ELLERTH And FARAGHER: Applying The Supreme Court's "Delphic Pronouncement" On Employers' Vicarious Liability For Sexual Harassment

The U.S. Supreme Court has issued two decisions, Burlington Industries, Inc v Ellerth and Faragher v City of Boca Raton, which provided additional guidance on an employer's liability for sexual harassment perpetrated by a supervisor with authority over the plaintiff-employee. In dissent, Justices Thomas and Scalia criticized the majority for its "Delphic pronouncements" that provided "shockingly little guidance about how employers can actually avoid vicarious liability."

A review of several post-Ellerth and Faragher cases reveals that the lower courts have taken differing approaches in applying the Ellerth and Faragher standards, giving some credence to the dissenters' concerns.

Vicarious Liability and the Court's Guidance on the Affirmative Defense

Essentially, in Ellerth and Faragher, the court ruled that when a supervisor's sexual harassment culminates in a tangible employment action, such as dismissal or an undesirable reassignment, the employer is automatically liable. However, when no tangible employment action is taken, the employer may avail itself of an affirmative defense.

The defense has two necessary elements:

  1. that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and
  2. that the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.

The First Element: The Employer's Reasonable Care

An employer must initially establish that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior. Today, most employers have established and distributed policies prohibiting sexual harassment. Whether an employer can satisfy its burden that it exercised reasonable care by virtue of such a policy has varied from case to case.

In some cases the courts have held, as a matter of law, that the employer met the first element of the affirmative defense by distributing a policy of which plaintiff was aware. In Fierro v Saks Fifth Avenue, (13 F.Supp.2d 481 (1998)), the court recognized that "the employer's promulgation of 'an anti-harassment policy with complaint procedure' is an important, if not dispositive, consideration."

In contrast, in Lancaster v Sheffler Enterprises (19 F.Supp.2d 1000 (W.D. Mo. 1998)), the court said that having a policy and forcing all new employees to sign the policy is not sufficient to establish reasonable care. Rather, the employer must demonstrate reasonable steps to enforce the policy, and prevent and correct violations of it.

The Second Element: The Employee's Unreasonableness

The second part of the affirmative defense requires that an employer show "that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise."

In Fierro, the court categorized this second element as "the crucial inquiry" and ruled that the employee's failure to report alleged harassment because of "conclusionary assertions of fear of repercussions" will not defeat the affirmative defense.

Establishing the unreasonableness of the employee's conduct is, of course, easiest when the employee has not complained about the harassment at all. Thus far, where the employer has disseminated an anti-harassment policy and the complainant knows of it, most courts have had little sympathy for employees who failed to use the policies to make their employers aware of the harassment.

A review of the cases suggests that an employee will have to do more than merely allege she had a reasonable explanation not complaining about harassment. She will have to articulate specific facts that support the alleged reason.

Prompt Remedial Measures

Before Ellerth and Faragher , an employer could avoid liability in many cases "if it adequately investigated and took prompt and appropriate remedial action upon notice of the alleged hostile work environment."

The Supreme Court in Ellerth and Faragher did not address this method for avoiding liability and the effect that Ellerth and Faragher were meant to have on it. The courts so far have varied in the significance they have placed on an employer's prompt remedial action.

In Gunnell v Utah Valley State College, the district court dismissed an employee's claim because the employer stopped the harassment after the employee complained. The Tenth Circuit reversed and sent the case back for further proceedings in light of Ellerth and Faragher, stating, "an employer whose supervisory personnel has harassed subordinates will be liable for the harassment that occurred even though the employer ultimately stopped further harassment."

In contrast, in Indest v Freeman Decorating, Inc, the Fifth Circuit ruled that the employer was not vicariously liable because it took prompt remedial measures in response to the employee's complaint, characterized by the court as "presenting only an incipient hostile environment," which the court ruled was not a tangible adverse employment action.

The court concluded that "[i]mposing vicarious liability on an employer for a supervisor's 'hostile environment' actions despite its swift and appropriate remedial response to the victim's complaint would undermine . . . Title VII's deterrent policy."

Recommendations

At a minimum, an employer must establish and distribute an anti-harassment policy, with avenues of relief, to its employees. The employer should also have employees sign a receipt for the policy to prevent an employee from subsequently claiming he or she never received the policy.

Simply distributing the policy is probably not enough and the employer should provide supervisors and managers with sexual harassment training or, at the very least, train them regarding the employer's policy.

If there is a complaint, an employer should investigate and take prompt remedial action to end the alleged harassment. At best, such action may be a defense to a claim and at worst, it may limit the employer's liability.

Drafting a Sexual Harassment Policy

In light of Ellerth and Faragher and the lower courts' interpretations of the Supreme Court's rulings, an employer's anti-harassment policy and complaint procedure should contain, at a minimum, the following elements:

  • A clear explanation of prohibited conduct;
  • Assurance that employees who make complaints of harassment or provide information related to such complaints will be protected against retaliation;
  • A clearly described complaint process that provides accessible avenues of complaint;
  • Assurance that the employer will protect the confidentiality of harassment complaints to the extent possible;
  • A complaint process that provides a prompt, thorough and impartial investigation; and
  • Assurance that the employer will take immediate and appropriate corrective action when it determines that harassment has occurred.