                            In the
 United States Court of Appeals
               For the Seventh Circuit
                         ____________

No. 03-3701
TONY CERROS,
                                            Plaintiff-Appellant,
                                v.

STEEL TECHNOLOGIES, INC.,
                                            Defendant-Appellee.
                         ____________
            Appeal from the United States District Court
      for the Northern District of Indiana, Hammond Division.
        No. 2:97 CV 103—Theresa L. Springmann, Judge.
                         ____________
    ARGUED MAY 25, 2004—DECIDED FEBRUARY 23, 2005
                     ____________


 Before EASTERBROOK, WOOD, and WILLIAMS, Circuit
Judges.
  WOOD, Circuit Judge. This is the second time the district
court has granted judgment against Tony Cerros in his
hostile work environment claim against his former em-
ployer, Steel Technologies, Inc., and for the second time, we
have concluded that we must reverse that judgment. In
Cerros v. Steel Technologies, Inc., 288 F.3d 1040 (7th Cir.
2002) (“Cerros I”), we expressed concern that the court’s
judgment against Cerros might have resulted from a
“misunderstanding about the legal threshold for harass-
ment cases,” given the court’s failure to explain why the
“appalling litany of misconduct” documented in its order
was insufficient to show a hostile work environment, id. at
2                                                No. 03-3701

1046-47. On remand, however, the court did not start from
a clean slate. Instead, it incorporated its factual findings
from its first order and made additional findings that
unfortunately conflict with respect to critical aspects of
Cerros’s claim. In light of these inconsistent findings, as
well as certain problems with the legal analysis reflected in
the judgment below and the conduct of Steel’s counsel, we
remand this case for a new trial.


                              I
  Our earlier opinion in this case sets forth the basic
facts relevant to the present appeal, and so we repeat here
only the essential points. We begin, however, with a re-
view of the procedural history of the case. On October 31,
1996, Cerros filed a Charge of Discrimination with the
Equal Employment Opportunity Commission (EEOC),
alleging discrimination and harassment based on his
national origin, which he identified as “Hispanic.” Cerros
received his right-to-sue letter on December 27, 1996, and
shortly thereafter he filed suit under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq., reiter-
ating his allegations that Steel discriminated against him
and created a hostile work environment because of his
national origin and race.
  Following a bench trial, the court issued its first order
on January 5, 2001. In this order, the court made exten-
sive findings of fact and concluded that Cerros could not
prevail on either his intentional discrimination or his
hostile work environment claims. With respect to the latter
claim, the court acknowledged that the racist comments and
graffiti to which Cerros was subjected “were offensive,
unenlightened, and inappropriate” and “caused discomfort.”
Yet the court deemed them “relatively isolated” and con-
cluded that, “although the misconduct occurred over the
course of more than a year, the evidence demonstrate[d]
No. 03-3701                                                 3

that the misconduct was neither frequent, nor severe, nor
physically threatening or humiliating.”
  On appeal, we affirmed the court’s judgment in favor
of Steel on Cerros’s discrimination claim, but vacated
and remanded the judgment on his hostile work environ-
ment claim. Cerros I, 288 F.3d at 1048. We began by
reviewing the elements of a hostile work environment
claim:
    In order to demonstrate harassment that rises to the
    level of a statutory violation, the plaintiff must prove
    that “his or her work environment was both subjectively
    and objectively offensive; ‘one that a reasonable person
    would find hostile or abusive, and one that the victim in
    fact did perceive to be so.’ ” Gentry v. Exp. Packaging
    Co., 238 F.3d 842, 850 (7th Cir. 2001) (quoting Faragher
    v. City of Boca Raton, 524 U.S. 775, 787 (1998)). The
    plaintiff must then show that the harassment was
    based on her membership in a protected class; that the
    conduct was severe or pervasive; and that there is a
    basis for employer liability. Burlington Indus., Inc. v.
    Ellerth, 524 U.S. 742, 754 (1998).
Id. at 1045. “Most of these points,” we noted, “are not in
dispute.” Id. There was no doubt that Cerros subjectively
believed that he suffered harassment; that any reasonable
person would perceive the comments and graffiti as based
on his race or ethnicity; and that he “made efforts to use the
complaint mechanisms that were available.” Id. We ex-
plained that “[a]t this stage, therefore, the question is only
whether the district court committed clear error in conclud-
ing that the harassment from which Cerros suffered was
not severe or pervasive enough to meet the statutory
standard.” Id. Several aspects of the lower court’s analysis
troubled us. First, “its ultimate conclusion does not seem to
have take into account the underlying facts it found earlier
in the opinion.” Id. at 1046. Second, “we do not know
4                                               No. 03-3701

exactly how often the offensive graffiti and taunts ap-
peared,” making an assessment of the pervasiveness of the
conduct impossible. Id. And finally, “we note[d] that the
district court had already found that Cerros was subjected
to direct and highly offensive racial epithets by employees
and supervisors that referred to him as brown boy, spic,
wetback, Julio, and Javier.” Id. Yet the court “never
explained why this appalling litany of misconduct” was
“insufficient to show a hostile work environment.” Id.
   On remand, the district court issued a supplemental order
on September 2, 2003. It began that order by quot-
ing verbatim both its findings of fact from its January 2001
order and the statement of facts that we provided in Cerros
I. The court then made “additional findings” based on its
review of the record. These findings detailed Steel’s harass-
ment training for its employees, the verbal comments made
to Cerros, the graffiti in the company restroom, and
Cerros’s communication with Steel regarding these inci-
dents. The court made clear that these “additional findings”
did not supplant its prior findings, which it reproduced in
the same order. In a footnote, the court explained: “The
Court now incorporates its findings of facts as stated in its
January 5, 2001 Memorandum of Decision and Order and
as set forth supra as well as the additional findings set
forth supra.”
  Based on all of this, the court addressed the issues that
we identified in Cerros I, beginning with the pervasive-
ness of the offensive conduct. The court concluded that,
as to the frequency of the verbal remarks and the bathroom
graffiti, “the Court cannot fix a certain number or frequency
with any degree of confidence.” The court consequently
found that both the comments and the graffiti “actually
shown to be race or national origin related [were] isolated.”
Turning to the severity of the conduct, the court concluded
that,“[a]lthough the credible evidence before the Court
demonstrates that some ‘severe’ terms appeared in the
No. 03-3701                                                    5

workplace, the Plaintiff has not shown by a preponderance
of the evidence that supervisors played any role in the
writing or speaking of these more ‘severe’ terms.” On this
basis, the court concluded that “although the Plaintiff
himself (i.e., subjectively) may have found the environment
to be abusive and discomforting, the environment was not
objectively offensive or hostile.” Finally, the court held that,
even if Cerros had shown a hostile work environment, there
was no basis for employer liability under Ellerth and
Faragher. It stated that Steel “exercised reasonable care
to prevent and correct promptly any harassing behavior”
and that Cerros “did not take advantage of any preventative
or corrective opportunities provided by the Defendant.”
Once again, the court entered judgment for Steel. This
successive appeal followed.


                               II
                               A
   The primary difficulty with the September 2003 order
is that it contains critical factual inconsistencies, as a result
of the district court’s decision to rely both on the findings
from the January 2001 order and the additional findings it
made on remand. For example, the court’s January 2001
order states that “during 1996 and 1997, supervisors
(including Colvin) and other employees occasionally re-
ferred to the Plaintiff as brown boy, spic, Julio, and Javier,
talked down to him, and said things under their breath.” In
addition, “[w]hile working on the second shift, the Plaintiff
was subjected to national origin related comments and
epithets.” In its September 2003 order, in contrast, the
court discounted Cerros’s testimony regarding these
incidents, describing it as “remarkably lacking in specific-
ity” and objecting that he had “not shown by a preponder-
ance of the evidence that supervisors played any role in the
writing or speaking of these more ‘severe’ [racial] terms.”
6                                                 No. 03-3701

The court also found “it significant that the EEOC Affidavit,
which the Plaintiff filed with his one and only Charge, did
not reference any specific racial remarks made by [supervi-
sors] Colvin [and] Harrington, or [plant manager] Bennett
or any specific incidents when such remarks would have
been made.” Had the court’s September 2003 order con-
sisted only of these latter comments, we might have
concluded that it had retracted its earlier finding that
Cerros was subjected to these utterly unacceptable labels.
Because the court explicitly incorporated its prior factual
findings into its September 2003 order, however, we cannot
avoid the tensions between these dual accounts of Cerros’s
treatment.
  It is also impossible to reconcile the court’s two sets of
findings with respect to Cerros’s efforts to notify Steel of the
harassment that he suffered and Steel’s response to his
complaints. In its January 2001 order, the court
stated unequivocally that “[t]he Plaintiff brought the
misconduct and some of the incidents to the attention of the
Defendant’s agents.” The court found five specific instances
in which Cerros informed his supervisors that he was being
harassed: (1) “The Plaintiff confronted Colvin, telling him
that he was behaving as a racist, but Colvin denied it.” (2)
“On September 11, 1996, the Plaintiff informed Colvin, his
immediate supervisor, that he believed he was the victim of
national-origin harassment.” (3) “The Plaintiff told Bennett
that he had moved from second to first shift to get away
from Colvin because of Colvin’s harassing conduct and the
national origin epithets.” (4) “On another occasion, the
Plaintiff told Bennett of the use of epithets such as brown
boy, spic, Julio, and Javier, by Colvin and others. However,
Bennett chuckled and responded that he could not believe
that Colvin would be capable of this. No formal investiga-
tion was conducted.” (5) “The Plaintiff also told several
supervisors, including Beal, Meyers, and Harrington, and
Norworul about these incidents, but the epithets contin-
ued.”
No. 03-3701                                               7

  The court’s “additional findings” in its September 2003
order directly contradict this account of Cerros’s communi-
cations with his supervisors. The court flatly stated that
“the Plaintiff did not take advantage of any preventative or
corrective opportunities provided by the Defendant and did
not otherwise avoid harm.” According to the court, “[t]he
credible evidence in the record shows . . . that the Defen-
dant was not told of race and national origin related slurs
or epithets” and “that Bennett, the plant manager,
promptly addressed the one clear instance in which the
Plaintiff complained of discrimination or harassment.” The
court further found that Cerros did not take “any matter,
complaint, or allegation through the chain of command” and
“did not take advantage of Bennett’s open door policy.”
  We see no way to square these contradictory accounts
of Cerros’s communications with Steel’s supervisors and
managers regarding the harassment, both of which are
included in the court’s September 2003 order. As we
noted in Cerros I, because there was a full bench trial in
this case, FED. R. CIV. P. 52(a) instructs that the district
court’s “[f]indings of fact shall not be set aside unless
clearly erroneous, and due regard shall be given to the
opportunity of the trial court to judge of the credibility
of witnesses.” 288 F.3d at 1044. Furthermore, “whether
intentional discrimination occurred itself calls for a find-
ing of fact, and thus the district court’s decision on that
point must be assessed under the clear error standard.” Id.
Here we are presented with two sets of inconsistent fac-
tual findings. Some of them, logically, must be clearly
erroneous. Yet, as an appellate court, we have no way to
know which ones. As these findings go to the heart of
Cerros’s hostile work environment claim and Steel’s
liability, we have no choice but to remand this case for a
new trial and for fresh findings of fact.
8                                                No. 03-3701

                              B
   Because the court’s September 2003 order also mis-
understands the law in some respects, we address those
points now so that the same problem does not recur. We
first examine the court’s determination that the racial
graffiti in the restroom at Steel’s plant did not create
a hostile work environment. The court found that the
graffiti was not pervasive because it could not “fix a certain
number or frequency with any degree of confidence.”
Turning to the question of severity, the court acknowledged
that “[t]he evidence presented does show that some race
and national origin related messages (some of which are
sharply offensive) appeared as graffiti.” In particular, the
court stated that “the remarks and graffiti employing the
terms ‘spic’ and ‘wetback’ and the instruction to ‘go back to
Mexico’ are clearly race and national origin related” and
“[t]he use of the word ‘spic’ could be sufficiently severe to
constitute an objectively hostile environment.” Nonetheless,
the court found that “the conduct at issue was not suffi-
ciently severe or pervasive as to make the working environ-
ment hostile or to change the terms and conditions of
employment.”
  In reviewing the court’s first order, we expressed con-
cern that the court’s finding that Cerros did not suffer a
hostile work environment “may have resulted from a
misunderstanding about the legal threshold for harassment
cases; . . . the district court here may well have set the bar
too high as a matter of law.” Cerros I, 288 F.3d at 1046-47.
The court’s second order does little to alleviate this concern.
While the order correctly uses the disjunctive “or” when
discussing the issues of severity or pervasiveness, it does
not, taken as a whole, carry through on this point. We
reiterate now that conduct that is either pervasive or severe
may give rise to a hostile work environment. See Hrobowski
v. Worthington Steel Co., 358 F.3d 473, 477 (7th Cir. 2004)
(rejecting the “erroneous premise that the harassing words
No. 03-3701                                                 9

or conduct had to be both severe and pervasive” and
emphasizing that “one or the other will do” (internal
quotation marks omitted)). Nor did the court seem to
appreciate that “even one act of harassment will suffice if
it is egregious.” Hostetler v. Quality Dining, Inc., 218 F.3d
798, 808 (7th Cir. 2000); see also Daniels v. Essex Group,
Inc., 937 F.2d 1264, 1273 (7th Cir. 1991) (“The number of
instances of harassment is but one factor to be considered
in the examination of the totality of the circumstances.”).
Otherwise, how could it have said that “certainly the
Plaintiff encountered some race and national origin related
remarks and graffiti in the Defendant’s workplace; certainly
some of these were offensive, unenlightened, and inappro-
priate; however, they were relatively isolated and infre-
quent, occurring over the course of more than a year.”
  We emphasized in Cerros I that “[w]hile there is no ‘magic
number’ of slurs that indicate a hostile work environment,
we have recognized before that an unambiguously racial
epithet falls on the ‘more severe’ end of the spectrum.” 288
F.3d at 1047 (citing Rodgers v. Western-Southern Life Ins.
Co., 12 F.3d 668, 675 (7th Cir. 1993)). Indeed, we find it
difficult to imagine epithets more offensive to someone of
Hispanic descent than those directed at Cerros. See, e.g.,
Torres v. Pisano, 116 F.3d 625, 632-33 (2d Cir. 1997) (“[A]
reasonable Puerto Rican would find a workplace in which
her boss repeatedly called her a ‘dumb spic’ and told her
that she should stay home, go on welfare, and collect food
stamps like the rest of the ‘spics’ to be hostile.”). While we
acknowledge that the “mere utterance of an [ ] epithet
which engenders offensive feelings in an employee does not
sufficiently affect the conditions of employment to implicate
Title VII,” Harris v. Forklift Sys., Inc., 510 U.S. 17, 21
(1993) (internal citation and quotation marks omitted), we
also recognize that pervasiveness and severity “are, to a
certain degree, inversely related; a sufficiently severe
episode may occur as rarely as once, while a relentless
10                                                No. 03-3701

pattern of lesser harassment that extends over a long
period of time also violates the statute.” Cerros I, 288 F.3d
at 1047 (internal citation omitted). If, as suggested in the
district court’s September 2003 order, Cerros was subjected
to graffiti calling him a “spic” and “wetback,” directing him
to “go back to Mexico,” and proclaiming “KKK” and “white
power,” the fact that each individual epithet may have
appeared in isolation does not undo their cumulative effect.
See McGinest v. GTE Serv. Corp., 360 F.3d 1103, 1116 (9th
Cir. 2004).
  Equally troubling is the court’s suggestion that, because
Cerros cannot prove that his supervisors authored the
graffiti, he cannot rely on the graffiti in making out a
hostile work environment claim. In its September 2003
order, the district court stated that “[t]he use of the word
‘spic’ could be sufficiently severe to constitute an objectively
hostile environment; however, the evidence that
any supervisor used this specific term is sketchy at best and
does not constitute a preponderance of the evidence in this
case.” The court reiterated this latter point at several points
in its discussion, and ultimately cited it as a basis for
finding no hostile work environment: “Although the credible
evidence before the Court demonstrates that some ‘severe’
terms appeared in the workplace, the Plaintiff has not
shown by a preponderance of the evidence that supervisors
played any role in the writing or speaking of these more
‘severe’ terms.”
   This implied prerequisite of supervisor involvement to
establish a hostile work environment finds no support
in the law. As we discuss in a moment, the involvement
of supervisors is pertinent to the rules for vicarious liability
of the employer, but the distinction between supervisor and
coworker misconduct in no way determines whether a
plaintiff can state a hostile work environment claim in the
first instance. Indeed, we have routinely reviewed hostile
No. 03-3701                                                 11

work environment claims arising exclusively from the
conduct of coworkers. See, e.g., Williams v. Waste Mgmt. of
Ill., 361 F.3d 1021 (7th Cir. 2004); Cooper-Schut v. Visteon
Auto. Sys., 361 F.3d 421 (7th Cir. 2004); Hrobowski, 358
F.3d at 478; Shepherd v. Slater Steels Corp., 168 F.3d 998
(7th Cir. 1999). Cerros’s inability to verify the authorship of
the racist graffiti poses no obstacle to his establishing that
this graffiti produced or contributed to a hostile work
environment.
   We turn then to the district court’s conclusion that “even
if the actions complained of created a hostile or abusive
working environment, there is no basis for employer liabil-
ity.” In Ellerth and Faragher, the Supreme Court estab-
lished that under Title VII, employers are vicariously liable
for hostile environment harassment perpetrated
by a supervisor. Ellerth, 524 U.S. at 765; Faragher, 524 U.S.
at 780. The only important qualification is that when, as in
Cerros’s case, the plaintiff suffered no tangible employment
action, the employer is entitled to establish an affirmative
defense consisting of two elements: “(a) that the employer
exercised reasonable care to prevent and correct promptly
any . . . harassing behavior, and (b) that the plaintiff
employee unreasonably failed to take advantage of any
preventive or corrective opportunities provided by the
employer or to avoid harm otherwise.” Ellerth, 524 U.S. at
765. By contrast, employers are liable for a coworker’s
harassment only “when they have been negligent either in
discovering or remedying the harassment.” Perry v. Harris
Chernin, Inc., 126 F.3d 1010, 1013 (7th Cir. 1997). An
employer satisfies its legal duty in coworker harassment
cases “if it takes reasonable steps to discover and rectify
acts of . . . harassment of its employees.” Parkins v. Civil
Constructors of Ill., Inc., 163 F.3d 1027, 1032 (7th Cir. 1998)
(internal quotation marks omitted).
  There are two aspects of the district court’s application of
the Ellerth/Faragher standard that merit closer examina-
12                                               No. 03-3701

tion. The first involves the court’s conclusion that “the
Plaintiff did not take advantage of any preventative or
corrective opportunities provided by the Defendant.” In this
connection, the court found that “the Plaintiff did not follow
the steps outlined in the Defendant’s policies by taking any
matter, complaint, or allegation through the chain of
command, did not take advantage of Bennett’s open door
policy, did not submit any complaint in writing, and did not
contact the Human Resources office at the corporate head-
quarters.” Setting aside the inconsistencies between those
findings and the others incorporated in the court’s order,
which we have already discussed, we focus now on the
court’s suggestion that a plaintiff’s failure to follow the
reporting mechanisms outlined in an employer’s harass-
ment policy is a sufficient basis in itself for finding no
employer liability.
  In Ellerth and Faragher, the Supreme Court explained
that “while proof that an employee failed to fulfill the
corresponding obligation of reasonable care to avoid harm
is not limited to showing any unreasonable failure to use
any complaint procedure provided by the employer, a
demonstration of such failure will normally suffice to satisfy
the employer’s burden under the second element of the
defense.” Ellerth, 524 U.S. at 765; Faragher, 524 U.S. at
807-08. At the same time, the Court made clear that
compliance with an employer’s designated complaint
procedure is not the sole means by which an employee
can fulfill her “coordinate duty to avoid or mitigate harm.”
Faragher, 524 U.S. at 806. Rather, under the functional
approach established in Ellerth/Faragher, an employer
must prove that “the plaintiff employee unreasonably failed
to take advantage of any preventive or corrective opportuni-
ties provided by the employer or to avoid harm otherwise.”
Ellerth, 524 U.S. at 765 (emphasis added).
 At bottom, the employer’s knowledge of the misconduct is
what is critical, not how the employer came to have
No. 03-3701                                                13

that knowledge. See Durkin v. City of Chi., 341 F.3d 606,
612 (7th Cir. 2003); Silk v. City of Chi., 194 F.3d 788, 807
(7th Cir. 1999). The relevant inquiry is therefore whether
the employee adequately alerted her employer to the
harassment, thereby satisfying her obligation to avoid the
harm, not whether she followed the letter of the report-
ing procedures set out in the employer’s harassment policy.
See, e.g., Crowley v. L.L. Bean, Inc., 303 F.3d 387, 403 (1st
Cir. 2002) (rejecting L.L. Bean’s contention that the plain-
tiff “did not properly notify management of her complaints
because she ‘bypass[ed] the reporting requirements under
L.L. Bean’s harassment policies,’ ” given that she “repeat-
edly alerted team leaders and supervisors” to the miscon-
duct (internal citation omitted)); Nichols v. Azteca Rest.
Enters., Inc., 256 F.3d 864, 876 & n.10 (9th Cir. 2001)
(observing that, although the plaintiff’s complaints to his
managers “did not follow the formal reporting requirements
of Azteca’s anti-harassment policy, they were sufficient to
place the company on notice of harassment”). Thus, on
remand, the court must determine whether Cerros followed
Steel’s reporting procedures or otherwise brought the
harassment he suffered to Steel’s attention.
  Finally, we pause to consider the requirement that, in the
case of supervisor misconduct, the employer exercise
“reasonable care to prevent and correct promptly any . . .
harassing behavior,” Ellerth, 524 U.S. at 765, or, in the case
of coworker harassment, that it “take reasonable steps to
discover and remedy harassment,” Cooper-Schut, 361 F.3d
at 426. In its September 2003 order, the court indicated
that Steel had met this standard, explaining:
    Considering the Defendant’s policy and training ses-
    sions, including the option for employees to con-
    tact human resources directly if they believed they were
    the victim of harassment or if it was not appropriate to
    report to their supervisor, or they had not received any
    response to a complaint made to a supervisor and
14                                              No. 03-3701

     considering the very general nature of the Plaintiff’s
     and [his co-employee’s] testimony, the Court concludes
     that the Plaintiff has not shown by preponderance of
     the evidence that the Defendant was negligent in
     discovering or remedying harassment.
First, it is important to emphasize that the enactment of an
anti-harassment policy and the implementation of training
sessions for employees is relevant only with respect to
whether an employer had notice of harassment and whether
it exercised reasonable care to prevent such harassment in
the first instance. See Shaw v. AutoZone, Inc., 180 F.3d 806,
812 (7th Cir. 1999) (finding that the “undisputed fact[ ]”
that AutoZone adopted a detailed anti-harassment policy
and distributed it to its employees “establish[es], as a
matter of law, that AutoZone exercised reasonable care to
prevent sexual harassment”); Parkins, 163 F.3d at 1035 (“In
determining whether an employer had notice of harass-
ment, we first determine whether the employer has desig-
nated a channel for complaints of harassment.”). The mere
existence of such a policy, however, does not necessarily
establish that the employer acted reasonably in remedying
the harassment after it has occurred or in preventing future
misconduct. See, Shaw, 180 F.3d at 812 (“The first prong of
the Ellerth affirmative defense also requires AutoZone to
prove that it exercised reasonable care to respond to the
sexual harassment.”); Spriggs v. Diamond Auto Glass, 242
F.3d 179, 188 (4th Cir. 2001) (“[A] jury could rationally
conclude that, although Diamond’s institution of an anti-
harassment policy represented a reasonable step toward
preventing the type of abuse suffered by the Spriggs, the
company unreasonably failed to correct . . . offending
behavior by neglecting to enforce the policy.”). Thus, the
district court’s reliance on Steel’s implementation of an
anti-harassment policy and its training sessions as a basis
for finding that it was not negligent in remedying harass-
ment is unfounded.
No. 03-3701                                               15

   Second, as we have noted before, “[a]n employer’s re-
sponse to alleged instances of employee harassment must
be reasonably calculated to prevent further harassment
under the particular facts and circumstances of the case at
the time the allegations are made.” McKenzie v. Ill. Dep’t of
Transp., 92 F.3d 473, 480 (7th Cir. 1996) (emphasis added)
(internal quotation marks omitted). “Put differently, the
employer can avoid liability for its employees’ harassment
if it takes prompt and appropriate corrective action reason-
ably likely to prevent the harassment from recurring.”
Williams, 361 F.3d at 1029 (internal quotation marks
omitted). Our cases recognize prompt investigation of the
alleged misconduct as a hallmark of reasonable corrective
action. See, e.g., Cooper-Schut, 361 F.3d at 428 (finding
employer’s actions reasonable when, the day after it was
alerted to a highly offensive caricature of the plaintiff, it
“began a complete investigation,” including interviewing
employees in the plaintiff’s department and “retain[ing] a
forensics expert to analyze the handwriting on the carica-
ture to determine who made it”); Savino v. C.P. Hall Co.,
199 F.3d 925, 933 (7th Cir. 1999) (finding that the employer
“reasonably attempted to correct and prevent sexual harass-
ment” when it “promptly investigated [the employee’s]
charges and sought to remedy the problem”); Saxton v. Am.
Tel. & Tel. Co., 10 F.3d 526, 535 (7th Cir. 1993) (emphasiz-
ing that the employer “began an investigation the day after
[it] was advised of Saxton’s complaint”). By the same token,
the absence of such action may signal a failure to meet this
standard of “prompt and appropriate corrective action.”
Williams, 361 F.3d at 1029. In Daniels, for example, we
found the employer liable because it was “less than diligent
in taking remedial action” in response to recurring graffiti
in the employer’s restroom proclaiming “KKK” and “All
niggers must die.” 937 F.2d at 1275. In so holding, we noted
that “the restroom graffiti reappeared two to three times
after plaintiff first noticed it,” a racial slur in another
location remained posted at the time the plaintiff left the
16                                               No. 03-3701

company, and, “[i]n addition to dragging its feet on respond-
ing to the discrete acts, the defendant made virtually no
effort to investigate the incidents.” Id.
  As Daniels suggests, although “Title VII does not require
that the employer’s responses to a plaintiff’s complaints . . .
successfully prevent[ ] subsequent harassment,” Savino,
199 F.3d at 933, the efficacy of an employer’s remedial
action is material to our determination whether the action
was “reasonably likely to prevent the harassment from
recurring,” Williams, 361 F.3d at 1029. In McGinest, for
example, the Ninth Circuit found a disputed issue of
material fact about the adequacy of GTE’s remedial mea-
sures in response to recurring graffiti in the company
restroom stating “nigger,” “white is right,” and “nigger go
home.” 360 F.3d at 1110. The court observed that, “although
painting over the graffiti was a necessary first step, the
record before us reveals no actions taken by GTE to ensure
that this recurrent problem would cease, and in fact it did
not cease.” Id. at 1120-21. Furthermore, “GTE took no
action to send a message that such graffiti was intolerable,
or recognize that it differed in kind from other graffiti
prevalent in the bathrooms. GTE could have heavily
emphasized to all employees that serious punishment would
result if the perpetrators of this or future incidents were
caught, underlining the fact that such behavior was neither
tolerated nor condoned.” Id. at 1220 n.14. “At a minimum,”
the court stated, GTE could have “had a manager check the
areas in question on a regular basis to ensure this problem
did not recur.” Id. This objection to the employer’s failure to
engage in effective remedial efforts is consistent with the
Supreme Court’s insistence in Faragher that we “recognize
the employer’s affirmative obligation to prevent violations
and give credit here to employers who make reasonable
efforts to discharge their duty.” 524 U.S. at 806. We under-
score, therefore, that the district court’s analysis of Steel’s
actions must be consistent with these princi-
No. 03-3701                                               17

ples. Generalized references to Steel’s anti-harassment
policy will not suffice under the Ellerth/Faragher standard.


                            III
   Already prolonged unnecessarily, this case neverthe-
less must be remanded for a new trial. The factual inconsis-
tencies in the district court’s September 2003 order pre-
clude any meaningful review of its conclusions with respect
to Cerros’s hostile work environment claim and Steel’s
liability. Furthermore, the need for a new trial was made
more obvious at oral argument when Steel’s counsel, John
Baumann, who also served as Steel’s manager of human
resources during Cerros’s tenure at the company, offered his
firsthand account of the company’s remedial efforts in
response to Cerros’s complaints. Counsel’s statements at
argument, perhaps more aptly characterized as testimony,
raise serious concerns under Indiana Rule of Professional
Conduct 3.7(a) (made effective in the District Court for the
Northern District of Indiana pursuant to Local Rule 83.5(f)),
which bars a lawyer from acting as an advocate at a trial in
which she is likely to be a necessary witness, except in
limited circumstances. The comment accompanying Rule 3.7
cautions that, when an attorney fails to comply with this
Rule, “[i]t may not be clear whether a statement by an
advocate-witness should be taken as proof or as an analysis
of the proof,” and we found ourselves mired in this very
uncertainty at argument.
  For these reasons, the judgment of the district court
is REVERSED, and this case is REMANDED for a trial on
the hostile work environment claim consistent with this
opinion. Circuit Rule 36 shall apply on remand.
18                                        No. 03-3701

A true Copy:
      Teste:

                    ________________________________
                    Clerk of the United States Court of
                      Appeals for the Seventh Circuit




               USCA-02-C-0072—2-23-05
