On June 26, 1998, the U.S. Supreme Court issued two rulings that will make it easier for employees who are sexually harassed by supervisors to sue their employers for money damages. These rulings will require changes in the steps employers take to prevent harassment and avoid liability.
In Faragher v. City of Boca Raton, a former female lifeguard employed in Boca Raton's Marine Safety Section claimed that two of her direct supervisors frequently touched her without invitation, made crude and disparaging remarks about sex and women in general, and made vulgar sexual remarks about the female lifeguards (including Faragher) and female beachgoers. Faragher told her next-level supervisor about the inappropriate conduct, but he did not pass the information up the chain of command, and no action was taken to stop the harassment. Although the City had a sexual harassment policy, the policy had not been distributed to the Marine Safety Section, and neither Faragher nor her supervisors were aware that the policy existed.
In Ellerth v. Burlington Industries, Inc., a former Burlington salesperson alleged that her supervisor touched her inappropriately and made unwelcome comments about her anatomy and appearance. According to Ellerth, her supervisor warned her that he could "make her life very hard or very easy at Burlington," and that her job would be easier if she would wear shorter skirts. However, Ellerth did not suffer any actual job detriment as a result of her refusal to submit to her supervisor's advances. Nor did she complain to anyone in Burlington's management until about three weeks after she resigned, although she was aware of Burlington's sexual harassment policy.
In analyzing whether Boca Raton and Burlington could be held liable for their supervisors' actions, the Court created a new, two-part framework for imposing employer liability for supervisor/subordinate sexual harassment. The new categories of liability focus on whether the complaining employee suffered a tangible job detriment - such as a termination, demotion, or denial of a promotion - along with the sexual harassment. Under the new tests:
If an employee can prove that a tangible job detriment resulted from a refusal to submit to a supervisor's sexual demands, the employer is automatically liable for sexual harassment. In this instance, the employee does not have to show that the harassment was "severe or pervasive" and it makes no difference whether the employer had knowledge of the harassment or took any measures to prevent sexual harassment in the workplace.
Even if a supervisor's harassment of a subordinate does not result in a tangible job detriment, the employer still will be automatically liable for sexual harassment, as long as the employee can prove that the harassment was severe or pervasive. However, the employer can avoid or reduce its automatic liability if it can show both (a) that it exercised reasonable care to prevent and promptly correct any harassing behavior, and (b) that the employee unreasonably failed to take advantage of any complaint procedure provided by the employer or to "otherwise avoid harm."This defense is not available in the first scenario.
Because neither Faragher nor Ellerth suffered a tangible job detriment, the Supreme Court analyzed their claims under the second scenario. In Faragher's case, the Court found that the harassment was severe and pervasive. Since the City could not establish that Faragher had ever received a copy of the sexual harassment policy or that she was aware of any complaint procedure, it could not argue either that it took reasonable care to prevent sexual harassment or that she unreasonably failed to take advantage of the procedure outlined in its policy. Thus, the City could not avoid liability for the Marine Safety supervisors' harassment of Faragher.
The Court also found that Ellerth had suffered severe or pervasive harassment, but sent the case back to the lower courts to determine whether Ellerth's knowledge of the sexual harassment policy and her failure to pursue a complaint would provide Burlington a valid defense to her claims.
As we advised in the lead article of our April 1998 newsletter, adopting a comprehensive sexual harassment policy is the core of an effective strategy for limiting exposure to liability and damages. However, as Faragher instructs, employers must also publish their policies to their workforces, and establish procedures for ensuring that all employees and supervisors have read and understood the policies. We recommend that in addition to including sexual harassment policies in employee handbooks, employers remind workers of the policies by distributing them separately on an annual or other regular basis. We also recommend that employees be asked to sign an acknowledgment form so there is no question they received, read, and understood the policy.
Further, requiring periodic training for supervisors will help employers convince judges and juries that they have taken reasonable care to prevent sexual harassment. Finally, since an employer cannot realistically expect to completely control every supervisor's actions, employers may wish to consider purchasing adequate employment practices liability insurance to cover supervisor/subordinate sexual harassment claims.