Townsend v. BENJAMIN ENTERPRISES, INC.
679 F.3d 41
| 2d Cir. | 2012Background
- Townsend, BEI employee, alleged Hugh Benjamin sexually harassed her from 2003–2005.
- Grey-Allen, BEI HR Director, began internal harassment investigation and was terminated in March 2005.
- Townsend and Grey-Allen filed suit in SDNY asserting Title VII, NYHRL, and tort claims.
- Grey-Allen's retaliation claim was dismissed at summary judgment as based on non-EEOC-related internal investigations.
- Townsend received a jury verdict for $30,400 against BEI, Michelle Benjamin, and Hugh Benjamin; BEI/Benjamin defendants were awarded no Title VII damages; Townsend was awarded fees and costs.
- District court denied post-trial motions and Townsend’s fee request; Rule 68 offer of judgment was $50,000 with dispute over pre/post-offer fees; on appeal, court affirmed the district court’s rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether internal investigation participation qualifies as protected activity under Title VII. | Grey-Allen argues participation clause protects involvement in internal BEI investigation. | BEI/Michelle/Hugh Benjamin argue not protected since no EEOC proceeding. | Participation in internal investigations not protected under Title VII participation clause. |
| Whether Faragher/Ellerth proxy/alter ego defense applies when harasser is the company’s proxy. | Townsend argues proxy/alter ego applies, limiting defense. | Defendants contend defense may apply; district court allowed proxy/alter ego analysis. | Faragher/Ellerth defense unavailable when harasser is BEI’s proxy/alter ego. |
| Whether Hugh Benjamin could be BEI’s alter ego and thus bind BEI to alter ego liability. | Evidence supports high ranking and control establishing alter ego. | Dispute over sufficiency of evidence. | Reasonable jury could find Hugh Benjamin as BEI’s alter ego; no JMOL error. |
| Whether Michelle Benjamin bears individual liability under NYHRL as an employer under alter ego theory. | Michelle could be liable as employer if alter ego finding imputes BEI liability. | Jury instruction proper under NYHRL 296(1). | Instruction proper; Michelle liable as employer if Hugh was alter ego. |
| Whether attorney’s fees after Rule 68 offer were properly awarded. | Fees post-offer should be recoverable given pre-offer amount and total recovery. | Fees after Offer should be denied if Offer exceeded ultimate recovery plus pre-offer fees. | District court’s fee award affirmed; $350/hour rate found reasonable; post-offer fees upheld. |
Key Cases Cited
- Faragher v. City of Boca Raton, 524 U.S. 775 (1998) (established Faragher/Ellerth defense framework for employer liability)
- Ellerth, 524 U.S. 742 (1998) (established vicarious liability framework and defense)
- Ackel v. Nat'l Commc'ns, Inc., 339 F.3d 376 (5th Cir. 2003) (proxy/alter ego liability not barred by Faragher/Ellerth)
- Johnson v. West, 218 F.3d 725 (7th Cir. 2000) (supervisor high-rank can be proxy/alter ego)
- Hatmaker v. Mem'l Med. Ctr., 619 F.3d 741 (7th Cir. 2010) (participation in internal investigation not protected)
- Mallinson-Montague v. Pocrnick, 224 F.3d 1224 (10th Cir. 2000) (alter ego evidence patterns for liability)
- Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986) (foundation for agency principles in harassment liability)
- Deravin v. Kerik, 335 F.3d 195 (2d Cir. 2003) (defending oneself in EEOC investigation protected)
- McMenemy v. City of Rochester, 241 F.3d 279 (2d Cir. 2001) (internal investigations and participation analysis)
- Total Sys. Servs., 221 F.3d 1114 (11th Cir. 2000) (participation clause scope in internal investigations)