Appeal from the United States District Courtfor the District of NevadaHoward D. McKibben, District Judge, PresidingSubmitted February 12, 1999*San Francisco, CaliforniaFiled March 25, 1999Before: Harlington Wood, Jr.,** David R. Thompson andSidney R. Thomas, Circuit Judges.Opinion by Judge Thompson
______________________COUNSEL Clarence E. Gamble, Las Vegas, Nevada, for the plaintiff-appellant.Mark J. Ricciardi, Ricciardi & Associates, Las Vegas,Nevada, for the defendant-appellee.
_____________________________OPINION THOMPSON, Circuit Judge:OVERVIEWDanielle Burrell ("Burrell") appeals the district court'ssummary judgment in favor of Star Nursery, Inc., dismissingher sexual harassment claim under Title VII of the CivilRights Act of 1964, 42 U.S.C. S 2000e et seq. ("Title VII"),and a pendent state claim for retaliatory discharge. Withregard to her Title VII claim, Burrell contends the districtcourt erred in concluding there was no genuine issue of mate-rial fact as to whether Star Nursery's management knew orshould have known of Burrell's alleged sexual harassment.We have jurisdiction under 28 U.S.C. S 1291. We affirmthe district court's summary adjudication absolving Star Nur-sery from liability for the alleged harassment by Burrell'scoworkers. However, in light of the Supreme Court's recentdecisions in Burlington Industries v. Ellerth, 118 S. Ct. 2257(1998), and Faragher v. Boca Raton, 118 S. Ct. 2275 (1998),addressing employer liability for sexual harassment commit-ted by an employer's supervisory personnel, we reverse thedistrict court's summary adjudication absolving Star Nurseryfrom liability for the alleged harassment by one of Burrell'ssupervisors, and we remand this case to the district court forfurther proceedings. Because we reinstate part of Burrell'sTitle VII claim, we reverse the district court's dismissal of thependent state claim.BACKGROUNDBurrell worked as a cashier at Star Nursery, first at StarNursery's Spring Mountain store and then at its BoulderHighway store. Her supervisors at the Boulder Highway storewere Glenn Slack ("Slack"), the store manager, and MarkBarita ("Barita"), the assistant store manager.Burrell alleges that store manager Slack sexually harassedher by making comments that contained sexual references;saying he wanted to take a trip to the mountains with her; andmaking comments about how Burrell looked and how "wellbuilt" she was.Burrell also alleges that assistant store manager Barita ver-bally harassed her about being the goddaughter of Donna Noe("Noe"), the manager of the Spring Mountain store, tellingher that she would no longer get any special treatment andtreating her unfairly by reprimanding her for minor incidents.In her affidavit in opposition to summary judgment, and inher appeal brief in this court, Burrell also alleges that Baritaharassed her because of her sex. In her earlier deposition testi-mony, however, Burrell explicitly stated that Barita had notsexually harassed her.Burrell had a confrontation with Barita in front of somestore customers. Following that confrontation, Burrellrequested a meeting with Star Nursery's corporate manage-ment to discuss the conflicts between her and Barita. Burrelladmitted in her deposition that she never mentioned at themeeting any of the alleged incidents of sexual harassment byBarita or Slack; she raised only her complaints about Barita'sunfair treatment of her. Following the meeting, she receivedthree reprimands, two for cash drawer shortages and one forthe incident that led to the confrontation with Barita in frontof the customers.Burrell also alleges sexual harassment by two coworkers,Gerald Brown ("Brown") and Richard Wright ("Wright").She alleges Brown and Wright made unwanted sexualadvances and sexually oriented comments to her, includingmaking frequent comments about her breasts. She also allegesthat one time in the parking lot after work, Wright grabbedher breasts.No one at the management level of Star Nursery witnessedany of the alleged incidents of sexual harassment by Barita,Slack, Brown, or Wright. Burrell also testified in her deposi-tion that she did not complain to management about thealleged harassment. Contrary to her earlier deposition testi-mony, however, Burrell stated in her affidavit in opposition tosummary judgment that she discussed her concerns with hergodmother, Donna Noe, the manager of the Spring Mountainstore, but that she did not talk to anyone in the corporateoffice because she feared losing her job.Around this same time, some of the cashiers, includingBurrell, were asked to clean the restrooms, even though clean-ing the restrooms was not one of the cashiers' regular jobduties. Burrell cleaned the restrooms, but refused to clean thetoilets without a toilet brush. At one point Barita suggestedthat she use the mop or her bare hands to clean the toilets.When she refused, she was reprimanded. Relying on this inci-dent, and two prior reprimands, Star Nursery terminated Bur-rell.In her complaint, Burrell alleged sexual harassment in vio-lation of Title VII and retaliatory discharge in violation ofNevada state law. After discovery, Star Nursery moved forsummary judgment. In ruling on the summary judgmentmotion, the district court held there were triable issues of factas to whether Burrell was sexually harassed. Nonetheless, thecourt granted Star Nursery's motion because it concluded thatStar Nursery had no actual or constructive knowledge of thealleged sexual harassment. The district court then declined toexercise supplemental jurisdiction over the pendent state lawretaliatory discharge claim, and dismissed that claim withoutprejudice. Summary judgment was entered in favor of StarNursery, and this appeal followed.DISCUSSIONA. Standard of ReviewWe review de novo a grant of summary judgment. SeeSummers v. A. Teichert & Son, Inc., 127 F.3d 1150, 1152 (9thCir. 1997). Viewing the evidence in the light most favorableto the nonmoving party, we must determine whether there isa genuine issue of material fact and whether the district courtcorrectly applied the relevant substantive law. See id.B. Sexual HarassmentWe first consider whether genuine issues of material factexist as to whether the alleged behavior of Star Nursery'semployees constituted sexual harassment.[1] Burrell has alleged a hostile work environment. Toassert a Title VII claim based on a hostile work environment,a claimant must allege a "pattern of ongoing and persistentharassment severe enough to alter the conditions ofemployment." Draper v. Coeur Rochester, Inc., 147 F.3d1104, 1108 (9th Cir. 1998) (citing Meritor Sav. Bank v. Vin-son,
477 U.S. 57, 66
-67 (1986)). The working environmentmust "both subjectively and objectively be perceived asabusive" because of the sexual harassment. Fuller v. City ofOakland, Cal., 47 F.3d 1522, 1527 (9th Cir. 1995) (citingHarris v. Forklift Sys., Inc.,
510 U.S. 17, 21
-22 (1993)).[2] The district court held that portions of Burrell's affida-vit filed in opposition to summary judgment should be disre-garded, or at least discounted, because they directlycontradicted her earlier deposition testimony and therebysought to create "sham issue[s] of fact. " See Kennedy v. AlliedMut. Ins. Co., 952 F.2d 262, 267 (9th Cir. 1991). We agree.Thus, we do not rely on Burrell's allegations of sexual harass-ment by Barita, which appeared for the first time in Burrell'saffidavit and contradicted her earlier deposition testimony.Without these allegations of sexual harassment, there is noevidence that Barita sexually harassed Burrell.[3] On the other hand, genuine issues of material fact existas to whether Slack, Brown, and Wright sexually harassedBurrell and whether their conduct created a hostile work envi-ronment. The question then becomes whether Star Nurserycan be found liable under Title VII based on these alleged actsof sexual harassment.C. Employer Liability[4] When the district court decided this case, the Ninth Cir-cuit followed the rule that an employer may be found liablein a hostile work environment case only for whatmanagement-level employees "knew or should have known."Nichols v. Frank, 42 F.3d 503, 508 (9th Cir. 1994) (citingEEOC v. Hacienda Hotel, 881 F.2d 1504, 1515-16 (9th Cir.1989)).[5] This rule still applies to sexual harassment bycoworkers. Thus, we first consider whether Burrell has raiseda genuine issue of material fact as to whether Star Nurserymanagement knew or should have known of the alleged sex-ual harassment by Burrell's coworkers Brown and Wright.We consider later in this opinion Star Nursery's potential lia-bility for the alleged sexual harassment of Burrell by hersupervisor Slack.[6] With regard to the alleged incidents of sexual harass-ment by Brown and Wright, there is no indication in therecord that anyone witnessed those incidents. Moreover, Bur-rell did not report any alleged harassment by Brown or Wrightto Star Nursery's management. Although Burrell says in heraffidavit that she reported her concerns to Noe, the managerof the Spring Mountain store, we decline to consider thatassertion because it contradicts Burrell's earlier depositiontestimony and therefore seeks to create a "sham " issue of fact.See Kennedy, 952 F.2d at 267.[7] We conclude Burrell has failed to come forward withevidence that Star Nursery management knew or should haveknown about Brown's or Wright's alleged sexual harassmentof her. Because she has not raised a genuine issue of materialfact on this issue, we affirm the district court's summary adju-dication absolving Star Nursery from Title VII liability for thealleged misconduct of these coworkers.[8] With regard to the alleged sexual harassment by storemanager Slack, however, we apply a different standard. Tworecent Supreme Court cases have set forth a new test fordetermining when an employer is vicariously liable for a hos-tile work environment created by a supervisor. In BurlingtonIndustries v. Ellerth, 118 S. Ct. 2257, 2270 (1998), andFaragher v. Boca Raton, 118 S. Ct. 2275, 2292-93 (1998), theSupreme Court held that "[a]n employer is subject to vicari-ous liability to a victimized employee for an actionable hostilework environment created by a supervisor with immediate (orsuccessively higher) authority over the employee."[9] To prevent this rule from imposing automatic liabilityand to encourage employers to adopt antiharassment policies,the Supreme Court provided employers with an affirmativedefense they could assert to avoid vicarious liability for theirsupervisors' misconduct: When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a prepon- derance of the evidence, see Fed. Rule Civ. Proc. 8(c). The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unrea- sonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise . . . . No affirmative defense is available, however, when the supervisor's harass- ment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassign- ment.Burlington Indus., 118 S. Ct. at 2270; Faragher, 118 S. Ct. at2293.The Court further explained the requirements of the twonecessary elements of the affirmative defense: While proof that an employer had promulgated an antiharassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employ- ment circumstances may appropriately be addressed in any case when litigating the first element of the defense. And while proof that an employee failed to fulfill the corresponding obligation of reasonable care to avoid harm is not limited to showing any unreasonable failure to use any complaint procedure provided by the employer, a demonstration of such failure will normally suffice to satisfy the employ- er's burden under the second element of the defense.Burlington Indus., 188 S. Ct. at 2270.[10] This new rule overturns Ninth Circuit precedent as toemployer liability for Title VII sexual harassment by supervi-sory personnel. In such a situation, the new rule focuses onwhether the harasser has immediate or successively higherauthority over the victim of the harassment, not on whetherthe employer knew about the harassment. Burlington Indus.,118 S. Ct. at 2270. Thus, if the harassment is actionable andthe harasser has supervisory authority over the victim, we pre-sume that the employer is vicariously liable for the harass-ment. This presumption may be overcome only if the allegedharassment has not culminated in a tangible employmentaction, and then only if the employer can prove both elementsof the affirmative defense.[11] The record establishes that Slack was Burrell's super-visor and that he had immediate or successively higherauthority over her, thereby satisfying the first part of theBurlington Industries and Faragher test. However, the recordis not sufficiently developed to allow us to determine the cau-sation question of whether the alleged sexual harassment cul-minated in a tangible employment action, and if it did not,whether Star Nursery may invoke the affirmative defensedescribed in Burlington Industries and Faragher.[12] With regard to the issue of tangible employmentaction, it is unclear whether Burrell's termination resultedfrom various instances of her own misconduct, or whetherSlack required Burrell to clean toilets and then terminated herbecause she had resisted his sexual advances.If the alleged sexual harassment did not culminate in Bur-rell's termination, or in other "tangible employment action,"then Star Nursery may attempt to establish the elements of theaffirmative defense discussed in Burlington Industries andFaragher. In that event, the district court will have to deter-mine whether Star Nursery exercised reasonable care to pre-vent or promptly correct any sexually harassing behavior (thefirst element of the affirmative defense). Then, although thereappears to be no dispute that Burrell failed to notify manage-ment of the alleged sexual harassment, the district court willhave to determine whether, if there was no reasonable policyin place, Burrell's failure to complain satisfied the second ele-ment of the affirmative defense.[13] We reverse the district court's summary adjudicationabsolving Star Nursery from liability for the alleged sexualharassment by Slack, and we remand this case to the districtcourt to permit it to evaluate Burrell's allegations of sexualharassment by Slack under the standard set forth inBurlington Industries and Faragher.In its renewed consideration of Burrell's Title VII claim,we encourage the district court to allow the parties to amendtheir pleadings and supplement their discovery to address theelements of the new standard. See Burlington Indus., 118 S.Ct. at 2271 (holding that parties should have adequate oppor-tunity to prove claims under the new standard).Because we reinstate part of Burrell's Title VII claim, wereverse the district court's order dismissing her pendent stateclaim for retaliatory discharge.CONCLUSIONWe affirm the district court's summary judgment insofar asit absolves Star Nursery from Title VII liability for the allegedsexual harassment committed by coworkers Brown andWright, and by assistant store manager Barita. As tocoworkers Brown and Wright, there is no evidence that StarNursery management knew or should have known of theiralleged sexual harassment. As to assistant store managerBarita, we will not consider the allegations of Burrell's affida-vit in opposition to summary judgment in which she contra-dicted her previous deposition testimony. Without thoseallegations, there is no evidence that Barita sexually harassedher.With regard to the alleged sexual harassment by store man-ager Slack, however, we reverse the district court's summaryjudgment absolving Star Nursery from Title VII liability.Slack was Burrell's supervisor with immediate or succes-sively higher authority over her. There is a genuine issue ofmaterial fact as to whether he sexually harassed her andwhether such conduct created a hostile work environment. Ifthese issues should be resolved against Star Nursery, it wouldbe liable for Burrell's conduct, unless it should prevail on theaffirmative defense described in Burlington Industries andFaragher. If that defense is available to Star Nursery, whetherit may be sustained will depend upon factual determinationsthat are either in dispute or cannot be resolved from the pres-ent record.Because we reverse in part the district court's summaryjudgment absolving Star Nursery from liability for Burrell'sTitle VII sexual harassment claim, we also reverse the districtcourt's order dismissing Burrell's pendent state claim forretaliatory discharge.Burrell shall recover from Star Nursery one-half of hercosts on appeal.AFFIRMED in part; REVERSED in part; andREMANDED for further proceedings. the end