                      United States Court of Appeals
                         FOR THE EIGHTH CIRCUIT
                                 ___________
                                   No. 06-3236
                                   ___________

William J. Dominic,                    *
                                       *
            Plaintiff - Appellee,      *
                                       * Appeal from the United States
     v.                                * District Court for the Western
                                       * District of Arkansas.
                                       *
DeVilbiss Air Power Company,           *
                                       *
            Defendant - Appellant.     *
                                  ___________

                             Submitted: April 10, 2007
                                Filed: July 20, 2007
                                 ___________

Before MURPHY, BRIGHT, and BENTON, Circuit Judges.
                           ___________

MURPHY, Circuit Judge.

      William J. Dominic sued his employer DeVilbiss Air Power Company
(company) for sexual harassment and retaliation in violation of Title VII of the Civil
Rights Act, 42 U.S.C. §§ 2000e et seq., and the Arkansas Civil Rights Act, Ark. Code.
Ann. §§ 16-123-101 et seq. A jury found in favor of Dominic on several claims and
awarded compensatory and punitive damages, and the district court denied the
company’s motion for judgment as a matter of law or new trial. The company
appeals, focusing only on the award of punitive damages. We reverse.
       William J. Dominic was hired by DeVilbiss Air Power Company as a cost
accountant in the company's Decatur, Arkansas manufacturing facility in January
2003. The Decatur plant employs 200 permanent full time workers and 110 temporary
employees. Dominic was promoted to accounting manager by early 2004.
Throughout his employment at the company, he was directly supervised by Patricia
J. Fant, controller for the Decatur facility. As accounting manager, Dominic was
Fant's second in command of the accounting department. On Friday, April 30, 2004,
plant manager Chuck Chism overheard Dominic telling another employee that Fant
had made sexual advances toward him. Dominic then stopped Chism and told him
about the incidents. Chism asked Dominic to submit a written description of Fant's
behavior. Dominic submitted a first draft that day and a more detailed report the next
Monday, May 3.

       In his written description Dominic claimed that around March 11, 2004, he and
Fant met after work for drinks at a country club. While they were at the club Fant
tried to unzip Dominic's pants and grab his crotch area. About one week later
Dominic, Fant, and other members of the accounting department met for drinks. At
that outing, Fant offered the group the use of her parents' van and her brother's
pornographic movies for a team building trip. Dominic reported that after the rest of
the group left, she asked if he wanted to rent a hotel room so she could tie him up and
attack him. He also stated that Fant brought him coffee, did unrequested favors for
him, stopped by his office, called him up even though she had no business to discuss,
and acted jealous when he spoke to other women.

      After Chism reviewed Dominic's claims, he set up a meeting to discuss the
charges. At the meeting Larry Hoover, the company's human resources manager, and
Chism agreed to investigate the charges and Dominic gave them a list of people who
could substantiate his claims. The next day Hoover and Chism met with Fant to
discuss Dominic's allegations. She denied all his claims. She was nevertheless sent
home on paid leave, instructed not to contact anyone at the office, and was to remain
home while the company investigated the charges.
                                         -2-
        As part of the company's investigation, Chism and Hoover questioned each
person on Dominic's list of employees who could substantiate his claims as well as all
other workers in the departments headed by Fant and Dominic. Chism and Hoover
were particularly concerned about what they considered the most serious allegations,
that Fant had unzipped Dominic's pants and suggested that they get a hotel room. A
list of questions was prepared by Chism and Hoover to be asked of each interviewee.
These questions included: How is your job going? How would you describe the work
climate in your department? How is your relationship with Patricia Fant? Does the
department socialize outside work? Did you attend an event at a bar with the group
around March 19? Tell us about that experience. Has the group been planning a team
building trip? Have you ever observed any conduct that you thought was
inappropriate in the department? The employees who were interviewed did not
confirm Dominic's allegations, except for his claims that Fant stopped by his desk,
brought him coffee, and sometimes acted jealous when he interacted with other
women. On May 6 Chism and Hoover again met with Dominic at the plant and with
Fant offsite to ask some follow up questions.

       Later in the day on May 6, Chism and Hoover also contacted Claude Kelly, a
vice president of Pentair which was the corporate owner of the company. Kelly
oversaw the human resources area for Pentair. After he heard about the results of the
investigation by Chism and Hoover, he traveled to Decatur from his office in Jackson,
Tennessee to discuss the matter with Chism, Hoover, and Dominic. Chism, Hoover,
and Kelly also consulted Pentair's attorney several times to ensure that their
investigation met all legal requirements. Management agreed that there were not
grounds to terminate Fant even though she had acted inappropriately by engaging in
"bar talk" with employees she supervised.

       Kelly and Hoover met again with Dominic on May 10. They told him that their
investigation had not substantiated the most serious allegations and that Fant would
be returning to work. Although Fant would remain in her position as Dominic's
supervisor, they explained that the accounting department would be required to meet
                                         -3-
daily as a group to minimize one on one communication between Fant and Dominic.
They encouraged Dominic to report any incidents of retaliation and gave him the rest
of the day off with pay. Kelly then met with the employees who reported to Fant and
Dominic and asked them to make it as easy as possible for the two to work together.

       Kelly and Hoover also met with Fant on May 10; she again denied the
allegations. Kelly told Fant she would be allowed to return to work, but that she had
acted unprofessionally and should refrain from socializing with employees in bars
after work. They warned her that she would be terminated if she retaliated against
Dominic. They also gave Fant a letter explaining the conditions of her return and
listing specific examples of what could be considered retaliation. These examples
included dramatic changes to Dominic's work assignments, threats of termination, and
inappropriate discipline of him. Fant signed the letter and Chism followed up with
three members of the department on May 27 to gauge the effectiveness of the daily
meetings and to ask them if they had noticed any behavior by Fant toward Dominic
that could have been retaliatory. None of the employees reported any inappropriate
behavior. Dominic did not complain of any further sexual harassment after the
company's investigation.

       Soon after Dominic and Fant began working together again, Dominic sent
management a series of emails alleging retaliation by Fant. He claimed Fant criticized
his work publicly, gave him too much work, assigned him busywork, tried to
sabotage his work, and gave him false instructions. He also alleged that Fant had
given him an order that would have caused him to violate the Sarbanes-Oxley Act;
he did not give any details about her request or explain why it would be illegal,
however. Dominic complained that someone had deleted work after he completed it,
and he began asking for technical support to backup his work. Chism and Hoover met
with Dominic on May 14, the same day they received his first email alleging
retaliation. They asked him for more details because of the conclusory nature of some
of his claims. Dominic refused to provide further details, claiming attorney client
privilege. After this meeting, management spoke to Fant about Dominic's complaints.
                                         -4-
She denied all allegations and submitted a written memorandum on May 15
responding to each of Dominic's allegations.

        On May 20 Dominic sent another email alleging that Fant had been rude and
obnoxious toward him, had visited him in his cubicle for 15-30 minutes which had
made him uncomfortable, and had interrupted one of his telephone calls. He claimed
that Fant embarrassed him in front of coworkers by publicly criticizing his work,
harassed him about a trainee's work, and told lies about him to other employees. He
also complained that Hoover had raised his voice in a recent meeting. Chism and
Kelly interviewed other employees in the departments of Fant and Dominic to see if
they had noticed any retaliation and reviewed Fant's written response denying
Dominic's claims of retaliation. They concluded that Dominic disagreed with Fant's
management style, but that Fant had not been retaliating against him. They reported
their findings to Dominic and asked him for more details about Fant's retaliation, but
he did not provide them. Dominic then wrote a letter of complaint to the chief
financial officer of Pentair, Tom DeWitt, alleging its subsidiary was using irregular
accounting practices. An investigation into these particular allegations did not verify
Dominic's claims.

       In late June 2004 Pentair hired the law firm of Leonard, Street, and Deinard to
review the company's own internal investigation and to conduct an additional
investigation into Dominic's allegations of sexual harassment and retaliation. The
record reflects that Leonard, Street, and Deinard is a law firm headquartered in
Minnesota with extensive experience with employment discrimination claims. The
firm attorneys undertook their investigation by reviewing the files on record, asking
Fant to provide another response to Dominic's allegations of retaliation, and
conducting additional employee interviews. Their investigation concluded that the
company's investigation had been adequate, that Dominic's harassment complaint did
not show he had experienced a hostile work environment, and that there was no
evidence of unlawful retaliation.

                                         -5-
      Kelly wrote a letter to Dominic informing him of the results of the study by the
outside firm, and directed Hoover to set up sexual harassment training, to arrange
mandatory supervisor training classes for Fant, and to speak with Fant daily about her
communications with Dominic. Since Dominic objected to further contact with Kelly,
management made arrangements for him to report to a human resources manager in
a separate subsidiary of Pentair who had no previous association with the plant.

       From late June until August, Dominic was placed on special paid assignment
and worked at home with full pay. Tom DeWitt wrote a letter to Dominic on July 27,
explaining that his home assignment would end and that he would be returning to the
office in early August. DeWitt also told Dominic that Fant would be required to
transmit all of his assignments via email and that these emails would be monitored by
John Uitz, the plant's previous comptroller, to ensure that no retaliation occurred.

       Dominic returned to work on August 3 and attended a sexual harassment
training session required of all salaried employees. He claims that Chism commented
during the session about his "dislike of sexual harassment laws" and that Chism used
hypotheticals similar to Dominic's own experience as examples of discrimination. He
claims that after the session employees made jokes about it, grabbed each other's
breasts, performed pelvic thrusts against one another, and simulated masturbation.
Dominic also complains that upon his return he was required to meet impossible
deadlines. Dominic was not in the office after August 5 until December due to
vacation, medical leave, and another home work schedule.

       Dominic met with psychiatrist Dr. Stanley Rest on August 5. Dr. Rest
recommended he seek a transfer or leave the company. Dominic's attorney sent the
company a letter on November 3 requesting a transfer to a different plant. Kelly
replied two days later that the company's accounting department was too small to be
able to accommodate Dominic's transfer request. At that time the company was in a
hiring freeze and was laying off hundreds of employees. Kelly asked Dominic for
other suggestions that would assist him in returning to work. On November 30,
                                         -6-
Dominic's attorney submitted a list of 26 written demands, including a request that
Fant be removed as his supervisor, that he not be required to attend the department's
daily meetings, that he would no longer be required to report or have personal contact
with Chism, that several supervisors be required to "stay away from [him] altogether,"
and that neither Fant nor Chism be allowed to modify his work. The company denied
several of these demands after determining that they were unreasonable and could not
be met, but it sent Dominic a letter stating that communications between Fant and him
would continue to be monitored, that he could address any complaints to the employee
responsible for the monitoring, and that an alternative human resources contact had
been arranged for him. Dominic resigned on December 11.

       Dominic later filed this action asserting sexual harassment and retaliation in
violation of Title VII of the Civil Rights Act, 42 U.S.C. §§ 2000e et seq., and the
Arkansas Civil Rights Act, Ark. Code. Ann. §§ 16-123-101 et seq. His complaint also
included state law claims for constructive discharge, negligent hiring, and negligent
supervision. A jury trial commenced at the end of November 2005. The company
moved for judgment as a matter of law at the close of the evidence, and the district
court granted it as to the negligent hiring claim but denied it in all other respects. The
jury returned a verdict in Dominic's favor for his claims for sexual harassment,
retaliation, and negligent supervision, but found for the company on the wrongful
discharge claim. It awarded Dominic $50,000 in compensatory damages on the
negligent supervision claim, $50,000 in compensatory damages on the sexual
harassment and retaliation claims, and $13,000 in lost wages and benefits on the
retaliation claim. The jury additionally awarded $250,000 in punitive damages based
solely on the Title VII sexual harassment and retaliation claims. After the district
court determined that Dominic should recover $50,964.51 in attorney fees, judgment
was entered in the total amount of $413,964.51.

       The company filed a post trial motion for judgment as a matter of law or
alternatively for a new trial or remittitur. One of the errors asserted in the motion was
the submission of the issue of punitive damages to the jury. The court denied the
                                             -7-
motion on August 4, 2006. The company appeals only the punitive damages award,
arguing that the district court should not have submitted the question of punitive
damages to the jury, particularly in light of its extensive good faith efforts to comply
with Title VII.

       We review the denial of a motion for judgment as a matter of law de novo,
applying the same standard as the district court. Voeltz v. Arctic Cat, Inc., 406 F.3d
1047, 1050 (8th Cir. 2005). The motion should be granted if the responding party has
been fully heard on an issue and a reasonable jury would not have a legally sufficient
basis to find for that party on that issue. Fed. R. Civ. P. 50(a)(1). The evidence is
viewed in the light most favorable to the jury verdict which should not lightly be set
aside. Canny v. Dr. Pepper/Seven-Up Bottling Group, Inc., 439 F.3d 894, 900 (8th
Cir. 2006) (citation omitted). We reverse only when the evidence is not susceptible
to any reasonable interpretation supporting the verdict. Warren v. Prejean, 301 F.3d
893, 900 (8th Cir 2002).

       Punitive damages are appropriate for victims of Title VII if the plaintiff has
shown that the employer engaged in intentional discrimination and acted with “malice
or with reckless indifference" to the plaintiff’s federally protected rights. 42 U.S.C.
§ 1981 a(b)(1); Kolstad v. American Dental Ass'n, 527 U.S. 526, 535 (1999). Malice
and reckless indifference can be shown by demonstrating that an employer
discriminated “in the face of a perceived risk that its actions will violate federal law.”
Id. at 536. This standard refers to the employer's state of mind regarding its
knowledge that it "may be acting in violation of federal law, not its awareness that it
is engaging in discrimination." Id. at 535. Even if the plaintiff can show that
individuals in the company demonstrated the requisite intent, punitive damages are
only appropriate if such intent can be imputed to the employer. Id. at 539. When an
employer promptly and conscientiously responds to complaints of harassment or
discrimination with good faith efforts, punitive damages are not warranted. Id. at 545-
46.

                                           -8-
       Dominic claims that the company did not make good faith efforts because the
investigations it initiated were cursory and biased. Examples of cursory or biased
investigations may be seen in Williams v. ConAgra Poultry Co., 378 F.3d 790, 796
(8th Cir. 2004) (employer terminated plaintiff instead of offender and took no action
despite repeated complaints); MacGregor v. Mallinckrodt, Inc., 373 F.3d 923 (8th Cir.
2004) (employer conducted only minimal investigation, issued no reprimand to
offender, and failed to communicate results of investigation to plaintiff); and Ogden
v. Wax Works, 214 F.3d 999 (8th Cir. 2000) (employer conducted "cursory
investigation" focused on plaintiff's performance rather than offender's behavior).
Here, the company had a zero tolerance sexual harassment policy, and it sponsored a
total of four investigations after Dominic made his complaint. None of the
investigations revealed evidence that would have justified firing Fant. In their
interviews, coworkers of Fant and Dominic were asked neutral questions which were
open ended and not suggestive. The company also hired outside employment law
specialists to look into whether its internal investigations had been proper and
thorough and contracted with them to investigate Dominic's claims further. The
outside specialists determined that the company's investigations had been thorough
and confirmed the company's conclusions.

       Dominic argues that it was unreasonable for Fant to remain as his supervisor.
The company responds that the small size of the plant and of the accounting
department made it impossible to accommodate his request for another supervisor
unless it were to terminate Fant. Terminating her without more evidence would have
exposed the company to legal action by her. Moreover, there were no further
complaints by Dominic of any sexual harassment after the company took its actions
in response to his initial complaint.

      The company did far more in response to Dominic's complaint than the
defendants in the cases cited by Dominic. In Williams, MacGregor, and Ogden, the
defendants had ignored complaints, done cursory investigations, and focused their
responses on the plaintiff's wrongdoing instead of the behavior of the alleged
                                        -9-
offenders. The company's response here was more like that of the employer in Carter
v. The Kansas City Southern Railway Co., 456 F.3d 841 (8th Cir. 2006). In Carter,
the employer had an antidiscrimination policy, conducted an immediate investigation
once it was notified of harassment claims, and terminated the primary offender when
the charges were substantiated. Dominic seeks to distinguish Carter on the basis that
the offender in that case was ultimately fired. In contrast to the Carter employer, the
company here did not uncover any information that corroborated Dominic's serious
claims or provide it grounds to terminate Fant. As in Carter, it would be "illogical to
ascribe malice or reckless indifference" to a company which responded appropriately
to charges of discrimination. Id. at 847. We conclude that Dominic has not
demonstrated that the company exhibited malice or reckless indifference toward their
obligations under federal law in response his complaints of sexual harassment.

       Dominic also contends that the company was reckless and malicious in
responding to his claims of retaliation, but the record shows that it attempted to
prevent retaliation by giving Fant a written warning explicitly listing examples of
retaliation and explaining that she would be terminated if she took any of those actions
against Dominic. The company quickly investigated and responded when Dominic
complained about retaliation. It met with Fant to get her response to his allegations
and limited direct communication between the two by requiring daily departmental
meetings. Chism later interviewed Dominic's coworkers to gauge the effectiveness
of these meetings. The company required Fant to put all of her assignments for
Dominic in writing and assigned an employee who had once held Fant's job to monitor
the assignments. Kelly directed Hoover to arrange for Fant to attend mandatory
supervisor training classes and to speak to Fant daily to monitor her interactions with
Dominic. Dominic was encouraged to report any incidents of retaliation, was given
two special paid assignments that allowed him to work from home, and was provided
an alternative human resources contact after he said he did not want to continue
dealing with Kelly.



                                         -10-
      Chism, Hoover, and Kelly interviewed members of the departments supervised
by Fant and Dominic several times as part of the investigation into his allegations and
conducted follow up interviews with them to ensure that no retaliation occurred.
When Chism, Hoover, and Kelly determined that some of Dominic's retaliation claims
were conclusory, he was given the opportunity to furnish more information. At least
one member of management reported the results of each investigation to Dominic and
explained what actions would be taken to remedy his complaints and prevent future
ones. After explaining why his request for a transfer could not be accommodated,
Dominic was asked for other suggestions to assist him in returning to the office; he
responded with a list of 26 demands.

       Dominic urges that punitive damages were warranted because Fant, Chism, and
Kelly all exhibited malice and reckless indifference and their states of mind should be
imputed to the company. Malice or reckless indifference exhibited by employees
working in a managerial capacity can be imputed to the employer if they were "acting
in the scope of their employment." Kolstad, 527 U.S. at 541 (citing Restatement
(Second) of Torts, § 909). An employer cannot be vicariously liable, however, for
"discriminatory employment decisions of managerial agents where those decisions are
contrary to the employer's good-faith efforts to comply with Title VII." Id. at 545.
Dominic argues that Fant's behavior after being warned against retaliation is evidence
of malice and reckless indifference toward federal sexual harassment law, as are
Chism's comment during the sexual harassment training and Kelly's lack of response
to his complaints and unwillingness to transfer him. Chism and Kelly's extensive
efforts to respond to Dominic's complaint belie malice or reckless indifference on their
part, and the company's good faith efforts to remedy Dominic's complaints of sexual
harassment and retaliation by Fant would defeat any imputation of liability for her
conduct. See id. at 541.

      We conclude the company made sufficient good faith efforts regarding
Dominic's claims to make punitive damages inappropriate. See id., see also Carter,
456 F.3d at 847-48. The company had a formal zero tolerance antiharassment policy,
                                      -11-
and it launched thorough investigations in response to Dominic's complaints about
sexual harassment, retaliation, and accounting irregularity. Plant management
consulted with the company's human resources experts, Hoover at the Decatur facility
and Kelly at corporate headquarters. Hoover and Chism drew up a set of neutral
questions that was used in their first internal investigation. They consulted with
counsel about the sufficiency and efficacy of their investigations. Although the
investigations did not substantiate most of Dominic's claims, the company minimized
communication between Fant and Dominic, kept a written record of those
communications, granted Dominic's request to report to a human resources manager
in a separate subsidiary, and offered him several accommodations, including an at
home work schedule for two separate periods. Kelly also directed Hoover to require
Fant to participate in a supervisor training session and to organize sexual harassment
training for all salaried employees.

      In sum, the company demonstrated good faith efforts to respond to Dominic's
complaints, to prevent sexual harassment and retaliation, and to fulfill its obligations
under Title VII. We conclude that on this record punitive damages should not have
been submitted to the jury.

     Accordingly, we reverse and remand to the district court for modification of the
judgment consistent with this opinion.
                    _________________________________




                                         -12-
