State of mind, not egregious conduct, is determinative. In Kolstad v. American Dental Ass'n, 119 S. Ct. 2118 (1999), the Supreme Court defined the standards for punitive damages under the Civil Rights Act of 1991, which amended the law to allow for punitive damage awards in intentional discrimination cases under Title VII and the ADA. A complaining party may recover punitive damages if the defendant "engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to the federally protected rights of an aggrieved individual." 42 U.S.C. § 1981a.
The Court unanimously rejected the notion that punitive damages are only available for "egregious" discrimination, as compared to "garden variety" discrimination. The terms "malice" and "reckless" refer to the actor's state of mind and its knowledge that it may be acting in violation of federal law. Egregious acts may, of course, be evidence supporting an inference of the requisite "evil motive;" they are not, in themselves, necessary to support an award of punitive damages. The Court mentioned a few safe harbors when the standard will not be met, however, where the employer is:
- unaware of the relevant federal prohibition;
- acts with the distinct belief that its discrimination is lawful, e.g., plaintiff's theory is novel or poorly recognized;
- reasonably believes that its discrimination satisfies a bona fide occupational qualification defense; or
- reasonably believes there is a statutory exception to liability.
Vicarious liability. Although the first part of the Kolstad opinion makes awards of punitive damages more likely than before, the Court went on, in a five-to-four decision, to hold that an employer may avoid liability for punitive damages for the discriminatory behavior of an agent under certain circumstances. The Court created unresolved issues about whether the acts of lower-level supervisors, as compared to those of "important" managers, will lead to punitive damages against the employer. Moreover, the Court explicitly modified common law rules to hold that "an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where these decisions were contrary to the employer's 'good-faith efforts to comply with Title VII.'" As in Faragher, the Court remarked that the goal of the statute is prophylactic - employers should be encouraged to prevent discrimination. It would not serve the goal if, when an employer trains its supervisors to avoid discrimination, the employer is nonetheless liable for their acts that disregard that training. Therefore, to avoid punitive damages for the acts of a manager, employers will need to train and implement policies against discrimination very much in the same way they are doing with respect to harassment as a result of the Faragher opinion last year. Employers should
- adopt policies that discrimination will not be tolerated
- provide a complaint procedure
- train supervisors to avoid discrimination (anyone who has responsibilities for tangible employment actions or directing work activities should be trained)
- keep an acknowledgment in supervisors' files that they have received training, and
- monitor and evaluate supervisors' performance regarding their compliance with EEO laws.
EEOC Guidance on Employer's Vicarious Liability for Workplace Harassment
On June 18, 1999, the Equal Employment Opportunity Commission issued Guidance on an employer's vicarious liability for harassment by supervisors under Title VII and other equal employment laws. The guidance comes a year after Burlington Industries, Inc. v. Ellerth, 118 S.Ct. 2257, 77 FEP 1 (1998), and Faragher v. City of Boca Raton, 118 S.Ct. 2275, 77 FEP 14 (1998), where the Supreme Court set forth the circumstances in which employers could be held liable for sexual harassment by supervisors. Most employers will already have programs in place to prevent and/or remedy sexual harassment in the workplace. The purpose of this Client Alert is to review the common elements contained in such programs to "fine tune" them in light of the EEOC's Guidance.The Guidance does not have the force of law, and employers may succeed in attacking certain aspects of it. For example, the Guidance made pronouncements on punitive damages, with which the Supreme Court disagreed only a few days later in Kolstad. However, the Guidance provides useful insight on many issues, courts may give some deference to the agency's interpretation, and the Guidance tells employers what positions the EEOC will likely take as a litigant.
Coverage. The EEOC's Guidance, and the underlying law, are not limited to sexual harassment, but extend to harassment based on race, color, national origin, age, disability and protected activity. The Guidance states that Title VII covers harassment directed at an individual because of his or her sex, even if not of a sexual nature, such as frequent derogatory but non-sexual remarks about women. Therefore, employers who now have a program in place to prevent sexual harassment should expand that policy to cover harassment based on any status protected by fair employment laws.
Who Is A Supervisor? A person with immediate (or successively higher) authority over the employee, to make or recommend tangible employment decisions, or to direct daily work activities, is a supervisor. The supervisor's authority must be of sufficient magnitude to assist the harasser in carrying out the harassment. In an expansive interpretation, the EEOC also asserts an "apparent authority" theory of liability: the employer can be vicariously liable for harassment by one who does not have actual authority over the employee, if the employee reasonably believed that the harasser had such power, because, for example, the chains of command were unclear.
High Ranking Management Officials. The EEOC asserted that certain harassers - president, owner, partner and corporate officer - are of sufficiently high rank to be the "alter egos" of the employer, and that unlawful harassment by them is imputed automatically to the employer, so that the employer cannot raise the affirmative defense discussed below. The EEOC relies on Ellerth and Faragher for this rule, although those cases entailed only lower-level supervisors, and the EEOC may be overreaching. For maximum protection, a harassment policy should continue to provide that harassment by anyone, from the highest officer or owner down to the most junior employee, is prohibited and that an employee who complains of harassment by a president, owner, partner or corporate officer will be protected.
Tangible Employment Action. Under Faragher and Ellerth, the employer is always liable for a supervisor's harassment if it culminates in a "tangible employment action." The employer cannot take advantage of the affirmative defense, described below, if there has been a tangible employment action.
A tangible employment action is a significant change in employment status, not just a threat. It might be hiring, firing, promotion, demotion, undesirable work assignments or a compensation decision. Some indication of a tangible employment action are that it requires an official act, is documented in company records, may be subject to review by higher level supervisors, or requires the formal approval of the enterprise and use of internal processes. A tangible employment action usually inflicts economic harm, but can occur with no economic harm, for instance, where the individual's duties or job are significantly changed.
The EEOC goes beyond, or relies very selectively, on case law in articulating a very broad definition of tangible employment action. For example, the EEOC asserts that a mere recommendation of adverse action can be a tangible employment action, as can progressive discipline which "brings the employee one step closer to discharge." The EEOC gave only one example of a job action that it did not believe qualified as a "tangible employment action" because it was "insignificant": alteration in a job title that did not change salary, benefits, duties or prestige, "and the only effect is a bruised ego." But, the EEOC warned, if "the new title is less prestigious, and thereby effectively constitutes a demotion, a tangible employment action would be found."
One lesson certainly to be learned from the EEOC's expansive view of "a tangible employment action" is to have an effective anti-harassment policy in place so that harassment is deterred - or ended - before the harassed employee's job is changed in any way.
Causation. The employer will have a chance to produce evidence that the tangible job action was taken for reasons entirely unrelated to the harassment. If the employer can show there was not a causal connection between the harassment and the tangible action, the employee must proceed under the alternative hostile environment harassment analysis, discussed below, and the employer has the opportunity to prove an affirmative defense.
Hostile Environment, With No Tangible Employment Action. If the harassment does not result in a tangible employment action, the employer may be able to avoid liability or limit damages by establishing an affirmative defense that includes two necessary elements:
(1) the employer exercised reasonable care to prevent and correct promptly any harassing behavior. Although the EEOC would not itemize particular steps that would provide a "safe harbor" for employers, an employer should:
- Establish an anti-harassment policy and complaint procedure.
- Give every employee a copy and redistribute it periodically. We additionally recommend that the employer get a signed acknowledgment from each employee that they have read the policy and understand it, and put the acknowledgment in the employee's personnel file.
- Include in the policy
a) a clear explanation that all forms of harassment and discrimination are prohibited. We also recommend prohibition of uncivil and inappropriate behavior.
b) encouragement to employees to report violations of the policy.
c) a commitment to protection against retaliation. We also recommend a follow-up program, reminding parties and witnesses about the prohibition against retaliation, and scrutinizing subsequent employment decisions affecting the complainant and witnesses to ensure against retaliatory decisions.
d) no statements that would mislead employees to think that the internal complaint tolls statutory filing deadlines or that promises that the internal process will produce any particular result. The EEOC Guidance also suggests that the employer include the statutory filing deadlines in the policy, but we see that as unnecessary if the normal posters and notices are in the workplace.
e) assurance of corrective action. The policy should provide for all appropriate corrective measures, proportioned to the seriousness of the offense, including warnings, transfer, demotion, pay cuts, suspension, discharge, training or counseling, and monitoring.
- Implement its policy with an effective complaint procedure. "If, for example, . . . management ignored previous complaints by other employees about the same harasser, then the employer has not exercised reasonable care in preventing the harassment." This may require:
a) keeping records on actions taken in response to complaints.
b) identifying alternative contact points, typically one in the chain of command and one in Human Resources. We recommend that a limited number of contacts be identified under the policy, rather than allowing complaints to be made to any supervisor, to assure that complaints go to those best able to handle them effectively and consistently.
c) carrying out a proper investigation. The EEOC sets forth questions that it might be appropriate to ask the complainant, the alleged harasser, and potential witnesses, and factors to consider in weighing credibility.
d) providing interim protection. While the investigation is in progress, it might be necessary to undertake intermediate measures, such as schedule changes, transfers or leave of absence to avoid contact between the alleged harasser and complainant. If it is impossible to determine what actually happened, it may still be necessary to undertake further preventive measures, such as training and monitoring.
e) providing remediation for the victim, to place him or her in the same position as if the harassment had not occurred, which EEOC describes to include restoration of leave taken because of the harassment, expungement of negative evaluations, reinstatement, apology, and monitoring, and compensation for losses. If it is appropriate to separate the parties, then the harasser should be transferred, unless the complainant prefers otherwise.
- Prove that despite the lack of a formal policy and procedure, the law is followed. This entails proof that employees and supervisors knew that harassment would not be tolerated and complaints would be investigated, and that anyone who suffered harassment should "take it right to the top." This is not a recommended way to proceed, particularly for a large employer. A formal policy and procedure will be far easier to defend.
(2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.
Courts are finding that this obligation extends not only to the duty to complain, but also to cooperate in the remedy rather than reject it and quit, to complain again if the remedy was not sufficient, and otherwise to avoid harm.
Confidentiality
- Future Job Recommendations. Informing a prospective employer that an employee made a harassment complaint could be retaliation.
- Employee Requests for Confidentiality. If the employer were to honor a request to keep a complaint confidential, it might find that it is liable anyhow. We therefore recommend against any such assurance, because it also may mean that other employees who are being harassed will not be aided. The EEOC suggested that one solution to deal with such requests would be an anonymous phone line for employees to discuss concerns about harassment with a non-management official, who would inform the employee that no investigation would occur unless an employee registered a complaint with management. We are not confident about whether a court would accept that type of mechanism, but the agency recommends it.
Other Measures To Prevent Harassment. The EEOC emphasized that an employer can take many measures to guard against harassment beyond implementing a complaint and investigation procedure.
- Training. Training supervisors to avoid harassment and to correct any observed harassment, regardless of whether there is an official complaint, is important. Training all employees is important to show that they were made aware of the policy and procedure for complaints and had no reason not to use them.
- Screening applications to weed out past harassers. We recommend requiring applicants to fill out the application completely to include the reasons for departures from past employment, and to follow up, if appropriate, to try to find out if there was harassment at prior jobs.
- Evaluating supervisors on harassment record. The EEOC suggested the employer evaluate supervisors on how they carry out their anti-harassment responsibilities, and keep records of all complaints to see whether there is a pattern of harassment by the same individual.
The courts are continuing to make post-Faragher law and interpretations of the law at a rapid rate, and employers will need to remain alert to court reactions to the EEOC's guidance.
Three Supreme Court Cases Clarify ADA Obligations
Mitigating or Corrective Measures May Be Taken into Account in Determining ADA "Disability"Three cases decided by the Supreme Court on June 22, 1999, are helpful to employers because they remove from ADA coverage many millions of Americans whose impairments are corrected with medication or with devices like eyeglasses.
In Sutton v. United Air Lines, Inc., 119 S. Ct. 2139 (1999), United required pilot applicants to have uncorrected vision of 20/100 or better. Plaintiffs failed that test, although with corrective lenses they had 20/20 vision. In Murphy v. United Parcel Service, 119 S. Ct. 2133 (1999), UPS fired a mechanic whose high blood pressure was corrected with medication, on the grounds that his blood pressure prevented him from holding DOT certification to drive commercial vehicles, which was required as part of his job.
The Supreme Court ruled that neither impairment was a "disability" under the ADA because as corrected it did not "substantially limit one or more . . . major life activities." The Court reasoned that "limits" means a present limitation -- not a hypothetical limitation that "might" limit a major life activity if corrective measures were not taken. It also held that Congress would not have said there were 43 million disabled people when it enacted the law, had it intended the broader definition urged by the plaintiff and the EEOC, which would yield a far higher count of disabled individuals.
A third case, Albertsons, Inc. v. Kirkingburg, 119 S.Ct. 2162 (1999), was brought by a monocular truck driver. The Court held that even though no mitigating measures could correct his impaired eye, his brain had compensated; the fact that his brain and eyes functioned "differently" than most individuals did not show that he was significantly restricted in the major life activity of seeing.
In all three cases, the Court refused to find any particular diagnosis or condition to be a disability per se; the determination will be an individual one that depends on all the circumstances, including the condition, the corrective devices or medicines the person is taking, the side effects of those medications, and the resulting level of limitation in major life activities. Although close definitional questions will be less critical in the workplace, for example, in making accommodations, these cases will make intense factual inquiry and discovery essential if litigation is filed, in order to try to position the case for summary judgment on the definition of disability.
The Supreme Court refused to decide the validity of the EEOC regulation that defines the major activity of working with reference to the inability to get a job in a broad class of jobs. The pilot-applicants could use their skills to work at many jobs such as regional airline pilots, or pilot instructor. Likewise, the mechanic could hold any job except one that required him to drive commercial vehicles. Therefore, they clearly were not significantly limited in working.
Regarded As Disabled. A person who is not actually disabled can also be covered by the ADA if he or she is "regarded as" having an impairment that substantially limits one or more major life activities. The Court ruled that plaintiffs are not "regarded as" having a disability simply because the employer perceives them as unable to meet the physical criteria it has established for a job. The ADA allows employers to prefer some physical attributes over others. "Accordingly, an employer is free to decide that physical characteristics or medical conditions that do not rise to the level of an impairment - such as one's height, build, or singing voice - are preferable to others, just as it is free to decide that some limiting, but not substantially limiting, impairments make individuals less than ideally suited for a job." The "regarded as" prong of the definition is satisfied only where there is a misperception, either that the individual has a substantially limiting impairment when he or she doesn't, or that an actual, nonlimiting impairment substantially limits a major life activity.
This prong of the disability definition will undoubtedly be pled far more frequently in the future. Employers can reduce the chances of a finding of liability in this area by taking proactive steps. As is true in the punitive damages and harassment areas, the Court has given employers substantial incentives to train and monitor supervisory behavior and comments. The key in the disability area is to train supervisors and interviewers to discuss applicants' or employees' ability or inability to meet certain criteria or hiring standards rather than any underlying conditions that lead to that result. Questions or comments - no matter how benign - about whether the employee is experiencing a problem (such as depression or alcoholism) that may have led to the failure to perform or qualify, must be avoided. Job relatedness is the touchstone. Supervisors will also need to know that the side effects of medication or corrective devices can themselves constitute a disability, and that many conditions or ailments may be ADA disabilities in one person and not qualify as such as they manifest themselves in others.
Employer Need Not Justify Refusal To Employ Disabled Person Who Does Not Meet Government Safety Standards. The Court also established in the Albertsons case that an employer does not violate the ADA when it complies with a straightforward governmental safety regulation, i.e., by refusing to employ an individual who does not meet government certification requirements. Albertsons discharged the monocular truck driver because he could not meet the DOT's basic vision test to hold a commercial driver's license, even though the DOT had initiated an experimental program under which he may have been able to get a waiver. The Court held that, even assuming the truck driver was "disabled" within the meaning of the ADA, the company would have been entitled to summary judgment because the truck driver was not a "qualified" individual with a disability.
Effect of Potential Waiver. The Supreme Court held that Albertsons could rely on the basic DOT vision standard, and did not need to become enmeshed in troublesome questions whether a waiver was a reasonable accommodation because the waiver program did not create a different substantive standard. The waiver program was merely an experiment, to collect data to determine whether the agency could relax the underlying vision standard. The Supreme Court held it would not be reasonable, or fair, to require the employer to defend the underlying safety standard, which the government had developed and tightened over many years. Nor did the employer have to show that the plaintiff was a direct threat to health or safety because he did not meet the standard; the failure to meet the standard was sufficient in and of itself to disqualify him.
Employers should keep in mind that in other situations where a waiver is available, the employer may still need to consider whether it is required to accept a waiver or to provide an applicant an opportunity to obtain a waiver when that is reasonably possible. Each case would appear to turn on whether the waiver program is an integral part of a statutory scheme that mandates individualized determinations to achieve safety standards or whether, as in the Albertsons case, it is an experimental program that does not change the underlying standard.
If you would like a copy of our sample anti-harassment policy or more information, please contact Barbara Berish Brown in our Washington, D.C. office at (202) 508-9551, or any lawyer in the Employment Law Department of PHJ&W LLP.
Client Alert is published solely for the interest of friends and clients of Paul, Hastings, Janofsky & Walker LLP and should in no way be relied upon or construed as legal advice. For specific information on recent developments or particular factual situations, the opinion of legal counsel should be sought. PHJ&W is a partnership, including professional corporations.