Townsend v. BENJAMIN ENTERPRISES, INC.

679 F.3d 41, 82 Fed. R. Serv. 3d 641, 2012 WL 1605758, 2012 U.S. App. LEXIS 9441, 95 Empl. Prac. Dec. (CCH) 44,499, 114 Fair Empl. Prac. Cas. (BNA) 1537
CourtCourt of Appeals for the Second Circuit
DecidedMay 9, 2012
DocketDocket 09-0197-cv(L), 09-4509-cv(XAP)
StatusPublished
Cited by228 cases

This text of 679 F.3d 41 (Townsend v. BENJAMIN ENTERPRISES, INC.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Townsend v. BENJAMIN ENTERPRISES, INC., 679 F.3d 41, 82 Fed. R. Serv. 3d 641, 2012 WL 1605758, 2012 U.S. App. LEXIS 9441, 95 Empl. Prac. Dec. (CCH) 44,499, 114 Fair Empl. Prac. Cas. (BNA) 1537 (2d Cir. 2012).

Opinions

Judge LOHIER concurs in a separate opinion.

JOHN G. KOELTL, District Judge:

Among other issues, this appeal requires us to answer two questions of first impression in this Court: first, whether there is a viable claim of retaliation under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. (“Title VII”), for participating in an internal employer investigation prior to any proceeding before the Equal Employment Opportunity Commission (“EEOC”); and, second, whether an employer is liable under Title VII for sexual harassment committed by a senior executive who is a proxy or alter ego for the employer, despite the existence of a possible affirmative defense under the Supreme Court’s decisions in Faragher v. City of Boca Raton, 524 U.S. 775, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998).

These questions arise in the following context. The plaintiff Martha Diane Townsend was employed by defendant Benjamin Enterprises, Inc. (“BEI”). She alleged that she was sexually harassed by defendant Hugh Benjamin, who was the husband of BEI President Michelle Benjamin, and the sole corporate Vice President of BEI, as well as a shareholder of BEI. Plaintiff Karlean Victoria Grey-Alien, the Human Resources Director (“HR Director”) of BEI, began to conduct an internal investigation of the allegations. However, before completing the investigation, she was fired by defendant Michelle Benjamin. Grey-Alien alleged that her termination was in retaliation for her participation in the internal investigation.

Grey-Alien and Townsend sued BEI, Michelle Benjamin, and Hugh Benjamin in the United States District Court for the Southern District of New York for violations of Title VII; New York Human Rights Law, N.Y. Exec. Law § 290 et seq. (“New York Human Rights Law”); and [45]*45New York State tort law. The District Court (Yanthis, Magistrate Judge)1 granted summary judgment dismissing Grey-Allen’s retaliation claims, and a jury returned a verdict in favor of Townsend against BEI, Michelle Benjamin, and Hugh Benjamin. Thereafter, the Magistrate Judge denied the defendants’ motion for judgment as a matter of law or, in the alternative, for a new trial, and awarded Townsend attorney’s fees and costs.

This is an appeal and a cross-appeal challenging three orders of the Magistrate Judge.

First, Grey-Alien challenges the order granting summary judgment dismissing her Title VII retaliation claim.2 The district court granted summary judgment on the ground that Grey-Allen’s participation in an internal employer investigation into Townsend’s sexual harassment allegations, an investigation that was not connected to any formal charge with the EEOC, did not qualify as protected activity under the participation clause of Title VII’s anti-retaliation provision. Townsend v. Benjamin Enters., Inc., No. 05 Civ. 9378, 2008 WL 1766944 (S.D.N.Y. Apr. 17, 2008).

Second, BEI and the Benjamins challenge the district court’s order denying their post-trial motion for judgment as a matter of law or, in the alternative, for a new trial.3 They contend that the district court erred in rejecting various arguments asserted by the defendants, including their argument that there is no “proxy” or “alter ego” exception to the Faragher/Ellerth affirmative defense.

Third, BEI and the Benjamins challenge the district court’s order awarding Townsend $141,308.80 in attorney’s fees and costs. They argue that Townsend was not entitled to fees and costs accrued after the defendants made an Offer of Judgment pursuant to Federal Rule of Civil Procedure 68 because, they assert, the Offer exceeded the sum of Townsend’s ultimate recovery and her fees and costs at the time of the Offer. They contend that the district court mistakenly reached a contrary conclusion because it erred in calculating the reasonable hourly rate for an attorney’s services by considering the prevailing market rate in the district, rather than the rate stated in Townsend’s retainer agreement with her counsel.

Because we find no error in the district court’s thoughtful and well-reasoned opinions, we affirm.

BACKGROUND

I.

Townsend began working at BEI in June 2002. She held the position of office manager and First Impressions Director, or receptionist. BEI trains disadvantaged or low-skilled individuals to work for local companies. Michelle Benjamin, the President of BEI, is a co-owner of BEI and has the power to hire and fire employees. [46]*46Hugh Benjamin is married to Michelle Benjamin and is the sole corporate Vice President of BEI, as well as a corporate shareholder. Hugh Benjamin once owned 34% of the corporate shares but owned only 5% of the corporate shares at the time of trial.

Townsend alleged that Hugh Benjamin sexually harassed her from the summer of 2003 through March 2005 by directing sexually offensive comments at her, propositioning her, touching her sexually, and sexually assaulting her. On March 9, 2005, Townsend told Michelle Benjamin about the harassment. On March 17, 2005, Townsend reported the sexual harassment to Karlean Victoria Grey-Alien, the HR Director of BEI.

II.

Grey-Alien began working for BEI as the HR Director in August 2004. When Townsend reported the sexual harassment to her, Grey-Alien asked Townsend to provide a written and oral account of the events that had occurred. Grey-Alien also spoke with the New York State Division of Human Rights, which suggested that she interview Hugh Benjamin and then separate him from Townsend. Grey-Alien then interviewed Hugh Benjamin and asked him to work from home.

On March 21, 2005, Grey-Alien discussed the sexual harassment allegations with Dennis Barnett, a management consultant retained by BEI. Barnett had been assigned to train Grey-Alien when she arrived at BEI, and Grey-Alien described him as a mentor with whom she believed she could share confidential concerns. Michelle Benjamin learned of Grey-Alien’s conversation with Barnett and allegedly deemed it inappropriate. Michelle Benjamin terminated Grey-Alien that same day, asserting that Grey-Alien had breached confidentiality by speaking with Barnett. On March 22, 2005, Michelle Benjamin took over the investigation of Townsend’s sexual harassment allegations. She allowed Hugh Benjamin to return to the office. She also retained HR Delivery, Inc. (“HR Delivery”), an outside human resources organization, to conduct the investigation. GreyAllen contends that the investigation by HR Delivery was inadequate and that Michelle Benjamin controlled how the investigation was conducted and what information HR Delivery was able to access. HR Delivery ultimately concluded that “nothing happened” between Hugh Benjamin and Townsend and that it was a “he said versus she said” case.

On March 23, 2005, Townsend resigned from BEI.

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679 F.3d 41, 82 Fed. R. Serv. 3d 641, 2012 WL 1605758, 2012 U.S. App. LEXIS 9441, 95 Empl. Prac. Dec. (CCH) 44,499, 114 Fair Empl. Prac. Cas. (BNA) 1537, Counsel Stack Legal Research, https://law.counselstack.com/opinion/townsend-v-benjamin-enterprises-inc-ca2-2012.