For some time now, different standards have been applied by the various federal circuit appellate courts in deciding whether or not an employer can be held vicariously liable for the sexual harassment of an employee where the offending employee holds a supervisory role.
Some circuits have taken an almost strict liability position, and have held that where the offending employee holds a supervisory position vis-a-vis the victim employee, the employer should be held vicariously liable even where the employer presents evidence that it has not been negligent, or otherwise at fault.
Other circuits have held that the employer can only be held vicariously liable where the victim employee presents evidence that the employer has acted negligently (with regard to the sexual harassment), or where it has been demonstrated that the employer knew about, or should have known about, the harassment.
These differences in approach have now seemingly been resolved by the United States Supreme Court in two decisions. Those decisions were Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries v. Ellerth, 524 U.S.742 (1998).
Not Always Automatically Liable
The legal issue in Faragher dealt with the City of Boca Raton's liability for acts of alleged sexual harassment by two life guards, who held supervisory roles over other life guards, including females. The issue in Burlington Industries v. Ellerth dealt more with whether or not a distinction should exist between sexual harassment claims based on a hostile work environment (where the offending employee is a supervisor) and quid pro quo sexual harassment claims. In examining the issue of vicarious liability, the Supreme Court used as a backdrop its earlier decision in Meritor Savings Bank SFB v. Vincent, 477 U.S. 57 (1986).
In Meritor, the Supreme Court held that Title VII places limits on an employer's responsibility for the creation of a discriminatory environment by a supervisor. "An employer is not always automatically liable for sexual harassment by their supervisors." Meritor at 72.
This holding in Meritor left enough wiggle room by stating that "an employer is not always automatically liable" so that the various federal circuits could then come down on either side of the issue of whether employers should be held vicariously liable for sexual harassment by their supervisory employees.
Vicarious Liability for Hostile Work Environment
Some circuits, including the Eleventh Circuit Court of Appeals ( which includes Georgia) were reluctant to impose vicarious liability on employers unless it was shown that the employer had done something to contribute to the alleged sexual harassment. Others were not so reluctant.
The sexual harassment in Faragher was pretty well undisputed as a factual matter. The only issue was whether or not the City of Boca Raton should be held vicariously liable for the creation of a hostile sexual work environment by two of its employees.
The plaintiff, Beth Ann Faragher worked part-time as a lifeguard for the City of Boca Raton during the summers from 1985 through 1990. During this time, she was supervised at various times by two employees, Bill Terry and David Silverman.
Both had supervisory duties and authority. For example, one or the other had authority to hire and fire lifeguards, supervise work assignments, counsel lifeguards, deliver oral reprimands, and record written documentation for any work related disciplinary actions.
Beth Ann Faragher made several factual allegations to support her contention that Bill Terry and David Silverman had created a hostile work environment. Some of the allegations were that Terry and Silverman had placed their arms around female employees including Faragher; had touched the buttocks of female employees; had made crude and demeaning references to women in general; and had commented on Faragher's figure, using disparaging language.
Based on this, both the lower courts and the Supreme Court had no problem finding that the harassment was sufficiently severe and pervasive so as to create a hostile work environment.
While the factual issues in Faragher were reasonably well settled, the legal issue was not. The legal issue was whether or not the City of Boca Raton could be held vicariously liable based on the actions of Terry and Silverman when the City argued that the alleged sexual harassment was outside the scope of Terry and Silverman's employment and that the City had not had knowledge, either actual or constructive, of the offensive conduct.
After a finding by the district court in favor of Beth Ann Faragher, the Eleventh Circuit reversed and ruled that:
- Terry and Silverman had not been acting within the scope of their employment when they engaged in the offensive conduct;
- that Terry and Silverman had not been aided in their actions by their agency relationship with the City; and
- that the City had not had constructive knowledge of the harassment by virtue of its pervasiveness or the fact that Beth Ann Faragher had confided in another employee ( who had some limited supervisory authority) about the alleged sexual harassment.
The decision of the Eleventh Circuit was to reverse the lower court's finding of vicarious liability.
The case then went to the Supreme Court because of the difference in standards being applied by the various federal courts on the issue of an employer's vicarious liability. Much of the Supreme Court's decision in Faragher is esoteric and overly concerned with the somewhat legalistic definition(s) of an agency relationship.
When reading the opinion, it seems at first that the Supreme Court is creating a legal rationale for denying vicarious liability by discussing issues of control, apparent authority, notice, etc., and whether or not sexual harassment/intentional torts have traditionally been within the scope of an employee's employment.
Vicarious Liability for Physical Action
After this discussion, and a related analysis of the differing positions taken by the various federal circuits on the issue of vicarious liability, the Supreme Court, somewhat suddenly, and without much underlying rationale, sets forth a very specific holding in favor of vicarious liability.
"In order to accommodate the principle various liability for harm caused by misuse of supervisory authority, as well as Title VII's equally basic policy of encouraging forethought by employers and saving action by objecting employees, we adopt the following holding in this case (Faragher) and in Burlington Industries, Inc. v. Ellerth, ante, p. __, also decided today. 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:
- that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and
- 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." Faragher at 807.
The Supreme Court's holding in Faragher seems to have settled the issue of vicarious liability and to have established that an employer can be held vicariously liable in a sexual harassment case where the offending employer is the victim's supervisor even when the employer had no knowledge of the offensive behavior and/or was not otherwise negligent or at fault.
Burlington Industries v. Ellerth
While the legal issue may now have been settled, the problems with application and/or the potential factual difficulties are far from settled. In a somewhat unusual development, the Supreme Court entered the exact holding in Burlington Industries, Inc. v. Ellerth, which was decided on June 26, 1998.
Factually, Ellerth involved a case in which the employee, Kimberly Ellerth, had refused unwelcome and threatening sexual advances made by her supervisor while employed by Burlington Industries from March, 1993 through May, 1994. Ms. Ellerth had worked as a sales person in one of Burlington's divisions in Chicago, Illinois, and alleged that she was subjected to constant sexual harassment by her supervisor, Ted Slowik.
Although Slowik was not considered an upper-level manager, he very clearly had supervisory authority and could hire, promote and fire.
The alleged sexual harassment included comments by Slowik such as "you know, Kim, I could make your life very hard or very easy at Burlington." On another occasion, Slowik expressed some reservation during a promotion interview that Ms. Ellerth was not "loose enough" and then reached over and rubbed her knee. Although Ms. Ellerth subsequently received a promotion, the decision was accompanied by a comment by Slowik that "you are gonna be out there with men who work in factories, and they certainly like women with pretty butts/legs."
Ellerth subsequently resigned from her job with Burlington Industries without filing any sort of a complaint against Slowik.
Ellerth had on one occasion told Slowik that a comment he had made was inappropriate. Ellerth's decision to resign was prompted by a comment from her immediate supervisor. Approximately three weeks after she resigned, Ellerth sent a letter to Burlington Industries explaining that she had resigned because of Slowik's behavior.
The legal issue in Ellerth was again whether or not an employer should be held vicariously liable for sexual harassment by a supervisory employee even without a showing that the employee was at fault.
Vicarious Liability for Quid Pro Quo
The Court also considered whether or not vicarious liability could be imposed where quid pro quo threats had been made but were left unfulfilled. "We must decide, then, whether an employer has vicarious liability when a supervisor creates a hostile work environment by making explicit threats to alter a subordinate's term or conditions of employment, based on sex, but does not fulfill the threat." Ellerth at p. 760.
Because Slowik's implicit and/or explicit threats to alter the terms and conditions of Ellerth's employment, based on sex, had not been fulfilled both the Seventh Court of Appeals and the Supreme Court found no quid pro quo sexual harassment.
For quid pro quo harassment to exist under Title VII, the threats of adverse job consequences, etc., based on sex must be fulfilled. Otherwise, the cause of action falls to the creation of a hostile work environment, which requires a showing that the harassment was severe and pervasive.
Although this was a fairly clear distinction before Ellerth, and one around which significant evidentiary issues revolved, the distinction between quid pro quo sexual harassment and hostile work place sexual harassment may no longer carry much significance, at least where the offending employee is a supervisor.
This is because vicarious liability will now be imposed on employers even without a showing of quid pro quo harassment. Even the Supreme Court, in Ellerth, seems to be saying that the issue is not whether the threats to alter the terms and conditions of employment, based on sex, have been fulfilled or not, but whether the employer should be held vicariously liable.
Definition of Supervisor
With the decision in Faragher it will be much easier to hold employers vicariously liable for sexual harassment by their employees, who hold supervisory authority. Again, the Supreme Court in Ellerth goes through a rather esoteric analysis of agency law, before holding that "[A]n 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..."
With this holding, a technical distinction still exists between quid pro quo sexual harassment and hostile work environment sexual harassment, but the distinction is not as significant from an evidentiary standpoint since vicarious liability can be found in either situation.
In other words, where the offending employee is a supervisor, it will no longer be necessary for the plaintiff (victim) to show quid pro quo sexual harassment to impose vicarious liability on the employer; nor will it be necessary to show that the employer knew, or should have known, about the harassment.
Instead, the employer will now be held vicariously liable anytime it is shown that the sexual harassment was perpetrated by an employee with supervisory responsibility or job authority.
Possible Defenses
With the decisions in Faragher and Ellerth, there seems to have been a change in the level of the playing field. This is true, at least, in those federal circuits, such as the Eleventh, which were previously slow to hold employers liable for alleged sexual harassment by employees, even where the employees held supervisory job responsibilities.
This change will presumably mean that it will become much more difficult for employers to obtain summary judgment based on arguments that the offensive conduct was outside the scope of the supervisor's employment or that they (the employer) did not have notice.
While Faragher does set forth an affirmative defense, at least where there has been no tangible job detriment, this defense will be based on fact in most cases, and will therefore go to a jury. To prove a Title VII violation against an employer, a plaintiff will now need to show only:
- that she is a member of protected class;
- that she has been the subject to unwelcome harassment;
- that the harassment was based on sex;
- that the harassment affected a term, condition or privilege of her employment; and
- that the offending employee was a supervisor or someone with successively higher authority.
Where the plaintiff is a female, and the offensive conduct involves sexual touching, the use of sexual language, the request of sexual favors, etc., a sufficient evidentiary basis would seem to exist to create vicarious liability assuming that the offending employee is a supervisor.
In these cases, an employer will still be able to rely upon the affirmative defense created by Faragher at least in those situations where there has been no loss of a tangible benefit, etc.
Other defenses may also exist. For example, there still must be a showing(s) that the sexual harassment was sufficiently severe and pervasive so as to create a sexually hostile work, and that the alleged sexual hostile work environment was both objectively and subjectively offensive. Assuming "arguendo" the plaintiff can show that:
- she is a member of a protected class,
- that the alleged sexual harassment was sufficiently severe and pervasive so as to create a sexually hostile work environment,
- that the alleged sexual harassment was both objectively and subjectively offensive,
- that the alleged sexual harassment affected a term or condition of her employment, and
- that the perpetrator of the alleged sexual harassment was a supervisor, what is the outcome?
According to Faragher the outcome is a finding of vicarious liability against the employer. The issue then becomes whether or not the employer can rely on the affirmative defense set forth in Faragher.
"When no tangible employment action is taken, an defending employer may raise an affirmative defense to liability or damages, subject to proof by preponderance of the evidence. . . "The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly in a sexually harassing behavior, and (b) that the plaintiff's employee reasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise." Faragher at 807.
Affirmative Defense Not Available for Loss of Job Benefit
Where the plaintiff shows the loss of a tangible job benefit or the imposition of a tangible job detriment, the above-quoted affirmative defense is not available to the employer. A tangible job detriment and/or loss of a tangible job benefit would presumably have a fairly broad definition but one which would require more than the creation of a hostile work environment.
Classic examples would be loss of a raise, a demotion, termination, reassignment to a less favorable job location, etc. There is presently some issue concerning whether or not a economic effect is necessary to establish the loss of a tangible job benefit or the creation of a tangible job detriment. The outcome of this issue will necessarily await subsequent post Faragher decisions.
Another defense, which may be appropriate in some cases, will concern whether or not the offending employee is a supervisor. The language used by the Supreme Court was "a supervisor with immediate or (successively higher authority)." Faragher at 808.
The Supreme Court's language would seem to mean that anyone in the chain of command above the plaintiff could qualify as a supervisor with the immediate or successfully higher authority. Again the outcome of this issue would seemingly involve a factual analysis, which in most cases will lead to a jury trial.
The issue of whether or not the offending employee was a supervisor may occasionally involve a situation where the offending employee does not have actual authority but because of some act or omission by the employer, an argument can be made that he had apparent authority. In these situations, the victim employee will argue that she reasonably believed the offending employer had sufficient authority to affect her job status, etc.
As already stated, where there has been no loss of a tangible job benefit, etc., or the imposition of a tangible job detriment, the employer will have an affirmative defense but one, which would again seemingly lead to a factual inquiry (jury trial).
Employer Must Show Reasonable Care
To establish the defense, the employer must show that "it exercised reasonable care to prevent and correct any sexually harassing behavior and that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise." (Emphasis added) Faragher at 808.
It is important to note that both elements must be established. In other words, the employer must show not only that it acted reasonably but also that the plaintiff acted unreasonably.
In these situations, the Supreme Court has directed the lower courts to consider "all the surrounding circumstances." To establish that it has acted reasonably, employers are going to want to show an established anti-harassment policy, which is in written form, has been published, has been delivered to "all" employees, and which has been enforced.
Not only will employers also have to show that they acted reasonably in the present case to prevent sexual harassment but employers will also need to show that they have acted reasonably in previous cases of alleged sexual harassment so as to create an environment wherein employees are encouraged to report acts of alleged sexual harassment.
In deciding how to establish the first prong of this affirmative defense, employers can rely on language from Faragher. "While proof that an employer had promulgated an anti-harassment policy with complaint procedure was not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense." Faragher at 807.
Stated Anti-Harassment Policy
It goes without saying that the best anti-harassment policy will be of no benefit unless it is published to employees. In fact, the decision in Faragher included a rejection of an anti-harassment policy created by the City of Boca Raton because the policy had never been published to employees. At a minimum, the policies would seem to need to be:
- in writing;
- unambiguous;
- define what is meant by "sexual harassment";
- state that sexual harassment is absolutely prohibited and is against the law;
- provide a reporting mechanism;
- provide an alternative reporting mechanism where the offending employer is a supervisor;
- assure employees that there will be no retaliation or adverse job consequence if they report sexual harassment;
- state that acts of sexual harassment, etc., will be dealt with confidentially and in an expeditious manner, etc.
The employer's activity after receiving a complaint will also be important. Employers who fail to conduct a "real" investigation with written findings, etc., or who fail to discipline or counsel the offending employee (assuming there is evidence of sexual harassment) will probably not get very far defending against vicarious liability.
While it will also be helpful to post an employer's anti-harassment policy in a location, where it can be observed by employees, copies should also be given to each employee with the employee signing an acknowledgment that he or she has received, read, and understands the policy. The acknowledgment form should be signed and dated by the employee. Regular and routine training sessions should also be established for all employees, not only managers and supervisors.
Affirmative Acknowledgement of Receipt of Policy
Managers should sign separate agreements that they are aware of the company's anti-harassment policy and will act to enforce it. Where an employer is able to show that it has acted reasonably to prevent sexual harassment, etc., it must then show that the victim employee has acted unreasonably.Neither the first nor the second part of this affirmative defense will be sufficient without the other.
Again, the language of the Supreme Court is instructive "(a)nd while proof that employee failed to fulfill the corresponding obligation of reasonable care to avoid harm is not limited to the showing of unreasonable failure to use any complaint procedure provided by the employer, a demonstration of such failure will normally suffice to satisfy the employer's burden under the second element of the defense." Faragher at 808.
The factual elements could range anywhere from a victim employee who, after being notified of the company's anti-harassment policy, fails to complain to a supervisor about the alleged harassment; to an employee who was a voluntary participant in the alleged conduct, or who encouraged the telling of sexual jokes, etc. Employers will still have to contend with plaintiffs who have not followed a published reporting procedure and who testify that the failure was based on fear of termination or adverse job consequence. It is not uncommon in these cases to have a plaintiff testify that he or she was told by the supervisor that if they complained, or filed a grievance, they would be fired. This is one of the reasons why employers will want to show that they have acted reasonably in handling claims of previous sexual harassment so as to create an environment where employees feel safe in reporting alleged sexual harassment.
Conclusion
Bottom line, Faragher and Ellerth, have made it easier to establish liability on the part of an employer in a sexual harassment case, at least where the offending employee is a supervisor. While defenses are still available to employers in this situation, those defenses are limited, and the specific affirmative defense created by Faragher will only be allowed where there has been no tangible employment action, such as discharge, demotion or undesirable reassi