Two decisions handed down by the United States Supreme Court on the same day, June 24, 2013, will have a significant influence on judicial standards relating to employer liability for alleged harassment of its employees by "supervisors" and claims by employees that they were subjected to unlawful retaliation as a result of making harassment complaints.
As a matter of both federal and state law, one of the key, if not most important, factors in determining an employer’s liability for workplace harassment, including creation of a hostile work environment, and other acts of discrimination of their employees is the status of the employee accused of engaging in harassment and/or discrimination and case law has drawn a sharp line between co-workers and supervisors. Specifically, if the harassing/discriminating employee is the victim’s co-worker, the employer is liable only if it was negligent in controlling working conditions. However, different rules apply when the harasser falls within the judicially accepted definition of a "supervisor" and in that situation the standard will be determined based on whether or not a "tangible employment action"--defined by the US Supreme Court as "a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits"--is involved. If the supervisor’s harassment culminates in a tangible employment action the employer is strictly liable. But if no tangible employment action is taken, the employer may escape liability by establishing, as an affirmative defense, that (1) the employer exercised reasonable care to prevent and correct any harassing behavior and (2) that the plaintiff unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided.
The federal Equal Employment Opportunity Commission ("EEOC"), when prosecuting harassment cases under Title VII of the Civil Rights Act of 1964, long relied on the meaning of "supervisor" in general usage and in other legal contexts, thus leading to an expanded view of employees that might be considered to be supervisors. However, in a new decision handed down on June 24, 2013 the Supreme Court mandated a narrower approach by holding that an employee is a "supervisor" for purposes of vicarious liability under Title VII only if he or she is empowered by the employer to take tangible employment actions against the victim.  The Court explained that its decision regarding the definition of supervisor took into account the fact that many modern organizations have abandoned a hierarchical management structure in favor of giving employees overlapping authority with respect to work assignments and that its concept of a supervisor could be readily applied and that, in fact, an alleged harasser’s supervisor status could often be capable of being discerned before (or soon after) litigation commences and would likely be resolved as a matter of law before trial. As to the concerns of the EEOC that employers might attempt to insulate themselves from liability for workplace harassment by empowering only a handful of individuals to take tangible employment actions, the Court noted that employees would not be unprotected against harassment by co-workers who possess some authority to assign daily tasks and that in such cases a victim could still prevail by showing that the employer was negligent in permitting the harassment to occur and that the jury should be instructed that the nature and degree of authority wielded by the harasser is an important factor in determining negligence.
On the same day that it provided guidance regarding the definition of "supervisor" the Court also handed down an important decision relating to how employers deal with employees who have asserted a harassment claim. Once a complaint is received, the employer must act quickly. In most cases, this means launching an investigation; however, that is not always necessary. For example, one case has held that it is reasonable for an employer to decline to investigate a report of possible harassment where the report was vague and the alleged victim indicated to the employer that he would be able to handle the situation on his own. If these conditions do not apply, the employer should commence an investigation and issue express instructions to the alleged harasser not to take any retaliatory action against the alleged victim. In fact, during the course of the investigation, the employer should consider offering the alleged victim an opportunity to move to another department. Concerns about retaliation are based in part on avoiding liability for violation of section 2000e-3(a) of Title VII, which prohibits employer retaliation "because [an employee] has opposed . . . an unlawful employment practice . . . or . . . made a [Title VII] charge." It should be noted that the longstanding views of the EEOC contained in its guidance manual had been that retaliation claims brought under section2000e-3(a) required only a showing that retaliation was a motivating factor for the adverse employment action, not its "but-for" cause. However, in University of Texas Southwestern Medical Center v. Nassar the Court dismissed this approach and declared that Title VII retaliation claims must be proved according to traditional principles of "but-for" causation, not the lessened motivating factor test which the Court noted should only be used with respect to determinations of "status-based" discrimination under section 2000e-2 of Title VII. The Court explained that the proper interpretation and implementation of section 2000e-3(a) and its causation standard were of central importance to the fair and responsible allocation of resources in the judicial and litigation systems, particularly since retaliation claims were being made with ever increasing frequency, and that lessening the causation standard would also contribute to the filing of frivolous claims, siphoning resources from efforts by employers, agencies, and courts to combat workplace harassment.
1. Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 761, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998).
2. See Faragher v. City of Boca Raton, 524 U.S. 775, 807, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 765, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998).
3. Vance v. Ball State University et al. _ U.S. _ (June 24, 2013).
4. Hardage v. CBS Broadcasting, Inc., 427 F.3d 1177 (9th Cir. 2005), amended on denial of rehearing, 433 F.3d 672 (9th Cir. 2006), further amended on further denial of rehearing en banc, 436 F.3d 1050 (9th Cir. 2006).
5. University of Texas Southwestern Medical Center v. Nassar, _ U.S. _ (June 24, 2013).
Alan S. Gutterman is the founder and principal of Gutterman Law & Business (http://www.alangutterman.com), a leading provider of timely and practical legal and business information for attorneys, other professionals and executives in the form of books, online content, newsletters, programs, training and consulting services. Mr. Gutterman has three decades of experience as a partner and senior counsel with internationally recognized law firms counseling small and large business enterprises in the areas of general corporate and securities matters, venture capital, mergers and acquisitions, international law and transactions, strategic business alliances, technology transfers and intellectual property, and has also held senior management positions with several technology-based businesses including service as the chief legal officer of a leading international distributor of IT products headquartered in Silicon Valley and as the chief operating officer of an emerging broadband media company. All editions of the Business Counselor Advisor are compiled into Business Counselor Update, which is released monthly and available along with other publications by Mr. Gutterman on the Thomson Reuters Legal Solutions site and through Westlaw Next at Business Counselor. Mr. Gutterman can be reached at email@example.com.