On August 9, 2007, the Ninth Circuit held in Craig v. M & O Agencies that an employee's 19-day delay in reporting blatant sexually offensive and unacceptable behavior by a direct supervisor did not necessarily constitute an unreasonable failure to take advantage of the preventative or corrective opportunities provided by the employer. Thus, the employer could not avoid a trial under Title VII for the supervisor's actions.

Eileen Craig worked for M & O Agencies (dba The Mahoney Group or "the Group") in its Tucson, Arizona branch office. Craig's direct supervisor was Leon Byrd, the interim president and branch manager. Over the course of several months, Byrd repeatedly made inappropriate sexual comments towards Craig. On August 8, 2003, Byrd escalated his advances by following Craig into a women's restroom, where he grabbed her and gave her an open-mouthed kiss. Craig did not immediately report the incident. Byrd's sexually inappropriate comments continued through at least August 20, 2003, despite rebuff from Craig.

On August 23, 2003, 19 days after the restroom incident, Craig reported Byrd's conduct pursuant to the Group's sexual harassment policy. The Group took immediate action. Specifically, Byrd was instructed to stay away from Craig and stop making sexual comments towards her, Craig began reporting to a different supervisor, and a senior executive was appointed to investigate the complaint (replaced by outside corporate counsel when it came to the Group's attention that the senior executive had previously been investigated for sexual harassment).

As a result of the investigation, corporate counsel recommended that Craig be provided counseling at the Group's expense, Byrd receive sexual harassment training and a severe reprimand putting him on notice that any subsequent behavior of this kind would result in termination, and all managers and supervisors of the Group receive sexual harassment training.

In late September 2003, Craig was informed that the investigation was complete and she began once again reporting to Byrd. Craig claimed Byrd then retaliated against her by ignoring her and withholding work-related information. While the Group provided the recommended sexual harassment training, Craig alleged that it was not taken seriously, as the Group's chairman made an inappropriate joke during a training session. Moreover, corporate counsel allegedly failed to interview those individuals Craig identified as other victims of Byrd's inappropriate behavior.

Craig eventually filed suit against the Group and several individual defendants alleging, among other causes of action, hostile work environment under Title VII. The Group moved for summary judgment with respect to the hostile work environment claim based on the affirmative defense set forth in Faragher v. City of Boca Raton. Under Faragher, when no tangible employment action (such as a firing or demotion) is taken, and employer may avoid vicarious liability if it can show that (a) it exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) the employee unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer.

The Ninth Circuit concluded that while the Group may have exercised reasonable care to prevent and promptly correct the behavior, it did not establish that Craig unreasonably failed to take advantage of the Group's preventative or corrective opportunities by summary judgment standards. Although 19 days went by before Craig reported the restroom incident, the Court believed it was reasonable for Craig to believe the situation might resolve itself and to fear adverse consequences as the result of her reporting. The Court found further justification for the delay in the fact that Byrd's inappropriate comments continued through August 20, 2003, only seven days prior to Craig's formal complaint. Consequently, the Court concluded that the Group could not avoid liability at the summary judgment stage.

Craig demonstrates that employers may be unable to escape trial, even when promptly taking preventative or corrective measures in response to a sexual harassment complaint, if the complaint is made within a reasonable time frame. A better defense—effective sexual harassment training to prevent the inappropriate behavior in the first place.