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CHALMERS v. QUAKER OATS CO.

July 8, 1994

LELAND R. CHALMERS, Plaintiff,
v.
THE QUAKER OATS COMPANY, QUAKER OFFICERS' SEVERANCE PROGRAM and ROBERT PENZKOVER and ROBERT MONTGOMERY as Members of the Severance Program Committee, Defendants.


Lindberg


The opinion of the court was delivered by: GEORGE W. LINDBERG

Plaintiff, Leland R. Chalmers ("Chalmers"), has filed an Employee Retirement Income Security Act ("ERISA") action to review defendants' denial of his severance benefits. Chalmers was terminated from his position as Vice President in charge of Quaker's Tax Department for violating the company's policy against sexual harassment. The Severance Program Committee ("Committee"), which administers the Quaker Officers' Severance Program, concluded that Chalmers' behavior constituted "gross misconduct" disqualifying him from receiving severance benefits under the ERISA employee benefits plan.

 Quaker has a company policy against sexual harassment which is independent of federal law and attempts to foster a work environment where men and women behave respectfully towards each other. Quaker's policy on sexual harassment provides as follows:

 
Providing a working environment which is free from intimidation is a fundamental Quaker policy. All supervisory personnel are responsible for assuring such an environment, including the absence of conduct that may be defined as sexual harassment. Sexual harassment is defined to include: unwelcome sexual advances; request for sexual favors; and other verbal or physical conduct of a sexual nature when such conduct is made explicitly or impliedly a term or condition of employment, is used as a basis for employment decisions, or has the purpose or effect of interfering with work performance or creating an otherwise offensive working environment. The Company will not condone such conduct by an employee or agent.
 
Any employee who is subjected to or aware of such harassment or intimidation is urged to bring such action promptly to the attention of their Personnel Representative or the Affirmative Action Department. All such complaints will be treated in the strictest confidence and will be promptly investigated. Where violations are confirmed, disciplinary action will be taken.
 
The Company's policy on this subject is to be communicated to all employees.

 (Plaintiff's Exhibit 4; signed by Chief Executive Officer William D. Smithburg and dated February 1990). CEO Smithburg and Philip A. Marineau, then Executive Vice President of U.S. Grocery Products, sent a subsequent notice to all employees on November 26, 1991 which further addressed Quakers' policy on sexual harassment:

 
Recent widely publicized sexual harassment allegations and subsequent televised hearings may have raised some questions in your mind about Quaker's sexual harassment policy. We want you to know our long standing position and policy on this sensitive subject. We also want you to know what you can do, and what process you can expect, if you believe you or co-workers are experiencing harassment.
 
Quaker's position has always been that sexual harassment is illegal, against company policy, and will not be tolerated. We expect a working environment where people are respected and encouraged to be productive. In this respect harassment of any nature is inappropriate. However, for purposes of a definition which reflects the law and Quaker's policy, sexual harassment includes: unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature, when it is a term or condition of employment, or when such conduct creates a hostile working environment.
 
At Quaker, harassment complaints may be taken to any member of management or any Human Resources professional, regardless of level or organization. We take this unusual position because we want employees who feel they are being harassed to be comfortable discussing this personal and difficult subject.
 
Investigations of sexual harassment allegations take place on a very confidential basis. This is for the protection of both the complainant and the alleged harasser. To assure consistency and fairness of process and discipline, the Corporate Affirmative Action Department is included in all complaint and investigation assessments. . . .

 (Plaintiff's Exhibit 3). An additional policy manual, entitled "Information About Sexual Harassment -- Quaker's Policy and Complaint Process," provides that:

 
in addition to physical or other explicit sexual conduct or language, our policy covers jokes of a sexual nature, "pinups", sexual stories, etc.

 (Plaintiff's Exhibit 4).

 In February of 1988, Karen Brady complained to Douglas Ralston, Quaker's Senior Vice-President Corporate Human Resources, that plaintiff had made sexually offensive comments to her on several occasions. Brady was a tax attorney and had worked for Chalmers for approximately two and a half years in the Tax Department. Chalmers allegedly commented "nice melons" to Brady while standing by a salad bar, told her it would be more interesting to be a gynecologist than a tax attorney, advised her to wear more feminine clothing and stated his concern that she not scream out confidential information about Quaker deals while in the throes of ecstasy with her husband.

 Ralston met with Brady on February 9, 15 and 18, 1988. Ralston subsequently met with Chalmers to discuss Brady's allegations. Chalmers admitted to making the "nice melons" and "throes of ecstasy" comments, which he referred to as "boy talk."

 Dan Orzechowski and Randy Olson reported to Ralston that Chalmers strongly indicated his displeasure with them for reporting to Human Resources that one of Chalmers' employees, Steve Vranek, was sexually harassing another employee. Department members were also aware of a conversation between Chalmers and Vranek at the time Vranek was terminated wherein Vranek allegedly stated: "Why am I being fired when you are worse than me [in harassing women]?" Chalmers allegedly responded: "Yes, but I didn't touch anyone."

 Ralston and other members of the Human Resources Department were consistently told that women in the Tax Department were afraid to report incidents of sexual harassment because Chalmers did not take the issue seriously and because they feared retaliation by Chalmers even if the incidents did not involve him. Chalmers' secretary, Cathy Abrahamian, reported that "many women [are] offended by [Chalmers] but all are afraid to say anything for fear of their jobs." Brady was reportedly so afraid of Chalmers that she asked Ralston not to discuss her allegations with him until after she left Quaker.

 As a result of the investigation, Quaker paid Karen Brady $ 30,000 to settle her threatened sexual harassment claim. On April 25, 1988, Larry Baytos, then Senior Vice President of Human Resources, addressed the entire Tax Department on Quaker's sexual harassment policy. As an additional follow-up to the Brady matter, Quaker held affirmative action and sexual harassment training sessions for the Tax Department on June 7, 1988 and June 20, 1988. Chalmers was required to attend the seminars and was warned by his supervisor, Mike Callahan, that any similar incidents would result in severe disciplinary action such as termination. Chalmers' bonus was also reduced as a further disciplinary measure.

 Despite the training sessions and warning about future disciplinary action, Chalmers kissed Anna Raisor, executive assistant to Terry Westbrook, at work on August 20, 1992. Chalmers kissed Raisor on the cheek when she returned a document to him during working hours in or around the hallway outside Chalmers' office. Raisor was assisting Chalmers in meeting deadlines on certain performance reviews and reports for Westbrook while Chalmers' secretary was on vacation.

 Chalmers had criticized her earlier that day for work done on a salary report and for a phone message she delivered. Chalmers had also lost his temper with Raisor when she interrupted a meeting in his office to obtain his signature on a performance review of Dan Orzechowski. According to Chalmers, Westbrook had insisted on a minor change which required the review to be retyped and resigned. Raisor apparently informed Chalmers that Westbrook would not sign the performance review without signatures from Chalmers and Orzechowski. Chalmers was rankled by Westbrook's insistence that the review be completed that day when Westbrook knew that Orzechowski was out-of-town and could not sign the revised document. Chalmers ultimately signed the performance review for both himself and Orzechowski.

 On August 25, 1992, Raisor told Douglas Ralston about the kissing incident. She characterized Chalmers' behavior as "inappropriate, shocking and repulsive." Ralston began an investigation into the incident. That same day Ralston advised Angela Hill, manager of Corporate Human Resources, about Raisor's complaint. Hill then informed Ralston of a recent incident between Chalmers and her subordinate, Nancy Kolinski. According to Kolinski, Chalmers took her hand, asked her to feel how warm it was and then commented that a "warm hand means a warm heart regardless of what people say about me." Hill further reported that Kolinski had not complained about the incident; she just thought Chalmers was "weird."

 As part of his investigation into Raisor's allegations, Ralston contacted former Quaker employee Mike Callahan on August 28, 1992 to determine what warning he had given Chalmers following the sexual harassment complaint by Karen Brady. According to Ralston's notes of the conversation, Callahan advised Ralston that he had made Chalmers aware of the seriousness of the situation and the consequences of a repeat offense. (Plaintiff's Exhibit 15).

 On August 31, 1992, Ralston and Joan Green, Quaker's Director of Affirmative Action, met with Chalmers to present and discuss Raisor's allegations. In response to Chalmers' request to present additional facts, they met again on September 1, 1992. Chalmers told Ralston and Green that he had given Raisor tickets to a Ravinia concert one week prior to the incident. Chalmers informed them that Raisor had thanked him profusely a few days later because the concert had provided her with an emotional escape from a recent death in the family. Chalmers explained that he made an emotional connection with Raisor because of this conversation and that his brief kiss on Raisor's cheek was merely a gesture of appreciation for her efforts and an apology for his earlier loss of temper that day. Chalmers informed Ralston and Green that he was shocked by Raisor's reaction to the kiss, which he equated to a handshake. He also attempted to dismiss the situation by commenting on his "Mediterranean blood."

 Joan Green discussed the incident with Raisor on September 2, 1992. Green did not characterize the meeting's purpose as fact-finding but instead to offer support and counseling services to Raisor as Quaker's Director of Affirmative Action. Green's notes of her conference with Raisor state in relevant part:

 
[Raisor] talked to Doug [Ralston] after a long weekend away. Incident was Thursday, took Friday and Monday off, talked to Doug Ralston on Tuesday. By then was pretty determined & knew what wanted to say.
 
- [Raisor] has heard [Chalmers] say negative things to women over time. For example, 'liked it better when you guys were in the kitchen.' Not anything particularly sexual.
 
- That day she was trying to help him - he was mean and out of line and yelling - kiss was maybe trying to make up for the whole day.
 
- Don't think things are out of hand now - don't want to see him - he's ...

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