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Freeman v. Dal-Tile Corp.

United States Court of Appeals, Fourth Circuit

April 29, 2014

LORI FREEMAN, Plaintiff - Appellant,
DAL-TILE CORPORATION, d/b/a Dal-Tile Distribution, Incorporated, d/b/a Dal-Tile Services, Incorporated, Defendant - Appellee, and VOSTONE INCORPORATED; TIMOTHY KOESTER, Defendants

Argued, January 29, 2014

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. W. Earl Britt, (5:10-cv-00522-BR). Senior District Judge.


Anne Warren King, GEORGETOWN UNIVERSITY LAW CENTER, Washington, D.C., for Appellant.

Kristine Marie Sims, CONSTANGY, BROOKS & SMITH, LLP, Winston-Salem, North Carolina, for Appellee.


Brian Wolfman, Institute for Public Representation, GEORGETOWN UNIVERSITY LAW CENTER, Washington, D.C., for Appellant.

William J. McMahon, IV, CONSTANGY, BROOKS & SMITH, LLP, Winston-Salem, North Carolina, for Appellee.

Before TRAXLER, Chief Judge, and NIEMEYER and SHEDD, Circuit Judges. Judge Shedd wrote the majority opinion, in which Chief Judge Traxler joined. Judge Niemeyer wrote an opinion concurring in part and dissenting in part.


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SHEDD, Circuit Judge

Lori Freeman appeals a grant of summary judgment in favor of her former employer, Dal-Tile Corporation, on her claims of racial and sexual hostile work environment, constructive discharge, and common law obstruction of justice. For the reasons discussed more fully below, we reverse the grant of summary judgment on the hostile work environment claims and remand them for further consideration. We affirm the grant of summary judgment on the claims of constructive discharge and common law obstruction of justice.


Dal-Tile Corporation manufactures, distributes, and markets ceramic tile and natural stone products.[1] It operates eight manufacturing facilities, five regional distribution centers, and over 250 sales service centers, including both stone yards and tile showrooms.

In June 2008, Dal-Tile acquired the assets of Marble Point, Inc., a stone yard located in Raleigh, North Carolina, from owner Marco Izzi. Dal-Tile incorporated this newly-acquired operation into a sale-service center organization (the " Stoneyard" ). After this sale, Izzi purchased an ownership interest in VoStone, Inc., a Raleigh-based kitchen and bath remodeling center. A significant percentage of VoStone's business involved working with Dal-Tile.

In August 2006, Freeman began working as a receptionist for Dal-Tile's predecessor, Marble Point. She was hired on a temporary basis through a staffing agency, but after six months, she joined Marble Point as a permanent employee. Throughout her tenure at Marble Point, Freeman reported to Izzi and to assistant manager Sara Wrenn. Following Dal-Tile's acquisition of Marble Point, Freeman became a Dal-Tile employee,[2] and Wrenn continued to be her supervisor. Freeman's first position with Dal-Tile was General Office Clerk. Over time, Freeman began interacting more frequently with Dal-Tile's customers, and she effectively functioned as a Customer Service Representative. In May 2009, she was promoted to the role of Sales Consultant. In November 2009, Freeman's position was reclassified to Customer Service Representative.

The harassment claims at issue are based on the behavior of Timothy Koester, an independent sales representative for VoStone. Freeman usually interacted with Koester more than once a day while he was conducting business with Dal-Tile on behalf of VoStone.

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About two weeks after Freeman became a temporary employee with Marble Point in August 2006, she overheard Koester as he walked into Wrenn's office and, referencing a photograph of two former employees, asked Wrenn and another employee: " [H]ey, who are these two black b****es[?]" J.A. 76. After the incident, Freeman asked Wrenn about Koester, inquiring: " [W]ho was he and what was his deal[?]" J.A. 77. Wrenn replied: " [H]e's an asshole, but I don't think he'll do it again." Id. The next day, Freeman told Koester " how uncomfortable and demeaning that made [her] feel," and she asked him not to use that sort of language anymore. J.A. 75.

Freeman also recalled Koester making comments about women he had been with the night before. On one occasion, Koester showed her a photograph of a naked woman on his cell phone and remarked: " [T]his is what I left in my bed to come here today." J.A. 80. On a different occasion, Freeman overheard Koester talking with one of her co-workers, Jodi Scott, about photographs of Scott's daughters that were displayed in Scott's office. According to Freeman, Koester told Scott: " I'm going to hook up with one your daughters," or " I'm going to turn one of your daughters out." J.A. 136. Scott replied: " [Y]ou better stay away from my kids," or " [D]on't talk to me about my kids." Id.

In a different instance, Koester passed gas on Freeman's phone. Koester was using Freeman's office phone, and she was standing there waiting for him to finish his conversation. Before Koester hung up the phone, he held it to his buttocks and passed gas on it. J.A. 81. Wrenn was present for this incident. Freeman immediately began crying and had to leave the room to calm down. J.A. 82.

In June 2009, Koester called Freeman about covering a customer appointment for him because he had been partying the night before. Koester indicated that he could not come into the office, saying: " I'm just too f***ed up, don't take offense, but I'm as f***ed up as a n****r's checkbook." J.A. 99. Freeman told Wrenn about Koester's comment that same day, but Wrenn just " scoffed and shook her head and put her head back down and continued on with trying to pick the nail polish off of her nails . . . ." J.A. 102. Freeman also reported Koester's remark to James Vose, one of the co-owners of VoStone. Vose laughed and said: " [Y]ou got to admit that's kind of funny, just do what I do and hit him because he's an asshole." J.A. 107.

Subsequently, on July 29, 2009, Koester called Dal-Tile's general office line, and Freeman answered the phone. Koester had his six-year-old daughter, Angelina, with him at the time. Freeman, who knew Angelina, asked Koester to tell Angelina that she said " hi." Instead, Koester put Freeman on speaker phone so that she and Angelina could talk with one another. Freeman then heard Angelina ask: " Daddy, who's that[?]" J.A. 111. Koester replied: " [T]hat's the black b**** over at Marble Point." Id. Freeman " immediately became very irate." Id. She told Koester: " [D]on't you ever call me a black b**** as long as you live." Id. Koester responded: " [O]h, word." Id. Freeman promptly told Wrenn about Koester's comment, but Wrenn appeared disinterested and continued a conversation that she had been having with some other co-workers.

In addition to these specific incidents, Freeman and other co-workers testified more generally that Koester frequently made inappropriate sexual comments. Freeman testified that Koester " was always coming in making some sort of lewd

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comments." J.A. 78. She also stated that " maybe two or three times a week" she would have to correct Koester and tell him not to say something inappropriate. J.A. 79. Freeman explained that Koester would " come in to discuss what he did the night before with whatever woman he was with and [Freeman] would tell him [she didn't] want to hear it." J.A. 80. Wrenn confirmed this, stating that " he liked to brag about his, you know, evening excursions, or his weekend excursions. . . . [T]here were times where he would say something about what he did the night before that had sexual content to it." J.A. 269. According to Wrenn, " [h]e always made comments about women." J.A. 274. Wrenn also testified that Koester used the word " b****" in the office, such as " You should have seen these hot b****es I met last night." J.A. 268. Jodi Scott testified that Koester used the word " b****" " [u]sually about every time that he came in." J.A. 381-82. Wrenn even referred to Koester as a " pig." J.A. 253. Koester himself also admitted he made sexual comments in the office. J.A. 325.

Freeman and other co-workers also testified generally about Koester's inappropriate racial remarks. For instance, Koester used racial " slang" such as " Yo, b****" and " How's my b****es?" when talking to the female employees. J.A. 384-85. Jodi Scott testified that Koester used racial language every day that he came into the office. J.A. 386. Koester himself admitted to using African-American type slang. J.A. 325. Cathy Diksa, a human resource manager, explained that according to manager Wrenn, Koester used racial language in the office. J.A. 217. For instance, following the election of Barack Obama in 2008, Koester said to Freeman, " [Y]ou guys won." J.A. 355. Koester himself testified that he probably made comments about taking " beautiful black girls" home with him. J.A. 343. He also admitted that he made comments that were " [m]aybe racially inappropriate." J.A. 344.

Following the most recent " black b****" incident in July 2009, Freeman reported Koester's remarks to Cathy Diksa in human resources after Wrenn ignored her complaint. Diksa initially promised Koester would be permanently banned from the facility. However, the company lifted the ban and instead prohibited Koester from communicating with ...

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