Christina Sisk (plaintiff) worked in a Wendy’s Restaurant operated by Tar Heel Capital Corp. (Tar Heel) (defendant). James Johnson became the general manager of the restaurant in 2001 and was Sisk’s direct supervisor. Johnson sexually harassed Sisk by inappropriately touching her, putting his hand down her shirt, pulling her into his lap, and making sexual comments. Sisk resigned by giving notice to the district manager and director of human resources. Sisk stated in her notice that she had resigned due to Johnson’s harassment. Sisk had not filed any previous complaints, and this was the first time that the district manager and human resources director had been informed of the harassment. Sisk required medical care as a result of the harassment. Tar Heel investigated the allegations and fired Johnson. Tar Heel offered Sisk the opportunity to return to work, but Sisk declined. Sisk was diagnosed with post-traumatic stress disorder and major depressive disorder. Sisk filed a claim for workers’ compensation with the Full Commission of North Carolina Industrial Commission. The commission determined that her injury occurred in the course of her employment, but the injury did not arise out of the employment. The commission denied Sisk’s claim, and she appealed.