                              In the

United States Court of Appeals
               For the Seventh Circuit

No. 12-2502

M C K INLEY L AMBERT,
                                                  Plaintiff-Appellant,
                                  v.

P ERI F ORMWORKS S YSTEMS, INC.,
                                                 Defendant-Appellee.


             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
         No. 10 C 6789—Sharon Johnson Coleman, Judge.



       A RGUED A PRIL 3, 2013—D ECIDED JULY 24, 2013




 Before P OSNER, W OOD , and H AMILTON, Circuit Judges.
  W OOD , Circuit Judge. Peri Formworks Systems, Inc., is
a supplier of concrete forms used in the construction
of high-rise buildings, tunnels, and bridges. McKinley
Lambert was employed as a laborer at one of Peri’s dis-
tribution yards. While working there, Lambert claims,
his co-workers and supervisors regularly made
sexually and racially offensive comments. He complained
regularly, but his supervisors took no action. Despite
2                                              No. 12-2502

the constant harassment, Lambert performed well and
was promoted to a lead position. One day, however,
Lambert’s supervisors observed him behaving in an
unusually aggressive manner. Concerned, they ordered
him to take a drug and alcohol test, which revealed that
he was intoxicated. Peri sacked him immediately
pursuant to its policy of “no tolerance” for employees
consuming alcohol on the job (an important policy, Peri
points out, for safety in a yard where workers operate
heavy machinery and maneuver large concrete objects).
  Lambert did not believe that his firing was prompted
by his intoxication. Instead, he attributed Peri’s decision
to terminate his employment to racial discrimination
and retaliation for his complaints about sexual and
racial harassment. He brought this suit, but the district
court granted summary judgment in favor of Peri on all
claims. We agree with the district court’s conclusion
that there is insufficient evidence that Lambert’s race
had anything to do with Peri’s decision to test him for
intoxication or to fire him. But we find that the court
acted prematurely in dismissing Lambert’s claims of
sexual and racial harassment: there are facts in the
record, viewed favorably to Lambert, upon which a jury
could find that he was subjected to a hostile work en-
vironment on account of race or sex, and that he took
all necessary steps to call his treatment to the
company’s attention. We therefore return this case to
the district court for further proceedings.
No. 12-2502                                              3

                             I
  In September 2003, Lambert, who is African-American,
began working as a general yard worker at Peri’s facility
in Calumet Park, Illinois. Yard workers handle ship-
ments of inventory to and from construction companies,
and they inspect, repair, and organize concrete forms
and scaffolding. They report to yard leads, who instruct
and organize teams of yard workers; yard leads report
to the yard manager, who oversees the yard, ensuring
that trucks are loaded correctly and that shipments
leave the yard in time. The logistics manager oversees
all operations at the facility. Lambert was a yard worker
from 2003 until January 2007. During that time, Jesus
Santiago was Lambert’s yard lead, and Robert Wallace
was the logistics manager. In January 2007, Santiago
promoted Lambert to a yard lead position.
  Lambert maintains that throughout the time he
worked at Peri, a co-worker, Hugo Robledo, would regu-
larly “tell[] Lambert to suck his penis and to give him
his ass, say[] Lambert had a beautiful ass, touch[] Lam-
bert’s buttox, star[e] at Lambert’s genitals, spy[] on Lam-
bert in the bathroom, expos[e] his penis to Lambert, and
rub[] and grab[] his own body in a sexual manner while
so close to Lambert that he often would be touching
or bumping into Lambert.” Lambert complained to Santi-
ago and another yard lead, Redalfo Avila, about
Robledo’s offensive behavior on multiple occasions
between 2004 and 2007, but neither of them took any
action. Before May 2005, Peri had no written sexual
harassment policy. In May 2005, it added one to its em-
4                                            No. 12-2502

ployee handbook. The policy instructed employees
either to report sexual harassment to Tami Osheroff,
Peri’s human resources manager (located off-site at the
head office in Maryland), or to write to the company’s
CEO. Lambert did neither.
  During the same period, Wallace referred to yard
laborers as “donkeys” on at least five occasions, and he
called an African-American co-worker a “gorilla” in
April 2007. Lambert understood the term “donkeys” to
be an epithet for minority laborers. In addition, a main-
tenance supervisor, Serge Berger, told Lambert that
Berger did not respect him because he is a “nigger.”
Lambert complained to Wallace about these comments
in April 2007, but Wallace took no action.
  On the morning of May 3, 2007, Wallace and Santiago
observed Lambert behaving unusually. Lambert admits
that he lifted up a co-worker while they were joking
about a boxing match. According to Wallace, Lambert
was speaking loudly; Santiago noticed that Lambert’s
eyes were glassy and he was avoiding eye contact.
Santiago and Wallace called Osheroff to ask whether
they had cause to test Lambert for drugs and alcohol
under Peri’s “reasonable suspicion” policy, which
permits testing if an employee displays erratic behavior
or other signs of intoxication. Osheroff spoke with
Lambert on the telephone, and she confirmed that
Wallace and Santiago’s observations supported a rea-
sonable suspicion of intoxication. After Santiago
informed Lambert that he would be tested, Lambert
purchased five cups of coffee, consumed them all on
No. 12-2502                                                 5

the way to the testing facility, and asked Santiago to
stop so that he could use the restroom. Notwithstanding
this impressive liquid intake, Lambert’s test revealed
that he had a blood alcohol level of 0.10%. Lambert was
immediately fired pursuant to Peri’s policy of “no toler-
ance” for drugs and alcohol on the job.
  In June 2007, a month after he was fired, Lambert sent
a letter to Peri’s corporate headquarters. The letter
raised a number of complaints about Peri: it rehearsed
the sexual and racial comments described above; it
accused Wallace of violating Peri’s inventory protocols
and misappropriating petty cash; and it asserted that
some Peri employees were not authorized to work in the
United States. This letter appears to be Lambert’s first
effort to complain of sexual or racial harassment to
anyone in Peri’s headquarters, including Osheroff.
  Lambert later filed this suit alleging racial and sexual
harassment, racial discrimination, and retaliatory dis-
charge, all in violation of Title VII of the Civil Rights Act,
42 U.S.C. § 2000e, and 42 U.S.C. § 1981. The district court
concluded that Lambert had not presented enough evi-
dence to permit a jury to find that Peri fired him because
of his race or his complaints. The court also held that
the racial remarks Lambert described were “neither
sufficiently severe nor pervasive to be actionable” as
racial harassment. On the sexual harassment claim,
the court found that there was no basis for holding
Peri liable because Lambert failed to report the problem
to someone with authority to address it.
6                                                  No. 12-2502

                               II
   Lambert emphasizes his claims of sexual and racial
harassment, and so we begin there, using the familiar
standard of review that applies to review of summary
judgments. See Harris N.A. v. Hershey, 711 F.3d 794, 798
(7th Cir. 2013). To move forward on his sexual harass-
ment claim, Lambert had to present evidence from
which a trier of fact could reasonably conclude that
because of his sex, he was subjected to unwelcome
sexual conduct that was severe or pervasive enough to
create a hostile work environment; in addition, he had
to show that there is a valid basis for employer liabil-
ity. Vance v. Ball State Univ., 133 S. Ct. 2434 (2013) (em-
ployer liability); Erickson v. Wis. Dep’t of Corr., 469 F.3d
600, 604 (7th Cir. 2006) (substantive elements). An em-
ployer is strictly liable if a supervisor harasses the em-
ployee and the employer cannot establish the affirma-
tive defense recognized in Burlington Industries, Inc. v.
Ellerth, 524 U.S. 742 (1998); when a co-worker harasses
an employee, the employer is liable only if the employer
is negligent in discovering or remedying the harassment.
Vance, 133 S. Ct. at 2439. Here, Robledo was a co-worker,
and so Peri’s liability turns on whether Lambert ade-
quately alerted the company to the problem. Notice that
is sufficient to trigger employer liability must be given
to either someone with authority to take corrective
action or, at a minimum, someone who could “reasonably
be expected to refer the complaint up the ladder to
the employee authorized to act on it.” Parkins v. Civil
Constructors of Ill., Inc., 163 F.3d 1027, 1037 (7th Cir. 1998).
No. 12-2502                                             7

If the employer has established a set of procedures for
reporting complaints about harassment, the com-
plainant ordinarily should follow that policy in order
to provide notice sufficient for the employer to be
held responsible, unless the policy itself is subject
to attack as inadequate. Id.
  Looking first to the sexual harassment claim, the
district court found that the undisputed facts show that
Peri could not be held responsible for Robledo’s
conduct, because Lambert made insufficient efforts to
notify Peri of the sexual harassment. It noted that
Lambert had complained only to Santiago and Avila,
both yard leads with no authority to hire, fire, or
discipline employees. Since yard leads could not
discipline other employees, it thought, they could not
reasonably be expected to receive or “process” complaints
about harassment on Peri’s behalf. Second, with regard
to the harassment that occurred after Peri adopted its
policy, the court stressed that Lambert had not followed
the prescribed procedures, as he did not complain to
either Osheroff or Peri’s CEO.
  Although after Vance we can assume that the yard
leads were not supervisors whose conduct might directly
be attributable to the company, that does not answer
the question before us. Lambert was not complaining
about harassment from either Santiago or Avila; he con-
cedes that his case involves co-worker harassment from
an entirely different person. Instead, he argues that
complaints to people who stand higher in the chain
of authority can be enough to begin the process of notify-
8                                             No. 12-2502

ing the employer about co-worker harassment, if
the evidence shows that those limited supervisors can
reasonably be expected to refer the complaint up to
someone with authority to address it. Parkins, 163 F.3d
at 1037. As we put it in Young v. Bayer Corp., 123 F.3d
672 (7th Cir. 1997), a “[f]ocus on whether the informa-
tion comes to the attention of someone who ought
by specification of his duties or, failing that, general
norms of management to do something about it, either
directly or by referring the matter to some other
corporate employee, is a better, . . . more practical, ap-
proach than asking at what level in a corporate
hierarchy an employee is.” Id. at 675. Santiago testified
that as a yard lead, for “anything that was going wrong
[it] was expected of me to report it to the yard man-
ager.” He also reported that a yard lead had a greater
responsibility than a general laborer to report incidents
of sexual harassment.
  Santiago’s testimony would permit a trier of fact to
conclude that a complainant could reasonably expect
that a yard lead had the responsibility to, and would,
refer his complaints to someone who could address the
problem—either the yard manager, the logistics
manager, or the human resources manager. Santiago
also testified that he heard Robledo say things like
“suck my dick” to other employees in Spanish. He
wrote this off as normal joking in which all yard workers
participated, including Lambert. But if a trier of fact
were to credit Santiago’s own testimony as well as Lam-
bert’s version of events, it could find that Santiago knew
that Lambert felt harassed by Robledo, that Lambert
No. 12-2502                                             9

did not see the comments as innocuous banter, and that
Santiago realized that he was responsible for reporting
problems like this to his superiors.
   Because the sexual harassment policy was not in place
at the time Lambert first complained to Santiago and
Avila, Lambert’s failure to follow the policy cannot
absolve Peri of all liability. When Santiago and Avila
ignored Lambert’s early complaints (Avila purportedly
laughed at Lambert), Lambert may have been dis-
couraged from complaining about the problem again.
The later adoption of a policy for reporting harassment
does not negate the wrong in the company’s failure to
address complaints that were made before the policy
existed. With respect to any harassment that continued
after the policy was in place, we have a closer case.
The record indicates that Lambert had contacted
Osheroff on other matters, and so it is hard to say that
the mechanism provided by the policy was unrea-
sonable, or worse, so inaccessible that no one would use
it. On the other hand, the fact that a company has desig-
nated one or two off-site corporate representatives
to receive complaints of harassment does not license on-
site managers to ignore complaints and evidence of co-
worker harassment. That is particularly true if, as is
the case here, there is evidence showing that the
company expected its on-site managers to pass this type
of complaint up the chain to the human resources
manager even if the victimized employee has not (yet)
used the policy. In effect, the victim is entitled to show
that there is a company custom for reporting that is not
memorialized in the written policy. We conclude that
10                                           No. 12-2502

a trier of fact could find that Lambert reasonably
expected that his reports of the harassment to the two
yard leads was enough to set in motion the process
of bringing his complaints to the attention of someone
with authority to remedy them.
   We next turn to Lambert’s racial harassment claim.
The standards governing this claim parallel those for
sexual harassment assertions: Lambert had to point to
evidence indicating that because of his race, he was
subjected to severe or pervasive conduct that created a
“subjectively and objectively offensive” work environ-
ment, and, once again, that there is a basis for employer
liability. Chaney v. Plainfield Healthcare Ctr., 612 F.3d
908, 912 (7th Cir. 2010). In determining whether the
conduct is sufficiently severe or pervasive to be
actionable, we look at all of the circumstances,
including the frequency of the discriminatory conduct,
how offensive a reasonable person would deem it to
be, whether it is physically threatening or humiliating
conduct as opposed to verbal abuse, whether it unreason-
ably interferes with an employee’s work performance,
and whether it was directed at the victim. See Peters v.
Renaissance Hotel Operating Co., 307 F.3d 535, 552 (7th
Cir. 2002).
  In Peters we concluded that an employee had not
done enough to avoid summary judgment with the fol-
lowing evidence: a supervisor referred to “black music
as ‘wicka-wicka woo music’ ”; a co-worker used the
word “nigger” in his presence; African-American
guests were denied additional ice and cups at a party; a
No. 12-2502                                              11

supervisor asked a white co-worker to carry money
when two African-American workers were present and
available to do the job; the human resources director
failed to say hello to two African-American employees;
and “interracial strife” was revealed at a diversity train-
ing. Id. at 552. We pointed out that with the exception of
the use of the word “nigger,” not directed at the plaintiff,
the other acts were “mildly offensive.” Id.
  Lambert’s case is right on the line, but we think that
the standard of review for summary judgments tips it
slightly in his favor. The district court took the position
that the most offensive statements—Wallace’s reference
to workers as “donkeys” and a “gorilla”; and Berger’s
statement directly to Lambert that he did not respect
Lambert because he is a “nigger”—occurred over a
period of several years, were not physically threatening,
and did not affect Lambert’s work performance. It
also emphasized that Wallace’s statements were not
directed at Lambert.
  But there was other evidence as well, and the district
court’s analysis gave too little weight to the degree
of offense in Berger’s direct racial insult to Lambert.
According to Lambert, Wallace and Berger referred to
workers on multiple occasions by names that a trier of fact
could see as racial slurs. Wallace did not deny
repeatedly calling workers “donkeys.” He said only
that he used that label to refer to all laborers, not only
African-American ones. But a trier of fact would not be
required to believe that explanation. Wallace also said
that he used the term “gorilla” because the worker was
12                                              No. 12-2502

strong. Once again, the trier of fact might draw a
different inference. The district court pointed out that
nothing in the record indicates that Wallace applied the
word “donkey” only to African-American workers,
and that donkeys are commonly known as labor animals.
But to survive summary judgment, Lambert was not
required to present conclusive evidence that Wallace
used the term “donkey” as a racial slur. If the jury were
to credit Lambert’s understanding of these words as
racial slurs, this record contains substantial evidence of
racial harassment. Here, crediting Lambert’s evidence,
supervisors repeatedly called employees racially of-
fensive terms, as opposed to the single unfortunate oc-
currence in Peters. A trier of fact could conclude that
the racial comments were severe or pervasive enough
to create a hostile work environment.


                             III
  Our assessment of Lambert’s retaliation and discrim-
ination claims is the same as the district court’s: Lambert
has no evidence indicating that Peri tested him or let
him go because of his race or his complaints about harass-
ment. Without evidence showing that a rational jury
could conclude that Peri terminated him because of his
race or his complaints, he cannot succeed. Coleman v.
Donahoe, 667 F.3d 835, 863 (7th Cir. 2012) (Wood, J., concur-
ring). (It is undisputed that he is a member of a protected
class and that he suffered an adverse action.) Where,
as here, there is no direct evidence of retaliation or dis-
crimination, we have identified several types of circum-
No. 12-2502                                             13

stantial evidence that may establish retaliatory or dis-
criminatory motive: “suspicious timing, ambiguous
statements oral or written, . . . and other bits and pieces
from which an inference of [retaliatory] intent might be
drawn”; “evidence, but not necessarily rigorous
statistical evidence, that similarly situated employees
were treated differently”; and “evidence that the
employer offered a pretextual reason for an adverse
employment action.” Id. at 860 (internal quotation marks
and citations omitted).
  Lambert did not submit any circumstantial evidence
of the kind described above. There was nothing
suspicious about the timing of any statements Peri repre-
sentatives made, and he did not offer evidence of
disparate treatment. Finally, because the results of his
alcohol test and the existence of Peri’s “no tolerance”
policy are clear, there is no evidence that Peri’s stated
reason for its action was pretextual. Because Lambert
actually turned out to be intoxicated, it is unlikely that
Santiago and Wallace fabricated their suspicion or lied
about Lambert’s behaving strangely that morning.
Their call to Osheroff in order to confirm that they had
cause for testing corroborates their testimony that they
were genuinely concerned about the proper way to pro-
ceed in light of their observations of Lambert. Moreover,
it appears that this was the only occasion on which
Peri tested Lambert. Had Peri begun to test Lambert
frequently after he complained about racial and sexual
harassment, matters might be different. But it did not.
  It is also telling that Lambert has not introduced
any evidence suggesting that Peri disproportionately
14                                             No. 12-2502

required drug tests from African-American employees.
Lambert makes much of the fact that all five employees
discharged from his facility for intoxication between
2006 and 2008 were African-American. But this figure
does not support the inference that Peri was testing
employees in a discriminatory manner. In order to
suggest that Peri was testing African-American em-
ployees because of their race, Lambert would need evi-
dence indicating that Peri administers drug tests to
African-American employees without reasonable suspicion
more often than other employees. If, for example, he
could have shown that 90% of the drug tests Peri ad-
ministered to African-American employees were
negative, while only 20% of tests administered to white
employees were negative, further inquiry would be
needed. But once again, there is no such evidence in
this record.
   Lambert has not identified one similarly situated em-
ployee who also failed a drug or alcohol test but was not
fired. In other words, he has no evidence that the no-
tolerance policy is disparately enforced against African-
American employees. He admits that every Peri em-
ployee that has failed a drug test has lost his job. And he
admits that Peri fired at least eight white employees
for failing drug tests at its U.S. facilities between 2006
and 2008. With nothing warranting a trial on these claims,
the district court correctly granted summary judgment
for Peri.
                         *   *   *
  We R EVERSE the district court’s judgment on Lambert’s
claims of racial and sexual harassment, and we A FFIRM
No. 12-2502                                            15

its judgment on his discrimination and retaliation claims.
Each party is to bear its own costs.




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