In these two cases, Faragher v. City of Boca Raton, 118 S.Ct. 2275 (1998) and Burlington Industries v. Ellerth, 118 S.Ct. 2257 (1998), the Supreme Court held:
"An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence . . . . The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise . . . . No affirmative defense is available, however, when the supervisor's harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment. See Burlington, ante, at 17." Faragher, 118 S.Ct. at __, 1998 U.S. LEXIS 4216, *59-60.
The Court previously established that if there is sexual discrimination and/or harassment that results in a derogatory employment decision, employers are vicariously liable. However, the lower courts were split as to whether there was such liability when there was no tangible employment action taken against the employee, but a sexually hostile environment was created and may have caused the employee to leave the job.
The Supreme Court settled the matter by creating somewhat of a compromise between employers and employees. That is, employers will be held vicariously liable if their supervisors create a hostile work environment. But, an employer may avoid liability but asserting an affirmative defense if it can show that it exercised reasonable care in preventing or correcting any harassing behavior, and the employee did not act reasonably in reporting or trying to avoid the situation.
To aid in proof of the first prong of the defense, employers should have written policies against discrimination which are disseminated to all employees. Further, this policy should have specific procedures for filing complaints, investigating them and taking necessary action. Once any such complaint is filed, employers must follow these procedures and assure that appropriate disciplinary action and/or reassignment is instituted if harassment or discrimination has occurred.
As to the second prong, employees who fail to file a complaint or to follow well established and publicized procedures, may not prevail unless their failure to do so is reasonable. The employee's action might be reasonable if the offending supervisor is the person with whom a complaint would be filed, and no alternative procedure is spelled out. It might also be reasonable if the actions are so pervasive that a reasonable person would not have been able to return to work and/or follow the procedures.
In the Faragher case, the Court held the City of Boca Raton vicariously liable for the harassing acts of a female lifeguard's supervisors. The supervisors in this case had repeatedly subjected Faragher to unwanted and offensive touching, as well as lewd comments. Further, the City had not distributed its sexual harassment policies to the lifeguard supervisors, there was not adequate oversight of these supervisors, and there was no alternative procedure for Faragher to follow to file a complaint. Consequently, the Court found the City liable and held that it could not have successfully raised the newly created affirmative defense.
In Burlington, the employee/salesperson, Ellereth, was subjected to comments regarding her breasts and her unwillingness to "loosen up" in relation to her ability to move up in the company. Although she did receive promotions, and was not fired for refusing her supervisor's unwanted advances, the harassing behavior continued and resulted in her ultimately leaving the company. The Supreme Court remanded the case to the lower court for additional proceedings in which Ellereth would have a chance to prove the discriminatory behavior and Burlington could assert the affirmative defense.
These cases show that employers must be much more careful in running their businesses and in assuring that the discrimination laws are not violated by supervisory personnel. Actual knowledge of discriminatory actions is not required, and liability will attach if policies and procedures for prevention and correction of such action are not in place and enforced. Therefore, it would be wise for all employers to seriously consider enacting a policy and procedure for handling discrimination claims, and training all supervisory personnel, as well as all employees on the topic and the use of the procedures. Employers must show that they have made reasonable efforts to prevent such actions, and at a minimum this will mean having and enforcing some type of policy.