The two cases at issue required the Court to determine when an employer is liable for the sexual harassment of its supervisors. In Burlington Industries, Inc. v. Ellerth, an employee suffered no tangible job detriment as a result of the sexual harassment of her supervisor. In fact, she was promoted, but she chose to quit her job due to the stress she allegedly suffered as a result of the harassment. In Faragher v. City of Boca Raton, an employee lifeguard suffered sexual harassment on the job, but her employer, the City, argued that it had no actual or constructive knowledge of the conduct. As a result, according to the City, it should not be held liable.
In response to these two cases, subject to the affirmative defense referred to below, the Supreme Court has decided that employers are responsible for sexual harassment of their supervisors, regardless of whether the harassment is hostile environment harassment or quid pro quo harassment. The fact that an employer did not know or reasonably should not have known of the conduct is irrelevant to the initial determination of liability.
At the same time, however, the Supreme Court, relying upon rules of agency law, has enunciated the affirmative defenses available to employers in certain cases of sexual harassment. Initially, it is critical to note that no affirmative defense is available to employers when the sexual harassment culminates in a tangible, adverse employment action. Thus, for example, if an employee is terminated, demoted, or transferred to an undesirable job in connection with the supervisor's harassing conduct, the employer is automatically liable for that supervisor's conduct. The fact that the employer has forbidden sexual harassment, has promulgated and enforced a policy forbidding harassment, and has no knowledge of the harassing conduct is irrelevant in cases in which the employee suffers a job detriment. This is a significant departure from existing case law which often held that an employer that did not know of harassment in the workplace, and reasonably would not have known of it, was not liable for the damage suffered by the employee.
In cases in which there is no tangible job detriment resulting from the harassment, the Supreme Court has enunciated an affirmative defense available to employers, consisting of two necessary parts. An employer may prove, by a preponderance of the evidence, that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior and that the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to otherwise avoid harm.
The real question lies in the manner in which courts will interpret the requirements of the affirmative defense. The Supreme Court noted that, although perhaps not necessary in every instance, an appropriately promulgated and enforced anti-harassment policy may address the first element of the affirmative defense. Further, a showing that the employee failed to follow the complaint procedure set forth in the policy is one way in which an employer may attempt to fulfill the second requirement of the defense. At the same time, however, the Court made clear that evidence of a policy and an employee's failure to follow the policy will not meet the employer's burden of proof in every case.
In the Boca Raton decision, the Court did not allow the City an opportunity to present an affirmative defense precisely because the record revealed that the City had failed to disseminate its sexual harassment policy and failed to monitor the conduct of its employees on the beach. As a result, the Court held as a matter of law that the City did not exercise reasonable care to prevent the supervisors' harassing conduct. In contrast, in the Burlington Industries decision, the Court remanded the case to the trial court to provide Burlington Industries an opportunity to prove that it acted reasonably in preventing harassment and that Ellerth unreasonably failed to complain about the conduct.
Although the Court's decisions do not specify actions employers should take to be prepared to prove an adequate affirmative defense, employers are well-advised to review and update their anti-harassment policies. Looking to the Equal Employment Opportunity Commission's recent consent decree with Mitsubishi Motor Manufacturing of America, Inc. for guidance, employers should adopt specific policies regarding sexual harassment. Their anti-harassment policies should include, at a minimum, a definition of harassment with real-life examples; non-retaliation language for employees who report instances of sexual harassment; and a statement that sexually harassing conduct will result in discipline to the offender, up to and including discharge. Further, employers should consider training all employees, from the CEO to front-line employees, to be sensitive to issues of sexual harassment. Such training should be sponsored by the leaders of the organization. Finally, complaints of sexual harassment must be promptly, vigorously and honestly investigated and valid complaints must be remedied.