Sefiane v. Wal-Mart Stores, Inc. CV-00-592-M 03/27/02 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Yousfi Joe Sefiane

v. Civil No. 00-592-M Opinion No.

Wal-Mart Stores, Inc.

REPORT AND RECOMMENDATION

Plaintiff Yousfi Joe Sefiane brought a four count state writ

based upon national origin discrimination. Defendant Wal-Mart

Stores, Inc. ("Wal-Mart") removed the case to this court

asserting both diversity and federal claim subject matter

jurisdiction. Defendant moved for summary judgment on each count

and that motion has been referred to me for proposed findings and

recommendations pursuant to

(b)(1)(B).

Summary Judgment Standard

Summary judgment is appropriate only "if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show 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." Fed. R. Civ. P.

56(c); see Lehman v. Prudential Ins. Co. of Am.,

, 327

(1st Cir. 1996). A genuine issue is one "that properly can be resolved only by a finder of fact because [it] . . . may

reasonably be resolved in favor of either party." Anderson v.

Liberty Lobby, Inc.,

(1986). A material fact

is one that affects the outcome of the suit. See

.

The moving party bears the initial burden of establishing

that there is no genuine issue of material fact. See Celotex

Corp. v. Catrett,

(1986) . If that burden is

met, the opposing party can avoid summary judgment only by

providing properly supported evidence of disputed material facts

that would require trial. See

In ruling on a motion for summary judgment, the court

construes the evidence in the light most favorable to the non­

movant, resolving all inferences in its favor, and determines

whether the moving party is entitled to judgment as a matter of

law. See Saenqer Orq. v. Nationwide Ins. Assocs.,

(1st Cir. 1997). The undisputed facts, viewed in the light

most favorable to Yousfi Joe Sefiane, are recited below.

Background

Plaintiff Sefiane is a former Wal-Mart management employee.

In this action, he asserts claims against Wal-Mart under Title

VII and N.H. Rev. Stat. Ann. ("RSA") § 354-A for national origin

2 discrimination (Count I), as well as claims for intentional

infliction of emotional distress (Count II), negligent infliction

of emotional distress (Count III) and negligent supervision

(Count IV).

Sefiane is a college graduate who, after completing Wal-

Mart' s management training program, was employed first as an

assistant manager and then as a co-manager at Wal-Mart. While

awaiting a transfer to California, Sefiane worked at a number of

store locations to help convert those stores to supercenters.

Upon the request of Jeffrey Whitney, Wal-Mart's Concord, New

Hampshire store manager, Sefiane was transferred to that store as

a co-manager in June of 1999. Whitney became Sefiane's immediate

supervisor. Shortly after plaintiff started his employment at

the Concord Supercenter, Whitney learned that plaintiff was from

Morocco.

Sefiane states that from July 1999 into October 1999,

Whitney referred to him as a foreigner. These incidents occurred

in various locations and took place both with and without

witnesses. As Sefiane describes, Whitney called him a foreigner

[m]any times. It became such a habit that it was a norm for him. -k

I was being so degraded that I was basically referred

3 to him in his eyes as just a foreigner. It wasalmost like I didn't have a name. I didn't have a - - I was just a foreigner.

Defendant's Exh. A, p.81. In a July 1999 management meeting,

plaintiff started to speak when Whitney "rudely interrupt[ed] and

[said], 'What does a foreigner know? You're just a foreigner.

What do you know?'" Defendant's Exh. A, pp. 78-79. Sefiane was

so embarrassed that he put his head down and said nothing.

Plaintiff's Vol I, Exh. B, p.23.

Sefiane complained to Whitney(as did other managers) about

Whitney's actions toward him. Whitney acknowledged only one

joking reference to Sefiane as a foreigner, but other managers

heard Whitney refer to Sefiane as a foreigner on other occasions.

In September or October 1999, Sefiane complained to the

district manager, Lisa Cowden, that Whitney had called him a

foreigner many times. Within a week of his complaint to Cowden,

plaintiff was transferred to the night shift. Sefiane alleges

that it was unheard of for a co-manager to work any shift other

than a day shift. Wal-Mart claims, without any support in the

record, that the shift change was routine. In December, Whitney

presented Sefiane with a written "coaching" regarding allegedly

deficient work that Sefiane performed in the time period

4 following his complaint to Cowden.

In order to assist Cowden in conducting an investigation of

Whitney's behavior, Sefiane provided her with the names of

witnesses. Cowden, however, failed to interview the witnesses

identified by the plaintiff. After interviewing Whitney, Cowden

concluded that there had been only one instance in which Whitney

had called Sefiane a foreigner. The record is clear that

independent witnesses heard Whitney call Sefiane a foreigner

numerous times, and Cowden has admitted that "[i]t would have

made a difference" if she had determined that Whitney had

referred to Sefiane as a foreigner on multiple occasions.

Plaintiff's Exh. D, p.69.

Cowden did have the regional manager, Gregory Samuelson,

call Sefiane. During the course of their conversation, Sefiane

described Whitney's behavior to Samuelson, and Samuelson asked

whether a transfer to an alternative location would help.

Sefiane also asked Samuelson to conduct an investigation.

Within a few days of the telephone call, Sefiane met with

Whitney, Cowden and Samuelson. At that meeting, Sefiane was

offered a transfer to the Oneida, New York Wal-Mart where Sefiane

could remain a co-manager. Plaintiff says that he was never

5 given the option of remaining a co-manager in Concord, although

Cowden testified that Sefiane was not asked to leave. Cowden's

testimony is inconsistent with the defendant's assertion to the

New Hampshire Human Rights Commission, which stated:

On January 1, 2000 Charging Party was demoted to the position of Assistant Manager due to his continued performance issues. It is Respondent's policy to transfer a member of management when they are demoted to another location to try and get a "fresh start".

Plaintiff's Exh. H, p.3.

Sefiane decided to decline the Oneida transfer because

Samuelson was the regional manager for that store and Sefiane did

not want to work for a manager who did not want to investigate

his claims. Instead, Sefiane asked for and received a transfer

to Maryland. In Maryland, Sefiane became an assistant manager

rather than a co-manager.

Despite his belief that Samuelson would not investigate his

allegations, Sefiane stated that he went to Maryland with the

"impression . . . [that] . . . Wal-Mart will do an investigation,

they'll call around and make things right." After nine (9)

months in Maryland, during which his work was admittedly

deficient, Sefiane still had heard nothing from Wal-Mart

regarding his complaints. In October 2000, Sefiane resigned.

6 Discussion

_Wal-Mart argues that it is entitled to summary judgment on

Sefiane's Title VII claims of harassment, retaliation and

constructive discharge on the grounds that (a) the alleged

harassment was not sufficiently severe to support a Title VII

claim; (b) Wal-Mart absolved itself of any liability by promptly

putting an end to the alleged harassment following Sefiane's

complaint; (c) Sefiane's failure to set forth evidence of an

adverse employment action defeats his retaliation claim; and (d)

the constructive discharge claim is not sustainable given

Sefiane's refusal to accept the lateral transfer to Oneida, New

York and his unreasonable delay in tendering his resignation. In

addition, Wal-Mart argues that it is entitled to summary judgment

on plaintiff's emotional distress and negligent supervision

claims because those claims are barred by the New Hampshire

workers' compensation statute, RSA ISl-AiS.1

A. Title VII Claims

_____ 1. Allegations of Harassment

To establish a hostile work environment under Title VII,

1Wal-Mart has not moved for summary judgment on Sefiane's claims for national origin discrimination pursuant to RSA § 354- A.

7 the plaintiff must show that the harassment based on national

origin was "sufficiently severe or pervasive to alter the

conditions of [his] employment," and that "the work environment

was both objectively and subjectively offensive, one that a

reasonable person would find hostile or abusive, and one that

[the plaintiff] in fact did perceive to be so." Conto v. Concord

Hosp., Inc.,

(1st Cir. 2001)(internal quotations

and citations omitted).2 This is not a precise test, and the

decision as to "whether an environment is 'hostile' or 'abusive'

can be determined only by looking at all the circumstances."

Harris v. Forklift Svs., Inc.,

(1993). See

also Conto,

(a determination as to whether the

defendant subjected the plaintiff to a hostile work environment

"necessarily entail[s] a fact-specific assessment of all the

attendant circumstances."). "Several factors typically should be

considered in making this determination: 'the frequency of the

discriminatory conduct; its severity; whether it is physically

2While there is little case law regarding national origin discrimination, the court may rely on Title VII cases involving harassment based on sex, race, color or religion. See Boutros v. Canton Reg'1 Transit Auth.,

(6th Cir. 1993)(the principles applicable to sexual harassment are applicable to harassment on the basis of race, color, religion, or national origin). threatening or humiliating, or a mere offensive utterance; and

whether it unreasonably interferes with an employee's work

performance'." O'Rourke v. City of Providence,

(1st Cir. 2001)(quoting Harris,

). However, no

single factor is required. See Harris,

.

The requirement that the harassment be sufficiently severe

or pervasive to alter the plaintiff's employment conditions

"takes a middle path between making actionable any conduct that

is merely offensive and requiring the conduct to cause a tangible

psychological injury."

. Accordingly, while offhand

comments, isolated incidents and mere utterances of an epithet

are insufficient to constitute harassment under Title VII, see

id.; O'Rourke,

, "Title VII comes into play before

the harassing conduct leads to a nervous breakdown." Harris,

.

Wal-Mart argues that Whitney's actions consisted only of

mild epithets that occurred over a brief period and were not

sufficiently severe or pervasive to alter Sefiane's employment

conditions. While Whitney's statements occurred during a period

of only three to four months, there is evidence indicating that

the statements occurred so frequently as to become habitual. The

9 evidence also shows that Whitney's comments were common enough to

be heard on numerous occasions by independent witnesses, and that

Whitney's behavior was sufficiently offensive that other managers

complained to Whitney about his treatment of Sefiane. Moreover,

the evidence suggests that Whitney's repeated use of the term

"foreigner" humiliated Sefiane and that Sefiane's work

performance may have declined as a result of the alleged

behavior. Based on these facts, a jury could determine that the

alleged harassment created a hostile work environment. See

DeNovellis v. Shalala.

(1st Cir.

1997)(harassment that is severe enough to alter the victim's

workplace experience or pervasive enough to become the defining

condition of the workplace violates Title VII).3

Because harassment serious enough to create a hostile work

3The fact that Whitney's behavior toward the plaintiff involved no physical threats does not defeat Sefiane's harassment claims, as long as the evidence is sufficient to show that Whitney's statements amounted to something more than single acts that were isolated or sporadic. See Harris,

(while physically threatening conduct is relevant in determining whether an environment is hostile or abusive, neither this nor any other single factor is required); O'Rourke,

(isolated or sporadic acts that are not severe enough to alter the work environment and create an abusive work environment will not support a viable claim of hostile work environment). For purposes of summary judgment, Sefiane has shown that the allegedly harassing behavior was consistent and even habitual over the course of three to four months.

10 environment often involves a cumulative process in which a series

of acts or events mount over time to create an unlawful

atmosphere, the question as to when offensive conduct violates

Title VII is often better resolved by the factfinder at trial and

not on summary judgment. See 0'Rourke,

.

Although the conduct complained of here is much closer to conduct

that is mildly offensive than it is to conduct that is clearly

egregious, I find that the plaintiff has introduced sufficient

evidence of harassment to satisfy his burden on summary judgment.

The question as to whether Whitney's use of the word "foreigner"

was or at some point over the course of three to four months

became sufficiently severe or pervasive to support a Title VII

harassment claim is best reserved for trial.

2. Affirmative Defense to Harassment Claim

Wal-Mart further argues that even if Whitney's statements

created a hostile work environment, Wal-Mart is entitled to

summary judgment on the harassment claim because Wal-Mart

promptly put an end to the harassment upon learning of Whitney's

behavior. Under the controlling authority, however, Wal-Mart has

not established a defense to liability for harassment based upon

the uncontroverted facts.

11 In a Title VII hostile work environment case, a defendant

employer may avoid vicarious liability for the misconduct of a

supervisor by establishing that it is entitled to the affirmative

defense set forth in the Supreme Court's holdings in Faragher v.

Boca Raton,

(1998) and Burlington Indus., Inc. v.

Ellerth,

(1998). The defense, which is only

available when no tangible employment action has been taken

against the plaintiff, "comprises two necessary elements: (a)

that the employer exercised reasonable care to prevent and

correct promptly any . . . harassing behavior [based on national

origin], 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." Faragher,

.4 See also White v. New Hampshire Dep't of

4Instead of relying on Burlington and Faragher, Wal-Mart urges the court to apply Indest v. Freeman Decorating, Inc.,

(5th Cir. 1999), which held that an employer's prompt corrective action was sufficient by itself to avoid vicarious liability under Title VII for sexual harassment committed by a supervisory employee. I agree with the Tenth Circuit Court of Appeals' rejection of the Indest decision, and therefore decline to apply its reasoning. See Harrison v. Eddy Potash, Inc.,

(10th Cir. 2001) . In particular, the Indest court's refusal to apply the second prong of the Burlington/Faragher defense ignores the Supreme Court's unambiguous directive that an employer wishing to avoid vicarious liability must prove both elements of the affirmative defense. See Burlington,

(the affirmative defense to

12 Corr.,

(1st Cir. 2000) (setting forth the

affirmative defense available to employers under Faragher) .

There remains a genuine question of fact as to whether Wal-

Mart took reasonable care to prevent and correct promptly

Whitney's allegedly harassing behavior. Viewed in the light most

favorable to Sefiane, the facts show that following Sefiane's

complaints, Wal-Mart neglected to perform any type of serious

investigation before concluding that there had been only one

instance when Whitney called Sefiane a foreigner. Moreover,

there is no evidence that Wal-Mart took any action against the

offending supervisor. Instead, the evidence indicates that the

allegedly harassing behavior ceased because Wal-Mart transferred

Sefiane to the night shift. Because it was so extraordinary for

Wal-Mart to place any co-manager on the night shift, it could be

inferred that this action was intended to punish Sefiane for his

complaints, and was unrelated to any effort to protect him from

Whitney.

In addition, Wal-Mart has failed to provide any evidence to

show that it can meet the second element of the

Burlington/Faragher defense. The evidence demonstrates that

vicarious liability comprises two necessary elements) .

13 Sefiane took affirmative steps to prevent additional harassment

by complaining first to Whitney and then to Cowden about

Whitney's use of the term "foreigner." Sefiane also requested

that Cowden and then Samuelson conduct an investigation. He even

provided Cowden with a list of witnesses in order to aid in an

investigation. Wal-Mart has provided no support for a finding

that these actions were insufficient or in any way unreasonable.

I recommend, therefore, that Wal-Mart's motion for summary

judgment on plaintiff's harassment claim be denied.

3. Retaliation

In order to establish a prima facie case of retaliation

under Title VII, the plaintiff must show that: "(1) [h]e engaged

in protected conduct under Title VII; (2) he suffered an adverse

employment action; and (3) the adverse action is causally

connected to the protected activity." Hernandez-Torres v.

Intercontinental Trading, Inc.,

(1st Cir. 1998).

See also Hazel v. U.S. Postmaster Gen.,

(1st Cir.

1993). Wal-Mart argues that it is entitled to summary judgment

on the plaintiff's retaliation claim due to Sefiane's failure to

set forth evidence of an adverse employment action. More

specifically, Wal-Mart asserts that its decision to transfer

14 Sefiane from Concord to another location did not constitute an

adverse employment action because (a) Sefiane demanded that Wal-

Mart transfer him from the Concord store and (b) Sefiane's

demotion from co-manager of the Concord store to assistant

manager of a Maryland store was the result of Sefiane's refusal

to accept a co-manager position in Oneida, New York.

Wal-Mart's version of the facts is inconsistent with the

summary judgment record. First, the record indicates that Wal-

Mart, not Sefiane, proposed a transfer. Second, Wal-Mart's

admission to the New Hampshire Human Rights Commission raises an

issue of fact as to whether or not Wal-Mart gave Sefiane an

option to remain in Concord as a co-manager. Third, Wal-Mart's

representation to the Human Rights Commission also raises an

issue of fact as to whether Wal-Mart intentionally demoted

Sefiane or whether it would have allowed Sefiane to remain a co­

manager .

The law is unsettled concerning when a lateral transfer

constitutes an adverse employment action. See Rav v. Henderson,

(9th Cir. 2000)(describing the split in

the circuits as to what constitutes an adverse employment action

and citing case law considering whether adverse employment

15 actions encompass lateral transfers). Moreover, while the First

Circuit has determined that adverse employment actions include

"disadvantageous transfers or assignments," Hernandez-Torres,

, it has provided no guidance as to when a transfer may

be considered disadvantageous so as to constitute evidence of

retaliation. First Circuit case law does specify, however, that

adverse employment actions include demotions. See White,

; Hernandez-Torres,

. Because Sefiane

has raised a question of fact as to whether Wal-Mart

intentionally demoted him from co-manager to an assistant manager

position, I recommend that Wal-Mart's motion for summary judgment

on plaintiff's retaliation claim be denied.

4. Constructive Discharge

In order to prevail on a constructive discharge claim under

Title VII, the plaintiff must show that he resigned within a

reasonable time period after the alleged harassment. See

Landrau-Romero v. Banco Popular de Puerto Rico,

(1st Cir. 2000); Smith v. Bath Iron Works Corp.,

(1st Cir. 1991). Wal-Mart correctly argues that Sefiane's

resignation did not occur within a reasonable time after the

alleged harassment ceased. Specifically, Sefiane admits that

16 Whitney's allegedly harassing behavior occurred from July 1999

into October 1999. There is no evidence indicating that any

harassment occurred after that time, either in the Concord store

or after Sefiane had transferred to the Maryland store. Sefiane

did not resign from Wal-Mart until October 2000, about one year

after Whitney's "foreigner" comments had ceased. Pursuant to

relevant authority, Sefiane's resignation occurred too late after

the offensive conduct had ended to be considered a constructive

discharge. See Landrau-Romero,

(no constructive

discharge where resignation occurred seven months after the

alleged harassment); Smith,

(no constructive

discharge where plaintiff resigned six months after the last

offensive conduct occurred). Accordingly, I recommend that the

court grant Wal-Mart's motion for summary judgment on the

constructive discharge claim.

B. State Law Claims

Wal-Mart argues that it is entitled to summary judgment with

respect to the plaintiff's state law claims for intentional and

negligent infliction of emotional distress and for negligent

supervision because those claims are barred by New Hampshire's

Workers' Compensation Act ("Act"). Both the First Circuit and

17 this court have interpreted the Act's exclusivity provision, RSA

§ 281-A:8,5 as precluding "claims under common law or statute by

employees against employers for personal injuries falling under §

281-A:2, including emotional distress." Martin v. Applied

Cellular Tech., Inc.,

(1st Cir. Mar. 19, 2002).

See also Holland v. Chubb Am. Serv. Corp.,

(D.N.H. 1996)(the exclusivity provision of New Hampshire's

Worker's Compensation Act prohibits an employee from maintaining

a common law action against his employer for personal injuries,

including an action for intentional or negligent infliction of

emotional distress, arising out of the employment relationship);

Miller v. CBC Cos., Inc..

(D.N.H.

1995)(the exclusivity provision of the New Hampshire Workers'

Compensation Act precludes employees from asserting both

intentional and nonintentional torts against their employers).

Under this line of cases, Sefiane's claims would be barred under

5RSA 281-A:8 states in relevant part:

I. An employee of an employer subject to this chapter shall be conclusively presumed to have accepted the provisions of this chapter and, on behalf of the employee . . . to have waived all rights of action whether at common law or by statute or provided under the laws of any other state or otherwise: (a) Against the employer . . . .

18 the Act. These cases, however, did not consider the effect that

recent amendments to the Act may have had on the viability of

personal injury claims by an employee against an employer.6

Even if, as Sefiane suggests, the amended Act should be

retroactively applied to this case, I find that RSA § 281-A:8

would continue to bar Sefiane's common law claims. The 2001

amendments, which became effective on August 10, 2001, now

exclude from the definition of "personal injury" a "mental injury

if it results from any disciplinary action, work evaluation, job

transfer, layoff, demotion, termination, or any similar action,

taken in good faith by an employer." RSA § 281-A:2, XI. (Supp.

2001). Accordingly, the amended Act erects no bar to emotional

distress claims resulting from any of these acts, as long as the

act was taken by the employer in good faith. As set forth in the

complaint, however, Sefiane's emotional distress claims stem not

from any disciplinary action, work evaluation, job transfer,

layoff, demotion, termination, or similar action by Wal-Mart, but

instead arise as a result of Whitney's allegedly harassing

^Although Martin was decided earlier this month, it did not consider the effect that the 2001 amendments to the Act may have had on the viability of personal injury claims, including emotional distress claims, against an employer. See Martin,

(considering the impact of RSA § 281-A:8, as it appeared in 1998, on plaintiff's emotional distress claims).

19 conduct.

Similarly, the recent amendments to RSA § 281-A:8 provide no

support for Sefiane's assertion that his common law claims should

survive summary judgment. As amended, RSA § 281-A:8 states that

"[n]othing in this chapter shall derogate from any rights a

former employee may have under common law or other statute to

recover damages for wrongful termination of, or constructive

discharge from, employment." Again, Sefiane's complaint

indicates that plaintiff's common law claims arose not as a

result of a wrongful termination or constructive discharge, but

as a result of the alleged harassment that occurred from July to

October 1999. Moreover, even if, as Sefiane suggests, the

emotional distress and negligent supervision claims were part and

parcel of his constructive discharge claim, Sefiane's failure to

introduce sufficient evidence to support his constructive

discharge claim would defeat those claims. I recommend,

therefore, that Wal-Mart's motion for summary judgment be granted

with respect to the state common law claims set forth in Counts

II through IV of the complaint.

Conclusion

For the foregoing reasons, I recommend that the defendant's

20 motion for summary judgment (document no. 19) be granted in part

and denied in part. Specifically, I recommend that the motion be

granted with respect to the plaintiff's constructive discharge

claim under Title VII and with respect to the plaintiff's state

law claims for intentional infliction of emotional distress,

negligent infliction of emotional distress and negligent

supervision. I further recommend that the court otherwise deny

the defendant's motion.

Any objections to this Report and Recommendation must be

filed within ten (10) days of receipt of this notice. Failure to

file objections within the specified time waives the right to

appeal the district court's order. See Unauthorized Practice of

Law Comm, v. Gordon,

(1st Cir. 1992); United

States v. Valencia-Copete,

(1st Cir. 1986) .

James R. Muirhead United States Magistrate Judge

Date: March 27, 2002

cc: E. Tupper Kinder, Esq. Paul R. Cox, Esq.

21