In the
United States Court of Appeals
For the Seventh Circuit

No. 00-2414

Lisa Worth,

Plaintiff-Appellee,

v.

Robert H. Tyer II, United States Title &
Abstract Company, Grundy County
Title & Abstract, Inc., Consolidated
Title Services Company of Illinois, Ogle
County Title & Abstract Company II, Title
Express Company, Ltd, and Grundy County
Title & Abstract Company II,

Defendants-Appellants.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 96 C 3539--Blanche M. Manning, Judge.

Argued April 12, 2001--Decided December 27, 2001


  Before Flaum, Chief Judge, and Manion and
Kanne, Circuit Judges.

  Kanne, Circuit Judge. After being
terminated, plaintiff, Lisa Worth
("Worth"), sued defendants, charging that
they had violated Title VII of the Civil
Rights Act of 1964, 42 U.S.C. sec. 2000e
et seq., and that her supervisor had
committed a battery in violation of state
tort law. The jury found for Worth and
awarded $52,500 in compensatory and
punitive damages for the Title VII claims
and $100,000 in compensatory and punitive
damages for the battery. Defendants
appeal, alleging that the district court
erred in denying their motion for
judgment as a matter of law or, in the
alternative, their post-trial motion to
amend the verdict or for a new trial.
Defendants also claim that the district
court lacked jurisdiction over Worth’s
claims. We affirm in part and reverse in
part.
I. History

  Individual defendant, Robert H. Tyer, II
("Tyer"), is significantly involved with
defendant corporations, all of which are
real estate title companies incorporated
in Illinois. Tyer is the sole director of
Grundy County Title & Abstract, Company
II ("Grundy II"). Grundy II was
incorporated in 1983 and, although the
corporation still exists, Grundy II
ceased all operations on December 31,
1994. While Grundy II operated, Tyer
managed its offices and divisions. Grundy
II’s divisions that are relevant to this
litigation are the United States Title
Insurance Company division and the Title
Express Company division.

  Tyer is the president and sole director
of defendant Ogle County Title & Abstract
Company II ("Ogle II"). Ogle II has two
divisions relevant to this litigation:
United States Title Insurance Company
division and the Title Express Company
division. On January 2, 1995, after
Grundy II had ceased operations, Ogle II
hired all of Grundy II’s former employees
and acquired Grundy II’s assets.

  Tyer owns defendant United States Title
and Abstract Company ("U.S. Title Co."),
which ceased operations in 1993. Tyer was
president of defendant Consolidated Title
Services Company ("CTS"), which ceased
operations in 1989. Tyer is the COO and
president of defendant Title Express
Company, Ltd. ("Title Express"), which
ceased operations in 1998.

  In early 1994, Worth worked as a
paralegal for a law firm in Joliet,
Illinois. Worth first contacted Tyer by
telephone in conjunction with a real
estate closing on which they were both
working. During that phone call, Worth
asked Tyer if there were any positions
available within his company. Tyer
suggested that she fax a resume to his
attention. On April 21, 1994, Worth faxed
Tyer a resume in care of "U.S. Title."
After reviewing the resume, Tyer
indicated to Worth that he was looking
for someone to increase business in
Joliet. Worth then faxed over a
supplemental resume outlining her
previous car sales experience.

  In early May 1994, Tyer and Worth met to
discuss employment opportunities. Tyer
offered to pay Worth $700 twice a month
for her services. Worth accepted Tyer’s
offer and was told to report to the
Morris, Illinois Office of the U.S. Title
division of Grundy II ("Morris Office").
On May 23, 1994, Worth arrived at the
Morris Office and met Lisa Fahrion, one
of the office managers. Worth trained
under Fahrion for several weeks and
developed a promotional flyer. During
this training period, Tyer was never in
the office, although he was present at
the Morris Office on June 13, 1994. On
the evening of June 14, 1994, Tyer and
Worth met in Worth’s office to review
some documents. During this meeting, Tyer
touched Worth’s breast. The circumstances
surrounding this incident gave rise to
Worth’s battery claim.

  On June 15, 1994, Worth went to the
Morris Police Department and filed a
police report concerning Tyer’s alleged
battery. The next morning, Morris Police
Detective Salemas contacted Tyer
regarding Worth’s report. Later that day,
Tyer informed Worth that "in light of
recent circumstances," he was terminating
her "independent contractor’s" status.

  On December 9, 1994, Worth filed a
charge of employment discrimination with
the Illinois Human Relations Commission
("IHRC"), a copy of which was forwarded
to the EEOC. On December 15, 1994, the
IHRC sent an inquiry letter to "Robert
Tyler III [sic] care of U.S. Title &
Abstract Company/Grundy Title & Abstract
[sic], " requesting information regarding
Worth’s charges. On January 15, 1995,
Tyer called the IHRC and stated that he
had just received the letter. He was
granted an extension to respond. On
February 20, 1995, Tyer responded to the
IHRC inquiry letter by stating that Worth
was not an employee of "U.S. Title," but
rather, she was an independent contractor
employed by Grundy II, which had recently
ceased operations. On June 12, 1996,
Worth filed suit in the United States
District Court for Northern Illinois,
alleging several Title VII counts, one
count of battery, and other state law
claims.

  At trial, Worth testified that she
inquired about an employment position
with Tyer and faxed him a resume in care
of "U.S. Title"--the company that she
believed he represented. She then faxed
supplemental information to Tyer in care
of "United States Title Insurance
Company" concerning her prior work in
sales. Worth and Tyer eventually met to
discuss possible employment at an office
for "U.S. Title." No job offer was made
at this time, but soon thereafter, Tyer
contacted Worth about starting work in
late May. Worth testified that due to her
lack of knowledge concerning the title
business, Tyer told her that the job
would initially entail training on title
searches, closings paperwork, and other
tasks relevant to the title business. In
discussing the job, Worth stated that
Tyer told her that there were definite
career advancement possibilities
including a position in office
management. Worth accepted the position
and Tyer told her to report to Fahrion,
the office manager of the Morris Office,
to begin training. On May 23, 1994, Worth
started work at the Morris Office and
spent most of her time training with
Fahrion. Among other things, the training
included one visit to the Schaumburg
Office of Title Express, a Grundy II
affiliate, in order to view a closing.

  Worth testified that she was required to
give a timecard to Fahrion every week in
order to receive her paycheck. Tyer later
testified that the same timecard was
given to every Grundy II employee and
that the independent contractors Tyer had
hired in the past had never used
timecards. Worth admitted that she did
not have withholdings from her paycheck,
nor did she receive any insurance, sick
leave, or vacation time. Worth testified
that Tyer refused to take out
withholdings, or give her benefits, for
thirty days because his corporations were
experiencing financial difficulties.

  Worth testified that during the time not
taken up with training, she worked with
Fahrion on a promotional flyer for the
"United States Title Insurance Company."
Worth stated that she was in charge of
composing the cover letter to accompany
the flyer. To compose the letter, Fahrion
gave Worth a form letter to use as a
template. Worth testified that her cover
letter was eventually sent to Tyer, who
gave his approval. Worth then sent
prospective clients the cover letter and
flyer, using letterhead for the cover
letter that stated "United States Title
Insurance Company, also authorized to do
business as United States Title &
Abstract Company." Worth testified that
Fahrion gave her the letterhead and that
everyone in the office used that
particular letterhead.
  Worth next testified about the
circumstances that gave rise to the suit.
On June 13, 1994, Tyer came into Worth’s
office late in the afternoon. According
to Worth, Tyer then placed his hands on
her shoulders and neck and massaged her
for several minutes. Worth testified that
this made her uncomfortable. The next
morning, while Worth was making copies,
Worth stated that Tyer approached her and
stroked her hand, and made a comment
regarding how office work must be hard on
her fingernails. Worth testified that she
found this conduct inappropriate and that
it made her uncomfortable. At
approximately 4:45 p.m. that afternoon,
Tyer came into Worth’s office to discuss
a project on which she was working. Worth
stated that Tyer brushed up against her
dress and then sat down beside her and
began staring at her breasts. Tyer then
asked for a computer disk that was in
Worth’s car. Because the office doors
were locked, Tyer unlocked the doors for
Worth to leave, and after retrieving the
disk, she returned to her office. Worth
stated that while she loaded the disk
onto the computer in her office, Tyer
again came up alongside her and stroked
her face, hair, and nose and commented on
her sunburn. Further, Worth testified
that Tyer stuck his hand down her dress
and placed it directly onto her breast.
According to Worth, Tyer placed his hand
approximately one inch away from her
nipple and kept it there for several
seconds. Worth testified that she was
shocked and made an excuse to leave
immediately. Tyer then followed her out
of her office. Worth stated that as she
was leaving the Morris Office, Tyer
stroked her back side and leg. Worth
testified that she had difficulty
sleeping that night.

  Worth further testified that on June 15,
1994, she went to the Morris Office and
attempted to work but was unable to
concentrate due to Tyer’s conduct the
previous day. At around noon, Worth
stated that she left the office and went
to the Morris Police Department to report
Tyer’s actions. Worth returned to the
office later that afternoon, after she
finished speaking with Morris Police
detectives and at the end of the work
day, she went home. The next morning,
Worth testified that she called Fahrion
to tell her that she was not coming into
the office because she did not want to
have any contact with Tyer. Later that
morning, Worth stated that Tyer spoke
with her on the phone and stated that "in
light of the recent circumstances," he
was going to terminate her "independent
contractor’s" status. Worth testified
that she had never heard Tyer say the
phrase "independent contractor" before
this conversation. On cross-examination,
Worth testified that she was never
explicitly told whether she was an
employee or an independent contractor,
but assumed that she was an employee due
to her duties and the nature of her work.

  Worth testified that after being fired,
she had headaches and could not sleep.
She stated that it took her eight weeks
to secure new employment. Finally, Worth
testified that in April 1995, she
received a tax form for her work at the
Morris Office. She stated that she did
not understand the significance of the
tax form and that she took the form to
H&R Block, who completed all of her tax
paperwork.

  Tyer also testified at trial. Initially,
his testimony focused on the
incorporation and management of the
defendant corporations. Tyer testified
that the corporations were incorporated
independently and proper corporate
formalities were observed at all times.
For instance, Tyer testified that he
maintained separate corporate records,
minute books, and tax returns for each
corporate defendant. Tyer also stated
that he never "commingled the records or
bills" of any of the companies.

  In addressing the alleged battery, Tyer
admitted touching Worth’s breast on June
14, 1994, and being contacted by Morris
Police Detective Salemas on the morning
of June 16, 1994. Tyer testified that on
June 16, 1994, he lied to Detective
Salemas and denied touching Worth. Tyer
also admitted repeatedly lying in the
pleadings by denying that he touched
Worth’s hair, breast, body or made any
comments to Worth regarding the same.
Tyer testified that thirteen days before
trial, he amended the pleadings to
reflect the truth.

  Tyer further testified that he had made
the decision to terminate Worth before
meeting with her on June 13, 1994,
because of Worth’s substandard job
performance. Tyer stated that she had
made many mistakes with respect to the
flyer and cover letter. Tyer was also
dissatisfied with stylistic aspects of
her work such as the use of "Dear Sir" in
the greeting instead of the addressee’s
name. However, Tyer admitted that he had
authorized a similar flyer four months
prior to Worth’s flyer. Tyer testified
that he told Worth not to mail the
promotional flyer because he did not
approve of it. In addressing her
termination, Tyer denied that the
incorrect letterhead played a large part
in Worth’s dismissal. Tyer’s testimony
was impeached, however, when his
deposition testimony was read into the
record. In his deposition, Tyer stated
that he dismissed Worth "in large part"
because she used improper letterhead. On
cross-examination, Tyer admitted that
another employee had used incorrect
letterhead for three years without being
terminated.

  At the close of testimony, defendants
filed a motion for judgment as a matter
of law ("JMOL") alleging: (1) U.S. Title
Co., CTS, Title Express, Ogle II, and
Tyer in his individual capacity were
improper defendants under Title VII; (2)
all Title VII claims should be dismissed
because Worth was an independent
contractor; (3) Worth failed to establish
a retaliatory discharge claim; (4) the
Morris Office was not hostile; (5) Tyer
did not engage in quid pro quo
harassment; and (6) all state law claims
except the battery should be dismissed.
The district court dismissed all of the
state law claims except the battery and
also dismissed Worth’s quid pro quo
claim. The district court found there was
sufficient evidence to submit the other
issues to the jury. Therefore, the claims
that survived the motion, and form the
basis of this appeal, were two Title VII
counts--one for sexual harassment and one
for retaliatory discharge--and one count
of battery.

  The jury returned a verdict against
defendants in the amount of $52,000 in
compensatory and punitive damages for the
Title VII claims. The jury also returned
a verdict against defendants in the
amount of $100,000 in compensatory and
punitive damages for the battery.
Defendants then moved to amend the
judgment, or in the alternative for a new
trial under Federal Rules of Civil
Procedure 59(a) and 59(e). In this
motion, defendants alleged that (1) there
was insufficient evidence to find U.S.
Title Co., CTS, Title Express, Ogle II,
or Tyer in his individual capacity proper
defendants under Title VII; (2) the
retaliatory discharge claim should not
have been submitted to the jury; (3)
there was insufficient evidence to
support the hostile work environment
claim; and (4) the damages were
excessive. The district court denied
defendants’ motion, and judgment was
entered against Grundy II, U.S. Title
Co., CTS, Title Express, Ogle II and
Tyer.

II.    Analysis

A.    Jurisdiction

  On appeal, defendants contend that the
district court lacked subject matter
jurisdiction over Worth’s claims.
Defendants rely on the fact that when
Worth filed her complaint on June 12,
1996, she lacked a Notice of Right to Sue
from the EEOC ("right-to-sue letter").
Defendants assert that a plaintiff must
obtain a right-to-sue letter to satisfy
the jurisdictional prerequisites of Title
VII. According to defendants, any
plaintiff who lacks a right-to-sue letter
at the time of filing its lawsuit can
have its suit dismissed at any point
thereafter for lack of jurisdiction.
Therefore, defendants contend that the
district court should have dismissed
Worth’s Title VII claim for lack of
jurisdiction. See Movement for
Opportunity & Equal. v. Gen. Motors,
Corp., 622 F.2d 1235, 1241 (7th Cir.
1980). Moreover, because the district
court lacked original jurisdiction over
Worth’s Title VII claims, defendants
argue that it also lacked supplemental
jurisdiction over Worth’s battery claim.
See 28 U.S.C. sec. 1367. Finally,
defendants contend that this issue has
been preserved for appeal because
jurisdictional arguments may never be
waived. See Fed. R. Civ. P. 12(h)(3).

  Defendants’ argument fails because the
receipt of a right-to-sue letter is not a
jurisdictional prerequisite to bringing a
Title VII suit. See Zipes v. Trans World
Airlines, Inc., 455 U.S. 385, 398, 102 S.
Ct. 1127, 71 L. Ed. 2d 234 (1982).
Rather, the lack of a right-to-sue letter
may constitute a defense to a Title VII
claim. See Perkins v. Silverstein, 939
F.2d 463, 471 (7th Cir. 1991). In
Perkins, we held that a complaint may be
deficient and subject to dismissal if the
plaintiff lacks a right-to-sue letter.
See id. However, the plaintiff’s receipt
of a right-to-sue letter before dismissal
cured any deficiency in the original
complaint. See id.

  In the present case, the EEOC sent Worth
a right-to-sue letter on October 21,
1996. Thus, defendants could have sought
to dismiss Worth’s complaint at any time
before October 21. See id. However, it
was defendants’ duty to bring any
deficiency in Worth’s complaint to the
court’s attention and they failed to do
so in a timely manner. Therefore,
defendants’ argument fails because it was
not raised before Worth received the
October 21, 1996 right-to-sue letter. See
id.

B.   Proper Defendants

a.   Corporate Defendants

  At the close of testimony, defendants
moved for JMOL, alleging that U.S. Title
Co., CTS, Title Express, and Ogle II
("Affiliates") were not proper defendants
under Title VII. The district court found
there was sufficient evidence to submit
the question to the jury, which returned
a verdict against defendants. Defendants
then moved to amend the judgment, or in
the alternative, for a new trial on the
same grounds. Their post-trial motion was
again denied. "While we review the denial
of a motion for judgment as a matter of
law de novo . . . we are limited to
assessing whether no rational jury could
have found for the plaintiff." Goodwin v.
MTD Prods., Inc., 232 F.3d 600, 605-06
(7th Cir. 2000). Further, "[w]e review
the denial of a motion for a new trial
for abuse of discretion." Harris v. City
of Chicago, 266 F.3d 750, 753 (7th Cir.
2001).

  In the present case, there are three
ways in which one of the Affiliates could
be found to be a proper Title VII
defendant. First, any of the Affiliates
that possibly maintained an employment
relationship with Worth may be named as a
defendant under Title VII. See Knight v.
United Farm Bureau Mut. Ins. Co., 950
F.2d 377, 380 (7th Cir. 1991). Affiliates
deny they are defendants under this stan
dard, although Grundy II concedes that it
is a proper defendant for this reason.
Next, if any of the Affiliates forfeited
its limited liability, it is a proper
defendant under Title VII. See Papa v.
Katy Ind., Inc., 166 F.3d 937, 941 (7th
Cir. 1999). The most common way for an
affiliated corporation to forfeit its
limited liability is through "piercing
the corporate veil," whereby corporate
formalities are ignored and the actions
of one company can accrue to another. See
id. Worth must show two things to pierce
the corporate veil of each Affiliate:
first, "there must be such unity of
interest and ownership [between the
Affiliate and Grundy II] that the
separate personalities . . . no longer
exist; and second, circumstances must be
such that adherence to the fiction of
separate corporate existence would
sanction a fraud or promote injustice."
Van Dorn Co. v. Future Chem. & Oil Corp.,
753 F.2d 565, 569-70 (7th Cir. 1985)
(quotation omitted). An affiliated
corporation also forfeits its limited
liability when it takes actions for the
express purpose of avoiding liability
under the discrimination laws or where
the affiliate corporation might have
directed the discriminatory act,
practice, or policy of which the employee
is complaining. See Papa, 166 F.3d. at
941. Finally, any of the Affiliates may
be liable under Title VII due to the
misdeeds of a predecessor through
successor liability. "When the successor
company knows about its predecessor’s
liability, knows the precise extent of
that liability, and knows that the
predecessor itself would not be able to
pay a judgment obtained against it, the
presumption should be in favor of
successor liability . . . ." EEOC v.
Vucitech, 842 F.2d 936, 945 (7th Cir.
1988). If any of the Affiliates satisfy
any of these scenarios, it is a proper
defendant under Title VII.

  Worth contends that there is a fourth
way Affiliates could be proper Title VII
defendants: through the "integrated
enterprise" test. The "integrated
enterprise" test determines whether
multiple corporate entities could both be
considered proper defendants in
employment discrimination cases even if
one of them did not directly employ the
plaintiff./1 See, e.g., Rogers v. Sugar
Tree Prods., Inc., 7 F.3d 577, 582 (7th
Cir. 1993). Worth’s argument fails,
however, because this Circuit no longer
applies the "integrated enterprise" test
to Title VII claims. See Papa, 166 F.3d
at 941-43. In Papa, we addressed the
application of the "integrated
enterprise" test in the context of
determining whether affiliated
corporations were proper defendants under
Title VII even if they did not meet the
minimum employee requirements of Title
VII ("tiny employer exception"). See id.
at 939. We stated that the "integrated
enterprise" test was too amorphous to be
applied consistently. See id. at 940-42.
Such inconsistencies made it difficult
for a corporation to determine when it
could be held liable for the actions of
its affiliate. Therefore, we held that
the "integrated enterprise" test should
be abrogated in Title VII cases. See id.
at 941-43.

  Worth erroneously contends that because
Papa addressed only the tiny employer
exception, it is limited to such cases.
Therefore, according to Worth, we should
still apply the "integrated enterprise"
test in this case because, Worth alleges,
defendants meet the minimum employee
requirement of Title VII. However,
nothing in Papa limits its application to
the tiny employer context. Rather, we
stated that the principles governing
affiliate liability should apply "across
the full range of American law" unless a
particular statute provided an
alternative test. Id. at 941.

  Turning to the each of the Affiliates,
Ogle II is proper defendant due to
successor liability. See Vucitech, 842
F.2d at 943-45. There was ample evidence
for the district court to conclude that
Ogle II knew about the existence and
extent of Grundy II’s liability to Worth
and that Grundy II was no longer
operating. See id. at 945. Tyer’s conduct
is what gives rise to any liability
against Grundy II and Tyer knew that,
when he terminated Worth, she had already
reported his conduct to the police.
Therefore, he knew that Grundy II was
potentially liable for his actions./2
On December 31, 1994, twelve days after
the IHRC sent Tyer a letter with respect
to this matter, Grundy II ceased
operations. Two days later, on January 2,
1995, every employee of Grundy II became
an employee of Ogle II and Ogle II
acquired Grundy II’s assets. Finally, and
most importantly, defendants’ counsel
conceded at trial that Ogle II should be
liable for any judgment against Grundy
II. Therefore, the district court did not
err in holding that Ogle II was a proper
defendant under Title VII.

  However, there was insufficient evidence
that Title Express was a proper
defendant. Although Worth briefly visited
the Schaumburg Office of Title Express,
she did so only in her capacity as a
representative of Grundy II. Title
Express did not pay Worth nor establish
any sort of relationship with Worth.
Therefore, Title Express did not employ
Worth. See Knight, 950 F.2d at 380.
Further, Worth was unable to show that
piercing Title Express’ corporate veil
was necessary to avoid fraud or prevent
injustice. See Sea-Land Servs., Inc. v.
Pepper Source, 941 F.2d 519, 522 (7th
Cir. 1991). Additionally, there was no
evidence that Title Express was set up
for the purpose of avoiding liability
under the anti-discrimination law or that
it directed any of the discriminatory
acts in question. See Papa, 166 F.3d at
941. Finally, Worth did not present any
evidence that Title Express succeeded
Grundy II in interest. See Vucitech, 842
F.2d at 943-45. Therefore, Title Express
was not a proper defendant under Title
VII.

  U.S. Title Co. and CTS both ceased
operations by May 1994 and, therefore,
neither directly employed Worth. See
Knight, 950 F.2d at 380. Moreover,
neither U.S. Title Co. nor CTS succeeded
Grundy II in interest so neither is
liable due to successor liability. See
Vucitech, 942 F.2d at 943-45. Further,
Worth presented no evidence that U.S.
Title Co. or CTS directed Tyer’s
misdeeds. See Papa, 166 F.3d at 941.
Worth did not establish that piercing the
corporate veil was necessary to avoid
fraud or the promotion of injustice. See
Sea-Land, 941 F.2d at 522. Worth
presented no evidence that when U.S.
Title Co. was incorporated in 1974, it
was set up to avoid liability under the
antidiscrimination laws. See Papa, 166
F.3d at 941. Nor did Worth present any
evidence that CTS was incorporated in
1983 in order to avoid the same
liability. Therefore, U.S. Title Co. and
CTS were also improper defendants under
Title VII. To summarize, the district
court was correct to conclude that Grundy
II and Ogle II were proper defendants
under Title VII. However, the court erred
in finding U.S. Title Co., CTS, and Title
Express to be proper defendants.
Therefore, we hold that the district
court erred in denying defendants’ motion
for JMOL as far as it applies to those
three corporations under Title VII.

b.   Tyer

  Tyer contends that the district court
erred in denying defendants’ motion for
JMOL because supervisors are not liable
in their individual capacities under
Title VII. See EEOC v. AIC Sec.
Investigations, Ltd., 55 F.3d 1276, 1279
(7th Cir. 1995). Worth assets that Tyer
is not liable as a supervisor, but rather
because he is an "alter ego" of the
defendant corporations, he should be
treated as Worth’s employer under Title
VII. See Curcio v. Chinn Enters., Inc.,
887 F. Supp. 190, 193-94 (N.D. Ill. 1995)
(holding that because defendant was sole
shareholder and main decisionmaker of
corporation he was liable in individual
capacity as "alter ego" of corporation).
According to Worth, Tyer--as the
maindecisionmaker and controlling
shareholder of Grundy II and Ogle II/3-
-is so intertwined with them that he is
their "alter ego." Because Tyer is the
corporations’ "alter ego," Worth contends
that Tyer should be treated as her actual
employer for Title VII purposes. See id.
at 194.

  We disregard the presumption of
shareholder protection from individual
liability only in limited circumstances.
See Van Dorn, 753 F.2d at 569-70. To
overcome this presumption, a party must
show, in addition to the interrelation of
a corporation and its shareholders, that
the protection must be disregarded in
order to prevent fraud or the promotion
of injustice. See id. at 570. The problem
with the "alter ego" theory is that it
seeks to impose liability upon
shareholders without a showing of fraud
or injustice. See AIC Sec., 55 F.3d at
1282 n.11 (suggesting that we would not
adopt "alter ego" theory because
shareholder is already potentially liable
through veil piercing). Our rejection of
the "alter ego" theory is further
supported by Congress’ aversion to
individual liability under Title VII.
See, e.g., id. at 1279-82. In the present
case, Worth presented no evidence that
Tyer should be liable in his shareholder
capacity. Therefore, the district court
erred in denying defendants’ motion for
JMOL as it relates to Tyer under Title
VII. We are then left with Grundy II and
Ogle II as proper defendants under Title
VII.

C.   Sufficiency of the Evidence

  Defendants contend the evidence was
insufficient to establish (1) that Worth
was an employee and, thus, covered under
Title VII; (2) that Worth was terminated
for statutorily protected expression; and
(3) that Worth’s work environment was
hostile.

a.   Independent Contractor or Employee

  Defendants assert that Worth was an
independent contractor and not one of
their employees. Because independent
contractors are not protected under Title
VII, see Knight, 950 F.2d at 380,
defendants assert that the district court
erred in denying their motions for
judgment as a matter of law or, in the
alternative, for a new trial. Defendants
contend that the district court
misapplied the applicable law, and
therefore, we should determine whether
Worth was an employee de novo. See
Daniels v. Essex Group, Inc., 937 F.2d
1264, 1269-70 (7th Cir. 1991).
Defendants’ contention is mistaken,
however, as the district court examined,
applied, and commented on the proper
test. Because the district court did not
misstate, misinterpret or misapply the
law, we apply the clear error rule
because defendants take issue with the
trial judge’s view of the evidence, not
with her view of the law. See Daniels,
937 F.2d at 1270./4

  To determine whether an individual is an
employee or an independent contractor
within the meaning of Title VII, we focus
on five factors:

(1) [T]he extent of the employer’s
control and supervision over the worker,
including directions on scheduling and
performance of work, (2) the kind of
occupation and nature of skill required,
including whether skills are obtained in
the workplace, (3) responsibility for the
costs of operation, such as equipment,
supplies, fees, licenses, workplace, and
maintenance of operations, (4) method and
form of payment and benefits, and (5)
length of job commitment and/or
expectations.

Knight, 950 F.2d at 378-79. The
employer’s right to control the worker’s
actions is the most important factor. See
id. at 378. "If an employer has the right
to control and direct the work of an
individual, not only as to the result to
be achieved, but also as to the details
by which that result is achieved, an
employer/employee relationship is likely
to exist." Spirides v. Reinhardt, 613
F.2d 826, 831-32 (D.C. Cir. 1979).

  On appeal, defendants contend that an
incident on the afternoon of June 15,
1994 demonstrates that Worth, not
defendants, controlled Worth’s actions.
That afternoon, Worth left the office
around lunch and did not return until
late in the afternoon. Defendants point
to this incident to show that Worth was
in control of her own work and schedule
because she was free to come and go as
she pleased. Moreover, defendants assert
that this incident is conclusive proof of
Worth’s independent contractor status
because, unlike employees, independent
contractors can set their own schedule.
See Knight, 950 F.2d at 380 (noting that
individual’s control over own work
schedule indicative of independent
contractor status).

  Worth presented significant evidence
that defendants controlled her actions
and dictated her schedule through either
Tyer or Fahrion. Worth testified that
Fahrion--acting under Tyer’s orders--set
Worth’s training schedule and that
training accounted for most of Worth’s
workday. Worth further stated that in
addition to setting Worth’s schedule,
either Fahrion or Tyer directed Worth’s
job duties by telling her on which
projects to work. Tyer also required
Worth to submit her work on the
promotional flyer to him for his
approval. Finally, Worth testified that
she was required to submit an employee
timecard to Fahrion. Tyer admitted that
all Grundy II employees filled out
similar timecards and that independent
contractors he had hired in the past had
not been required to fill out timecards.

  Defendants next contend that Worth’s
previous sales experience indicates that
she was an independent contractor
possessing unique sales skills. An
individual’s unique work skills may
indicate independent contractor status.
See Spirides, 613 F.2d at 832. However,
if the individual requires substantial
training and supervision, an employee/
employer status is more likely. See
Knight, 950 F.2d at 380. In the present
case, Worth did not dispute that she had
previous sales experience. However, she
contends that most people bring some sort
of skills to a new job and there was
nothing unique about her experience.
Moreover, she testified that most of her
day consisted of training.

  The party that bears the costs of
operation is also relevant to our
determination. See id. If an entity bears
costs of operation--such as for equipment
or office space--an employee/employer
relationship is more likely. See Ost v.
W. Suburban Travelers Limousine, Inc., 88
F.3d 435, 438 (7th Cir. 1996); Spirides,
613 F.2d at 832. In the present case,
there was no dispute that Grundy II bore
the costs of operation involved in
Worth’s work.

  Turning to the method of payment and
benefits, defendants assert that Worth’s
tax return shows that she was an
independent contractor. Whether an
individual is paid by time or by
commission is indicative of the
individual’s status. See Spirides, 613
F.2d at 832. Further, whether the entity
pays the appropriate taxes--such as FICA
or Social Security--and gives the
individual benefits must also be
considered. See id. Defendants rely on
Worth’s 1994 tax return, which listed
Worth’s income from Grundy II as "free
lance" work, for its assertion that Worth
was an independent contractor./5
Defendants note that Worth did not have
taxes taken out of her paycheck or
receive any insurance, sick leave, or
vacation time.

  Worth testified that she never
characterized her employment as "free
lance" work. Rather, H&R Block prepared
her tax returns that year and reached
that conclusion itself. Worth further
testified that she never told H&R Block
that she was doing free lance work.
Defendants attempted to rebut this
testimony by showing that Worth’s
previous work experience showed that she
was familiar with employee forms.
Finally, Worth testified that although
she did not have taxes taken out of her
paycheck, or receive benefits, she
believed that both events would occur
within the thirty days.

  Finally, we turn to the parties’
expectations regarding the length of
Worth’s employment. Contracts of a set
length often indicate independent
contractor status. See Mazzei v. Rock N
Around Trucking, Inc., 246 F.3d 956, 965
(7th Cir. 2001). Defendants concede that
both Tyer and Fahrion repeatedly
discussed career advancement with Worth.
Defendants asserts that advancement in
this context meant a change from
independent contractor status to employee
status. Worth testified that Tyer told
her that, eventually, she might be
promoted into office management.

  We conclude that the district court did
not err in denying defendants’ motions,
see Daniels, 937 F.2d at 1270, because
all five Knight factors cut in Worth’s
favor. Grundy II, through Tyer and
Fahrion, controlled all of Worth’s work
actions by setting her hours, assigning
her projects and approving her work. See
Spirides, 613 F.2d at 831-32; see also
Knight, 950 F.2d at 380. Worth also
lacked unique work skills, relevant to
defendants’ business. See Spirides, 613
F.2d at 632. Defendants provided all the
costs of operation for Worth’s work, see
Ost, 88 F.3d at 438, and Tyer and Worth
discussed the possibility of being
promoted. Further, Worth had to submit a
time card and was not paid a sales
commission. See id. Therefore, there was
sufficient evidence for the jury to
conclude that Worth was an employee.

b.   Retaliatory Discharge

  Defendants next contend that the
evidence at trial was insufficient for
Worth to establish a claim of retaliatory
discharge under Title VII and, therefore,
the district court erred in not granting
their motions for JMOL or a new trial. To
establish a prima facie case of
retaliation under Title VII, Worth "must
show that (1) she engaged in statutorily
protected expression; (2) she suffered an
adverse action by her employer; and (3)
there [was] a causal link between her
protected expression and the adverse
action." Sweeney v. West, 149 F.3d 550,
555 (7th Cir. 1998). If Worth established
these elements, the burden would shift to
defendants to produce a legitimate, non-
discriminatory reason for firing her. See
Miller v. Am. Family Mut. Ins. Co., 203
F.3d 997, 1007 (7th Cir. 2000). If
defendants succeeded in producing a
legitimate justification, the burden
would shift back to Worth to prove that
the reason was a mere pretext for
retaliating against her. See id.

  Defendants contend that Worth failed to
show that she engaged in statutorily
protected expression, relying on the fact
that Worth was fired long before she
filed her EEOC complaint. Defendants
further assert that Worth’s filing of the
police report does not constitute
statutorily protected expression under
Title VII because, according to
defendants, the only type of activity
protected by the statute is the filing of
a Title VII complaint. We disagree.

  In relevant part, Title VII provides
that "[i]t shall be an unlawful
employment practice for an employer to
discriminate against any of his employees
. . . because he has opposed any practice
made an unlawful employment practice by
this subchapter . . . ." 42 U.S.C. sec.
2000e-3(a). Among other things, Title VII
prohibits employers from retaliating
against employees who "oppose" sexual
harassment. See Rennie v. Dalton, 3 F.3d
1100, 1109 (7th Cir. 1993). Moreover, we
have previously held that sexual contact
may constitute sexual harassment. See
Hostetler v. Quality Dining, Inc., 218
F.3d 798, 807 (7th Cir. 2000). A
plaintiff that reports such conduct to
the police clearly "opposes" it within
the meaning of 42 U.S.C. sec. 2000e-3(a).
In the present case, Worth’s police
report alleged that Tyer touched her
breast while she was in her office. We
have no problem concluding that Worth’s
police report constitutes protected
activity under Title VII’s "opposition"
clause. See EEOC v. Dinuba Med. Clinic,
222 F.3d 580, 586 (9th Cir. 2000)
(holding that filing of assault and
battery police report constitutes
statutorily protected expression).

  Turning to the second prong, there is no
question that termination constitutes an
adverse action under Title VII. See Silk
v. City of Chicago, 194 F.3d 788, 800
(7th Cir. 1999). In addressing the third
prong, the timing of the discharge may
support the establishment of a causal
nexus. See Dey v. Colt Constr. & Dev.
Co., 28 F.3d 1446, 1458 (7th Cir. 1994).
In Dey, we noted that "a plaintiff may
establish [a causal] link through
evidence that the [adverse action] took
place on the heels of protected
activity." Id. In the present case, there
was no dispute that Worth was terminated
the morning after filing her police
report. Such proximity supports the
jury’s determination of a causal nexus.
See id. Therefore, Worth succeeded in
establishing a prima facie case of
retaliatory discharge under Title VII.

  Defendants assert that they rebutted
Worth’s prima facie case by producing a
non-discriminatory reason (poor job
performance) for terminating Worth. See
Miller, 203 F.3d at 1007. Worth responds
that such justification was pretextual.
See id. A plaintiff can establish pretext
either directly, with evidence suggesting
that retaliation was the most likely
motive for the termination, or
indirectly, by showing that the
employer’s proffered reason was not
worthy of belief. See Johnson v.
Sullivan, 945 F.2d 976, 980 n.5 (7th Cir.
1991) (quotation omitted). "The indirect
method requires some showing that (1) the
defendant’s explanation has no basis in
fact, or (2) the explanation was not the
real reason, or (3) . . . the reason
stated was insufficient to warrant the
termination." See Sanchez v. Henderson,
188 F.3d 740, 746 (7th Cir. 1999)
(quotation omitted).

  Tyer testified that he had decided to
terminate Worth on June 13, 1994--before
Worth filed her police report. Tyer
testified that he based his decision to
fire Worth on the fact that the flyer and
cover letter that Worth worked on
contained multiple errors including
improper letterhead. On appeal,
defendants also contend that Worth could
have been fired because Worth was absent
from work without authorization on June
15, 1994.

  Worth asserts that there is direct
evidence of pretext in this case. Tyer
testified that he had been interviewed by
Detective Salemas on June 16, 1994. Worth
testified that later that day, Tyer
justified her firing "in light of recent
circumstances." According to Worth, the
"circumstances" to which Tyer alluded
concerned her filing of the police
report--an event about which Tyer learned
only hours before firing her. Worth
contends that Tyer’s admission directly
shows that his justification was
pretextual. See Schreiner v. Caterpillar,
Inc., 250 F.3d 1096, 1100 (7th Cir. 2001)
(suggesting admission shows pretext).

  Worth also contends there was
circumstantial evidence showing that
Tyer’s justification was pretextual
because it was not credible. Initially,
Worth asserts that because Tyer was not
credible witness, the jury was entitled
to disregard his justification. Worth was
able to show, and have Tyer admit, that
in his initial answer to the complaint,
as well as two amended answers, Tyer had
denied ever touching Worth in any regard.
Tyer then admitted that these answers
were lies and that it was only thirteen
days before trial that he amended his
answer to reflect the truth. Further,
Tyer also admitted lying to Detective
Salemas when he was first questioned
about the alleged battery.

  Worth then points to evidence supporting
the conclusion that her work was
satisfactory. Tyer’s previous testimony
stated that he based Worth’s dismissal
"in large part" on using incorrect
letterhead. However, Tyer admitted that
another employee had used the wrong
letterhead for a period of three years
without being terminated. Although Tyer
asserted that Worth was fired for
mistakes in the flyer and cover letter
including improper letterhead, he
admitted that he had authorized a similar
flyer including a similar letterhead
approximately four months earlier.

  The jury was presented with conflicting
stories: either that Worth was fired for
reporting Tyer to the police or that she
was fired for poor work product and being
absent from work without permission. A
rational juror could have believed that
termination "in light of recent
circumstances" meant that Worth was fired
for reporting Tyer to the police and that
any post-termination justification was
pretextual. See id. Moreover, based on
Tyer’s dishonest behavior in this case,
the jury was entitled to conclude that
Tyer’s justification was not credible.
See Johnson, 945 F.2d at 980 n.5. Thus,
the jury’s finding that Worth was fired
in retaliation for reporting Tyer to the
police was not clearly erroneous. See
Emmel v. Coca-Cola Bottling, 95 F.3d 627,
629 (7th Cir. 1996); Anderson v. City of
Bessemer, 470 U.S. 564, 574, 105 S. Ct.
1504, 84 L. Ed. 2d 518 (1985) ("Where
there are two permissible views of the
evidence, the factfinder’s choice between
them cannot be clearly erroneous.").
Therefore, the district court did not err
in denying defendants’ motion for JMOL or
for a new trial.

c.   Hostile Work Environment

  Defendants next contend that the
district court erred in not granting
their motions for JMOL or, in the
alternative, for a new trial because the
evidence at trial was insufficient to
establish actionable sexual harassment
under Title VII. Sexual harassment is
actionable under Title VII only when it
is "sufficiently severe or pervasive to
alter the conditions of the victim’s
employment and create an abusive working
environment." Meritor Sav. Bank v.
Vinson, 477 U.S. 57, 67, 106 S. Ct. 2399,
91 L. Ed. 2d 49 (1986) (quotation
omitted). Whether harassment rises to
this level depends on the totality of the
circumstances including: "the frequency
of the discriminatory conduct; its
severity; whether it is physically
threatening or humiliating, or a mere
offensive utterance; and whether it
unreasonably interferes with an
employee’s work performance." Harris v.
Forklift Sys., Inc., 510 U.S. 17, 23, 114
S. Ct. 367, 126 L. Ed. 2d 295 (1993).
"The work environment cannot be described
as ’hostile’ for purposes of Title VII
unless a reasonable person would find it
offensive and the plaintiff actually
perceived it as such." See Hostetler, 218
F.3d at 807.

  Worth contends the Morris Office was
hostile on June 13, 1994 and on June 14,
1994. We first address the subjective
prong because if Worth did not find the
work environment hostile, we must dismiss
this claim. See Dey, 28 F.3d at 1454. We
can, however, dispose of this prong
quickly because there is ample evidence
to conclude that Worth perceived her work
environment to be hostile. Worth
testified her contact with Tyer on June
13 and 14 made her uncomfortable.
Moreover, Worth testified that after the
June 14, 1994 incident, she was unable to
concentrate or work. She then reported
Tyer’s conduct to the police. These
actions show Worth’s concern over Tyer’s
actions and an unwillingness to tolerate
further harassment. See Hostetler, 218
F.3d at 807. Therefore, the district
court did not err in concluding that
Worth found the work environment hostile.
See id.

  Whether Worth’s work environment
objectively could be described as hostile
"should be judged from the perspective of
a reasonable person in the plaintiff’s
position, considering ’all the circumstances.’"
Oncale v. Sundowner Offshore Servs.,
Inc., 523 U.S. 75, 81, 118 S. Ct. 998,
140 L. Ed. 2d 201 (1998). As we have
previously observed:

Drawing the line [between vulgar behavior
and sexually harassing behavior] is not
always easy. On one side lie sexual
assaults; other physical contact, whether
amorous or hostile, for which there is no
consent express or implied; uninvited
sexual solicitations; intimidating words
or acts; obscene language or gestures;
pornographic pictures. On the other side
lies the occasional vulgar banter, tinged
with sexual innuendo, of coarse or
boorish workers. We spoke [previously] of
"the line that separates the merely
vulgar and mildly offensive from the
deeply offensive and sexually harassing."
It is not a bright line, obviously, this
line between a merely unpleasant working
environment on the one hand and a hostile
or deeply repugnant one on the other.

Baskerville v. Culligan Int’l Co., 50
F.3d 428, 430-31 (7th Cir. 1995)
(citations omitted) (emphasis added). In
the present case, we must determine
whether Tyer’s conduct over the two-day
period was so severe that a reasonable
person would have considered Worth’s work
environment hostile. See Hostetler, 218
F.3d at 807.

  There is no minimum number of incidents
required to establish a hostile work
environment. See id. at 808. That is
because "harassment need not be both
severe and pervasive to impose liability;
one or the other will do." Id. Indeed, we
have often recognized that even one act
of harassment will suffice if it is
egregious. See id. (listing cases). The
fact that conduct that involves touching
as opposed to verbal behavior increases
the severity of the situation. See id.
More importantly, in the present case, of
the several touching incidents, one
involved Tyer touching an intimate body
part--Worth’s breast. We have previously
recognized that direct contact with an
intimate body part constitutes one of the
most severe forms of sexual harassment.
See DiCenso v. Cisneros, 96 F.3d 1004,
1009 (7th Cir. 1996) (holding conduct not
severe because, among other things,
defendant "did not touch an intimate body
part"); see also Hostetler, 218 F.3d at
808-09. That the touching in this case
lasted for several seconds also increases
its severity. Cf. Adusumilli v. City of
Chicago, 164 F.3d 353, 362 (7th Cir.
1998) (holding that brief touch not
severe). Based on the totality of the
circumstances, see Harris, 510 U.S. at
23, there was sufficient evidence to
conclude that Tyer’s conduct was severe.
See Smith v. Sheahan, 189 F.3d 529, 533
(7th Cir. 1999).

  Defendants cite Adusumilli, 164 F.3d
353, in support of its position that the
conduct at issue was not severe. In
Adusumilli, we noted that there exists a
"safe harbor for employers in cases in
which the alleged harassing conduct is
too tepid or intermittent or equivocal to
make a reasonable person believe" the
environment was hostile. 164 F.3d at 362
(quotation omitted). However, contrary to
defendants’ assertions, the conduct at
issue here is neither "tepid" nor
"equivocal." Rather, a supervisor
touching one’s breast near the nipple for
several seconds is severe enough to
remove such conduct from any safe harbor.
See DiCenso, 96 F.3d at 1009; Hostetler,
218 F.3d at 809. Therefore, we cannot
conclude that the district court erred in
concluding that Worth’s work environment
was hostile.
 D.   Damages and Fees

  Defendants argue that although the
jury’s finding of Title VII liability
means that the award of some compensatory
damages was appropriate, $20,000 for
retaliatory discharge and $2,500 for
sexual harassment was excessive. The dis
trict court upheld the damage awards
against a post-trial challenge. We review
the district court’s refusal to grant a
new trial on the grounds of excessive
damages for an abuse of discretion. See
AIC Sec., 55 F.3d at 1285. We make three
inquiries when reviewing a compensatory
damages award: whether the award is
"monstrously excessive"; whether a
rational connection exists between the
award and the evidence, and "whether the
award is roughly comparable to awards
made in similar cases." Id.

  The district court found that there was
a rational connection between the
evidence and the damage awards, and we
agree. For all counts, Worth claimed
emotional damages. Only for the
retaliatory discharge claim did Worth
also claim compensatory damages including
lost wages and benefits, and expenses
associated with finding future
employment. The injuries Worth suffered--
lack of sleep, humiliation, distress,
lost wages, etc.--were significant enough
to warrant the jury’s award. Therefore, a
rational connection between the
respective awards and the evidence
existed. Defendants attempt to minimize
the conduct by claiming that Tyer lacked
"harassing intent" and by commending Tyer
for "not proposition[ing]" Worth.
However, our analysis focuses on
compensating Worth, not on examining
Tyer. Moreover, we have previously upheld
much larger awards in similar cases. See,
e.g., AIC Sec., 55 F.3d at 1286 (listing
cases). Finally, the awards of $20,000
and $2,500 cannot be described as
"monstrous" or "excessive." Id. at 1285
n.13.

  Next, defendants challenge the battery
damage award of $50,000./6 As we
discussed, Worth claimed emotional
damages and we find that the district
court did not err in finding a rational
connection between the award and the
damage. Moreover, comparable cases
indicate similar awards, see, e.g.,
Barrios v. Kody Marine, Inc., 2000 WL
775067, at *5 (E.D. La. June 14, 2001)
($40,000 for, inter alia, touching
buttocks and genitalia); Troutt v.
Charcoal Steak House, Inc., 835 F. Supp.
899, 900 (W.D. Va. 1993) ($25,000),
aff’d, 37 F.3d 1495 (4th Cir. 1994), and
we cannot describe the award of $50,000
as "monstrous" or "excessive." See AIC
Sec., 55 F.3d at 1285 n.13.

  Defendants next contend that the
district court abused its discretion in
denying their motion for a new trial
because the punitive damage awards were
excessive. "We will set aside a jury’s
award of punitive damages only if we are
certain it exceeds what is necessary to
serve the objectives of deterrence and
punishment." Id. at 1287. We do not find
the award of $5,000 for sexual
harassment, $25,000 for retaliatory
discharge, or the $50,000 punitive award
for battery to be excessive. The punitive
awards barely exceed the amount of
compensatory damages for the respective
claims. Although not definitive, such a
result is relevant. See id. Furthermore,
all three awards are consistent with
awards we have upheld in the past. See
id. (listing cases). Finally, we note
that Tyer’s actions in this case support
such awards as he lied to the plaintiff
and the court for over three years before
finally admitting the truth thirteen days
before trial.

  Defendants’ final contention is that the
district court erred in awarding Worth
attorney’s fees under 42 U.S.C. sec.
2000e-5(k) because Worth was not a
prevailing party. Defendants’ argument is
without merit as Worth prevailed on
significant issues in the litigation.
See, e.g., Hensley v. Eckerhart, 461 U.S.
424, 433, 103 S. Ct. 1933, 76 L. Ed. 2d
40 (1983).

III.   Conclusion

  We REVERSE the district court on the
Title VII claims against Tyer in his
individual capacity and against U.S.
Title Co., CTS, and Title Express. We
AFFIRM the district court in all other
respects. Therefore, in accordance with
the forgoing analysis, Ogle II and Grundy
II are liable for $20,000 for
compensatory damages and $25,000 for
punitive damages for the retaliatory
discharge claim, $2,500 for compensatory
damages and $5,000 for punitive damages
for the sexual harassment claim, and the
award of attorneys’ fees and costs.
Grundy II, U.S. Title Co., CTS, Title Ex
press, Ogle II, and Tyer in his
individual capacity are liable for
$50,000 in compensatory damages and
$50,000 in punitive damages for the
battery. Therefore, the judgment
heretofore entered is ordered VACATED and
this case is REMANDED to the district
court for entry of judgment consistent
with this opinion.

FOOTNOTES

/1 The four-factor test focuses on interrelation of
operations, common management, centralized con-
trol of labor relations and personnel, and common
ownership. See Rogers, 7 F.3d at 582.

/2 We note that Tyer is an attorney admitted to the
Illinois Bar and filed his own briefs in this
appeal.

/3 The evidence indicated that Tyer was not the
controlling shareholder. In disposing of the
"alter ego" theory, however, we assume that he
was.

/4 Defendants also contend that Worth waived any
challenge to the standard of review. However, the
court, not the parties, must determine the stan-
dard of review, and therefore, it cannot be
waived. See, e.g., Vizcaino v. Microsoft Corp.,
120 F.3d 1006, 1022 n.4 (9th Cir. 1997) (en banc)
(O’Scannlain, J., concurring in part and dissent-
ing in part).

/5 According to Webster’s Third New International
Dictionary "free lance" in this context means
"one who pursues a profession or occupation . .
. under no long-term contractual commitments to
any one employer or company." Webster’s Third New
Int’l Dictionary 906 (1986).

/6 Judgment was entered against U.S. Title Co.,
Grundy II, CTS, Title Express, Ogle II and Tyer
for the battery. Defendants challenge only the
damages award and not the imposition of liabili-
ty.
