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January 5, 1994

HANNA T. PIECH, Plaintiff,
ARTHUR ANDERSEN & CO., S.C., (Societe Cooperative, a Swiss Partnership), and ARTHUR ANDERSEN & CO. (an Illinois Partnership), Defendants.


The opinion of the court was delivered by: JAMES B. ZAGEL

Hanna T. Piech filed suit against Arthur Andersen & Co., S.C., ("AASC") and Arthur Andersen & Co. ("AA & Co.") alleging Title VII violations, breach of contract, and intentional infliction of emotional distress. *fn1" AA & Co. moved to dismiss the complaint. In response, Piech filed a brief in opposition and an amended complaint. The defendants now collectively move to dismiss portions of the amended complaint for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6). *fn2"

 A plaintiff fails to state a claim upon which relief may be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Leahy v. Board of Trustees of Community College Dist. No. 508, 912 F.2d 917, 921 (7th Cir. 1990). A district court must accept as true all well-pleaded allegations and draw all reasonable inferences in the light most favorable to the plaintiff. Bethlehem Steel Corp. v. Bush, 918 F.2d 1323, 1326 (7th Cir. 1990). This Court accepts the following facts as true for purposes of this motion.


 AA & Co. employed Piech in its Tax Division in April 1988. Piech accepted the position after interviewing with James Lynch, the head of the company's firm-wide Mergers & Acquisitions Group. *fn3" AA & Co. agreed to compensate Piech at a "stated sum per year," and her employment was renewed, at least annually, until 1992.

 In 1989, AA & Co. offered Piech a position in its State & Local Tax Group. Piech declined because the Mergers & Acquisitions Group assignment best suited her career goals. In 1990, while Piech was on disability leave for childbirth, AA & Co. considered promoting her to manager. AA & Co. denied Piech the promotion and opted to promote instead a female employee who is alleged to have been less qualified, involved in a romantic relationship with a partner in the decision-making process, and knowledgeable of inappropriate male partner sexual conduct. AA & Co., however, subsequently promoted Piech to manager in spring 1991.

 In September 1991, while Piech was pregnant with her second child, the Tax division was reorganized and numerous managers, including newly promoted managers, received new clients. AA & Co. did not assign any new clients to Piech, allegedly because she was due to take disability leave. Piech expressed her concern about this decision. While Piech was on disability leave for the birth of her second child, AA & Co. reassigned her to the State & Local Tax Group, the same group to which she had declined reassignment approximately two years earlier. AA & Co. informed Piech of the reassignment upon her return from disability leave, and it was made clear that if she did not accept the reassignment, she would have no future at the firm. In May 1992, Piech resigned. This suit followed.


 The defendants first move to dismiss what they have labelled the "Claimed 'Favoritism' of Female Colleague (Title VII)" claim or the "favored female co-worker claim." In support of this claim, Piech alleges that a less qualified, single female co-worker was promoted to manager instead of her because of the "favored" female's knowledge of inappropriate male partner sexual conduct and her amorous relationship with a partner in the decision-making process. She also alleges that "it was necessary for women so situated to grant sexual favors . . . and, in part, because [she] did not do so, she was denied promotion." The defendants contend that these allegations are not enough to state a Title VII sex discrimination claim because Title VII does not make actionable claims based on allegations that a "favored female" colleague was given preferential employment treatment. DeCintio v. Westchester County Medical Ctr., 807 F.2d 304 (2d Cir. 1986). Piech argues that she has properly pleaded a Title VII claim for "Sexual Harassment - Reverse Quid Pro Quo," and that Title VII affords relief for sex-based discrimination to a woman who alleges that she was denied employment benefits in favor of another woman who had a sexual relationship with a partner in the decision-making process. King v. Palmer, 250 U.S. App. D.C. 257, 778 F.2d 878 (D.C. Cir. 1985).

 No court recognizes a claim entitled "reverse quid pro quo," and neither will this court. The differing titles placed on this Title VII claim have caused much confusion among the parties. The effect has been to obfuscate the critical distinctions between two very different types of discrimination proscribed under Title VII--"economic" or "tangible" discrimination (i.e., sex discrimination resulting in tangible, economic loss such as a job or promotion) and sexual harassment (i.e., sexual misconduct either linked to an economic quid pro quo or resulting in a hostile work environment)

 The language of Title VII prohibits discrimination in employment because of an individual's sex, or simply put, sex discrimination. 42 U.S.C. ยง 2000e-2 (a)(1) (1988). The way plaintiffs traditionally proved sex discrimination was through direct or circumstantial evidence that the applicant's or employee's sex was a factor in an employer's adverse employment decision, such as the denial of a job or promotion opportunity or other employment benefit available to persons of the opposite sex. In Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 91 L. Ed. 2d 49, 106 S. Ct. 2399 (1986), the Supreme Court recognized sexual harassment as a form of sex discrimination prohibited by Title VII. Sexual harassment includes the "hostile work environment" variety and the "quid pro quo " variety. Id. at 65. Hostile work environment arises when the alleged sexual harassment "has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment." Id. Quid pro quo sexual harassment describes situations in which submission to sexual demands is made a condition of tangible employment benefits. Dockter v. Rudolf Wolff Futures, Inc., 913 F.2d 456, 461 (7th Cir. 1990).

 In DeCintio, seven male physical therapists brought a Title VII sex discrimination claim against their employer. The plaintiffs alleged that the program administrator recommended national board registration as a job requirement for the position to which they sought promotion in order to disqualify them as applicants so that the program administrator could then hire a female with whom he had a consensual, romantic relationship. DeCintio, 807 F.2d at 305. The Second Circuit held that the plaintiffs failed to state a Title VII sex discrimination claim. The court noted that the plaintiffs were not prejudiced because they were males but because the decision-maker preferred his paramour; the males faced the same situation as any woman other than the paramour because of the relationship. Id. at 308. The court emphasized that the "proscribed differentiation under Title VII . . . must be a distinction based on a person's sex, not on his or her sexual affiliations." Id. at 306-07. The court could find "no justification for defining 'sex,' for Title VII purposes, so broadly as to include an ongoing, voluntary, romantic engagement." Id. at 307.

 Essentially, the DeCintio court defined "sex," for purposes of Title VII claims, as membership in a class delineated by "gender," rather than a class delineated by sexual activity regardless of gender or sexual affiliations. Id. at 306-07. Significantly, the Seventh Circuit has refused to include sexual identity in the definition of "sex," preferring to adhere to the "traditional" definition of "gender" discrimination for Title VII purposes. See, e.g., Ulane v. Eastern Airlines, Inc., 742 F.2d 1081 (7th Cir. 1984) (prohibiting sex discrimination implies it is unlawful to discriminate against women because ...

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