A U.S. Supreme Court Win for Employers Regarding Employer Liability Under Title VII

By:  RACHEL D. GEBAIDE, TIMOTHY C. HAUGHEE & HALLIE B. FISHER

OCTOBER 30, 2013

In a big win for employers, the U.S. Supreme Court held earlier this summer that only supervisors who have been empowered by their employers to bring a “tangible employment action” against an employee who complains of workplace harassment may subject the employer to strict liability (i.e., automatic liability) under Title VII of the Civil Rights Act.  Prior Supreme Court rulings on the subject indicated that employers could be held strictly liable for the actions of their supervisors, but did not clarify whether such “supervisors” were limited to those employees who had the power to bring a tangible employment action (such as hiring or firing) against the complaining employee, or also included those employees who had the authority to direct the employee’s daily tasks and job responsibilities.

In Vance v. Ball State University, an African-American woman (Vance) alleged that Davis, a fellow employee, created a racially hostile work environment at the Ball State University dining facility where both women worked.  The question before the Supreme Court was whether Davis was Vance’s “supervisor,” which would determine whether Davis’ employer, Ball State University, could be held strictly liable for the improper actions of its employee.

In deciding Vance, the Supreme Court relied on the holdings of two of its prior cases, Faragher and Ellerth, which set forth the circumstances in which an employer may be held strictly liable for an employee’s harassment of a co-worker.  In those cases, the Supreme Court ruled that an employer may be held strictly liable for an employee’s actions when the employee who violates Title VII is a “supervisor.”  The Supreme Court reasoned that supervisors are agents of the employer and can therefore be considered to be acting on the employer’s behalf while at the workplace.

What Faragher and Ellerth left open – and what Vance intends to clarify – is the answer to the question:  who is a “supervisor” for purposes of an employer’s strict liability?  In Vance, the Supreme Court concluded that the official power to bring a “tangible employment action” against a victim is the defining characteristic of a supervisor.  The Supreme Court explained that a “tangible employment action” means to “effect a significant change in employment status, such as hiring, firing failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.”  With respect to the facts in Vance, since Davis had not been empowered by Ball State University to take a tangible employment action against Vance, Davis could not be considered Vance’s supervisor.  As a result, Ball State University could not be held strictly liable for Davis’s improper actions towards Vance.

In its decision, the Supreme Court noted that in modern workplaces, employees may be referred to as “supervisors” even when they do not have the authority to affect the conditions of employment of another employee in a tangible way.  Consequently, the Supreme Court emphasized that an employee’s title (which may not accurately describe an employee’s duties and authority) or an employee’s rank should not be dispositive and that instead the facts of the particular case will control.

The Supreme Court also reiterated its prior decision in Faragher that if no tangible employment action is taken against the employee complaining of harassment, then the employer may escape or mitigate liability by establishing, as an affirmative defense, that:  (1) it exercised reasonable care to prevent and correct any harassing behavior, and (2) the plaintiff/employee unreasonably failed to take advantage of the preventative or corrective opportunities that the employer provided.

As a result of the Supreme Court’s ruling in Vance, employers now have greater certainty as to which employees may subject them to strict liability for violations of Title VII.  As to all other employees who are not “supervisors” under the Vance standard but who may have the authority to direct the daily tasks and job responsibilities of co-workers, the Supreme Court recognized that such employees have the potential to create intolerable work environments for fellow employees.  As a result, the Court reiterated its prior holdings in Faragher and Ellerth that in those situations, an employer may still be held liable if the employer was negligent in permitting the harassment to occur.

The Supreme Court’s opinion can be found here.

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