Oliver Fenceroy v. Gelita USA, Inc., Bob Kersbergen, Tom Haire, Jeff Tolsma, and Jeremy Kneip

• Court: Court of Appeals of Iowa
• Decided: November 6, 2019
• Docket: 18-1817
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 18-1817 Filed November 6, 2019

OLIVER FENCEROY, Plaintiff-Appellant,

vs.

GELITA USA, INC., BOB KERSBERGEN, TOM HAIRE, JEFF TOLSMA, and JEREMY KNEIP, Defendants-Appellees. ________________________________________________________________

Appeal from the Iowa District Court for Woodbury County, Jeffrey A. Neary,

Judge.

A plaintiff appeals the district court summary judgment dismissal of his

claims of racial harassment, racial discrimination, and intentional infliction of

emotional distress. AFFIRMED.

Jay Denne and Stanley E. Munger of Munger, Reinschmidt & Denne, L.L.P.,

Sioux City, for appellant.

Ruth A. Horvatich, Aaron A. Clark, and Abigail M. Moland of McGrath North

PC LLO, Omaha, Nebraska, for appellees.

Heard by Bower, C.J., and May and Greer, JJ. 2

BOWER, Chief Judge.

Oliver Fenceroy appeals the district court’s granting of summary judgment

in favor of defendants Gelita USA, Inc. (Gelita), Tom Haire, and Jeff Tolsma and

dismissing his claims of racial harassment, racial discrimination, and intentional

infliction of emotional distress. We find Fenceroy did not show Gelita had the

requisite knowledge to support the harassment claims, did not establish an

adverse employment action for his discrimination claim, and the evidence did not

support a finding of severe emotional distress. We affirm.

I. Background Facts & Proceedings

Gelita is a corporation based out of Germany with a plant in Sergeant Bluff,

Iowa, which produces gelatin products used in a variety of industries. Fenceroy,

an African-American, began working for Gelita in 1975 and retired in March 2013.

For the majority of his tenure at Gelita, Fenceroy was the only African-American

employee in the plant.

Gelita’s Code of Conduct provided to employees includes an anti-

harassment policy as well as a reporting procedure. Fenceroy was also aware he

had complaint procedures available to him through his union membership.

Gelita holds annual training sessions concerning harassment and

discrimination, which Fenceroy acknowledged attending on at least three separate

occasions. Jeff Tolsma, Gelita’s current head of human resources, sent a memo

to all employees in August 2010, explaining harassment was a serious offense that

could lead to disciplinary action.

In October 2011, Fenceroy reported to human resources that a rope he

believed was tied to resemble a noose was hanging in the plant where he worked. 3

Tolsma and the production manager for the plant, Jeremie Kneip, went to the

factory and looked at the rope, determining the rope—which had a loop tied at the

end—was used for a valid employment purpose to create pressure on a scale and

the loop might be used as a handle. But, they ordered the rope to be untied and

advised Fenceroy of their action. Fenceroy observed the rope was soon tied back

into the loop by unknown persons in the factory. Tolsma and Kneip do not appear

to have ordered the rope untied again. However, Fenceroy made no additional

reports to human resources to complain of the “noose.”

In 2012, Gelita sent out a “confidential” survey to all employees asking for

suggested improvements or changes to the harassment policy. Fenceroy did not

report any harassment through the survey.

After retiring from Gelita in 2013, Fenceroy filed a complaint with the Iowa

Civil Rights Commission (ICRC). Fenceroy identified multiple occasions in 2012

when Gelita employees, including Tom Haire and Bob Kersbergen, made racially

discriminatory or harassing comments; many of the comments were overtly white

supremacist in nature or otherwise denigrated African-Americans. Kersbergen

allegedly assaulted Fenceroy by grabbing and pulling him to the ground. Fenceroy

alleges Kneip told him not to bother bringing complaints to human resources.

Fenceroy stated the foremen did not take action when he complained or they

witnessed the harassing comments. Fenceroy did not report any of the 2012

incidents to human resources when they occurred or at any time prior to his

retirement. The ICRC issued Fenceroy a right-to-sue letter. 4

On May 30, 2014, Fenceroy filed suit against Gelita and employees Tolsma,

Kneip, Kersbergen, and Haire, alleging violations of the Iowa Civil Rights Act

(ICRA) and tortious infliction of emotional distress.

During the discovery process, the supreme court heard an interlocutory

appeal, which examined the limits of the attorney–client privilege when a defendant

relies on the attorney’s investigation.1 Fenceroy v. Gelita USA, Inc., 908 N.W.2d

235, 238 (Iowa 2018) (deciding “whether plaintiff’s counsel may depose defense

counsel and obtain counsel’s prelawsuit work product”). The district court’s ruling

denying a protective order for defense counsel’s investigative notes was affirmed,

and the case was remanded. Id. at 249.

On April 7, 2016, Gelita, Haire, and Tolsma filed a motion for summary

judgment. Kersbergen did not join in the motion.2 The motion was amended in

February 2018, following the supreme court’s ruling on the discovery issue. On

September 21, the district court granted the motion for summary judgment, holding

Gelita had established the Faragher-Ellerth affirmative defense3 and was entitled

to judgment as a matter of law. The court found Gelita had no notice of the

harassing behavior and could not be held liable for negligent control of the work

environment; Fenceroy had not established he suffered an adverse employment

action in his racial-discrimination claim; and Fenceroy could not establish the

defendants’ conduct resulted in his suffering severe emotional distress.

1 The case was stayed in district court during the pendency of the interlocutory appeal. 2 Fenceroy’s claims against Kersbergen are still outstanding. 3 The Faragher-Ellerth affirmative defense is a “two-part defense [that] requires employers to show reasonable care was exercised to ‘prevent and correct promptly any . . . harassing behavior’ and to further show the claimant employee ‘unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.’” Fenceroy, 908 N.W.2d at 242 (citations omitted). 5

Fenceroy’s claims against Gelita, Haire, and Tolsma were dismissed with

prejudice. Kneip was not formally served with Fenceroy’s petition, and the court

dismissed the claims against him without prejudice.

Fenceroy appeals the summary judgment ruling as to Gelita, Haire, and

Tolsma. Fenceroy does not appeal Kneip’s dismissal.

II. Standard of Review

“Appellate review of a grant of a motion for summary judgment is for errors

at law.” Estate of Harris v. Papa John’s Pizza, 679 N.W.2d 673, 677 (Iowa 2004).

Summary judgment is to be granted if the evidence shows “that there is no genuine

issue as to any material fact and that the moving party is entitled to a judgment as

a matter of law.” Iowa R. Civ. P. 1.981(3). The court looks at the evidence in the

light most favorable to the non-moving party and considers “every legitimate

inference that can be reasonably deduced from the record.” Estate of Harris, 679

N.W.2d at 677 (quoting Phillips v. Covenant Clinic, 625 N.W.2d 714, 718 (Iowa

2001)).

III. Analysis

A. Supervisor harassment. To establish a hostile-work-environment

claim under the ICRA, a plaintiff must show: “(1) he or she belongs to a protected

group; (2) he or she was subjected to unwelcome harassment; (3) the harassment

was based on a protected characteristic; and (4) the harassment affected a term,

condition, or privilege of employment.” Boyle v. Alum-Line, Inc., 710 N.W.2d 741,

746 (Iowa 2006) (quoting Farmland Foods, Inc. v. Dubuque Human Rights

Comm’n, 672 N.W.2d 733, 744 (Iowa 2003)). 6

An employer may be entitled to the Faragher-Ellerth affirmative defense to

claims of vicarious liability for harassment by a supervisor that do not involve

tangible employment action. See Fenceroy, 908 N.W.2d at 241–42. “[V]icarious

liability does not replace the direct negligence theory of employer liability, but

rather supplements the theory with an additional agency-based standard.” Id. at

242. “Generally, if an employee fails to notify the employer of wrongdoing, courts

have found that such failure, coupled with adequate preventative policies, is

sufficient to prevail in the defense.” Id. at 246.

The district court did not examine the underlying hostile-work-environment

claim, but instead granted summary judgment based on the Faragher-Ellerth

affirmative defense. The court found Gelita had valid anti-harassment policies in

place and exercised reasonable care to prevent and correct harassment in the

workplace. Fenceroy was aware he could file a grievance regarding harassment

and discrimination. He filed only one grievance during his thirty-seven years of

employment—in 2011—when he reported a rope looped into an apparent noose.

Gelita investigated and took action on his grievance.

Fenceroy had internal procedures available and a union representative who

could inform Gelita of alleged continuing harassing behaviors by coworkers and

supervisors. He admitted to knowing and understanding that if his immediate

supervisor or foreman was the problem, he was to report to an upper manager or

human resources. He did not do so. Fenceroy made no further complaint nor did

he take advantage of corrective opportunities offered to him until after he retired—

a point at which Gelita had no opportunity to fix the problem with respect to

Fenceroy. Fenceroy’s decision to not pursue corrective actions before retirement 7

was not within the control of the employer. We conclude the district court did not

err in determining Gelita is entitled to the Faragher-Ellerth defense.

B. Coworker harassment. When establishing a harassment claim

against non-supervisors, the plaintiff must establish the employer was negligent in

controlling working conditions. Farmland Foods, 672 N.W.2d at 744. To establish

this claim, in addition to the four elements of a hostile work environment listed

above, the plaintiff must show the employer “knew or should have known of the

harassment and failed to take proper remedial action.” Id. (citation omitted).

The district court ruled Fenceroy did not show Gelita “knew or should have

known of the harassment and failed to take proper remedial action.” See id.; see

also Boyle, 710 N.W.2d at 746. The court found no evidence to suggest that

employee harassment of Fenceroy “was so open and obvious that Gelita should

have, on its own, discovered the harassment.” Fenceroy did not notify Gelita of

the continuing harassment, and Gelita took proper remedial action when Fenceroy

filed his single complaint. Therefore, Fenceroy has failed to establish the final

element of his harassment claim.

C. Discrimination. To establish a prima facie claim of racial

discrimination, a plaintiff must show they are a member of a protected class, were

performing the work satisfactorily, and suffered an adverse employment action.

Farmland Foods, 672 N.W.2d at 741 n.1. “[A]n adverse employment action is ‘an

action that detrimentally affects the terms, conditions, or privileges of

employment.’” Haskenhoff v. Homeland Energy Sols., LLC, 897 N.W.2d 553, 587

(Iowa 2017) (citation omitted). The question of “[w]hether an adverse employment

action occurred ‘normally depend[s] on the facts of each situation.’” Id. (citation 8

omitted). “[M]inor changes in working conditions that only amount to an

inconvenience cannot support discrimination.” Farmland Foods, 672 N.W.2d at

742.

Fenceroy claims Gelita constructively discharged him—that leaving the

“noose” up in the factory meant Fenceroy had no choice but to quit his employment

at Gelita. “Constructive discharge exists when the employer deliberately makes

an employee’s working conditions so intolerable that the employee is forced into

an involuntary resignation.” Van Meter Indus. v. Mason City Human Rights

Comm’n, 675 N.W.2d 503, 511 (Iowa 2004) (citation omitted). “The test for

constructive discharge is objective, evaluating whether a reasonable person in the

employee’s position would have been compelled to resign and whether an

employee reasonably believed there was no possibility that an employer would

respond fairly.” Haskenhoff, 897 N.W.2d at 592. “[C]onditions will not be

considered intolerable unless the employer has been given a reasonable chance

to resolve the problem.” Van Meter Indus., 675 N.W.2d at 511.

The district court concluded Fenceroy “did not provide Gelita with a

reasonable chance to work out any problems he was having while he worked for

Gelita.” The court also noted the extended timeframe between the 2011 reported

incident and Fenceroy’s 2013 retirement suggested Fenceroy did not find “his

working conditions so intolerable that he must resign.”

In August 2012, Fenceroy provided Gelita with six-month’s notice of his

intent to retire. He then extended his retirement date an additional month so he

could qualify for full Social Security benefits at the time of his retirement. In his

deposition, Fenceroy pinpointed the noose as “the last straw that broke the camel’s 9

back.” Fenceroy reported the noose in October 2011 and asserted the rope

continued to be tied with the loop at the end until his retirement. He did not file a

complaint or otherwise notify human resources and the company of the loop’s

continuing existence or of the comments and assaults occurring at work. He

waited ten months after his complaint before submitting his retirement notice. He

then remained on the job for an additional seven months after his notice of

retirement.

Looking at the evidence in the light most favorable to Fenceroy, we find he

has failed to allege sufficient facts to establish a constructive discharge. Fenceroy

has failed to prove an adverse employment action and so has failed to establish a

prima facie case of racial discrimination. The district court did not err in granting

the motion for summary judgment on this claim.

D. Intentional infliction of emotional distress. A successful claim of

intentional infliction of emotional distress requires a plaintiff demonstrate four

elements: “(1) outrageous conduct by the defendant; (2) the defendant

intentionally caused, or recklessly disregarded the probability of causing, the

emotional distress; (3) plaintiff suffered severe or extreme emotional distress; and

(4) the defendant’s outrageous conduct was the actual and proximate cause of the

emotional distress.” Smith v. Iowa State Univ. of Sci. & Tech., 851 N.W.2d 1, 26

(Iowa 2014) (citation omitted). The district court determined Fenceroy’s emotional

distress did not rise to the level of “severe or extreme emotional distress,” and

consequently, the claim failed as a matter of law.

“Our cases that have found substantial evidence of emotional harm have

had direct evidence of either physical symptoms of the distress or a clear showing 10

of a notably distressful mental reaction caused by the outrageous conduct.” Id. at

30 (citation omitted). In Smith, our supreme court looked to the Restatement

(Second) of Torts to distinguish between emotional distress—which “includes all

highly unpleasant mental reactions, such as fright, horror, grief, shame,

humiliation, embarrassment, anger, chagrin, disappointment, worry, and

nausea”—and severe or extreme emotional distress that “is so severe that no

reasonable man could be expected to endure it.” 851 N.W.2d at 30 (quoting

Restatement (Second) of Torts § 46 cmt. j, at 77–78).

Fenceroy’s allegations of emotional distress included “fright, horror, shame,

humiliation, embarrassment, anger, disappointment, and worry.” The language

tracks the terms listed in the Restatement for “emotional distress.” But severe or

extreme emotional distress is required. See id. Moreover, when comparing

Fenceroy’s emotional distress allegations to the cases discussed in Smith,

evaluating sufficient evidence of severe emotional distress to go to the jury,

Fenceroy’s allegations of distress are akin to the cases where the emotional

distress alleged was insufficient to reach the jury. See id. at 30–31 (collecting

cases).4 Fenceroy has not offered evidence of a physical manifestation or a

debilitating mental or emotional reaction to his coworkers’ conduct. We therefore

affirm the district court’s finding his claim for intentional infliction of emotional

distress fails as a matter of law.

AFFIRMED.

4 The cases with sufficient evidence to reach the jury generally exhibited some acute physical or psychological manifestation of the distress. See Smith, 851 N.W.2d at 30–31.