Supreme Court Decision Narrows Employer Liability for Supervisor Harassment
The United States Supreme Court issued a significant decision that narrows employers’ liability exposure arising from harassment of employees by their supervisors that constitutes a form of discrimination in violation of Title VII of the Civil Rights Act of 1964.
Supreme Court Decision Narrows Employer Liability for Supervisor Harassment
On June 24, 2013, the United States Supreme Court issued a significant decision that narrows employers’ liability exposure arising from harassment of employees by their supervisors that constitutes a form of discrimination in violation of Title VII of the Civil Rights Act of 1964.
In a split 5-4 decision, the court majority adopted the narrower definition of “supervisor.” Thus, in order for an employer to be held vicariously liable for a “supervisor’s” harassment under Title VII, the person must be empowered by the employer to take tangible employment actions against the alleged victim of harassment.
The decisions where the court established a rule for holding an employer liable under Title VII for a supervisor’s harassment of an employee were Faragher v. City of Boca Raton, 524 U.S. 775 (1998) (Faragher) and Burlington Industries Inc. v. Ellerth, 524 U.S. 742 (1998) (Ellerth). Under the Ellerth/Faragher rule, an employer will be held strictly liable for the supervisor’s harassment of an employee (i.e., liability is imposed without a finding of fault such as negligence or intentional wrongdoing) in the event the harassment leads to an adverse tangible employment action.
The Ellerth/Faragher decisions have generally been viewed as favorable to employees seeking to hold their employers liable for harassment incurred from persons deemed to be supervisors. Since the 1998 Supreme Court decisions, the United States Courts of Appeals have been divided on their definitions of what responsibilities a person must have to be labeled as a supervisor for purposes of holding employers liable under the Ellerth/Faragher supervisor harassment liability rule. Specifically, the U.S. Court of Appeals for the Seventh Circuit found the rule is limited to only those harassers who have the power to “. . . hire, fire, demote, promote, transfer, or discipline . . .” their victims.
The Justice Department and EEOC filed an amicus curiae brief with the Supreme Court in the Vance case in support of neither party, while maintaining that this broader interpretation of the term “supervisor” in the EEOC guidance was reasonable and entitled to be given deference by the court.
Analysis of the Vance Decision
Maetta Vance, an African-American woman, had been employed by Ball State University (BSU) in several different positions in its banquet and catering division. A white woman, Saundra Davis, was also employed in that division. After filing numerous internal complaints with the university and charges with the EEOC alleging racial harassment and discrimination (many of which concerned Davis), Vance filed a lawsuit in a federal district court in Indiana. In that suit, Vance claimed (among other things) that she had been subjected to a racially hostile work environment in violation of Title VII. In the complaint, Vance alleged that Davis was her supervisor and that BSU was vicariously liable for Davis’ actions, as her employer, in creating a racially hostile work environment. Although the parties were in conflict on the precise nature of Davis’ duties, they agreed that she did not have the authority to take tangible employment action against Vance.
The district court granted summary judgment in favor of BSU. It determined that BSU could not be held vicariously liable for Davis’ alleged harassment, because Davis was not Vance’s supervisor inasmuch as Davis lacked the authority to hire, fire, demote, promote, transfer, or discipline Vance. On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s decision on the same basis. The court of appeals indicated that Vance could not recover from BSU unless she could prove BSU had been negligent.
Justice Samuel Alito wrote the majority opinion for the court, in which Chief Justice John Roberts Jr. and Justices Antonin Scalia, Anthony Kennedy, and Clarence Thomas joined.
The majority explained that the court’s decisions in Ellerth and Faragher contemplated only a unitary category of supervisors who had the authority to make tangible employment decisions, rather than two categories of supervisors as recognized in the EEOC guidance. The majority noted that its narrower definition of “supervisor” is easily workable and can be readily applied without undue difficulty. In many cases, the parties will know before litigation commences whether an alleged harasser is a supervisor, and in other cases, supervisor status generally will become clear to the parties after discovery. Even when supervisor status cannot be determined through discovery, the majority felt such status could be capable of resolution at the summary judgment stage.
The majority focused on a supervisor’s power as compared to that of a co-worker. In particular, a supervisor has the power to cause direct economic harm via a tangible employment action, and moreover, tangible employment actions fall within the special province of the supervisor. While a co-worker can inflict psychological injuries by creating a hostile work environment, that co-worker is unable to dock the person’s pay or demote him or her. The majority emphasized that the authority to take tangible employment actions is the defining characteristic of a supervisor, as opposed to being simply a characteristic of a subset of an ill-defined class of employees who qualify as supervisors. Since a supervisor has the authority to inflict direct economic injury—and its potential use lingers as a threat over the victim—the majority noted that vicarious liability (subject to the affirmative defense) established in Ellerth/Faragher is justified.
The majority disagreed with the dissent’s contention that this definition of “supervisor” would leave employees unprotected against harassment by co-workers who possess the authority to inflict psychological injury by assigning unpleasant tasks or by making the work environment objectionable. The majority suggested that victims could prevail if they show the employer was negligent in permitting the harassment to occur, and the nature and degree of authority exercised by the harasser (which can vary greatly) is an important factor in determining negligence. The types of evidence relevant to supporting a showing of employer negligence could include that an employer did not monitor the workplace, failed to respond to complaints, failed to provide a system for registering complaints, or effectively discouraged complaints from being filed.
A significant point the majority made was that even with its narrower “supervisor” definition, the heightened liability of Ellerth/Faragher may still apply to a broader group of employees beyond those with actual tangible employment decision-making authority. If an employer concentrates all such authority in a few individuals, but those individuals rely on other workers who interact with the affected employees, the employer may be held to have effectively delegated the power to take tangible employment actions to the employees on whose recommendations it relies.
Justice Ruth Bader Ginsburg delivered the dissenting opinion, in which Justices Stephen Breyer, Sonia Sotomayor, and Elena Kagan joined. Justice Ginsburg indicated that she would follow the EEOC’s broader “supervisor” definition, noting that the agency’s guidance paid close attention to the Ellerth/Faragher framework and reflected its “informed judgment” and “body of experience.” She maintained that by striking from the supervisory category employees who control the day-to-day schedules and assignments of others, and thereby confining the supervisory category to those formally empowered to take tangible employment actions, the majority had diminished the force of the Ellerth/Faragher framework and shifted it in a decidedly employer-friendly direction. Moreover, according to Justice Ginsburg, the majority’s decision ignored the conditions under which members of the workforce labor, and disserves the objective of Title VII to prevent discrimination from “infecting” American workplaces. Regarding Faragher, where the harassers were individuals employed by the city of Boca Raton, Florida to oversee the corps of ocean lifeguards, Justice Ginsburg argued that the case illustrates an “all-too-plain reality” that a supervisor with authority to control subordinates’ daily work is no less aided in his harassment than is a supervisor with authority to fire, demote, or transfer.
Justice Ginsburg questioned the degree to which the majority’s definition of “supervisor” is clear and workable. She observed that whether various tangible employment actions, such as reassignment or discipline, might confer supervisor status on the person with that authority could be dependent in specific cases on whether those actions have economic consequences. Also, she inquired whether it is sufficient for an employment action that results in any economic consequence to be deemed a significant change in employment status or if there is a minimum threshold for economic consequences.
Finally, Justice Ginsburg observed that Congress has in the recent past enacted legislation to override the Supreme Court’s “wayward interpretations” of Title VII, citing the Lilly Ledbetter Fair Pay Act of 2009 and the Civil Rights Act of 1991. She called on Congress once again to correct what she saw as the court’s error in weakening protections against workplace harassment.
The Supreme Court’s decision in Vance is generally a positive result for employers. In workplaces with a large number of employees subject to oversight and direction from numerous individuals, many of whom lack the authority to take tangible employment action regarding employees they oversee or direct, Vance reduces the potential number of individuals who would qualify for supervisor status in a Title VII workplace harassment case. Consequently, employers have a diminished strict liability exposure for supervisor harassment. More practically, employees who may claim they were subjected to harassment may be less inclined to pursue litigation where they would need to meet a negligence standard of proof if the alleged harasser is determined to be a co-worker rather than a supervisor.
The impact of the decision will be more far-reaching for manufacturing companies in which complex processes can cause persons with various levels of responsibility to direct other workers during different stages of the manufacturing process to varying degrees in their daily activities. In all likelihood, persons given such responsibility without having the authority to make tangible employment decisions would not qualify as supervisors under Vance.
At the same time, employers must take note of the majority’s observation in Vance that the vicarious liability construct of Ellerth/Faragher may still apply to those individuals who lack actual tangible employment decision-making authority but who have been effectively delegated the power to take tangible employment actions because their employers rely on their recommendations regarding some employees. So long as employers maintain effective processes for employees to report complaints of harassment and other wrongful behavior in the workplace (often anonymously through hotlines) and for taking corrective action, they should be in a more advantageous position to prove the Ellerth/Faragher affirmative defense should the alleged harasser be deemed a supervisor on the basis that he/she has been delegated power to take tangible employment actions.