                 IN THE COURT OF APPEALS OF TENNESSEE
                     WESTERN SECTION AT NASHVILLE


DEMETRA LYREE PARKER,             )
                                  )
           Plaintiff/Appellant,   ) Warren Chancery No. 5920
                                  )
VS.                               ) Appeal No. 01A01-9704-CH-00175
                                  )
WARREN COUNTY
UTILITY DISTRICT,
                                  )
                                  )
                                  )
                                                       FILED
           Defendant/Appellee.    )
                                                        January 9, 1998

                                                Cecil W. Crowson
        APPEAL FROM THE CHANCERY COURT OF WARREN COUNTY
                    AT McMINNVILLE, TENNESSEE Appellate Court Clerk
            THE HONORABLE JOHN W. ROLLINS, CHANCELLOR




ROBERT S. PETERS
SWAFFORD PETERS & PRIEST
Winchester, Tennessee
Attorney for Appellant



DIANNA BAKER SHEW
STEPHEN H. PRICE
FARRIS, WARFIELD & KANADAY, PLC
Nashville, Tennessee
Attorneys for Appellee



REVERSED AND REMANDED




                                             ALAN E. HIGHERS, J.



CONCUR:

W. FRANK CRAWFORD, P.J., W.S.

DAVID R. FARMER, J.
          Plaintiff Demetra Lyree Parker appeals the trial court’s order granting the motion for

summary judgment filed by Defendant/Appellee W arren County Utility District. We reverse

the trial court’s judgment based on our conclusion that a genuine issue of material fact

exists as to whether the Utility District responded promptly, adequately, and effectively to

Parker’s allegations of sexual harassment against the Utility District’s general manager.



                              I. Factual and Procedural History



          In October 1988, the Utility District’s general manager, David Grissom, hired Parker

to work at the Utility District. Sometime in 1991 or 1992, Parker complained to her

supervisor, Pam Link, that she was being sexually harassed by Grissom. According to

Parker, Grissom’s actions included touching her breast, attempting to kiss her following a

Utility District Christmas party, rubbing his body against hers, rubbing her legs and

shoulders, commenting on the way her clothes fit her body, and whispering remarks of a

sexual nature in her ear while she was working at the Utility District’s drive-in window. As

Parker was leaving work one day, Grissom allegedly told her that “the solution to [Parker’s]

problem was [Grissom]” and that he “was a man” and “could take care of [her].”



          Pam Link took Parker’s allegations seriously because of her own experiences with

Grissom. Link testified that Grissom often would “undress” her with his eyes and that, on

one occasion when Link and Grissom were in Pigeon Forge for a conference, Grissom

entered Link’s hotel room, pushed her onto the bed, and started “hunching” on her. Link

and another employee also heard Grissom tell Parker, upon learning that she had a date,

to “keep [her] panties on” and to “keep her legs together.” In fact, Grissom’s alleged sexual

harassment of Parker was commonly discussed among the female employees in Link’s

office.



          In response to Parker’s allegations, Link asked Parker “what she wanted to do

about” the harassment. Parker told Link to do nothing because she feared that she would

lose her job. Believing that Parker’s fear was justified, Link did not initiate any formal



                                                2
complaint process or grievance procedure on Parker’s behalf. Link instead advised Parker

to try to avoid Grissom and “[n]ot to dress in a manner that might cause him to act the way

he acted, that would give him ideas.” After this discussion, Parker continued to complain

to Link about incidents of harassment by Grissom which, Parker testified, occurred on

almost a daily basis.



       Although Link agreed not to pursue a formal complaint on Parker’s behalf, Link did

discuss Parker’s allegations with one member of the Utility District’s Board of

Commissioners, Phillip Vinson. Like Link, Vinson asked what Parker wanted to do about

the alleged harassment. Link informed Vinson that Parker did not “want anything done

about it because she’s afraid she’ll lose her job.” According to Link, Vinson agreed that

Parker probably would lose her job if she pursued the allegations.



       In addition to talking to Commissioner Vinson, Link spoke with Grissom, her boss,

on an informal basis about his treatment of Parker. Grissom allegedly responded by

saying that Parker had “done everything but lay [sic] down in the floor and take her clothes

off in front of [him].” Based on this response, Link decided not to pursue the matter with

Grissom because she concluded that any further conversation would not be productive.

       Sometime in 1992 or 1993, Parker herself discussed the allegations of sexual

harassment with Commissioner Vinson. In discussing the allegations, however, Parker

specifically asked Vinson not “to go to the Board with it because she felt that she would

[lose] her job.” Vinson replied that he did not think Parker would lose her job, but that he

had only one vote and did not know how the other four commissioners would vote. Vinson

also advised Parker to sue the Utility District if she felt “like [she had] a harassment case.”

Throughout her discussions with Link and Vinson, Parker insisted that she did not “want

to make an official complaint.” Vinson did not report Parker’s allegations to the rest of the

Board of Commissioners, nor did he discuss the allegations with Grissom.



       Grissom’s alleged sexual harassment of Parker continued until April 1994, when

Grissom voluntarily resigned from the Utility District. In the fall of 1994, however, the Board



                                              3
of Commissioners considered rehiring Grissom as the Utility District’s general manager.

In an effort to prevent Grissom from returning to work at the Utility District, Parker brought

her allegations of sexual harassment before the Board of Commissioners. Despite

Parker’s allegations, the Board voted to rehire Grissom, but the Board also hired outside

counsel to conduct an independent investigation into Parker’s allegations of sexual

harassment. As a result of the investigation, the Board suspended Grissom without pay.

Grissom did not sexually harass Parker after he was rehired.



       In October 1994, Parker filed this action against Grissom, the Warren County Utility

District, and two of its commissioners. In addition to asserting statutory claims under the

Tennessee Human Rights Act,1 Parker asserted common-law tort claims for negligent and

intentional infliction of emotional distress. Parker subsequently filed a notice of voluntary

dismissal without prejudice as to the two commissioners, Bobby Mayfield and Harrison

Gant. The trial court later entered an agreed order dismissing with prejudice Parker’s

action against David Grissom.



       The Utility District, the only remaining defendant, filed a motion for summary

judgment contending, inter alia, that its “prompt, corrective action in response to [Parker’s]

allegations [was] a complete defense to any ‘hostile environment’ [sexual harassment]

claim.” The Utility District also moved for summary judgment as to Parker’s common-law

tort claims. The trial court granted the Utility District’s motion, and this appeal followed.

On appeal, Parker challenges only the trial court’s dismissal of her sexual harassment

claim against the Utility District.



               II. Legal Standard for Hostile Work Environment Claims
                           Involving Supervisor Harassment



       As a preliminary matter, we find it necessary to address the appropriate legal

standard to be applied in this case. Under the Tennessee Human Rights Act, in order to

prevail on a hostile environment claim based on sexual harassment by a co-worker, the

       1
        See T.C.A. §§ 4-21-101 to 4-21-80 6 (1991).

                                                  4
employee first must establish the existence of a hostile work environment by proving the

following elements:

                (1)      the employee is a member of a protected class;

                (2)      the employee was subjected to unwelcomed sexual
                         harassment;

                (3)      the harassment occurred because of the employee’s
                         gender; [and]

                (4)      the harassment affected a “term, condition, or privilege”
                         of employment; . . . .

Campbell v. Florida Steel Corp., 919 S.W.2d 26, 31 (Tenn. 1996) (citing Rabidue v.

Osceola Ref. Co., 805 F.2d 611, 620 (6th Cir. 1986), cert. denied, 481 U.S. 1041 (1987)).

Inasmuch as the Tennessee Human Rights Act does not impose strict liability for hostile

environment claims, in order to recover against the employer, the employee additionally

must prove that (5) “the employer either knew or should have known of the harassment,

and failed to take prompt and appropriate remedial action.” Campbell, 919 S.W.2d at 32

(emphasis in original). This final element is the focus of this appeal.



        In the proceedings below, both the trial court and the parties relied on the foregoing

“knew or should have known” standard when they addressed the issue of the Utility

District’s liability for Grissom’s actions.          In adjudicating analogous Title VII claims,2

however, the federal courts have distinguished between the standards to be applied in co-

worker harassment and supervisor harassment cases:



                Under the “hostile environment” theory, there are two types of
                cases, those where the harasser is a co-worker and those
                where the harasser is a supervisor. . . .

                         ....

                         . . . [U]se of the phrase “respondeat superior” is
                 typically associated with the co-worker “knew or should have
                 known” standard. A different but closely related standard of
                 general agency applies in supervisor harassment cases.




        2
          Inasmuch as the purpose and intent of the Tennessee Human Rights Act is to execute the policies
embodied in the federal civil rights laws, our analysis of this issue is the same under both the Tennessee Act
and T itle VII of the fed eral act. Cam pbe ll, 919 S.W.2d at 31.

                                                      5
Kauffman v. Allied Signal, Inc., 970 F.2d 178, 182-84 (6th Cir.), cert. denied, 506 U.S. 1041

(1992).



       In an earlier decision, the court outlined the agency elements to be applied in

supervisor harassment cases:

               The essential question in applying agency principles is whether
               the act complained of took place in the scope of the agent’s
               employment. This determination requires an examination of
               such factors as when the act took place, where it took place,
               and whether it was foreseeable. See generally Restatement
               (Second) of Agency §§ 217--232 (1958). The Restatement
               specifically provides that even though an act is forbidden it
               may still be within the scope of employment. Restatement
               (Second) of Agency § 230.

Yates v. Avco Corp., 819 F.2d 630, 636 (6th Cir. 1987) (emphasis in original). In holding

the employer liable, the court conducted the following analysis of these agency factors:

               Here the harassment took place at the office, during working
               hours and was carried out by someone with the authority to
               hire, fire, promote and discipline the [employee]. There is no
               question that it was foreseeable. Had it not been, [the
               employer] would not have had a policy attempting to deal with
               it.

Yates, 819 F.2d at 636.



       In the present case, it was undisputed that the alleged harasser was in a supervisory

position over Parker at the Utility District. David Grissom was the Utility District’s general

manager, and Parker’s supervisor, Pam Link, reported directly to Grissom who, in turn,

reported to the Board of Commissioners. Accordingly, we conclude that the “scope of

employment” standard for supervisors applies instead of the “knew or should have known”

standard for co-worker harassment cases. Kauffman, 970 F.2d at 183.



       We further conclude that the undisputed evidence with regard to the agency factors

set forth in Yates supports the imposition of liability against the Utility District. The majority,

if not all, of the alleged acts of sexual harassment took place on Utility District premises

during working hours. Yates, 819 F.2d at 636. Moreover, the acts were carried out by

someone in a supervisory position who exercised significant control over Parker’s hiring,

firing, or conditions of employment. Kauffman, 970 F.2d at 185. According to Parker’s


                                                 6
supervisor, Pam Link, Grissom had the authority “to hire and fire as he saw fit.” Grissom

himself testified that he hired Parker and that only he had the authority to recommend

raises for Parker and other employees. Although the Board of Commissioners had the

ultimate authority to deny Grissom’s raise requests, Grissom could not remember the

Board ever doing so. Finally, in accordance with Yates, there is no question that the acts

of sexual harassment were foreseeable.



            III. Utility District’s Duty to Respond to Parker’s Allegations and
                  Parker’s Failure to Invoke Formal Complaint Procedure



        Although the “scope of employment” standard for supervisor harassment cases is

different from the “knew or should have known” standard for co-worker harassment cases,

the standards are similar in that an employer can avoid liability for supervisor harassment

by showing that the employer responded promptly, adequately, and effectively to the

problem once it had notice of the supervisor’s alleged acts. Kauffman v. Allied Signal, Inc.,

970 F.2d 178, 184 (6th Cir.), cert. denied, 506 U.S. 1041 (1992); cf. Campbell v. Florida

Steel Corp., 919 S.W.2d 26, 32 (Tenn. 1996) (in order to prevail on co-worker harassment

claim, plaintiff must show that employer knew or should have known of alleged harassment

and failed to take “prompt and appropriate remedial action”). This defense requires that,

once the employer has notice of allegations of sexual harassment, the employer must “act

promptly and in a way which effectively eliminates the harassment.” Graves v. Circuit City

Stores, No. 03A01-9501-CH-00012, 1995 WL 371659, at *3 (Tenn. App. June 21, 1995);

cf. Campbell, 919 S.W.2d at 33 (requirement of “prompt and appropriate remedial action”

in co-worker harassment cases means that employer must take “steps ‘reasonably

calculated’ to terminate the harassment”). 3 In this case, the parties agree that the

dispositive issue is whether the trial court erred in ruling, as a matter of law, that the Utility




        3
           The only significant d ifference between the two standards may lie in the burden of proof. In a co-
worker harassm ent case, as an elem ent of her prim a facie case, the plaintiff must prove that the employer
knew or should have known of the alleged harassment and failed to take “prom pt and ap propriate remedial
action.” Cam pbe ll, 919 S.W.2d at 32. In contrast, in a supervisor harassment case, once the plaintiff has met
her burden of establishing employer liability under agency principles, the employer can avoid liability by proving
that it respond ed prom ptly and effe ctively to elimina te the allege d haras sme nt. Kauffman, 970 F.2d at 184;
Graves, 1995 WL 371659, at *3.

                                                        7
District promptly, adequately, and effectively responded to Parker’s allegations of sexual

harassment.



       The Utility District contends, and apparently the trial court agreed, that no duty to

take corrective action arose until Parker complained to the Board of Commissioners in

October 1994 because, in making her earlier complaints to Supervisor Pam Link and

Commissioner Vinson, Parker indicated that she did not want to make an “official”

complaint and that she did not want any action taken on her complaint. We disagree.



       In making this argument, the Utility District relies on Hollis v. Fleetguard, Inc., 668

F. Supp. 631 (M.D. Tenn. 1987), aff’d, 848 F.2d 191 (6th Cir. 1988). The facts of that case

were similar in that, when the plaintiff complained to management, she urged them neither

to confront the alleged harasser nor to investigate her allegations, and she insisted that

“she could handle the problem.” Hollis, 668 F. Supp. at 637. In the plaintiff’s subsequent

sexual harassment action, the court rejected the plaintiff’s claim of liability against the

employer:

              Once a member of management attempted to explore the
              plaintiff’s claim . . . and was asked not to by the plaintiff, she
              will not be heard to say that her employer was thereafter
              responsible for the hostility of her work environment. On the
              whole, the court finds that the procedure followed, albeit
              meager, was “reasonably responsive to the employee’s
              complaint,” . . . .

Hollis, 668 F. Supp. at 637.



       We conclude that the Hollis decision does not control the outcome of the case at

bar for several reasons. First, Hollis was not decided on appeal from a summary judgment

but, rather, was decided in a memorandum opinion issued by the trial court after a bench

trial. Thus, unlike the present case, the trial court was in the position of weighing the

evidence and deciding whether the employer’s response to the plaintiff’s allegations was

reasonable. Moreover, in Hollis the court stressed that, even if the events described by the

plaintiff were true, these events did not constitute sexual harassment. Hollis, 668 F. Supp.

at 637 n.4. In contrast, for purposes of these summary judgment proceedings, the



                                              8
evidence was undisputed that Parker made specific allegations against Grissom as early

as 1991 or 1992, and that Parker’s supervisor, Pam Link, considered the described

behavior to constitute sexual harassment. In this regard, the court in Hollis appears to

have limited its ruling to the facts of that case. The court ruled:

                      Under this set of facts, the court does not find that [the
               employer’s] management acted irresponsibly because they
               were not informed of any events constituting harassment.
               However, in most cases, a supervisor has a duty to investigate
               reported instances of sexual harassment, with or without an
               employee’s consent.

Hollis, 668 F. Supp. at 637 n.4 (emphasis added).



       The Hollis decision and other federal court decisions suggest that, while an

employee’s conscious decision to forego the employer’s formal complaint process may

weigh against the employee’s claim of employer liability, 4 an employee’s refusal or failure

to lodge a formal complaint does not necessarily relieve the employer of liability for hostile

environment sexual harassment. Hollis, 668 F. Supp. at 637 n.14; accord Meritor Sav.

Bank v. Vinson, 477 U.S. 57, 72 (1986) (rejecting employer’s argument that it was

insulated from liability by “the mere existence of a grievance procedure and a policy

against discrimination, coupled with [the employee’s] failure to invoke that procedure”);

Varner v. National Super Mkts., 94 F.3d 1209, 1213 (8th Cir. 1996) (rejecting employer’s

argument that it was entitled to judgment as matter of law based on employee’s failure to

invoke reporting procedures of employer’s sexual harassment policy), cert. denied, 117 S.

Ct. 946 (1997). As pointed out by the court in Hollis, an employer has some duty to

investigate an employee’s complaint, with or without the employee’s consent. Hollis, 668

F. Supp. at 637 n.4. Other courts have recognized that employers have a responsibility

to address allegations of sexual harassment even where the employee has declined to

lodge a formal complaint. McCoy v. Macon Water Auth., 966 F. Supp. 1209, 1219 n.3

(M.D. Ga. 1997). The relevant question is whether the employer had notice of the alleged

harassment and “failed to implement prompt and appropriate corrective action.” Varner,

94 F.3d at 1213.




       4
        See, e.g., Hartleip v. McNeilab, Inc., 83 F.3d 767, 776 (6th Cir. 1996).

                                                     9
       Rather than relieving the employer of liability, the employee’s failure to invoke an

existing grievance procedure is merely a factor to take into consideration when determining

the reasonableness of the employer’s response to allegations of sexual harassment. As

explained by one court,

              In some situations, particularly when there is some doubt as to
              the seriousness or the veracity of the charge or when the
              complainant is unwilling to state a formal charge, less drastic
              measures, such as warning the accused harasser, or
              reiterating the policy on harassment, will be more appropriate.

McCoy, 966 F. Supp. at 1219 (ruling that informal steps taken by employer constituted

sufficient response to sexual harassment allegations where plaintiff was unwilling to make

formal complaint) (emphasis added).



       We conclude that summary judgment was precluded in this case because a genuine

issue of material fact exists as to whether the Utility District responded promptly,

adequately, and effectively to Parker’s informal complaints of sexual harassment. It is

undisputed that Parker consistently maintained that she did not “want to make an official

complaint” because she feared she would be fired. Nevertheless, Parker’s refusal to

pursue a formal complaint did not relieve the Utility District of its duty to respond to her

allegations. For example, the Utility District could have informally counseled Grissom on

the subject of sexual harassment, or it could have required him and other employees to

attend seminars dealing with sexual harassment issues and, specifically, with the issue of

hostile environment sexual harassment. McCoy, 966 F. Supp. at 1219.



       In mentioning these possible responses, we do not mean to imply that the Utility

District was required to pursue these specific avenues, nor do we mean to imply that these

responses would have been sufficient to relieve the Utility District of liability for Grissom’s

actions.   The reasonableness of an employer’s response to allegations of sexual

harassment will vary depending on the circumstances of each case and, thus, must be

evaluated on a case-by-case basis. Rabidue v. Osceola Ref. Co., 805 F.2d 611, 621 (6th

Cir. 1986), cert. denied, 481 U.S. 1041 (1987); Campbell, 919 S.W.2d at 33. W e merely




                                              10
hold that, at this stage in the proceedings, the evidence reveals a genuine issue of material

fact as to the reasonableness of the Utility District’s response to Parker’s allegations.



       In determining the effect of Parker’s failure to invoke the Utility District’s formal

complaint procedure and, ultimately, the Utility District’s liability for Grissom’s actions, the

trial court also should consider Parker’s reasons for refusing to follow the procedure. In

this regard, the key inquiry is “whether a complainant has deliberately bypassed a

procedure that she would know was effective.” Valerio v. Dahlberg, 716 F. Supp. 1031,

1039 (S.D. Ohio 1988) (citing Meritor Sav. Bank, 477 U.S. at 72, 78). Again, we conclude

that a factual dispute exists as to this issue.



       The deposition witnesses gave conflicting testimony as to the existence of an

established grievance procedure at the Utility District. Pam Link testified that the Utility

District did have a grievance procedure but that, to her knowledge, the procedure never

was explained to any of the Utility District’s employees, including herself. At one time, Link

had a copy of the grievance procedure in her desk, but she was not familiar with its

provisions. Parker corroborated Link’s testimony, stating that she never was told about the

procedure for making such a complaint.              When Parker initially complained to

Commissioner Vinson, rather than instructing Parker to follow an established grievance

procedure, Vinson told Parker that she should sue the Utility District if she felt “like [she

had] a harassment case.” Grissom, on the other hand, testified that the Utility District had

no sexual harassment policy in place during the time period in which the alleged acts of

harassment occurred. According to Grissom, the Utility District did not adopt such a policy

until October 1994, after Parker formally complained about Grissom’s actions to the Board.



       Even if the Utility District had an established grievance procedure or policy on sexual

harassment, we conclude that the evidence raises a question as to Parker’s knowledge of

the effectiveness of such procedure or policy. When told of Parker’s fear that she would

be fired if she pursued a formal complaint, Link and Vinson did nothing to reassure her.

Instead, Vinson stated that he did not know whether Parker would lose her job, that he did



                                              11
not “think so,” but that he was “only one vote” and he did not know “what the other four

[commissioners would] do.” Like Parker, Link believed that Parker would lose her job if she

lodged a formal complaint. In light of this evidence, we are unable to conclude as a matter

of law that Parker’s failure to pursue an official complaint precludes a finding of liability

against the Utility District. See Valerio, 716 F. Supp. at 1039-40.



       The trial court’s judgment is hereby reversed, and this cause is remanded for further

proceedings consistent with this opinion. Costs of this appeal are taxed to the Utility

District, for which execution may issue if necessary.




                                                                HIGHERS, J.



CONCUR:




CRAWFORD, P.J., W.S.




FARMER, J.




                                             12
