214 F.3d 813 (7th Cir. 2000)
Equal Employment Opportunity Commission,    Plaintiff-Appellee,v.Indiana Bell Telephone Co., Inc., d/b/a  Ameritech Indiana, and Ameritech Corp.,    Defendants-Appellants.
No. 99-1155
In the  United States Court of Appeals  For the Seventh Circuit
Argued November 12, 1999Decided May 26, 2000As Modified Aug. 4, 2000.

Appeal from the United States District Court   for the Southern District of Indiana,  Indianapolis Division.  No. IP-95-217-C M/S--Larry J. McKinney, Judge. [Copyrighted Material Omitted][Copyrighted Material Omitted]
Before Flaum, Ripple, and Rovner, Circuit  Judges.
Flaum, Circuit Judge.


1
The defendants,  Indiana Bell Telephone Co., doing  business as Ameritech Indiana, and  Ameritech Corp. (collectively referred to  as "Ameritech") appeal the judgment  entered against them following a jury  trial in the United States District Court  for the Southern District of Indiana. The  defendants contend that the evidence  presented at trial was insufficient to  support the jury's verdict. In addition,  the defendants allege various errors by  the district court concerning the  admission of evidence and the jury  instructions. For the reasons stated  below, we reverse and remand this case to  the district court for further  proceedings consistent with this opinion.


2
I.  Facts  A.    This appeal arises out of a suit brought  by the Equal Employment Opportunity  Commission ("EEOC" or "Commission") on  behalf of the claimants alleging that  Ameritech engaged in unlawful employment  discrimination in violation of Title VII  of the Civil Rights Act of 1964, 42  U.S.C. sec. 2000e et seq. The sexual  harassment claims upon which the EEOC's  suit is based stem from a course of  sexually offensive conduct that former  Ameritech employee Gary Amos directed at  several of his female co-workers.  Although only those incidents that  occurred after November 21, 1991 can  serve as a basis for holding Ameritech  liable for Amos's actions, all of the  incidents are relevant to Ameritech's  knowledge of Amos's propensity to harass  women and to the reasonableness of  Ameritech's response.1 As such, it is  necessary to recount the entire series of  incidents constituting Amos's allegedly  offensive conduct.


3
In 1975, Amos was employed in  Ameritech's coin center with Barbara  Huckeba. At trial, Huckeba testified that  Amos exposed himself to her on three  separate occasions. Huckeba also stated  that she reported these incidents to her  supervisor. Ameritech discharged Huckeba  on October 24, 1975, citing her problems  with Amos and its belief that Huckeba, as  a white female, could more readily find  another job than Amos, a black male. All  of the complaints surrounding Huckeba's  encounters with Amos were expunged from  Amos's employment record, but two  complaints about Amos's behavior during  1975 were not expunged. These complaints  indicate that Amos brushed one co-  worker's buttocks as she bent over, and  that Amos partially exposed his penis to  another co-worker.


4
In February 1988, Amos engaged in  conduct that Jacquelyn Stine, a co-worker  with whom he was training to be a  customer service representative, found  offensive. Stine testified that this  conduct included telling Stine he was in  love with her, smelling Stine's hair and  telling her it was beautiful, and running  a strand of Stine's hair through his  mouth. During Stine's last encounter with  Amos, Amos pushed himself against Stine  as she stood at a vending machine and  Stine noticed that Amos had an erection.  As a result of these problems with Amos,  Stine left the customer service training  program and returned to her previous job  as an operator. A copy of Stine's  complaint against Amos was placed in his  file, but Ameritech did not discipline  Amos at this time.


5
An Ameritech report indicates that on  July 18, 1989, Amos continued his  offensive conduct by partially exposing  his penis to a co-worker while seated in  the back of a van. Janie Kern, the co-  worker involved in this incident,  reported Amos's conduct to Ameritech. At  this point, Ameritech warned Amos that he  would be disciplined if he were found at  fault in any future allegations of sexual  harassment.


6
In 1990, six female Ameritech employees  formally complained to Ameritech about  Amos's conduct in the small business  office where he worked. Of these six  women, five indicated that Amos had  rubbed his penis against them. Ameritech  investigated these complaints and  suspended Amos for two weeks. In  addition, Ameritech stripped Amos of a  sales award and informed him that he  faced termination for any such future  incidents. At the time the decision to  suspend Amos was made, Ameritech did not  review Amos's personnel files, nor were  any of the supervisors involved in the  decision aware of Amos's past history of  misconduct.


7
Despite the two-week suspension, Amos  continued his harassing behavior. In  early 1991, Debbie Murray, one of Amos's  co-workers in the small business office,  asked to move to a different desk because  Amos was making improper comments. These  comments included inviting Murray over to  his house and asking her whether she ate  breakfast alone. That same year,  Ameritech received an anonymous letter  claiming that Amos was still sexually  harassing women in the workplace. In the  investigation that followed, at least  three women confirmed that Amos was still  engaging in sexually harassing conduct.


8
In February 1992, Jennifer Rice, another  employee in Ameritech's small business  office, complained about Amos's conduct.  Rice stated that Amos rubbed himself  against her, rubbed her neck, and made  inappropriate comments about her body. In  response to Rice's complaint, Brian  Bauer, the direct supervisor of both Amos  and Rice, and Darlene Olberding, who was  in charge of the managers in the small  business office, met with Amos. Amos was  informed that he could not have any  physical contact with anyone in the  office, and that further misconduct could  result in his suspension or termination.  Amos expressed interest in moving out of  the small business office, but Bauer told  him that a transfer would not be the  answer.


9
One of the claimants in this case,  Debbie Wentland, was also employed in the  small business office and was seated in a  four-person cubicle directly across the  aisle from Amos's cubicle. Initially,  Amos and Wentland engaged in only  innocuous conversations, but during one  encounter Amos walked behind Wentland's  chair and placed his hands on her  shoulders. Wentland also testified that  Amos rubbed and touched his crotch area  on a daily basis. At various times, Amos  would approach Wentland and touch her,  including standing close enough to her  desk that their legs touched and rubbing  his hand up and down her back. Wentland  asked Amos to stop touching her. She  complained to Bauer in November 1992  after an incident in which Amos patted  her stomach and said "Oh, so you are  going to be a mom," and then followed her  to her desk where he continued to talk to  her while rubbing his erect penis through  his pants.


10
Bauer met with Wentland on November 25,  1992 and informed her that he would  forward her complaint to Monica Sharp,  Ameritech's Equal Employment Opportunity  ("EEO") Coordinator. Sharp first met with  Wentland to discuss Amos's conduct, and  then met with Amos on two occasions.  Sharp informed Amos that he had violated  the previous warning not to touch anyone  in the office. On December 18, 1992,  Sharp recommended that Amos be terminated  based on her conclusion that Amos "d[id  not] seem able to control himself at  Indiana Bell." After forwarding this  recommendation to Ameritech's legal  department, Sharp went on vacation.


11
On December 28, 1992, Labor Relations  manager Joyce Leck returned from vacation  and, after reviewing Sharp's  recommendation that Amos be terminated,  noticed that the thirty-day period for  disciplinary action provided for in the  collective bargaining agreement had  expired. Because Ameritech missed the  deadline for disciplining Amos, the  company did not take any action against  him. However, Sharp did meet with Leck  and an official from Ameritech's legal  department. They agreed that the next  complaint against Amos would result in an  immediate suspension pending  investigation in order to avoid missing  any deadlines.2 Amos was then informed  that he was not being disciplined because  of an administrative error, but that any  further misconduct could result in his  suspension or termination.


12
In January 1993, Sharp began an  investigation to determine whether Amos  was continuing to harass Wentland or any  of the other service representatives.  While Wentland stated that Amos had not  harassed her again, she did recommend  that Sharp speak to Lori Everts or  Patricia Black. Everts, a chief union  steward and a claimant in this case,  refused to talk to Sharp because she  regarded it as a conflict of interest to  assist the company in investigating a  member of the union. After an  unproductive meeting with Black, during  which a union steward continually  interrupted the interview, Sharp became  angry at what she regarded as union  interference with the investigation.  Sharp informed Leck, Ameritech's Labor  Relations manager, of her concerns. Leck  then informed the union president that  the company intended to hold the union  liable if it were sued as a result of  Amos's conduct.


13
On April 15, 1993, Everts filed a charge  with the EEOC based on Amos's conduct. In  her charge, Everts stated that Amos  walked around the office with his hands  in his pockets fondling his genitalia.  Everts also testified that Amos began  directing his behavior toward her in  February 1993 by brushing up against her  with his penis erect. Everts stated that  at different times Amos brushed his hand  over her buttocks, grabbed her waist, and  stared at her and stuck out his tongue.  Despite the filing of the EEOC charge  Amos's misconduct continued, including  tapping his fingers on Everts's back,  placing his hand on her back as she  walked down the hall, and yelling out to  her that her legs looked nice.


14
When Ameritech received notice of  Everts's EEOC complaint, it acted  according to established company  procedures for handling external  complaints and referred the matter to  Ameritech's legal department. Ameritech  did not investigate the complaint, but  rather cooperated with the EEOC  investigation. Because Everts had refused  to cooperate in Sharp's investigation,  Leck believed that the complaint was in  response to the company's threat to hold  the union liable. An attorney in  Ameritech's legal department ultimately  concluded that Everts's charge had no  merit. Amos was not disciplined as a  result of the Everts complaint.


15
In June 1993, Patricia Wolter, a  supervisor in the small business office,  found a note on her desk that read:  "Patti, you look so sexy today." Wolter  was upset by the note, and she asked Amos  if he was the author. Amos admitted  having written the note, but he claimed  that it was just a joke. Wolter reported  the incident to Carol Merriwether, who  was serving as EEO Coordinator while  Sharp was out of the office. As a result  of this incident, Ameritech suspended  Amos for thirty days.


16
Wendy Pollard, the third claimant in  this case, began working with Amos in thesmall business office in November 1993.  After approximately one month in the  office, Amos began touching and grabbing  Pollard's hair and shoulders when he  passed. Amos also frequently stared at  Pollard while she was working, often with  his belt unbuckled. One afternoon, after  overhearing a conversation about  Pollard's new jeans, Amos stood up,  stared at Pollard's crotch, and said  "Wendy, I think you are right, those  jeans are a little too tight." In other  incidents, Amos told Pollard that he  would try to stop touching her hair but  that he was obsessed, and brought in  pictures of topless women and women in  lingerie to show Pollard and another  female co-worker.


17
The final incident during Amos's tenure  at Ameritech occurred on March 7, 1994.  While Pollard was moving her belongings,  she looked over the partition next to her  new desk and saw Amos sitting in a chair  masturbating. Pollard reported the  incident to Ameritech's EEO Coordinator.  Ameritech suspended Amos pending  investigation and it terminated his  employment later that month.

B.

18
On February 21, 1995, the EEOC filed a  complaint in federal district court  against Ameritech. The Commission alleged  that Ameritech violated Title VII of the  Civil Rights Act of 1964, 42 U.S.C. sec.  2000e et seq., by subjecting Everts and  other similarly situated females to  sexual harassment. The EEOC sought both  compensatory and punitive damages.


19
Before the trial on the sexual  harassment claims against Ameritech  began, the district court considered  whether to allow Ameritech to present  evidence at trial related to its  collective bargaining agreement with  Amos's union. Ameritech wanted to present  evidence that its decision regarding the  timing of Amos's discharge was influenced  by management's concern that if Amos were  discharged in violation of the "just  cause" provision of the collective  bargaining agreement, Amos would have  filed a union grievance, prevailed on  that grievance, and been reinstated by an  arbitrator.


20
After hearing argument on the issue, the  district court excluded testimony  relating to Ameritech's concern that Amos  might be reinstated under the "just  cause" standard. As the court read the  relevant law, Title VII required  Ameritech to "act adequately and  reasonably to end the harassment." The  district court found that  Ameritech'scollective bargaining  agreement, or its fears that an  arbitrator might reinstate Amos, were not  relevant in determining the  reasonableness of Ameritech's actions  under Title VII.


21
The district court reaffirmed its  evidentiary ruling as to the collective  bargaining agreement and the arbitration  evidence in a written order dated  September 15, 1997. In that order, the  court stated that "any concerns by an em  ployer that an arbitrator might undo the  discipline it has meted out for  misconduct does not excuse taking no, or  very little, action when [Title VII]  requires them [sic] to act promptly to  halt any violations of its provisions."  The court also noted its fear that if an  employer was entitled to delay taking  action against an employee because of the  risk of arbitration, employment  discrimination law would be subject to  "the vagaries of collective bargaining  and negotiated grievance and arbitration  procedures."


22
During the course of trial, Ameritech  moved for judgment as a matter of law as  to punitive damages. Ameritech argued  that the EEOC had presented no evidence  that would support an award of such  damages. The district court denied  Ameritech's motion, and held that it  would instruct the jury on punitive  damages. The court's decision with regard  to this instruction was based on the  understanding that punitive damages are  available if "an employer exhibits a  consistent attitude of indifference to  the protected rights of the claimant in  the face of evidence indicating that  corrective action that has already been  taken has not stopped the harassment."  The court further stated that the EEOC  would have to establish Ameritech's  reckless indifference to the claimants'  Title VII rights by clear and convincing  evidence.


23
Near the close of trial, and again at  the end of trial, Ameritech renewed its  motion for judgment as a matter of law.  Ameritech argued that the evidence  presented by the EEOC did not establish a  hostile working environment or liability  on the part of Ameritech, and further  contended that the evidence failed to  show damages in connection with Everts's  claim. The district court denied both of  these motions and the case went to the  jury.


24
The jury returned a verdict for the EEOC  in the following amounts: $10,000 in  compensatory damages and $500,000 in  punitive damages on Wentland's claim; $0  in compensatory damages and $50,000 in  punitive damages on Everts's claim; and  $5,000 in compensatory damages and  $500,000 in punitive damages on Pollard's  claim. Ameritech immediately moved for  judgment notwithstanding the verdict and  remittitur and the district court took  both of these motions under advisement.


25
On October 3, 1997, the district court  entered judgment in favor of the  Commission. The court ordered that  damages be paid to the claimants in the  following amounts: $10,000 in  compensatory damages and $290,000 in  punitive damages to Wentland; $0 in  compensatory damages and $0 in punitive  damages to Everts; and $5,000 in  compensatory damages and $295,000 in  punitive damages to Pollard. The court  then denied a motion by the Commission to  amend the judgment, and denied  Ameritech's motions for judgment  notwithstanding the verdict, new trial,  and remittitur beyond the reduction in  damages reflected in the court's order.  Ameritech filed a notice of appeal with  this Court, and the Commission cross-  appealed. The two appeals were  consolidated for argument.


26
On October 27, 1998, the district court  issued an order indicating it was  inclined to grant the Commission's motion  to reconsider the issue of Everts's  damages. The case was then remanded to  the district court for modification of  final judgment. Upon remand, the district  court reinstated the jury's verdict  awarding $50,000 in punitive damages to  Everts. Ameritech now appeals from the  district court's amended judgment of  December 22, 1998.


27
II.  Analysis  A.


28
We review the district court's denial of  Ameritech's motions for judgment as a  matter of law de novo. See Emmel v. Coca-  Cola Bottling Co. of Chicago, 95 F.3d  627, 629 (7th Cir. 1996). Our review is  limited to "whether all evidence  presented, 'combined with all reasonable  inferences that may be drawn from it, is  sufficient to support the verdict when  viewed in the light most favorable to the  party winning the verdict.'" Hennessy v.  Penril Datacomm Networks, Inc., 69 F.3d  1344, 1354 (7th Cir. 1995) (quoting  Mathewson v. National Automatic Tool  Corp., 807 F.2d 87, 90 (7th Cir. 1986)).  As to punitive damages, we ask only if "a  reasonable jury could have awarded  punitive damages against [Ameritech]."  Tincher v. Wal-Mart Stores, Inc., 118  F.3d 1125, 1132 (7th Cir. 1997).


29
Ameritech first contends that the  district court erred in denying its  motion for judgment as a matter of law as  to the issue of punitive damages because  the evidence presented at trial did not  support a punitive damages award.  Punitive damages "require more than . . .  'intentional unlawful discrimination.'"  Tincher, 118 F.3d at 1133 (quoting Emmel,  95 F.3d at 636). The EEOC must also  "prove that the defendant employer  engaged in the discriminatory practice  'with malice or reckless indifference to  the federally protected rights of the employee.'"  Emmel, 95 F.3d at 636 (quoting 42 U.S.C.  sec. 1981a(b)(1)). A showing of "malice  or reckless indifference" under 42 U.S.C.  sec. 1981a requires proof "that the  defendant almost certainly knew that what  he was doing was wrongful and subject to  punishment."3 Soderbeck v. Burnett  County, Wis., 752 F.2d 285, 291 (7th Cir.  1985).


30
In evaluating Ameritech's insufficiency  of the evidence claim as to punitive  damages, we must consider the evidence in  light of the entire record to determine  whether a reasonable jury could have  determined that Ameritech acted with  "malice or reckless indifference" to the  claimants' Title VII rights. See Emmel,  95 F.3d at 636. When examined against the  backdrop of Amos's past history, it is  apparent that a reasonable jury could  have concluded that Ameritech acted with  "malice or reckless indifference." In  this regard, it is significant that by  November 21, 1991, Ameritech had  accumulated a history of complaints  against Amos going back to 1975.  Ameritech had received at least eleven  complaints against Amos indicating a  pattern and history of misconduct  directed at women. These complaints, and  Ameritech's disciplinary actions in  response, indicate that as of November  21, 1991, Ameritech was on notice of  Amos's recurring problems with female co-  workers. See Jonasson v. Lutheran Child &  Fam. Serv., 115 F.3d 436, 439 (7th Cir.  1997) (stating that although incidents  prior to November 21, 1991 cannot serve  as a basis for employer liability, they  may be used to provide the jury a context  for evaluating the reasonableness of the  employer's response).


31
Despite its knowledge of Amos's  misconduct and the futility of its prior  disciplinary efforts, Ameritech continued  to allow Amos to work in the small  business office where ninety percent of  the employees were female. Even after the  company learned in February 1992 that  Amos had sexually harassed Jennifer Rice,  the company issued another warning to  Amos and refused his request to be  transferred out of the small business  office. Furthermore, after Wentland  complained to Ameritech about Amos's  conduct and a subsequent investigation  found that Amos sexually harassed  Wentland, Ameritech did not discharge  Amos within the thirty-day limit for  disciplinary action imposed by the  collective bargaining agreement. In  addition, Ameritech concluded that  Everts's EEOC charge had no merit and  thereby failed to act on it, and  repeatedly refused to discipline Amos on  other occasions. This Court has  previously held that the failure of an  employer to act to remedy an employee's  misconduct, when coupled with the  employer's knowledge of that conduct, can  be sufficient to justify an award of  punitive damages. See Jonasson, 115 F.3d  at 438. While the evidence in this case  may not compel the conclusion that  Ameritech acted with "malice or reckless  indifference" to the claimants' Title VII  rights, it certainly provides a  sufficient basis for a reasonable jury to  find in favor of the Commission.


32
In addition to its claims as to the  insufficiency of the evidence on punitive  damages, Ameritech also contends that the  evidence presented by the EEOC was  insufficient to support a conclusion that  Ameritech was negligent, or that the  claimants suffered a hostile work  environment. However, given our  conclusion that the record supports an  award of punitive damages against  Ameritech, we find the company's  additional insufficiency of the evidence  arguments to lack merit. First, any  question as to the sufficiency of the  evidence on negligence, and consequently  as to Ameritech's liability, see Perry v.  Harris Chernin, Inc., 126 F.3d 1010, 1013  (7th Cir. 1997) ("[E]mployers are liable  only when they have been negligent either  in discovering or remedying the  harassment."), is necessarily answered by  our discussion of punitive damages.  "Malice or reckless indifference"  establishes a higher standard than  negligence, so evidence supporting the  former supports the latter. Similarly, we  conclude that the evidence in this case  was sufficient to establish the existence  of a hostile work environment. All of the  claimants experienced various incidents  with Amos involving suggestive comments,  inappropriate touching, or indecent  exposure. Furthermore, all of the  claimants testified that they were  disturbed by this conduct. There is no  question that the evidence presented by  the EEOC was enough to establish a  hostile work environment from both an  objective and a subjective perspective,  see id., and that the evidence presented  was sufficient to justify an award of  both compensatory and punitive  damages.4

B.

33
With regard to Ameritech's evidentiary  challenges, we review the rulings of the  district court for an abuse of  discretion. See Buckner v. Sam's Club,  Inc., 75 F.3d 290, 292 (7th Cir. 1996).  "[T]he relevant inquiry is not how the  reviewing judges would have ruled if they  had been considering the case in the  first place, but rather whether any  reasonable person could agree with the  district court." Geitz v. Lindsey, 893  F.2d 148, 150 (7th Cir. 1990). If we  determine that the district court has  abused its discretion in making an  evidentiary ruling, we nonetheless affirm  the district court if the erroneous  ruling is determined to be harmless. See  Holmes v. Elgin, Joliet & E. Ry. Co., 18  F.3d 1393, 1397 (7th Cir. 1994).


34
Ameritech challenges the district  court's decision to exclude evidence  regarding Ameritech's obligations under  its collective bargaining agreement and  the effect those obligations had on the  timing of Amos's dismissal. The district  court held that such evidence was "not  relevant to a determination of the  reasonableness of an employer's response  to sexual harassment in the workplace."  According to Ameritech, the district  court's ruling in this regard was  erroneous as a matter of law. The  reasonableness of Ameritech's response  should be determined according to whether  it was "'reasonably calculated to prevent  further harassment under the particular  facts and circumstances of the case at  the time the allegations were made.'"  McKenzie v. Illinois Dep't of Trans., 92  F.3d 473, 480 (7th Cir. 1996) (quoting  Brooms v. Regal Tube Co., 881 F.2d 412,  421 (7th Cir. 1989)). Ameritech contends  that its obligations under its collective  bargaining agreement were part of the  facts and circumstances that informed  Ameritech's judgment as to Amos's  discipline, and as such they are relevant  to a jury's determination of the  reasonableness of its response.


35
Ameritech also argues that the exclusion  of the arbitration evidence was erroneous  in light of the punitive damages  instruction given to the jury, and the  large punitive damages awards that were  returned. As has been previously  discussed, in order to receive an award  of punitive damages the EEOC must show  that Ameritech acted with "malice or  reckless indifference" to the claimants'  Title VII rights. Emmel, 95 F.3d at 636.  According to Ameritech, it acted not out  of "malice or reckless indifference," but  rather out of concern for its obligations  under the collective bargaining agreement  and its fear that Amos would be  reinstated by an arbitrator if he were  fired. By excluding evidence of the  collective bargaining agreement and the  possibility of reinstatement, the  district court precluded Ameritech from  presenting what Ameritech contends was  important evidence that would go toward  proving it did not act with the state of  mind necessary for the imposition of  punitive damages.


36
In evaluating the district court's  decision excluding evidence of the  collective bargaining agreement and the  potential outcome of arbitration  proceedings, we must first determine what  the district court meant when it stated  that the evidence in question was  irrelevant. As we understand it, the  district court was not considering the  question as a matter of logical  relevance; the district court did not  mean that this evidence was not useful in  assessing the probability that Ameritech  acted with "malice or reckless  indifference." Fed.R.Civ.P. 401. Nor did  the district court indicate that "the  probative value [of the evidence was]  substantially outweighed" by other  considerations. Fed.R.Civ.P. 403. Rather,  the district court stated that "an  employer is subjected to separate duties  under a positive law, such as Title VII,  and under a [collective bargaining  agreement]," and when those duties  conflict "the positive law controls." In  essence, the district court held that as  a matter of law, Ameritech's obligations  under the collective bargaining agreement  and its fears as to the possible outcome  of arbitration could not be introduced in  the face of conflicting duties under  Title VII.


37
To the extent the district court's  ruling reflects the idea that Title VII  always trumps the provisions of a  collective bargaining agreement, that  ruling is erroneous as a matter of law.  While it is true that employers cannot  use collective bargaining agreements to  contract around anti-discrimination laws  like Title VII, see Trans World Airlines,  Inc. v. Hardison, 432 U.S. 63, 79 (1977)  ("[A] collective-bargaining contract . .  . may [not] be employed to violate the  statute."), that principle is not  applicable to this case. The EEOC does  not allege that Ameritech negotiated for  the thirty-day limit on disciplinary  action in order to avoid Title VII  obligations, nor is there any evidence in  the record to that effect. Furthermore,  this is not a situation where Ameritech  is seeking to use its obligations under  the collective bargaining agreement as an  affirmative defense precluding liability  under Title VII.5 Rather, Ameritech  seeks only to introduce evidence as to  its collective bargaining agreement, and  its concern over the possible outcome of  arbitration, to demonstrate that it did  not act with the state of mind necessary  for an award of punitive damages and to  show that its response to Amos's  misconduct was reasonable. See Deneen v.  Northwest Airlines, Inc., 132 F.3d 431  (8th Cir. 1998) (holding that proof of  discrimination offered by the plaintiff  was insufficient to support a punitive  damages award in light of the employer's  belief that its actions were required by  a collective bargaining agreement). In  this context, the district court erred in  finding that evidence of Ameritech's  collective bargaining agreement was  irrelevant as a matter of law.


38
The relationship between an employer's  obligations under its collective  bargaining agreement and potentially  conflicting obligations under an anti-  discrimination statute like Title VII is  more complex than the district court's  decision indicates. Title VII and  collective bargaining agreements6 each  represent important congressional  policies: preventing discrimination in  the workplace, and "effecting workable  and enforceable agreements between  management and labor," Trans World  Airlines, 432 U.S. at 79. Given the  important national policies underlying  both Title VII and collective bargaining  agreements, it is incorrect to hold, as  the district court did, that obligations  under Title VII always trump obligations  that exist under valid labor agreements.  See id. (holding that an agreed-upon  seniority system did not "give way" to an  employer's duty to "reasonably  accommodate" religious observance under  Title VII); Eckles v. Consolidated Rail  Corp., 94 F.3d 1041, 1051 (7th Cir. 1996)  (holding that a collectively-bargained  seniority system was not trumped by the  duty to "reasonably accommodate" the  disabled under the Americans With  Disabilities Act). Because the district  court based its decision to exclude the  disputed evidence on an error of law,  that decision constitutes an abuse of  discretion.7 See Waid v. Merrill Area  Pub. Sch., 130 F.3d 1268, 1273 (7th Cir.  1997).


39
While the EEOC concedes that the  district court may have been mistaken  about the legal relationship between  collective bargaining agreements and  Title VII, it contends that any such  mistake was harmless. We disagree.  Although the EEOC correctly points out  that Ameritech was able to present  evidence as to the thirty-day limit on  disciplinary action under the collective  bargaining agreement, Ameritech employees  were prevented from testifying about the  facts and circumstances surrounding the  timing of their decision to terminate  Amos. Ameritech was also precluded from  presenting evidence that it failed to  discharge Amos after the Wentland  incident because of concerns about  violating the collective bargaining  agreement. Furthermore, Ameritech could  not present evidence as to the  likelyoutcome of arbitration, and its  decisionmakers' fears that Amos would be  reinstated were he to be discharged in  violation of the collective bargaining  agreement. As we have previously noted,  this was potentially significant evidence  as to Ameritech's state of mind and to  the reasonableness of Ameritech's  actions, and we cannot say that the  outcome of the trial would have been the  same had the jury been permitted to hear  this evidence. See United States v.  Stefonek, 179 F.3d 1030, 1036 (7th Cir.  1999) ("A 'harmless error' as the term is  used in law is a trial error that does  not alter the trial's outcome."); Collins  v. Kibort, 143 F.3d 331, 339 (7th Cir.  1998) (stating that an error is not  harmless when "a significant chance  exists" that the error "affected the out  come of the trial").


40
Our conclusion that this evidence was  not harmless is bolstered by the nature  of the jury verdict in this case. In the  case of all three claimants, the punitive  damages awards rendered by the jury far  surpassed the awards given for  compensatory relief. When punitive  damages are such an important part of a  jury award, the defendant's state of mind  is a central issue. See Kolstad v.  American Dental Ass'n, 119 S.Ct. 2118,  2125-26 (1999) ("Most often . . .  eligibility for punitive awards is  characterized in terms of a defendant's  motive or intent."); Ortiz v. John O.  Butler Co., 94 F.3d 1121, 1127 (7th Cir.  1996) (stating that the "requisite  showing for punitive damages necessarily  focuses upon the defendant's state of  mind"). By precluding the disputed  evidence, the district court deprived  Ameritech of potentially valuable  evidence that would have allowed it to  counter the jury's impression that it  acted negligently or with "malice or  reckless indifference" to the claimants'  Title VII rights. The sheer size of the  jury's verdict in this case, when viewed  in relation to the amount of compensatory  damages awarded, supports our conclusion  that the district court's erroneous  preclusion of the arbitration evidence  was not harmless.

III.  Conclusion

41
Because we have determined that the  evidence was sufficient to support the  jury's verdict, we decline to enter  judgment on behalf of Ameritech. However,  in light of our ruling that the district  court erred in excluding evidence of  Ameritech's collective bargaining  agreement and its concern about the  outcome of arbitration, we REVERSE the  judgment of the district court and REMAND  this case for further proceedings  consistent with this opinion.



Notes:


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


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


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


4
 Ameritech also contends that the punitive damages  awards in this case were clearly excessive. In  support of this contention, Ameritech points out  that two of the punitive damages awards, $290,000  to Wentland and $295,000 to Pollard, were near  the statutory maximum of $300,000 established by  42 U.S.C. sec. 1981a (b)(3)(D). According to  Ameritech, Hennessey v. Penril Datacomm Networks,  Inc., 69 F.3d 1344 (7th Cir. 1995), held that  awards at or near the statutory maximum should be  reserved for the most egregious of cases, and  that this is not an appropriate case for such a  large award.
We believe Ameritech has misread our holding in  Hennessey, which reduced an award at the statuto-  ry maximum. Id. at 1355-56. Although Hennessey  provides support for the idea that punitive  damages awards can be excessive, and that awards  at or near the statutory maximum should be re-  served for egregious cases, the Court in that  case limited the decision to its facts and did  not purport to establish a per se rule about the  availability of punitive damages at or near the  statutory maximum. It is well-recognized that the  amount of damages is largely within the province  of the jury, and that its determination should  not generally be disturbed. See EEOC v. AIC  Security Investigations, Ltd., 55 F.3d 1276, 1287  (7th Cir. 1995) ("[T]he primary responsibility  for deciding the appropriate amounts of [puni-  tive] damages rests with the jury."). Here, a  jury could well have determined that Ameritech's  conduct was egregious and warranted a large  punitive damages award, and the district court's  award of punitive damages at or near the statuto-  ry maximum was not in error.


5
 In response to the dissent, we want to emphasize  that our opinion should not be read to imply that  Ameritech, or any employer, can use a provision  in its collective bargaining agreement to shield  itself from liability under Title VII. An employ-  er has a clear responsibility under Title VII to  act reasonably to end sexual harassment and to  protect its employees from harassing behavior,  see Brooms v. Regal Tube Co., 881 F.2d 412, 421  (7th Cir. 1989) (recognizing "that an employer is  liable for an employee's action if the employer  knew or should have known about an employee's  acts of harassment and fails to take appropriate  remedial action"), and Ameritech's obligations in  that regard remain unchanged. However, Ameritech-  's obligation to end sexual harassment, and  consequently its vicarious liability for the  actions of non-supervisory employees, is not  absolute. See Meritor Savings Bank, FSB v. Vin-  son, 477 U.S. 57, 72 (1986) (stating that there  are "some limits on the acts of employees for  which employers under Title VII are to be held  responsible"); Juarez v. Ameritech Mobile Comm.,  Inc., 957 F.2d 317, 320 (7th Cir. 1992) ("Employ-  ers are not strictly liable under Title VII for  sexual harassment engaged in by their employ-  ees."). Under Title VII, employers are liable for  compensatory damages only upon a showing of  negligence, see Baskerville v. Culligan Int'l  Co., 50 F.3d 428, 432 (7th Cir. 1995) ("[T]he  criterion for when an employer is liable for  sexual harassment is negligence."), and liability  for punitive damages is limited to situations  where an employer acts with "malice or reckless  indifference," 42 U.S.C. sec. 1981a(b)(1). By  focusing on an employer's duty to remedy sexual  harassment under Title VII, and not on the issue  of Ameritech's state of mind, we respectfully  suggest that both the district court and the  dissent misapprehend the purpose for which Ameri-  tech sought to introduce the disputed evidence.
In order to counter the plaintiffs' allegation  that it acted negligently or with "malice or  reckless indifference" when it failed to termi-  nate Amos following the Wentland incident, Ameri-  tech should have been allowed to present evidence  as to its asserted justification for acting (or  failing to act) in the way that it did. Only  after hearing this evidence could the jury prop-  erly evaluate Ameritech's state of mind and the  reasonableness of its response. Our holding in  this regard does not elevate Ameritech's obliga  tions under the collective bargaining agreement,  or its fears about the possible outcome of arbi-  tration, into a defense to Title VII liability.  Having heard this evidence, a jury could conclude  that Ameritech should have discharged Amos after  the Wentland incident regardless of whether that  action would have violated the collective bar-  gaining agreement. In this case, however, the  jury did not have the opportunity to consider  Ameritech's asserted justification for its ac-  tions because the district court erroneously  determined that Ameritech's obligations under its  collective bargaining agreement were irrelevant  to its responsibilities under Title VII. We  reverse and remand this case not, as the dissent  characterizes our opinion, because the district  court precluded Ameritech from offering evidence  of its collective bargaining agreement as a  defense to Title VII liability, but rather only  because the district court erroneously prevented  Ameritech from offering relevant evidence regard-  ing its state of mind and the reasonableness of  its response to Amos's harassing acts.


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


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



42
ROVNER, Circuit Judge, concurring in part and  dissenting in part.


43
Nearly two decades after it  fired the first woman to complain of Gary Amos'  harassment, Ameritech at last did what it should  have done years before--it fired him. By that  time, Amos had sexually harassed at least  eighteen of Ameritech's female employees,  variously touching the women, exposing himself to  them, peppering them with suggestive remarks,  masturbating in their presence, and rubbing his  erect penis against their bodies. Long after it  was clear to the company that it had a serial  harasser in its employ, Ameritech botched any  number of opportunities to deal with his  misconduct decisively. It warned and suspended  Amos without effect; it promised harsher  sanctions in the future but did not follow  through; when it finally resolved to fire Amos in  1992, it inexcusably missed the thirty-day  deadline imposed by the collective bargaining  agreement; and even after that fumble, Ameritech  waited for three more women to complain of  harassment before it ultimately terminated Amos.  The evidence was thus more than sufficient to  support the jury's conclusion that Ameritech's  response to the harassment was not only  negligent, but indicative of a reckless  indifference to the rights of the women in its  employ, such that punitive damages were  appropriate. With that much of the majority  opinion, I wholeheartedly concur.


44
I do not agree, however, that the district  judge abused his discretion in excluding evidence  of Ameritech's professed concern for the outcome  of arbitration that might have ensued had the  company fired Amos sooner than it did. The  arbitration defense posits a conflict between the  obligation that Title VII imposes on an employer  to protect its workers from sexual harassment and  certain provisions of the collective bargaining  agreement between Ameritech and its unionized  workforce. More specifically, the defense assumes  that an arbitrator interpreting the agreement  might not agree with--and might well undo--  disciplinary action that Ameritech has taken in  fulfillment of its statutory obligation to  address workplace harassment. Proof along that  line, Ameritech posits, would have shown the jury  why its decision not to discharge Amos in  December 1992 and again in June 1993 was  reasonable: not wishing to see an arbitrator  reinstate Amos, it was simply biding its time  until it could fire Amos under circumstances that  an arbitrator would agree warranted his  discharge. What Ameritech wants, then, is for the  jury to evaluate the company's conduct not solely  in terms of what was reasonably necessary to stop  the harassment that Amos was inflicting on his  co-workers, but also in terms of what the  collective bargaining agreement and an arbitrator  might have permitted.


45
I believe my colleagues are mistaken in opening  the door to this defense. Title VII imposes an  unequivocal duty on employers to take reasonable  measures to stop harassment. Never before today  have we held that the provisions of a collective  bargaining agreement--or, more accurately,  concerns about how an arbitrator might interpret  them--can modify this obligation. What Ameritech  has won is the right to invoke the collective  bargaining agreement as an excuse for sitting on  its hands while Amos kept on terrorizing his  female colleagues. In fact, however, nothing in  the collective bargaining agreement forced  Ameritech to forego discharging Amos. And to the  extent that an employer's duties under Title VII  and a collective bargaining agreement may  conflict, its obligation to protect its workers  from harassers should take precedence, as Judge  McKinney held. To permit the jury to let an  employer off the hook because of its professed  concerns about how an arbitrator might interpret  the collective bargaining agreement in effect  holds unionized employers to a lesser standard of  care in eliminating workplace harassment.

1.

46
What one must appreciate at the outset is that  Ameritech's liability in this case hinges not on  its failure to act on any one occasion in  particular, but on its pattern of inaction in the  face of Amos' unrelenting misconduct. Consider  what the company knew when the amended version of  Title VII took effect in November of 1991. By  that time, Amos had harassed at least thirteen  women at Ameritech. His acts already had run the  entire gamut of harassment, from inappropriate  remarks to intimate and unwelcome touching.  Indeed, by my count, Amos had already exposed  himself at least five times by then and had  rubbed his erect penis against startled co-  workers on at least as many occasions. Nothing  that Amos did after 1991, then, could have come  as a surprise to Ameritech. The company had  already disciplined Amos on several occasions and  had twice threatened to fire him if he persisted  in the harassment. See Tr. 193, 570. It also  knew, as of 1991, that the discipline and  warnings had proven ineffective; for in  investigating the complaints of Debbie Murray and  an anonymous co-worker that year, Ameritech  learned that Amos was continuing to engage in  sexual misconduct. Tr. 584-93, 811-18.


47
With this history in mind, one would think that  Ameritech, if genuinely concerned about the  welfare of its female employees, would have taken  more aggressive action in response to the acts of  harassment that occurred after the Civil Rights  Act of 1991 took effect. Instead, the company  bungled opportunity after opportunity to take  decisive action against Amos. In early 1992,  after Jennifer Rice complained of inappropriate  remarks and physical contact, the company simply  told Amos that he was not to touch anyone in the  office and warned him--again--that further  misconduct might result in suspension or  termination. Tr. 596-97. It did not fire him, it  did not suspend him, it did not dock his pay, it  did not, in fact, take any punitive action  against him. It even rejected Amos' own  suggestion that he be transferred out of the  small business office (Tr. 1096-97), where  ninety-five percent of his co-workers were women  (see Tr. 177, 408, 843). Later that year, Amos  touched Debbie Wentland inappropriately--thereby  violating his supervisor's admonition not to have  physical contact with his co-workers--and rubbed  his erect penis through his pants while talking  to her. The company's EEO coordinator recommended  his discharge for this conduct (Tr. 776-77, 847),  but her recommendation sat unread on the labor  relations manager's desk until after the thirty-  day period for discipline specified by the  collective bargaining agreement had already  expired (Tr. 644). The company at that point  concluded it could take no action against Amos.


48
Having muffed the decision to fire Amos in  1992, Ameritech should have been fully prepared  to take swift and decisive action when the next  incident of misconduct occurred. See Tr. 255,  648, 829-30, 1193. Yet, even after Lori Everts  filed an E.E.O.C. charge in 1993 because Amos had  touched her inappropriately, fondled his  genitalia through his clothing in front of her,  and brushed up against her while aroused--all  things he had done before to other women--the  company did not so much as investigate her  complaint. See Tr. 930-31, 941, 944-45, 1141.  When Amos wrote the "you look so sexy today" note  to supervisor Patricia Wolter in June 1993,  Ameritech opted simply to suspend him, a measure  that had already proven ineffective. See Tr. 406.  This freed Amos to harass Wendy Pollard, who  began to work with him in November 1993. After  months of touching her hair, staring at her with  his belt unbuckled, telling her that he was  obsessed with her, displaying photos of lingerie-  clad and topless women to her, Amos finally drove  Pollard to the EEO coordinator when she  discovered him sitting at his desk, with his  penis exposed and erect, masturbating. Finally,  the company got it right--it suspended him  immediately pending investigation and ultimately  terminated him.


49
Ameritech thus allowed the equivalent of an  armed torpedo to wander about the workplace for  years wreaking havoc upon its female employees.  At least eighteen women--that we know of--fell  victim to Amos' harassment. To focus upon  Ameritech's failure to act in any single  instance--as its arbitration defense invites us  to do--is to miss the larger picture. By November  of 1991, Ameritech knew that it had an employee  who was prone to sexually harass his co-workers  in extremely offensive ways, and as to whom  repeated warnings and disciplinary measures had  proven utterly ineffective. Yet, the company  continued to respond to Amos' misconduct with the  same day-late-and-a-dollar-short measures it had  tried before. Therefore, the first and most  important point with respect to Ameritech's  liability is not that it failed to discharge Amos  in response to the Wentland and Wolter complaints  in particular, but that it missed those and so  many other chances to take action reasonably  calculated to stop his harassment--including not  only termination, but demotion, transfer,  intensive supervision, warnings to his  uninitiated co-workers, and any number of other  disciplinary and prophylactic measures.

2.

50
As I noted at the outset, Ameritech's  arbitration defense presupposes some degree of  tension between the collective bargaining  agreement and Title VII. In December of 1992, the  asserted conflict arose from the collective  bargaining agreement's thirty-day limit on  disciplinary action: by the time Ameritech was  prepared to fire Amos in response to Wentland's  complaint, thirty days had already passed. If it  had gone ahead and fired him after that point,  Ameritech posits, an arbitrator might well have  declared the discharge invalid and reinstated  him. The first and most glaring problem with this  line of defense is that the purported clash was  one wholly of Ameritech's making.


51
Only Ameritech is to blame for the failure to  discharge Amos in a timely fashion. The  collective bargaining agreement gave Ameritech  thirty days within which to impose discipline on  Amos.  Ameritech does not argue that it was  unable to make the discharge decision within this  period of time. In fact, the only explanation  that Ameritech has offered for not meeting the  deadline is that its EEO coordinator, Monica  Sharp, left on vacation immediately after she  made the recommendation to discharge Amos, and  labor relations manager Joyce Leck did not review  the recommendation until she herself returned  from vacation, after the thirty-day deadline for  action had expired. So nothing precluded  Ameritech from firing Amos; it simply dropped the  ball. Standing alone, this is, at the least, a  classic instance of neglect. See Universal Reins.  Corp. v. Allstate Ins. Co., 16 F.3d 125, 128 (7th  Cir. 1994). Considered in light of Amos'  extensive history of harassment, and Ameritech's  own professed certainty that an arbitrator would  never have permitted a late discharge, missing  the deadline amounts to something much worse.


52
It is thus more than a bit ironic that  Ameritech's own unreasonable failure to act  within the constraints of the collective  bargaining agreement has been transformed into a  defense to liability for both compensatory and  punitive damages. The thirty-day time limit was  not one unilaterally imposed on Ameritech by the  union. The company consented to that restraint in  negotiations with the union, and presumably it  did so with confidence that thirty days was  enough time to make discharge and other  disciplinary decisions. Having agreed to the time  limit, and presumably knowing from past  experience that an arbitrator might well declare  a discharge made beyond that time frame invalid,  Ameritech knew that it had to discharge Amos  within thirty days or not at all.


53
To accept Ameritech's argument on its own  terms, then, is to appreciate the gravity of the  company's mistake in allowing the deadline to  expire. If, as Ameritech posits, the thirty-day  time limit on discipline was ironclad, then the  only pertinent question insofar as the  reasonableness of Ameritech's actions and state  of mind is concerned is what Ameritech did during  those thirty days. The answer is nothing. It was  entirely fair, in that context, for the E.E.O.C.  to castigate Ameritech for not discharging Amos  when, as the company admits, its own slip-up  accounts for the inability to take that step. See  Tr. 1301-04, 1356-57. It was also entirely within  the district court's discretion to prevent  Ameritech from attempting to pin the failure to  discharge Amos on the likelihood that an  arbitrator would order him reinstated. Only  Ameritech is to blame for the situation in which  it found itself. Knowing that it had to act  within thirty days, the company dallied, allowing  the deadline to come and go without doing  anything. That the company may have wished to  fire Amos, that it might have done so eventually  but for its fears about what an arbitrator would  say, is beside the point. See Ameritech Br. 17-  18, 34. It would be a bit like a reckless driver  claiming that he meant to use more care after he  has already mowed down a pedestrian--good  intentions mean nothing after the fact. Ameritech  is no less culpable for allowing the deadline to  expire before acting on Sharp's recommendation to  discharge Amos than it would be if it never  considered discharging him at all.


54
There is a second, but equally important, flaw  in the arbitration defense insofar as it revolves  around the thirty-day limit. Ameritech would have  us believe that the jury was kept in the dark as  to the reason for the company's decision not to  fire Amos in December 1992. Its opening brief,  for example, asserts that "Ameritech was  prevented from presenting the evidence explaining  why it did not terminate Amos at that time--  specifically, because an arbitrator would have  reinstated him." Ameritech Br. 34 (emphasis in  original); see also Reply Br. 12-13. Yet, as my  colleagues acknowledge, Ameritech was able to  explain that it did not discharge Amos in  response to Debbie Wentland's complaint because  it did not effectuate that decision within the  thirty-day time frame specified by the collective  bargaining agreement. See, e.g., Tr. 1327. In  fact, as the record reveals, the thirty-day limit  on disciplinary action was discussed again and  again (and again) during the trial--on more than  twenty occasions, by my count. See Tr. 38-39,  202-03, 212, 219-26, 234-35, 248-55, 259-260,  261, 279, 280, 291, 335-40, 521, 608-09, 627,  642-48, 777, 779, 807, 926, 1103-04, 1145-46,  1301-04, 1327, 1356-57. The jury was thus fully  aware of the deadline and the constraints it  imposed on Ameritech's ability to deal with Amos.  Evidence that an arbitrator would have enforced  that deadline might have been apropos had a  witness or the E.E.O.C. opined that Ameritech was  free to ignore the deadline and fire Amos anyway.  Ameritech suggests that this was the case.  Ameritech Br. 34; Reply Br. 12-13. My colleagues  appear to agree. See ante at 20. They have been  misled. A review of the record makes clear that  no one--no one--ever suggested that Ameritech  could have fired Amos after the thirty-day  deadline had expired. On the contrary, the  attorneys in their questions and argument, and  the witnesses in their testimony, uniformly  presumed that the time limit was inviolable.1  As far as the jury knew, then, there was no way  around the thirty-day deadline. The notion that  there was a compelling need for the arbitration  evidence is therefore a fallacy. As the record  makes plain, the E.E.O.C. chastised Ameritech not  for being unwilling to try and circumvent the  deadline after it had already expired, but for  failing to meet the deadline in the first  instance. See Tr. 1301-04; 1356-57.2

3.

55
In June of 1993, another provision in the  collective bargaining agreement purportedly stood  in the way of discharging Amos. It was then that  Amos wrote a note to Patti Wolter telling her  "Patti, you look so sexy today." Tr. 387  (emphasis in original). Rather than discharging  him, Ameritech opted to impose the most serious  form of discipline short of discharge--it  suspended him for thirty days. The collective  bargaining agreement permitted discharges only  for "just cause," and if permitted Ameritech  would have shown that it had lost one or more  arbitrations over the just cause issue and that  in all probability, had Ameritech fired Amos for  writing the note, he would have won reinstatement  from an arbitrator.


56
One can readily appreciate why an arbitrator  might not think that the note by itself  constituted just cause to discharge Amos.  Although troubling to Ms. Wolter--as it indeed  might have been to any reasonable person--the  note standing alone was relatively innocuous. In  view of Amos' lengthy tenure with the company,  terminating him simply because he wrote that  single note to a co-worker would be a harsh form  of discipline. Indeed, a Title VII claim founded  on the note alone would surely falter, for  without more it would not establish the  objectively hostile working environment that the  case law requires. E.g., Rennie v. Dalton, 3 F.3d  1100, 1107 (7th Cir. 1993), cert. denied, 510  U.S. 1111, 114 S. Ct. 1054 (1994) ("'isolated  and/or trivial remarks of a sexual nature' do not  satisfy the definition of sexual harassment"),  quoting Downes v. F.A.A., 775 F.2d 288, 293 (Fed.  Cir. 1985), abrogated on other grounds by Harris  v. Forklift Sys., Inc., 510 U.S. 17, 114 S. Ct.  367 (1993).


57
It is not at all clear, however, why the note,  considered in the full context of Amos' campaign  of harassment, would not have constituted just  cause for termination. By June of 1993, of  course, Amos had a well-documented history of  harassing women at Ameritech. What is more, the  more severe manifestations of that harassment  often were presaged or accompanied by remarks  akin to the "you look so sexy" observation Amos  made in his note to Wolter. Before Amos pushed  his aroused body against Jacquelyn Stine in 1988,  for example, he told her that her hair was  beautiful, that it was "just really delicious, or  . . . sensual," and that he was in love with her.  Tr. 73. And just before Amos followed Debbie  Wentland around the office in November 1992 as he  rubbed the erection in his pants, he patted her  stomach and remarked "Oh, so you are going to be  a mom." Tr. 271-72. These examples, among many  others, demonstrate all too well that statements  of the kind Amos made to Wolter were neither  isolated nor innocent. Typically, these remarks  were part of a pattern of verbal and physical  harassment which, left unchecked, simply  escalated.


58
Why an arbitrator would blind himself to this  pattern--and to the proven ineffectiveness of  all disciplinary measures short of discharge in  stopping Amos' harassment--is left unexplained.  Ameritech's prediction of reinstatement seems to  assume that the arbitrator would focus solely  upon the event precipitating the discharge,  without consideration of any of Amos' prior  conduct. Cf. Chrysler Motors Corp. v.  International Union, Allied Indus. Workers of  America, 959 F.2d 685, 686 (7th Cir. 1992)  (arbitrator refused to consider other incidents  of harassment that employer only discovered after  it had already discharged worker), cert. denied,  506 U.S. 908, 113 S. Ct. 304 (1992). Yet, so far  as the record reveals, nothing in the collective  bargaining agreement so restricts the just cause  inquiry. If it did, then we might well have a  genuine clash between the collective bargaining  agreement and Title VII that Ameritech posits.  For Title VII would indeed expect Ameritech to  have learned its lessons. When Amos wrote the  note to Wolter, Ameritech must have known that he  simply was not going to stop harassing his female  co-workers, and that terminating him was the only  way to bring the harassment to an end. See Tr.  233, 406, 630-31, 701. Indeed, one can read into  Ameritech's arbitration defense a concession that  it knew as much; by the company's own account, it  was simply awaiting the best opportunity to make  his discharge "stick." See Ameritech Br. 17-18,  34. But in this record there is no proof that the  collective bargaining agreement posed an obstacle  to discharging Amos in June of 1993.

4.

59
Ameritech's arbitration defense also presupposes  that if Ameritech had discharged Amos in either  December of 1992 or June of 1993 and an  arbitrator had subsequently ordered him  reinstated, that order would have been final.  That is not the case. Even if an arbitrator had  ordered Amos' reinstatement, Ameritech could have  contested that decision in court. As the district  court recognized, courts can and do refuse to  enforce arbitration awards when they conflict  with explicit, well-defined public policy.  Chrysler Motors, supra, 959 F.2d at 687; see  generally United Paperworkers Int'l Union v.  Misco, Inc., 484 U.S. 29, 43, 108 S. Ct. 364,  373-74 (1987); W.R. Grace & Co. v. Local Union  759, Int'l Union of United Rubber, Cork, Linoleum  & Plastic Workers of America, 461 U.S. 757, 766,  103 S. Ct. 2177, 2183 (1983). The public has a  strong interest, which Title VII embodies, in  eliminating sex discrimination from the  workplace. Chrysler Motors, 959 F.2d at 687.  Reinstating an employee who either does not wish  or is unable to refrain fromsexually harassing  his female co-workers presents an obvious clash  with that interest. See, e.g., Stroehmann  Bakeries, Inc. v. Local 776, International  Brotherhood of Teamsters, 969 F.2d 1436, 1442 (3d  Cir. 1992) (vacating arbitration award  reinstating harasser who allegedly assaulted  customer's employee: "an award which fully  reinstates an employee accused of sexual  harassment without a determination that the  harassment did not occur violates public  policy"), cert. denied, 506 U.S. 1022, 113 S. Ct.  660 (1992); Newsday, Inc. v. Long Island  Typographical Union, No. 915, 915 F.2d 840, 845  (2d Cir. 1990) (vacating arbitration award  reinstating serial harasser: "[The arbitrator's]  award of reinstatement completely disregarded the  public policy against sexual harassment in the  work place."), cert. denied, 499 U.S. 922, 111 S.  Ct. 1314 (1991); Consolidated Edison of New York,  Inc. v. Utility Workers' Union of America, No. 95  C 1672, 1996 WL 374143, at *5 (S.D.N.Y. Jul. 3,  1996) (vacating arbitration award reinstating serial harasser: "Reinstatement of an employee  who has already been issued a strong and  unambiguous warning that any further sexual  misconduct could lead to dismissal would  contravene public policy condemning such  behavior."). Ameritech thus had a firm basis on  which to resist Amos' reinstatement. Of course,  we cannot know for certain how Ameritech would  have fared in the effort to overturn an adverse  decision by the arbitrator. But that is the  point: having forsaken the opportunity to make  its case to an arbitrator and, if necessary, to  a court, Ameritech has left us all to speculate  about what might have happened.


60
Moreover, it is not at all clear to me how  Ameritech's other employees would have been worse  off had the company risked arbitration by  discharging him in either December of 1992 or  June of 1993. As Judge McKinney wrote,  "Overlooked in this argument is the continuing  adverse effect Amos's conduct may have on the  female employees while the employer waits until  it thinks it may have enough evidence to overcome  an arbitration decision." R. 213 at 10. For  whatever length of time it would have taken for  the anticipated arbitration and litigation over  the discharge to be resolved, Amos would have  been removed from the workplace, granting his  female co-workers at least a temporary reprieve  from his harassment. In the event of his  reinstatement, Ameritech would have been just as  capable of terminating him in the future if and  when he resumed harassment as it was when the  company decided in December 1992 and again in  June 1993 to "wait and see" rather than  discharging him on those occasions. See Chrysler  Motors Corp. v. International Union, Allied  Indus. Workers of America, 2 F.3d 760 (7th Cir.  1993) (sustaining the immediate discharge of  reinstated employee based on additional evidence  of harassment). Only Ameritech, it seems to me,  had anything to gain by following the latter  course, sparing itself the possible expense and  bother of having to defend a discharge in  arbitration and/or litigation.3

5.

61
Even assuming that there was an outright,  irreconcilable conflict between the collective  bargaining agreement and Title VII, I am not  convinced that Ameritech's obligation to protect  its employees from harassment necessarily had to  yield to the constraints imposed by its contract  with the union. The district court may have  overstated matters when it said that the  provisions of a collective bargaining agreement  must invariably give way to an employer's  obligations under the civil rights statutes (R.  213 at 9), for Trans World Airlines, Inc. v.  Hardison, 432 U.S. 63, 97 S. Ct. 2264 (1977), and  Eckles v. Consolidated Rail Corp., 94 F.3d 1041,  1051 (7th Cir. 1996), cert. denied, 520 U.S.  1146, 117 S. Ct. 1318 (1997), reveal that this is  not always the case. But neither of those  precedents, on the other hand, gives an employer  license to sit back while its workers are  sexually harassed, simply because it believes  that a provision of the collective bargaining  agreement stands in the way of effective action.


62
TWA holds simply that Title VII does not  require an employer to interfere with the  seniority rights of some employees in order to  accommodate the religious needs of others. The  plaintiff in that case worked for an airline in  a critical department that operated twenty-four  hours a day, seven days a week. After becoming  involved in a religion that proscribed work on  Saturdays and on certain religious holidays, the  plaintiff asked that his work schedule be  adjusted accordingly to give him those days off.  Although the company had no difficulty finding  volunteers to fill in for the plaintiff on the  religious holidays that he observed, no one was  willing to work in his stead on Saturdays.  Consequently, the only means of accommodating the  plaintiff's religious needs would have been to  deprive more senior employees of their shift  preferences by requiring one or more of those  employees to take the Saturday shifts. The  airline refused to take that step, and the  Supreme Court concluded Title VII did not compel  it to do so:


63
We agree that neither a collective-bargaining  contract nor a seniority system may be employed  to violate the statute, but we do not believe  that the duty to accommodate requires TWA to take  steps inconsistent with the otherwise valid  agreement. Collective bargaining, aimed at  effecting workable and enforceable agreements  between management and labor, lies at the core of  our national labor policy, and seniority  provisions are universally included in these  contracts. Without a clear and express indication  from Congress, we cannot agree with Hardison and  the E.E.O.C. that an agreed-upon seniority system  must give way when necessary to accommodate  religious observances.


64
432 U.S. at 79, 97 S. Ct. at 2274 (footnote  omitted). The rights of other employees, as well  as the unique importance of seniority provisions  in collective bargaining, figured prominently in  the Supreme Court's analysis. "It would be  anomalous," the Court explained, "to conclude  that by 'reasonable accommodation' Congress meant  that an employer must deny the shift and job  preference of some employees, as well as deprive  them of their contractual rights, in order to  accommodate or prefer the religious needs of  others. . . ." Id. at 81, 97 S. Ct. at 2275; see  also id. at 85, 97 S. Ct. at 2277. The Court went  on to note that the statute itself singles out  seniority rights for special treatment, "mak[ing]  clear that the routine application of a bona fide  seniority system would not be unlawful under  Title VII." Id. at 82, 97 S. Ct. at 2275, quoting  International Brotherhood of Teamsters v. United  States, 431 U.S. 324, 352, 97 S. Ct. 1843, 1863  (1977).


65
Our own opinion in Eckles sounds the same  theme. The issue there was whether the Americans  with Disabilities Act required an employer to  guarantee an employee a position compatible with  his medical restrictions even if it meant  "bumping" a more senior employee from the  position in the first instance and preventing  other employees with greater seniority from in  turn "bumping" the plaintiff from that position  later on. Accommodating him in this way "pose[d]  a conflict not so much between the rights of the  disabled individual and his employer and union,"  we observed, "but between the rights of the  disabled individual and those of his co-workers."  94 F.3d at 1046. Relying on TWA and a host of  other cases decided under both the Rehabilitation  Act as well as the ADA, we concluded that the  duty to reasonably accommodate the limitations of  a disabled employee did not compel the employer  to ignore the seniority rights of other workers.  Id. at 1051. We were quite careful to emphasize  the narrow reach of our opinion, however.


66
We emphasize that our conclusion is limited to  individual seniority rights and should not be  interpreted as a general finding that all  provisions found in collective bargaining  agreements are immune from limitation by the ADA  duty to reasonably accommodate. The ADA does not  lack force in the unionized workplace, and the  duty to provide for the special needs of disabled  workers cannot be voided by either skillful  manipulation (such as a pretextual seniority  system) or inadvertence. We recognize that many  of the "reasonable accommodations" specifically  proposed within the ADA also have effects on  other workers, but find that collectively  bargained seniority rights have a pre-existing  special status in the law and that Congress to  date has shown no intent to alter this status by  the duties created under the ADA.


67
Id. at 1051-52; see also id. at 1046 n.9 ("We  most certainly do not here decide that all  provisions of collective bargaining agreements  will preempt a covered entity's duty to  reasonably accommodate a disabled employee under  the ADA. We address only collectively-bargained  seniority systems that establish rights in other  employees.").


68
My colleagues have taken a significant leap  beyond the holdings and rationale of both TWA and  Eckles in concluding that an employer may invoke  the provisions of a collective bargaining  agreement, and its concerns about how an  arbitrator might enforce those provisions, as an  excuse for the failure to remove a recalcitrant  harasser from the workplace. Neither TWA nor  Eckles remotely speaks to this issue, and  fundamental differences between those cases and  the one before us suggest that we should not be  so quick to rely on them now. This case does not  present the clash between the rights of the  plaintiff and the rights of his co-workers that  confronted the courts in those two cases. Indeed,  seniority rights, which occupy a position of  central importance in the collective bargaining  process that was cited repeatedly in both TWA and  Eckles, are not implicated here at all. Instead,  we are dealing with two entirely different  provisions of a collective bargaining agreement,  neither one of which, as I have explained above,  necessarily conflicts with the employer's duty to  deal with harassment proactively. To the extent  that either of these provisions imposes a  constraint that might prevent an employer from  taking action that Title VII would otherwise  require--as Ameritech's arbitration defense  supposes--we should hesitate to allow these  provisions to trump an employer's obligations  under Title VII.


69
The thirty-day limit on discharging or otherwise  disciplining an employee is simply that, a  limitation on the timing rather than the  substance of the action that an employer may take  against an employee. I do not doubt that, as a  general matter, the employees and their union  have a legitimate interest in seeing that  deadline enforced; and certainly Amos, as the one  facing termination, had a keen interest in the  enforcement of that limit. But as a procedural  limitation, the thirty-day limit surely ranks  much lower in the hierarchy of importance among  collective bargaining terms than seniority  provisions, which were central to the rationale  of TWA and Eckles. Recall too that the thirty-day  limit is not absolute--Ameritech could have taken  as much time as it wished to make the discharge  decision if only it had suspended Amos  immediately at the outset of its investigation.  See ante at 6 n.2. So as between the collective  bargaining agreement's directive that discipline  be meted out within thirty days, and Title VII's  command that employees be protected from sexual  harassment, I have little doubt that the latter  should prevail, as Judge McKinney reasoned.


70
The just cause provision of the collective  bargaining agreement is, of course, more  substantive. For that reason, it may occupy a  position of more central importance to the  collective bargaining process. That does not  mean, however, that such a provision--or an  arbitrator's interpretation of it--will or should  prevail over the employer's Title VII duty to  address workplace harassment. On the contrary,  the case law already makes clear that the public  interest in eradicating sexual harassment will in  some instances take priority over an arbitrator's  assessment of just cause. For example, in  Chrysler Motors Corp. v. International Union,  supra, 959 F.2d 685, Chrysler asked the court to  set aside an arbitrator's order reinstating an  employee discharged for sexual harassment. We  acknowledged the public policy against workplace  harassment reflected in both Title VII and the  E.E.O.C.'s sexual harassment guidelines. Id. at  687-88. We also agreed that it would be  appropriate for the court to set aside an  arbitration award that clashed with this policy.  "As with any contract, a court may not enforce an  arbitrator's interpretation of a collective  bargaining agreement that is contrary to public policy." Id. at 687. As it turned out, we were  not convinced that the particular order under  review in Chrysler did run afoul of public  policy. The evidence before the arbitrator  indicated that the harasser had only engaged in  a single instance of misconduct and that he was  never warned or otherwise disciplined prior to  his discharge; the record also gave the  arbitrator no cause to believe that he was  incapable of rehabilitation. 959 F.2d at 688-89.  Under those circumstances, we believed that the  arbitrator's order reinstating him was consistent  both with the just cause provision of the  collective bargaining agreement and with public  policy. Id. at 689. What is implicit throughout  our opinion, however, is that we would not  hesitate to set aside an arbitrator's order if,  for example, it required the reinstatement of a  recidivist harasser, a move that would jeopardize  the rights of his co-workers and undermine the  public interest in a harassment-free workplace.  Our sister circuits have done just that. E.g.,  Newsday, Inc. v. Long Island Typographical Union,  supra, 915 F.2d at 845; see also Stroehmann  Bakeries, Inc. v. Local 776, International  Brotherhood of Teamsters, supra, 969 F.2d at  1442.


71
The rights of Amos' co-workers cannot be over-  emphasized in this analysis, particularly in view  of the rationale of TWA and Eckles. In each of  those cases, the rights of other employees would  have suffered had the plaintiff been given the  accommodation he sought. Here the opposite is  true. The women who worked around Amos had an  undeniable interest in seeing Amos discharged as  promptly as possible once it was clear that  milder forms of discipline were ineffective in  stopping his abhorrent behavior. On the other  hand, allowing Amos to remain in the workplace  until Ameritech believed it had a sure-fire case  of just cause to fire him had the predictable  consequence of subjecting more women to a hostile  work environment.


72
These distinctions vanish today, however, as my  colleagues articulate no limits on what types of  collective bargaining agreement provisions trump  an employer's obligation to remediate  discrimination. This is a troubling result, for  both this and future cases. Never mind that  Ameritech alone is responsible for the failure to  comply with the contractual deadline in December  1992; and never mind that no arbitrator or court  was ever invited to decide whether discharging  Amos either then or in June of 1993 would have  been appropriate notwithstanding the thirty-day  and just cause provisions of the collective  bargaining agreement. Having waited for years  (and years) to get rid of Amos, Ameritech may now  hold up the collective bargaining agreement as a  fig leaf for its own inaction. I have no doubt  that other unionized employers will follow suit.

6.

73
Even if the district court did err in excluding  evidence as to the collective bargaining  agreement and Ameritech's fears of unfavorable  arbitration, that error does not require us to  overturn the jury's verdict and put these parties  to the expense of a new trial. Two quick points  deserve making in that regard.


74
Overwhelming evidence supports the jury's  finding that Ameritech's response to the  harassment was negligent, and that the company  was therefore liable for compensatory damages  under Title VII.  Indeed, the evidence here comes  about as close as I have seen to a case for  liability as a matter of law. At the outset of  the relevant time period in November 1991,  Ameritech knew that it had a dangerous employee  on its hands. Amos had already harassed thirteen  women by then and showed no signs of stopping. On  the contrary, he went right on verbally  harassing, touching, and rubbing his penis  against his female co-workers. Yet, as I  indicated above, Ameritech's reaction continued  to be half-hearted, bumbling, and wholly  ineffective. The failure to effectuate Amos'  discharge in December 1992 within the time frame  specified by the collective bargaining agreement  is but another example of the company's  negligence. At the very least, the underlying  verdict on liability should stand. To suggest  that any reasonable jury would find Ameritech's  conduct non-negligent is, I must respectfully  submit, preposterous.


75
The question of punitive damages might at first  seem closer in view of the more culpable state of  mind required for such damages. But one must bear  in mind that Ameritech enjoyed the benefit of a  jury instruction that toughened the E.E.O.C.'s  burden of proof on punitive damages beyond what  the law actually requires. Over the E.E.O.C.'s  objection, the district court instructed the jury  that the Commission must prove Ameritech's  reckless indifference by clear and convincing  evidence. Tr. 1114-15, 1378. Yet, a mere  preponderance of the evidence is all that is  necessary to support an award of punitive damages  under 42 U.S.C. sec. 1981a(b)(1). Knowlton v.  Teltrust Phones, Inc., 189 F.3d 1177, 1186 (10th  Cir. 1999); Stender v. Lucky Stores, Inc., 803 F.  Supp. 259, 324 (N.D. Cal. 1992); see generally  Price Waterhouse v. Hopkins, 490 U.S. 228, 253,  109 S. Ct. 1775, 1792 (1989). The fact that the  jury found the E.E.O.C.'s evidence compelling  enough to meet even this heightened burden  demonstrates just how strong the Commission's  case was.


76
In the series of Ameritech's ineffective  responses to Amos' harassment, one has no  difficulty detecting a reckless indifference to  the plight of the company's female workers. More  than once the company responded to a complaint  about Amos as if it were the first, failing to  check his employment history, failing to ratchet  up the discipline from that which had already  been imposed previously, and, in December of  1992, failing to ensure that the time period in  which disciplinary measures could be imposed  would not be permitted to expire. Considering  what the company knew as of November of 1991, it  should have been on high alert from that point  forward, prepared to deal with any and all  complaints about Amos expeditiously and  efficaciously. After it dropped the ball in  December 1992, it should have been all the more  at the ready to protect its other employees. Even  so, three more complaints were required before  Ameritech finally terminated Amos. The fact that  it took the company nearly twenty years to bring  the harassment to an end is telling in and of  itself.


77
Twenty years!


78
I respectfully dissent.



Notes:


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


2
 Ameritech argues that Debbie Wentland's testimony  triggered the need for the arbitration evidence.  Wentland testified that upon hearing the news  that Ameritech would not discipline Amos because  of the missed deadline, "I was very upset. I was  hurt. It is just, I guess I was naive, because I  felt like I had worked with the company for 14  years, and again they had no respect for me, they  didn't care about my feelings. They were more  concerned about Gary's rights than mine." Tr.  280. Nowhere in Wentland's expression of frustra-  tion, however, is there a suggestion that the  company could have disregarded the contractual  deadline. The direct testimony on that point is  entirely to the contrary. See n.1, supra. Indeed,  when read in context, Wentland's criticism was  directed to the half-hearted and ineffective  manner in which the company handled her complaint  as well as those of the other women that Amos  harassed. See Tr. 275-82, 284, 329-40.
Ameritech also points out that manager Darlene  Olberding testified that she would have recom-  mended the dismissal of Amos for Wentland's  complaint (Tr. 174) and again suggests that the  exclusion of the arbitration evidence left the  company unable to explain why Amos was not dis-  charged. Ameritech Br. 34; Reply Br. 10. But  Olberding herself acknowledged that the adminis-  trative "slip-up" precluded action against Amos  (Tr. 174); and she never suggested that the  company had the power to ignore the collective  bargaining agreement. The fact that she thought  termination was the appropriate response was  hardly remarkable in and of itself. After all,  EEO coordinator Monica Sharp recommended that  Amos be discharged (Tr. 776-77, 847).  And Robert  McFeely, the director of human resources for the  five-state region served by Ameritech, himself  testified that Amos would have been terminated  but for the fact that the company missed the  thirty-day deadline. Tr. 226.


3
 Amiritech suggests that had an arbitrator ordered Amos reinstated, he might also have ordered that Amos's record be wiped clean of any wrongdoing for purposes of future disciplinary proceedings. If indeed tht was a realistic prospect, it demonstrates tome why it is imperative that we insist employers deal with repeat harassers decisively and resort to the courts if and when arbitrators render adverse decisions of the type that worried Amiritech. I cannot imagine tht a court would approve an arbitration award that mandates the expungement of an employee's record of sexual harassment and precludes an employer from relying on that record if and when the harassment recurs. Yet, Ameritech's line of defense postulates that the possibility of such a bad outcome in arbitration-even if it is one that a court would not sustain-is reason enough for an employer todelay terminating a serial harasser when it is reasonably clear that discharge is  the only eay to stop the harassment. In this respect, Ameritech's defense is doubly troublesome. It invites a jury to condone inaction for fear of an unfavorable outcome in arbitration, and at the same time, to the extent this line of thinking encourages an employer to avoid arbitration by refraining from decisive action, it deprives courts of the opportunity to correct the very types of misguided awards that Americtech purports to have been concerned about.


