99-1155 EEOC v. Indiana Bell Telephone Co.

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“Ameritech contends that the 30-day, just-cause, and arbitration provisions of the collective bargaining agreement demonstrate that its actions were reasonable, and thus that Amos’s misconduct should not be attributed to the employer. … It did not take Ameritech’s managers long to learn, however, that Amos is incorrigible. An employer knowing that working conditions are worse for women than for men may experiment reasonably with strategies to cure that problem, but it can not be reasonable to string that process out for a decade, as Ameritech did, no matter how high the costs of correction. Once managers knew not only of Amos’s misbehavior but also of his unwillingness (or inability) to change, it had to do something more effective. Doing nothing can never be the sort of ‘reasonable’ step that prevents imputation to the firm of the inferior working conditions encountered by a protected class of employees… Even if the firm acted reasonably in not discharging Amos, its do-nothing approach cannot have been reasonable, which means that Ameritech is responsible for the conditions Amos created in the workplace.”

“But Ameritech may be able to persuade a reasonable jury that its labor-relations decisions do not evince ‘malice’ or ‘reckless indifference’ to the federally protected rights of female employees. The EEOC has a strong argument that Ameritech’s inaction indeed demonstrates ‘reckless indifference’, but the debate should not be preempted by disabling Ameritech from explaining itself. Moreover, as we have stressed, even ‘malice’ and ‘reckless indifference’ come in gradations. Keeping Amos around because of a concern with firm’s bottom line is bad, but not as bad as keeping him around because Ameritech’s supervisors agreed with his attitude toward, and treatment of, female workers. An employer is entitled to show that things were not as bad as they appeared, and thus to influence the jury’s assignment of punitive damages. The district court’s order enabled the EEOC to ask the jury rhetorically why any conscientious employer would have acted as Ameritech did unless it wanted harm to befall female workers, while disabling Ameritech from giving what may have been its best answer.”

Affirmed in part, and vacated in part.

Appeal from the United States District Court for the Southern District of Indiana, McKinney, J., Easterbrook, J., en banc.