Even assuming that Stachelski could qualify as an agent, however, Daulo still has an uphill battle to fight in his attempt to impute Stachelski's racial harassment to ComEd. To review, applying agency principles, Daulo argues that ComEd should be liable for Stachelski's conduct under one of two theories: first, Stachelski acted within the scope of his employment; and/or second, Stachelski acted within the scope of his apparent authority.
Regarding the scope of employment argument, several courts have either expressed great doubt as to whether harassment could fall within the scope of a supervisor's employment, see, e.g., Shager v. Upjohn Co., 913 F.2d 398, 405 (7th Cir. 1990) ("From the outside, at least, it looks as if he is doing his job, which is not the case when one worker sexually harasses another. . . ."); Hunter, 797 F.2d at 1422 ("It would be the rare case where racial harassment against a co-worker could be thought by the author of the harassment to help the employer's business."); Faragher v. City of Boca Raton, 76 F.3d 1155, 1164 (11th Cir. 1996) ("Only in an exceptional case will a harasser act as the employer's agent in creating a hostile work environment."), en banc reh'g granted, decision vacated, 83 F.2d 1346 (11th Cir. 1996), or concluded that such harassing conduct, by its very nature, is not within the scope of employment, see, e.g., Andrade v. Mayfair Management, Inc., 88 F.3d 258, 261 (4th Cir. 1996) ("Our precedent rests on the presumption that illegal sexual harassment is an illegitimate corporate activity, beyond the scope of supervisors' employment."); Hicks v. Gates Rubber Co., 833 F.2d 1406, 1417-18 (10th Cir. 1987) ("Sexual harassment simply is not within the job description of any supervisor or any other worker in any reputable business."); Jansen v. Packaging Corp. of Am., 895 F. Supp. 1053, 1061 n.9 (N.D. Ill. 1995) ("Was sexual harassment within the scope of [the supervisor's] employment? Of course not.").
Nevertheless, some courts have noted that if the harasser's conduct was motivated, at least in part, by an intent to serve or further the employer's business, the harassment could fall within the supervisor's scope of employment. See Faragher, 76 F.3d at 1164, n.9; Ellerth, 912 F. Supp. at 1116-17; Fields v. Horizon House, Inc., 1987 U.S. Dist. LEXIS 11315, No. 86-4343, WL 26652 *3 (E.D. Pa. Dec. 9, 1987). Under this line of reasoning, because many of Stachelski's alleged racially derogatory comments berated Daulo's work performance, the conduct could be found to be sufficiently linked to a motive to serve ComEd, i.e., the motivation for discriminating against Daulo based on his race overlapped with a motivation to improve his performance and thus benefit ComEd. Thus, if the Seventh Circuit accepts such reasoning, assuming Stachelski could qualify as an agent of ComEd, the racial harassment arguably was within the scope of his employment.
Although Daulo's scope of employment argument could have some merit to it, it appears that his apparent authority argument is a loser. The vast majority of courts to consider this particular issue hold that if the employee knew or should have known that the employer did not tolerate the harassing conduct and that he could report it without fear of adverse consequences, the apparent authority argument is doomed. See, e.g., Gary v. Long, 313 U.S. App. D.C. 403, 59 F.3d 1391, 1398 (D.C. Cir. 1995), cert. denied, 133 L. Ed. 2d 493, 116 S. Ct. 569 (1995); Bouton v. BMW of North Am., Inc., 29 F.3d 103, 109-10 (3d Cir. 1994); Ripberger v. Western Ohio Pizza, Inc., 908 F. Supp. 614, 622-24 (S.D. Ind. 1995); Jansen, 895 F. Supp. at 1066-67.
Here, although Daulo failed to complain to anyone about the bulk of Stachelski's conduct, he eventually went to Cook after Stachelski told him that he "just finished reading his obituary." Thus, obviously, Daulo knew that Stachelski's behavior was inappropriate and that he had recourse within ComEd's upper management. Accordingly, he cannot now complain that he reasonably believed Stachelski's racial harassment was within the scope of his apparent authority. See Jansen, 895 F. Supp. at 1067 ("But when she was pushed 'to the limit' . . . she 'just walked out and went to personnel.' [Plaintiff] plainly knew that she had some recourse at Packaging, and she cannot now claim that she believed [the] conduct to be sanctioned by Packaging.").
Now, back to the relevant issue.
Having concluded that Stachelski is not sufficiently "high up" in ComEd's management to qualify as an agent for purposes of imposing direct liability upon ComEd, ComEd will be liable only if it knew or had reason to know of the misconduct and failed to take appropriate corrective action.
Saxton, 10 F.3d at 535 (quoting Guess, 913 F.2d at 465). It is undisputed that, with one exception, Daulo failed to inform anyone about Stachelski's conduct.
On that one occasion, Daulo notified Cook that Stachelski told him that he was "reading his obituary." Certainly, one apparently race neutral comment did not put ComEd on notice of the racially hostile working environment created by Stachelski.
Furthermore, Daulo did not inform Cook of the improper comment until February 1, 1994. Daulo was transferred to the day shift, however, on January 3, 1994. It is undisputed that Daulo was never harassed by Stachelski after he transferred to the day shift. Thus, the racially hostile working environment created by Stachelski ended on January 3, 1994. The purpose of notifying the employer of the harassment is to allow the employer to take prompt remedial action.
See Williams v. Banning, 72 F.3d 552, 555 (7th Cir. 1995). Accordingly, even assuming ComEd was on notice of all of Stachelski's conduct as of February 1, 1994, how could it possibly take corrective action when the racially hostile environment had ended one month earlier? Regardless, it is clear that ComEd did not know about the hostile working environment and thus cannot be liable for Stachelski's conduct.
2. 42 U.S.C. § 1981
Generally, § 1981 "addresses racial discrimination in contractual relationships." Morris v. Office Max, Inc., 89 F.3d 411, WL 389344 (7th Cir. 1996). The statute reads in pertinent part:
(a) Statement of equal rights
All persons within the jurisdiction of the United States shall have the same right to make an enforce contracts . . . as is enjoyed by white citizens. . . .