, employers are liable for
compensatory damages only upon a showing of
negligence, see Baskerville v. Culligan Int’l
Co., 50 F.3d 428, 432 (7th Cir. 1995) ("[T]he
criterion for when an employer is liable for
sexual harassment is negligence."), and liability
for punitive damages is limited to situations
where an employer acts with "malice or reckless
indifference," 42 U.S.C. sec. 1981a(b)(1). By
focusing on an employer’s duty to remedy sexual
harassment under Title VII, and not on the issue
of Ameritech’s state of mind, we respectfully
suggest that both the district court and the
dissent misapprehend the purpose for which Ameri-
tech sought to introduce the disputed evidence.

  In order to counter the plaintiffs’ allegation
that it acted negligently or with "malice or
reckless indifference" when it failed to termi-
nate Amos following the Wentland incident, Ameri-
tech should have been allowed to present evidence
as to its asserted justification for acting (or
failing to act) in the way that it did. Only
after hearing this evidence could the jury prop-
erly evaluate Ameritech’s state of mind and the
reasonableness of its response. Our holding in
this regard does not elevate Ameritech’s obliga
tions under the collective bargaining agreement,
or its fears about the possible outcome of arbi-
tration, into a defense to Title VII liability.
Having heard this evidence, a jury could conclude
that Ameritech should have discharged Amos after
the Wentland incident regardless of whether that
action would have violated the collective bar-
gaining agreement. In this case, however, the
jury did not have the opportunity to consider
Ameritech’s asserted justification for its ac-
tions because the district court erroneously
determined that Ameritech’s obligations under its
collective bargaining agreement were irrelevant
to its responsibilities under Title VII. We
reverse and remand this case not, as the dissent
characterizes our opinion, because the district
court precluded Ameritech from offering evidence
of its collective bargaining agreement as a
defense to Title VII liability, but rather only
because the district court erroneously prevented
Ameritech from offering relevant evidence regard-
ing its state of mind and the reasonableness of
its response to Amos’s harassing acts.

/6 The congressional policies underlying collective
bargaining agreements are embodied in the Nation-
al Labor Relations Act, 29 U.S.C. sec. 151 et
seq.

/7 The EEOC concedes that the district court’s
statement of the law may be incorrect, but argues
that this mistake of law did not serve as the
basis of the district court’s opinion. Rather,
the EEOC asserts that the district court engaged
in a Rule 403 analysis and concluded on the facts
of this case that Ameritech’s concern about
violating its collective bargaining agreement was
so speculative as to render it irrelevant for
purposes of determining the appropriate response
to Amos’s behavior. We do not read the district
court’s opinion in this manner. The district
court indicated numerous times that it regarded
the disputed evidence to be inadmissible as a
matter of law, and we find no support for rechar-
acterizing the court’s decision as a discretion-
ary one.



  ROVNER, Circuit Judge, concurring in part and
dissenting in part. Nearly two decades after it
fired the first woman to complain of Gary Amos’
harassment, Ameritech at last did what it should
have done years before--it fired him. By that
time, Amos had sexually harassed at least
eighteen of Ameritech’s female employees,
variously touching the women, exposing himself to
them, peppering them with suggestive remarks,
masturbating in their presence, and rubbing his
erect penis against their bodies. Long after it
was clear to the company that it had a serial
harasser in its employ, Ameritech botched any
number of opportunities to deal with his
misconduct decisively. It warned and suspended
Amos without effect; it promised harsher
sanctions in the future but did not follow
through; when it finally resolved to fire Amos in
1992, it inexcusably missed the thirty-day
deadline imposed by the collective bargaining
agreement; and even after that fumble, Ameritech
waited for three more women to complain of
harassment before it ultimately terminated Amos.
The evidence was thus more than sufficient to
support the jury’s conclusion that Ameritech’s
response to the harassment was not only
negligent, but indicative of a reckless
indifference to the rights of the women in its
employ, such that punitive damages were
appropriate. With that much of the majority
opinion, I wholeheartedly concur.

  I do not agree, however, that the district
judge abused his discretion in excluding evidence
of Ameritech’s professed concern for the outcome
of arbitration that might have ensued had the
company fired Amos sooner than it did. The
arbitration defense posits a conflict between the
obligation that Title VII imposes on an employer
to protect its workers from sexual harassment and
certain provisions of the collective bargaining
agreement between Ameritech and its unionized
workforce. More specifically, the defense assumes
that an arbitrator interpreting the agreement
might not agree with--and might well undo--
disciplinary action that Ameritech has taken in
fulfillment of its statutory obligation to
address workplace harassment. Proof along that
line, Ameritech posits, would have shown the jury
why its decision not to discharge Amos in
December 1992 and again in June 1993 was
reasonable: not wishing to see an arbitrator
reinstate Amos, it was simply biding its time
until it could fire Amos under circumstances that
an arbitrator would agree warranted his
discharge. What Ameritech wants, then, is for the
jury to evaluate the company’s conduct not solely
in terms of what was reasonably necessary to stop
the harassment that Amos was inflicting on his
co-workers, but also in terms of what the
collective bargaining agreement and an arbitrator
might have permitted.

 I believe my colleagues are mistaken in opening
the door to this defense. Title VII imposes an
unequivocal duty on employers to take reasonable
measures to stop harassment. Never before today
have we held that the provisions of a collective
bargaining agreement--or, more accurately,
concerns about how an arbitrator might interpret
them--can modify this obligation. What Ameritech
has won is the right to invoke the collective
bargaining agreement as an excuse for sitting on
its hands while Amos kept on terrorizing his
female colleagues. In fact, however, nothing in
the collective bargaining agreement forced
Ameritech to forego discharging Amos. And to the
extent that an employer’s duties under Title VII
and a collective bargaining agreement may
conflict, its obligation to protect its workers
from harassers should take precedence, as Judge
McKinney held. To permit the jury to let an
employer off the hook because of its professed
concerns about how an arbitrator might interpret
the collective bargaining agreement in effect
holds unionized employers to a lesser standard of
care in eliminating workplace harassment.

1.

  What one must appreciate at the outset is that
Ameritech’s liability in this case hinges not on
its failure to act on any one occasion in
particular, but on its pattern of inaction in the
face of Amos’ unrelenting misconduct. Consider
what the company knew when the amended version of
Title VII took effect in November of 1991. By
that time, Amos had harassed at least thirteen
women at Ameritech. His acts already had run the
entire gamut of harassment, from inappropriate
remarks to intimate and unwelcome touching.
Indeed, by my count, Amos had already exposed
himself at least five times by then and had
rubbed his erect penis against startled co-
workers on at least as many occasions. Nothing
that Amos did after 1991, then, could have come
as a surprise to Ameritech. The company had
already disciplined Amos on several occasions and
had twice threatened to fire him if he persisted
in the harassment. See Tr. 193, 570. It also
knew, as of 1991, that the discipline and
warnings had proven ineffective; for in
investigating the complaints of Debbie Murray and
an anonymous co-worker that year, Ameritech
learned that Amos was continuing to engage in
sexual misconduct. Tr. 584-93, 811-18.

  With this history in mind, one would think that
Ameritech, if genuinely concerned about the
welfare of its female employees, would have taken
more aggressive action in response to the acts of
harassment that occurred after the Civil Rights
Act of 1991 took effect. Instead, the company
bungled opportunity after opportunity to take
decisive action against Amos. In early 1992,
after Jennifer Rice complained of inappropriate
remarks and physical contact, the company simply
told Amos that he was not to touch anyone in the
office and warned him--again--that further
misconduct might result in suspension or
termination. Tr. 596-97. It did not fire him, it
did not suspend him, it did not dock his pay, it
did not, in fact, take any punitive action
against him. It even rejected Amos’ own
suggestion that he be transferred out of the
small business office (Tr. 1096-97), where
ninety-five percent of his co-workers were women
(see Tr. 177, 408, 843). Later that year, Amos
touched Debbie Wentland inappropriately--thereby
violating his supervisor’s admonition not to have
physical contact with his co-workers--and rubbed
his erect penis through his pants while talking
to her. The company’s EEO coordinator recommended
his discharge for this conduct (Tr. 776-77, 847),
but her recommendation sat unread on the labor
relations manager’s desk until after the thirty-
day period for discipline specified by the
collective bargaining agreement had already
expired (Tr. 644). The company at that point
concluded it could take no action against Amos.

  Having muffed the decision to fire Amos in
1992, Ameritech should have been fully prepared
to take swift and decisive action when the next
incident of misconduct occurred. See Tr. 255,
648, 829-30, 1193. Yet, even after Lori Everts
filed an E.E.O.C. charge in 1993 because Amos had
touched her inappropriately, fondled his
genitalia through his clothing in front of her,
and brushed up against her while aroused--all
things he had done before to other women--the
company did not so much as investigate her
complaint. See Tr. 930-31, 941, 944-45, 1141.
When Amos wrote the "you look so sexy today" note
to supervisor Patricia Wolter in June 1993,
Ameritech opted simply to suspend him, a measure
that had already proven ineffective. See Tr. 406.
This freed Amos to harass Wendy Pollard, who
began to work with him in November 1993. After
months of touching her hair, staring at her with
his belt unbuckled, telling her that he was
obsessed with her, displaying photos of lingerie-
clad and topless women to her, Amos finally drove
Pollard to the EEO coordinator when she
discovered him sitting at his desk, with his
penis exposed and erect, masturbating. Finally,
the company got it right--it suspended him
immediately pending investigation and ultimately
terminated him.

  Ameritech thus allowed the equivalent of an
armed torpedo to wander about the workplace for
years wreaking havoc upon its female employees.
At least eighteen women--that we know of--fell
victim to Amos’ harassment. To focus upon
Ameritech’s failure to act in any single
instance--as its arbitration defense invites us
to do--is to miss the larger picture. By November
of 1991, Ameritech knew that it had an employee
who was prone to sexually harass his co-workers
in extremely offensive ways, and as to whom
repeated warnings and disciplinary measures had
proven utterly ineffective. Yet, the company
continued to respond to Amos’ misconduct with the
same day-late-and-a-dollar-short measures it had
tried before. Therefore, the first and most
important point with respect to Ameritech’s
liability is not that it failed to discharge Amos
in response to the Wentland and Wolter complaints
in particular, but that it missed those and so
many other chances to take action reasonably
calculated to stop his harassment--including not
only termination, but demotion, transfer,
intensive supervision, warnings to his
uninitiated co-workers, and any number of other
disciplinary and prophylactic measures.

2.

  As I noted at the outset, Ameritech’s
arbitration defense presupposes some degree of
tension between the collective bargaining
agreement and Title VII. In December of 1992, the
asserted conflict arose from the collective
bargaining agreement’s thirty-day limit on
disciplinary action: by the time Ameritech was
prepared to fire Amos in response to Wentland’s
complaint, thirty days had already passed. If it
had gone ahead and fired him after that point,
Ameritech posits, an arbitrator might well have
declared the discharge invalid and reinstated
him. The first and most glaring problem with this
line of defense is that the purported clash was
one wholly of Ameritech’s making.

  Only Ameritech is to blame for the failure to
discharge Amos in a timely fashion. The
collective bargaining agreement gave Ameritech
thirty days within which to impose discipline on
Amos. Ameritech does not argue that it was
unable to make the discharge decision within this
period of time. In fact, the only explanation
that Ameritech has offered for not meeting the
deadline is that its EEO coordinator, Monica
Sharp, left on vacation immediately after she
made the recommendation to discharge Amos, and
labor relations manager Joyce Leck did not review
the recommendation until she herself returned
from vacation, after the thirty-day deadline for
action had expired. So nothing precluded
Ameritech from firing Amos; it simply dropped the
ball. Standing alone, this is, at the least, a
classic instance of neglect. See Universal Reins.
Corp. v. Allstate Ins. Co., 16 F.3d 125, 128 (7th
Cir. 1994). Considered in light of Amos’
extensive history of harassment, and Ameritech’s
own professed certainty that an arbitrator would
never have permitted a late discharge, missing
the deadline amounts to something much worse.

  It is thus more than a bit ironic that
Ameritech’s own unreasonable failure to act
within the constraints of the collective
bargaining agreement has been transformed into a
defense to liability for both compensatory and
punitive damages. The thirty-day time limit was
not one unilaterally imposed on Ameritech by the
union. The company consented to that restraint in
negotiations with the union, and presumably it
did so with confidence that thirty days was
enough time to make discharge and other
disciplinary decisions. Having agreed to the time
limit, and presumably knowing from past
experience that an arbitrator might well declare
a discharge made beyond that time frame invalid,
Ameritech knew that it had to discharge Amos
within thirty days or not at all.

  To accept Ameritech’s argument on its own
terms, then, is to appreciate the gravity of the
company’s mistake in allowing the deadline to
expire. If, as Ameritech posits, the thirty-day
time limit on discipline was ironclad, then the
only pertinent question insofar as the
reasonableness of Ameritech’s actions and state
of mind is concerned is what Ameritech did during
those thirty days. The answer is nothing. It was
entirely fair, in that context, for the E.E.O.C.
to castigate Ameritech for not discharging Amos
when, as the company admits, its own slip-up
accounts for the inability to take that step. See
Tr. 1301-04, 1356-57. It was also entirely within
the district court’s discretion to prevent
Ameritech from attempting to pin the failure to
discharge Amos on the likelihood that an
arbitrator would order him reinstated. Only
Ameritech is to blame for the situation in which
it found itself. Knowing that it had to act
within thirty days, the company dallied, allowing
the deadline to come and go without doing
anything. That the company may have wished to
fire Amos, that it might have done so eventually
but for its fears about what an arbitrator would
say, is beside the point. See Ameritech Br. 17-
18, 34. It would be a bit like a reckless driver
claiming that he meant to use more care after he
has already mowed down a pedestrian--good
intentions mean nothing after the fact. Ameritech
is no less culpable for allowing the deadline to
expire before acting on Sharp’s recommendation to
discharge Amos than it would be if it never
considered discharging him at all.

  There is a second, but equally important, flaw
in the arbitration defense insofar as it revolves
around the thirty-day limit. Ameritech would have
us believe that the jury was kept in the dark as
to the reason for the company’s decision not to
fire Amos in December 1992. Its opening brief,
for example, asserts that "Ameritech was
prevented from presenting the evidence explaining
why it did not terminate Amos at that time--
specifically, because an arbitrator would have
reinstated him." Ameritech Br. 34 (emphasis in
original); see also Reply Br. 12-13. Yet, as my
colleagues acknowledge, Ameritech was able to
explain that it did not discharge Amos in
response to Debbie Wentland’s complaint because
it did not effectuate that decision within the
thirty-day time frame specified by the collective
bargaining agreement. See, e.g., Tr. 1327. In
fact, as the record reveals, the thirty-day limit
on disciplinary action was discussed again and
again (and again) during the trial--on more than
twenty occasions, by my count. See Tr. 38-39,
202-03, 212, 219-26, 234-35, 248-55, 259-260,
261, 279, 280, 291, 335-40, 521, 608-09, 627,
642-48, 777, 779, 807, 926, 1103-04, 1145-46,
1301-04, 1327, 1356-57. The jury was thus fully
aware of the deadline and the constraints it
imposed on Ameritech’s ability to deal with Amos.
Evidence that an arbitrator would have enforced
that deadline might have been apropos had a
witness or the E.E.O.C. opined that Ameritech was
free to ignore the deadline and fire Amos anyway.
Ameritech suggests that this was the case.
Ameritech Br. 34; Reply Br. 12-13. My colleagues
appear to agree. See ante at 20. They have been
misled. A review of the record makes clear that
no one--no one--ever suggested that Ameritech
could have fired Amos after the thirty-day
deadline had expired. On the contrary, the
attorneys in their questions and argument, and
the witnesses in their testimony, uniformly
presumed that the time limit was inviolable./1
As far as the jury knew, then, there was no way
around the thirty-day deadline. The notion that
there was a compelling need for the arbitration
evidence is therefore a fallacy. As the record
makes plain, the E.E.O.C. chastised Ameritech not
for being unwilling to try and circumvent the
deadline after it had already expired, but for
failing to meet the deadline in the first
instance. See Tr. 1301-04; 1356-57./2
3.

  In June of 1993, another provision in the
collective bargaining agreement purportedly stood
in the way of discharging Amos. It was then that
Amos wrote a note to Patti Wolter telling her
"Patti, you look so sexy today." Tr. 387
(emphasis in original). Rather than discharging
him, Ameritech opted to impose the most serious
form of discipline short of discharge--it
suspended him for thirty days. The collective
bargaining agreement permitted discharges only
for "just cause," and if permitted Ameritech
would have shown that it had lost one or more
arbitrations over the just cause issue and that
in all probability, had Ameritech fired Amos for
writing the note, he would have won reinstatement
from an arbitrator.

  One can readily appreciate why an arbitrator
might not think that the note by itself
constituted just cause to discharge Amos.
Although troubling to Ms. Wolter--as it indeed
might have been to any reasonable person--the
note standing alone was relatively innocuous. In
view of Amos’ lengthy tenure with the company,
terminating him simply because he wrote that
single note to a co-worker would be a harsh form
of discipline. Indeed, a Title VII claim founded
on the note alone would surely falter, for
without more it would not establish the
objectively hostile working environment that the
case law requires. E.g., Rennie v. Dalton, 3 F.3d
1100, 1107 (7th Cir. 1993), cert. denied, 510
U.S. 1111, 114 S. Ct. 1054 (1994) ("’isolated
and/or trivial remarks of a sexual nature’ do not
satisfy the definition of sexual harassment"),
quoting Downes v. F.A.A., 775 F.2d 288, 293 (Fed.
Cir. 1985), abrogated on other grounds by Harris
v. Forklift Sys., Inc., 510 U.S. 17, 114 S. Ct.
367 (1993).

  It is not at all clear, however, why the note,
considered in the full context of Amos’ campaign
of harassment, would not have constituted just
cause for termination. By June of 1993, of
course, Amos had a well-documented history of
harassing women at Ameritech. What is more, the
more severe manifestations of that harassment
often were presaged or accompanied by remarks
akin to the "you look so sexy" observation Amos
made in his note to Wolter. Before Amos pushed
his aroused body against Jacquelyn Stine in 1988,
for example, he told her that her hair was
beautiful, that it was "just really delicious, or
. . . sensual," and that he was in love with her.
Tr. 73. And just before Amos followed Debbie
Wentland around the office in November 1992 as he
rubbed the erection in his pants, he patted her
stomach and remarked "Oh, so you are going to be
a mom." Tr. 271-72. These examples, among many
others, demonstrate all too well that statements
of the kind Amos made to Wolter were neither
isolated nor innocent. Typically, these remarks
were part of a pattern of verbal and physical
harassment which, left unchecked, simply
escalated.

  Why an arbitrator would blind himself to this
pattern--and to the proven ineffectiveness of
all disciplinary measures short of discharge in
stopping Amos’ harassment--is left unexplained.
Ameritech’s prediction of reinstatement seems to
assume that the arbitrator would focus solely
upon the event precipitating the discharge,
without consideration of any of Amos’ prior
conduct. Cf. Chrysler Motors Corp. v.
International Union, Allied Indus. Workers of
America, 959 F.2d 685, 686 (7th Cir. 1992)
(arbitrator refused to consider other incidents
of harassment that employer only discovered after
it had already discharged worker), cert. denied,
506 U.S. 908, 113 S. Ct. 304 (1992). Yet, so far
as the record reveals, nothing in the collective
bargaining agreement so restricts the just cause
inquiry. If it did, then we might well have a
genuine clash between the collective bargaining
agreement and Title VII that Ameritech posits.
For Title VII would indeed expect Ameritech to
have learned its lessons. When Amos wrote the
note to Wolter, Ameritech must have known that he
simply was not going to stop harassing his female
co-workers, and that terminating him was the only
way to bring the harassment to an end. See Tr.
233, 406, 630-31, 701. Indeed, one can read into
Ameritech’s arbitration defense a concession that
it knew as much; by the company’s own account, it
was simply awaiting the best opportunity to make
his discharge "stick." See Ameritech Br. 17-18,
34. But in this record there is no proof that the
collective bargaining agreement posed an obstacle
to discharging Amos in June of 1993.

4.

  Ameritech’s arbitration defense also presupposes
that if Ameritech had discharged Amos in either
December of 1992 or June of 1993 and an
arbitrator had subsequently ordered him
reinstated, that order would have been final.
That is not the case. Even if an arbitrator had
ordered Amos’ reinstatement, Ameritech could have
contested that decision in court. As the district
court recognized, courts can and do refuse to
enforce arbitration awards when they conflict
with explicit, well-defined public policy.
Chrysler Motors, supra, 959 F.2d at 687; see
generally United Paperworkers Int’l Union v.
Misco, Inc., 484 U.S. 29, 43, 108 S. Ct. 364,
373-74 (1987); W.R. Grace & Co. v. Local Union
759, Int’l Union of United Rubber, Cork, Linoleum
& Plastic Workers of America, 461 U.S. 757, 766,
103 S. Ct. 2177, 2183 (1983). The public has a
strong interest, which Title VII embodies, in
eliminating sex discrimination from the
workplace. Chrysler Motors, 959 F.2d at 687.
Reinstating an employee who either does not wish
or is unable to refrain fromsexually harassing
his female co-workers presents an obvious clash
with that interest. See, e.g., Stroehmann
Bakeries, Inc. v. Local 776, International
Brotherhood of Teamsters, 969 F.2d 1436, 1442 (3d
Cir. 1992) (vacating arbitration award
reinstating harasser who allegedly assaulted
customer’s employee: "an award which fully
reinstates an employee accused of sexual
harassment without a determination that the
harassment did not occur violates public
policy"), cert. denied, 506 U.S. 1022, 113 S. Ct.
660 (1992); Newsday, Inc. v. Long Island
Typographical Union, No. 915, 915 F.2d 840, 845
(2d Cir. 1990) (vacating arbitration award
reinstating serial harasser: "[The arbitrator’s]
award of reinstatement completely disregarded the
public policy against sexual harassment in the
work place."), cert. denied, 499 U.S. 922, 111 S.
Ct. 1314 (1991); Consolidated Edison of New York,
Inc. v. Utility Workers’ Union of America, No. 95
C 1672, 1996 WL 374143, at *5 (S.D.N.Y. Jul. 3,
1996) (vacating arbitration award reinstating
serial harasser: "Reinstatement of an employee
who has already been issued a strong and
unambiguous warning that any further sexual
misconduct could lead to dismissal would
contravene public policy condemning such
behavior."). Ameritech thus had a firm basis on
which to resist Amos’ reinstatement. Of course,
we cannot know for certain how Ameritech would
have fared in the effort to overturn an adverse
decision by the arbitrator. But that is the
point: having forsaken the opportunity to make
its case to an arbitrator and, if necessary, to
a court, Ameritech has left us all to speculate
about what might have happened.

  Moreover, it is not at all clear to me how
Ameritech’s other employees would have been worse
off had the company risked arbitration by
discharging him in either December of 1992 or
June of 1993. As Judge McKinney wrote,
"Overlooked in this argument is the continuing
adverse effect Amos’s conduct may have on the
female employees while the employer waits until
it thinks it may have enough evidence to overcome
an arbitration decision." R. 213 at 10. For
whatever length of time it would have taken for
the anticipated arbitration and litigation over
the discharge to be resolved, Amos would have
been removed from the workplace, granting his
female co-workers at least a temporary reprieve
from his harassment. In the event of his
reinstatement, Ameritech would have been just as
capable of terminating him in the future if and
when he resumed harassment as it was when the
company decided in December 1992 and again in
June 1993 to "wait and see" rather than
discharging him on those occasions. See Chrysler
Motors Corp. v. International Union, Allied
Indus. Workers of America, 2 F.3d 760 (7th Cir.
1993) (sustaining the immediate discharge of
reinstated employee based on additional evidence
of harassment). Only Ameritech, it seems to me,
had anything to gain by following the latter
course, sparing itself the possible expense and
bother of having to defend a discharge in
arbitration and/or litigation.

  5.

  Even assuming that there was an outright,
irreconcilable conflict between the collective
bargaining agreement and Title VII, I am not
convinced that Ameritech’s obligation to protect
its employees from harassment necessarily had to
yield to the constraints imposed by its contract
with the union. The district court may have
overstated matters when it said that the
provisions of a collective bargaining agreement
must invariably give way to an employer’s
obligations under the civil rights statutes (R.
213 at 9), for Trans World Airlines, Inc. v.
Hardison, 432 U.S. 63, 97 S. Ct. 2264 (1977), and
Eckles v. Consolidated Rail Corp., 94 F.3d 1041,
1051 (7th Cir. 1996), cert. denied, 520 U.S.
1146, 117 S. Ct. 1318 (1997), reveal that this is
not always the case. But neither of those
precedents, on the other hand, gives an employer
license to sit back while its workers are
sexually harassed, simply because it believes
that a provision of the collective bargaining
agreement stands in the way of effective action.

  TWA holds simply that Title VII does not
require an employer to interfere with the
seniority rights of some employees in order to
accommodate the religious needs of others. The
plaintiff in that case worked for an airline in
a critical department that operated twenty-four
hours a day, seven days a week. After becoming
involved in a religion that proscribed work on
Saturdays and on certain religious holidays, the
plaintiff asked that his work schedule be
adjusted accordingly to give him those days off.
Although the company had no difficulty finding
volunteers to fill in for the plaintiff on the
religious holidays that he observed, no one was
willing to work in his stead on Saturdays.
Consequently, the only means of accommodating the
plaintiff’s religious needs would have been to
deprive more senior employees of their shift
preferences by requiring one or more of those
employees to take the Saturday shifts. The
airline refused to take that step, and the
Supreme Court concluded Title VII did not compel
it to do so:

We agree that neither a collective-bargaining
contract nor a seniority system may be employed
to violate the statute, but we do not believe
that the duty to accommodate requires TWA to take
steps inconsistent with the otherwise valid
agreement. Collective bargaining, aimed at
effecting workable and enforceable agreements
between management and labor, lies at the core of
our national labor policy, and seniority
provisions are universally included in these
contracts. Without a clear and express indication
from Congress, we cannot agree with Hardison and
the E.E.O.C. that an agreed-upon seniority system
must give way when necessary to accommodate
religious observances.

432 U.S. at 79, 97 S. Ct. at 2274 (footnote
omitted). The rights of other employees, as well
as the unique importance of seniority provisions
in collective bargaining, figured prominently in
the Supreme Court’s analysis. "It would be
anomalous," the Court explained, "to conclude
that by ’reasonable accommodation’ Congress meant
that an employer must deny the shift and job
preference of some employees, as well as deprive
them of their contractual rights, in order to
accommodate or prefer the religious needs of
others. . . ." Id. at 81, 97 S. Ct. at 2275; see
also id. at 85, 97 S. Ct. at 2277. The Court went
on to note that the statute itself singles out
seniority rights for special treatment, "mak[ing]
clear that the routine application of a bona fide
seniority system would not be unlawful under
Title VII." Id. at 82, 97 S. Ct. at 2275, quoting
International Brotherhood of Teamsters v. United
States, 431 U.S. 324, 352, 97 S. Ct. 1843, 1863
(1977).

  Our own opinion in Eckles sounds the same
theme. The issue there was whether the Americans
with Disabilities Act required an employer to
guarantee an employee a position compatible with
his medical restrictions even if it meant
"bumping" a more senior employee from the
position in the first instance and preventing
other employees with greater seniority from in
turn "bumping" the plaintiff from that position
later on. Accommodating him in this way "pose[d]
a conflict not so much between the rights of the
disabled individual and his employer and union,"
we observed, "but between the rights of the
disabled individual and those of his co-workers."
94 F.3d at 1046. Relying on TWA and a host of
other cases decided under both the Rehabilitation
Act as well as the ADA, we concluded that the
duty to reasonably accommodate the limitations of
a disabled employee did not compel the employer
to ignore the seniority rights of other workers.
Id. at 1051. We were quite careful to emphasize
the narrow reach of our opinion, however.

We emphasize that our conclusion is limited to
individual seniority rights and should not be
interpreted as a general finding that all
provisions found in collective bargaining
agreements are immune from limitation by the ADA
duty to reasonably accommodate. The ADA does not
lack force in the unionized workplace, and the
duty to provide for the special needs of disabled
workers cannot be voided by either skillful
manipulation (such as a pretextual seniority
system) or inadvertence. We recognize that many
of the "reasonable accommodations" specifically
proposed within the ADA also have effects on
other workers, but find that collectively
bargained seniority rights have a pre-existing
special status in the law and that Congress to
date has shown no intent to alter this status by
the duties created under the ADA.

Id. at 1051-52; see also id. at 1046 n.9 ("We
most certainly do not here decide that all
provisions of collective bargaining agreements
will preempt a covered entity’s duty to
reasonably accommodate a disabled employee under
the ADA. We address only collectively-bargained
seniority systems that establish rights in other
employees.").


 My colleagues have taken a significant leap
beyond the holdings and rationale of both TWA and
Eckles in concluding that an employer may invoke
the provisions of a collective bargaining
agreement, and its concerns about how an
arbitrator might enforce those provisions, as an
excuse for the failure to remove a recalcitrant
harasser from the workplace. Neither TWA nor
Eckles remotely speaks to this issue, and
fundamental differences between those cases and
the one before us suggest that we should not be
so quick to rely on them now. This case does not
present the clash between the rights of the
plaintiff and the rights of his co-workers that
confronted the courts in those two cases. Indeed,
seniority rights, which occupy a position of
central importance in the collective bargaining
process that was cited repeatedly in both TWA and
Eckles, are not implicated here at all. Instead,
we are dealing with two entirely different
provisions of a collective bargaining agreement,
neither one of which, as I have explained above,
necessarily conflicts with the employer’s duty to
deal with harassment proactively. To the extent
that either of these provisions imposes a
constraint that might prevent an employer from
taking action that Title VII would otherwise
require--as Ameritech’s arbitration defense
supposes--we should hesitate to allow these
provisions to trump an employer’s obligations
under Title VII.

  The thirty-day limit on discharging or otherwise
disciplining an employee is simply that, a
limitation on the timing rather than the
substance of the action that an employer may take
against an employee. I do not doubt that, as a
general matter, the employees and their union
have a legitimate interest in seeing that
deadline enforced; and certainly Amos, as the one
facing termination, had a keen interest in the
enforcement of that limit. But as a procedural
limitation, the thirty-day limit surely ranks
much lower in the hierarchy of importance among
collective bargaining terms than seniority
provisions, which were central to the rationale
of TWA and Eckles. Recall too that the thirty-day
limit is not absolute--Ameritech could have taken
as much time as it wished to make the discharge
decision if only it had suspended Amos
immediately at the outset of its investigation.
See ante at 6 n.2. So as between the collective
bargaining agreement’s directive that discipline
be meted out within thirty days, and Title VII’s
command that employees be protected from sexual
harassment, I have little doubt that the latter
should prevail, as Judge McKinney reasoned.

  The just cause provision of the collective
bargaining agreement is, of course, more
substantive. For that reason, it may occupy a
position of more central importance to the
collective bargaining process. That does not
mean, however, that such a provision--or an
arbitrator’s interpretation of it--will or should
prevail over the employer’s Title VII duty to
address workplace harassment. On the contrary,
the case law already makes clear that the public
interest in eradicating sexual harassment will in
some instances take priority over an arbitrator’s
assessment of just cause. For example, in
Chrysler Motors Corp. v. International Union,
supra, 959 F.2d 685, Chrysler asked the court to
set aside an arbitrator’s order reinstating an
employee discharged for sexual harassment. We
acknowledged the public policy against workplace
harassment reflected in both Title VII and the
E.E.O.C.’s sexual harassment guidelines. Id. at
687-88. We also agreed that it would be
appropriate for the court to set aside an
arbitration award that clashed with this policy.
"As with any contract, a court may not enforce an
arbitrator’s interpretation of a collective
bargaining agreement that is contrary to public
policy." Id. at 687. As it turned out, we were
not convinced that the particular order under
review in Chrysler did run afoul of public
policy. The evidence before the arbitrator
indicated that the harasser had only engaged in
a single instance of misconduct and that he was
never warned or otherwise disciplined prior to
his discharge; the record also gave the
arbitrator no cause to believe that he was
incapable of rehabilitation. 959 F.2d at 688-89.
Under those circumstances, we believed that the
arbitrator’s order reinstating him was consistent
both with the just cause provision of the
collective bargaining agreement and with public
policy. Id. at 689. What is implicit throughout
our opinion, however, is that we would not
hesitate to set aside an arbitrator’s order if,
for example, it required the reinstatement of a
recidivist harasser, a move that would jeopardize
the rights of his co-workers and undermine the
public interest in a harassment-free workplace.
Our sister circuits have done just that. E.g.,
Newsday, Inc. v. Long Island Typographical Union,
supra, 915 F.2d at 845; see also Stroehmann
Bakeries, Inc. v. Local 776, International
Brotherhood of Teamsters, supra, 969 F.2d at
1442.

  The rights of Amos’ co-workers cannot be over-
emphasized in this analysis, particularly in view
of the rationale of TWA and Eckles. In each of
those cases, the rights of other employees would
have suffered had the plaintiff been given the
accommodation he sought. Here the opposite is
true. The women who worked around Amos had an
undeniable interest in seeing Amos discharged as
promptly as possible once it was clear that
milder forms of discipline were ineffective in
stopping his abhorrent behavior. On the other
hand, allowing Amos to remain in the workplace
until Ameritech believed it had a sure-fire case
of just cause to fire him had the predictable
consequence of subjecting more women to a hostile
work environment.

  These distinctions vanish today, however, as my
colleagues articulate no limits on what types of
collective bargaining agreement provisions trump
an employer’s obligation to remediate
discrimination. This is a troubling result, for
both this and future cases. Never mind that
Ameritech alone is responsible for the failure to
comply with the contractual deadline in December
1992; and never mind that no arbitrator or court
was ever invited to decide whether discharging
Amos either then or in June of 1993 would have
been appropriate notwithstanding the thirty-day
and just cause provisions of the collective
bargaining agreement. Having waited for years
(and years) to get rid of Amos, Ameritech may now
hold up the collective bargaining agreement as a
fig leaf for its own inaction. I have no doubt
that other unionized employers will follow suit.

6.

  Even if the district court did err in excluding
evidence as to the collective bargaining
agreement and Ameritech’s fears of unfavorable
arbitration, that error does not require us to
overturn the jury’s verdict and put these parties
to the expense of a new trial. Two quick points
deserve making in that regard.

  Overwhelming evidence supports the jury’s
finding that Ameritech’s response to the
harassment was negligent, and that the company
was therefore liable for compensatory damages
under Title VII. Indeed, the evidence here comes
about as close as I have seen to a case for
liability as a matter of law. At the outset of
the relevant time period in November 1991,
Ameritech knew that it had a dangerous employee
on its hands. Amos had already harassed thirteen
women by then and showed no signs of stopping. On
the contrary, he went right on verbally
harassing, touching, and rubbing his penis
against his female co-workers. Yet, as I
indicated above, Ameritech’s reaction continued
to be half-hearted, bumbling, and wholly
ineffective. The failure to effectuate Amos’
discharge in December 1992 within the time frame
specified by the collective bargaining agreement
is but another example of the company’s
negligence. At the very least, the underlying
verdict on liability should stand. To suggest
that any reasonable jury would find Ameritech’s
conduct non-negligent is, I must respectfully
submit, preposterous.

  The question of punitive damages might at first
seem closer in view of the more culpable state of
mind required for such damages. But one must bear
in mind that Ameritech enjoyed the benefit of a
jury instruction that toughened the E.E.O.C.’s
burden of proof on punitive damages beyond what
the law actually requires. Over the E.E.O.C.’s
objection, the district court instructed the jury
that the Commission must prove Ameritech’s
reckless indifference by clear and convincing
evidence. Tr. 1114-15, 1378. Yet, a mere
preponderance of the evidence is all that is
necessary to support an award of punitive damages
under 42 U.S.C. sec. 1981a(b)(1). Knowlton v.
Teltrust Phones, Inc., 189 F.3d 1177, 1186 (10th
Cir. 1999); Stender v. Lucky Stores, Inc., 803 F.
Supp. 259, 324 (N.D. Cal. 1992); see generally
Price Waterhouse v. Hopkins, 490 U.S. 228, 253,
109 S. Ct. 1775, 1792 (1989). The fact that the
jury found the E.E.O.C.’s evidence compelling
enough to meet even this heightened burden
demonstrates just how strong the Commission’s
case was.

  In the series of Ameritech’s ineffective
responses to Amos’ harassment, one has no
difficulty detecting a reckless indifference to
the plight of the company’s female workers. More
than once the company responded to a complaint
about Amos as if it were the first, failing to
check his employment history, failing to ratchet
up the discipline from that which had already
been imposed previously, and, in December of
1992, failing to ensure that the time period in
which disciplinary measures could be imposed
would not be permitted to expire. Considering
what the company knew as of November of 1991, it
should have been on high alert from that point
forward, prepared to deal with any and all
complaints about Amos expeditiously and
efficaciously. After it dropped the ball in
December 1992, it should have been all the more
at the ready to protect its other employees. Even
so, three more complaints were required before
Ameritech finally terminated Amos. The fact that
it took the company nearly twenty years to bring
the harassment to an end is telling in and of
itself.

  Twenty years!

  I respectfully dissent.



1/ See, e.g., Tr. 627 ("Q. And meeting that 30 day
time frame is essential, correct? A. Absolutely
essential."); 645-46 ("Q. Let me ask you this:
Has there ever been an occasion, to your knowl-
edge, where somebody had been terminated outside
of the 30 day calendar day period prescribed by
the contract? A. Not to my knowledge. . . . Q.
Could you have suspended Mr. Amos pending inves-
tigation and disciplined him under the contract
at that time? A. No. Q. Why not? A. Because the
30 day clock had come and gone."); 779 ("Q. What
did you hear from Joyce Leck? No action could be
taken because of [the] 30 day time line? A.
Right, exactly."); 807 ("Q. Isn’t it a fact that
any discipline cannot be done outside of 30 days?
A. I now know that, but I may have not known that
before. . . ."); 1145-46 ("Q. Is there a rule in
the collective bargaining agreement that says
that the company cannot take any disciplinary
action after 30 days from the incident? A. Yes.
Q. Has the union ever consented to the waiver of
that 30 day rule? A. Not that I’m aware of. . .
. Q. And if the company missed that time line is
it the union’s position that the company is
absolutely forbidden from taking any type of
discipline? A. Right.").

/2 Ameritech argues that Debbie Wentland’s testimony
triggered the need for the arbitration evidence.
Wentland testified that upon hearing the news
that Ameritech would not discipline Amos because
of the missed deadline, "I was very upset. I was
hurt. It is just, I guess I was naive, because I
felt like I had worked with the company for 14
years, and again they had no respect for me, they
didn’t care about my feelings. They were more
concerned about Gary’s rights than mine." Tr.
280. Nowhere in Wentland’s expression of frustra-
tion, however, is there a suggestion that the
company could have disregarded the contractual
deadline. The direct testimony on that point is
entirely to the contrary. See n.1, supra. Indeed,
when read in context, Wentland’s criticism was
directed to the half-hearted and ineffective
manner in which the company handled her complaint
as well as those of the other women that Amos
harassed. See Tr. 275-82, 284, 329-40.

  Ameritech also points out that manager Darlene
Olberding testified that she would have recom-
mended the dismissal of Amos for Wentland’s
complaint (Tr. 174) and again suggests that the
exclusion of the arbitration evidence left the
company unable to explain why Amos was not dis-
charged. Ameritech Br. 34; Reply Br. 10. But
Olberding herself acknowledged that the adminis-
trative "slip-up" precluded action against Amos
(Tr. 174); and she never suggested that the
company had the power to ignore the collective
bargaining agreement. The fact that she thought
termination was the appropriate response was
hardly remarkable in and of itself. After all,
EEO coordinator Monica Sharp recommended that
Amos be discharged (Tr. 776-77, 847). And Robert
McFeely, the director of human resources for the
five-state region served by Ameritech, himself
testified that Amos would have been terminated
but for the fact that the company missed the
thirty-day deadline. Tr. 226.
