Nannette B. DAVIS, Appellant, v. UNITED STATES STEEL CORPORATION and its Division, USS Agri-Chemicals, Appellees, 779 F.2d 209

MURNAGHAN, Circuit Judge: Nannette B. Davis asserted against United States Steel Corporation a claim under the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5, et seq. and three pendent state law claims for wrongful discharge, assault and battery, and intentional infliction of emotional distress. Davis was a secretary/receptionist at the Bamberg, South Carolina United States Steel facility and its only female employee. Davis produced testimony of numerous indignities at the hands of her immediate boss, Jim Bryan, who was responsible for hiring and firing.

Over a fifteen month period she was subject to Bryan’s questionable language, off-color and sexual jokes and innuendos, and frequent invasion of her privacy concerning her marital affairs and sexual relationship with her husband. She also reported verbal and sexual advances towards her by Bryan. Davis alleged that repeatedly Bryan recommended that she “ought to try it with somebody else besides my husband” and that she should “try it with a man.” Finally, according to Davis, on August 21, 1981, Bryan explicitly asked her “Why won’t you go to bed with me?”.

Bryan’s activities which Davis found offensive were, according to her, ones which took place at the workplace during working hours. Corroborating testimony for some of these incidents came from Davis’ coworker, Gene Cooke. In addition, Bryan’s supervisor, Jim Stoutz, provided an affidavit that he personally witnessed a pat by Bryan on Davis’ posterior, describing it as “an innocent friendly gesture.” Davis testified that Stoutz witnessed several such incidents and overheard Bryan’s remarks to her.

Stoutz did not speak to Bryan about the incidents or inform his United States Steel supervisors about Bryan’s conduct. In August of 1981, in response to complaints by Davis, United States Steel conducted an investigation at the Bamberg facility. The investigation was conducted by Stoutz and his two immediate superiors. • Bryan was advised to “cool off” for a week and was given time off for that purpose with pay. Davis testified that she believed that United States Steel would inform her of the action they were taking against Bryan.

However, the company was not amenable to work assignments which would separate Davis from Bryan. Davis believed that United States Steel had not taken measures against Bryan and, in anticipation of his return, Davis tendered her' resignation on September 4, 1981. Procedurally, the case progressed to a point where

summary judgment was granted in favor of United States Steel on the common law claims. The theory was that respondeat superior was inapplicable since Bryan was not acting in furtherance of United States Steel’s purposes. In order to achieve appealable status as a final judgment, Davis dismissed her Title VII claim. Of the remaining common law tort claims based on diversity of citizenship, Davis also dropped her wrongful discharge claim, leaving outstanding her appeal from the adverse judgment on her assault and battery and intentional infliction of emotional distress claims. Our function on review is limited.

We need only apply the same standard as that used by the court below, that is whether there is “no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R. Civ.P. 56(c). “We must examine the record in a light most favorable to the party opposing the motion.” Smith v. University of North Carolina, 632 F.2d 316, 338 (4th Cir.1980).

A majority of the panel has concluded from the factual background here presented that Davis could present a case permitting the fact-finder to establish, under the doctrine of respondeat superior that the observations and inaction of United States Steel’s supervisory employee, Stoutz, should be imputed to the company. At the point in time when Stoutz observed Bryan’s improper behavior and failed to inform either the company or Bryan that his behavior violated company policies, the matter could be said to have progressed from a frolic of Bryan’s own to behavior known to United States Steel and condoned by it.

Stoutz was a supervisory employee and Bryan’s immediate superior. His knowledge of the activities of an employee subject to his supervision, in the face of his inaction, created the possible inference that United States Steel did not object or, in the absence of explicit complaint by Davis, intend to take any steps to curtail Bryan’s behavior. Those circumstances would permit the factfinder to infer that toleration by Bryan’s employer, United States Steel, of his behavior meant that it was not inimi-cable to the fostering of its purposes.

On the other hand, a different majority of the panel has concluded that, under South Carolina principles of responde-at superior, United States Steel would not be liable for Bryan’s activities before Stoutz observed the employee’s breach of company policy and failed to take action against Bryan. That case is essentially disposed of by one which also involved sexual misbehavior. Rabon v.

Guardsmark, Inc., 571 F.2d 1277, 1279, 1282 (4th Cir. 1978): The parties agree, as did the district court and as do we, that under the doctrine of respondeat superior, as traditionally applied in South Carolina, Guardsmark was not liable for Roberts’ intentional tort. Lane v. Modern Music, Inc., 244 S.C. 299, 136 S.E.2d 713 (1964); Adams v. South Carolina Power Co., 200 S.C. 438, 21 S.E.2d 17 (1942); Courtney v. American Ry. Express Co., 120 S.C. 511, 113 S.E. 332 (1922).

The assault by Roberts was manifestly not in furtherance of Guardsmark’s business; it was the converse of Guardsmark’s purpose — that of providing protection and that for which it was employed. The assault was to effect Roberts’ independent purpose, and it was not within the scope of his employment. The mere fact that the tort was committed at a time that Roberts should have been about Guardsmark’s business and that it occurred at the place where Roberts was directed to perform Guardsmark’s business does not alter these conclusions.

Plaintiff’s right to recovery may be sustained only by extending the exception to the traditional rule of respondeat superior that a principal is not liable for his servant’s unauthorized intentional tort in derogation of the common law. But the South Carolina courts have been reluctant to expand tort liability. With respect to the situation once knowledge could be imputed to the corporation through Stoutz, however, as we have earlier indicated, a majority of the court feels otherwise. The testimony Stoutz provided in his affidavit was: I do recall on one occasion when I was at the Bamberg facility seeing Mr.

Bryan gently pat Mrs. Davis one time on the backside as she alighted from a stool. This appeared to be an innocent friendly gesture which I did not take particular note of at the time. At no time did I ever witness, sanction or approve any harassment or offensive touching of Mrs. Davis by Mr. Bryan or any other employee. A jury as finder of fact could permissibly conclude that the conclusion reached by Stoutz that this was an “innocent friendly gesture” was unjustified and that he, as a supervisor, had a responsibility flowing from his employment by United States Steel to take necessary corrective action.

See Restatement of Torts Second § 317: A master is under a duty to exercise reasonable care so to control his servant while acting outside the scope of his employment as to prevent him from intentionally harming others or from so conducting himself as to create an unreasonable risk of bodily harm to them, if (

a) the servant is upon the premises in possession of the master and (

b) the master (

i) knows or has reason to know that he has the ability to control his servant, and (ii) knows or should know of the necessity and opportunity for exercising such control. Accordingly, while the behavior of Bryan, despicable as it appears to be at the current posture of the case, where all factual matters are to be viewed in the plaintiff’s favor, standing alone, cannot be the basis for a recovery by Davis for assault and battery or intentional infliction of emotional distress, the situation is otherwise with respect to the observations of Stoutz and his failure to take any action. In view of the materials bearing on inaction of Stoutz,

summary judgment was inappropriate and the case is reversed and remanded for further proceedings consistent with this opinion. REVERSED AND REMANDED. . A security guard employed by the defendant was alone in defendant’s building with the plaintiff who had been detailed to work at night. The security guard "forcibly assaulted and raped the plaintiff at gunpoint."