This morning, in addition to an affirmative action decision requiring colleges to use strict scrutiny in justifying the consideration of race in admissions, a 5-4 majority of the Supreme Court also rejected the argument that an employer can be held vicariously liable for alleged harassment by a non-supervisory employee who, at best, had only the ability to direct the work of the plaintiff. Vance v. Ball State University, No. 11-556 (6-24-13). Instead, the Supreme Court held that under the Ellerth/Faragher affirmative defense for harassment, "an employee is a 'supervisor' for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim." The Court rejected the EEOC's "murky" approach of "remarkable ambiguity" to determining whether an individual is a co-worker or a supervisor in favor of a bright-line rule that will be easier to administer at the summary judgment stage of litigation. Even so, employers can still be held liable for harassment by other employees and co-workers under a negligence standard.
According to the Court, the plaintiff claimed that she was being harassed by a white co-worker in the university's catering services. While the parties disputed the nature of the co-worker's duties, they agreed that she "did not have the power to hire, fire, demote, promote, transfer, or discipline [the plaintiff]." The plaintiff had filed many internal complaints and EEOC Charges about this co-worker, including allegations that she:
"gave her a hard time at work by glaring at her, slamming pots and pans around her, and intimidating her." Ibid. She alleged that she was "left alone in the kitchen with Davis, who smiled at her"; that Davis "blocked" her on an elevator and "stood there with her cart smiling"; and that Davis often gave her "weird" looks.
The plaintiff eventually filed a lawsuit claiming that her employer should be held liable for the hostile work environment created by this co-worker. The district court granted summary judgment, and the court of appeals affirmed, on the basis that the employer is not vicariously liable for a hostile work environment created by a co-worker and the plaintiff failed to show that the employer knew, or should have known, about the harassment because it always reasonably corrected the situation whenever it learned of it.
The Court noted that "supervisor" is not defined or mentioned in Title VII and this issue has only arisen because of the Court's own decision in Ellerth and Faragher. In the Ellerth/Faragher decisions, the Court
identified two situations in which the aided in-the-accomplishment rule warrants employer liability even in the absence of negligence, and both of these situations involve harassment by a "supervisor" as opposed to a co-worker. First, the Court held that an employer is vicariously liable "when a supervisor takes a tangible employment action," Ellerth, supra, at 762; Faragher, supra, at 790—i.e., "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." Ellerth, 524 U. S., at 761. We explained the reason for this rule as follows: "When a supervisor makes a tangible employment decision, there is assurance the injury could not have been inflicted absent the agency relation. . . . A tangible employment decision requires an official act of the enterprise, a company act. The decision in most cases is documented in official company records, and may be subject to review by higher level supervisors." Id., at 761–762. In those circumstances, we said, it is appropriate to hold the employer strictly liable. See Faragher, supra, at 807; Ellerth, supra, at 765.
Second, Ellerth and Faragher held that, even when a supervisor's harassment does not culminate in a tangible employment action, the employer can be vicariously liable for the supervisor's creation of a hostile work environment if the employer is unable to establish an affirmative defense.3 We began by noting that "a supervisor's power and authority invests his or her harassing conduct with a particular threatening character, and in this sense, a supervisor always is aided by the agency relation." Ellerth, supra, at 763; see Faragher, 524 U. S., at 803–805. But it would go too far, we found, to make employers strictly liable whenever a "supervisor" engages in harassment that does not result in a tangible employment action, and we therefore held that in such cases the employer may raise an affirmative defense. Specifically, an employer can mitigate or avoid liability by showing (1) that it exercised reasonable care to prevent and promptly correct any harassing behavior and (2) that the plaintiff unreasonably failed to take advantage of any preventive or corrective opportunities that were provided.
The Court rejected the EEOC's guidance about how to determine whether an individual is a supervisor by examining the alleged supervisor's "ability to exercise significant direction over another's daily work." Instead, the Court held:
that an employer may be vicariously liable for an employee's unlawful harassment only when the employer has empowered that employee to take tangible employment actions against the victim, i.e., 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."
While co-workers can inflect psychological harm, they cannot dock each other's pay or demote the victim. Only a supervisor has the power to create direct economic harm. This would also seem to imply that other supervisors – who do not have the power to take tangible employment actions against the victim – will be judged under a negligence standard. "Negligence provides the better framework for evaluating an employer's liability when a harassing employee lacks the power to take tangible employment actions."
The Court concluded that the EEOC's vague approach would needlessly complicate employment litigation and lead to confusing jury instructions on alternative theories. In particular, the EEOC's approach "would make matters far more complicated and difficult. The complexity of the standard they favor would impede the resolution of the issue before trial."
The Court also rejected the EEOC's concern that employers would concentrate the power of tangible employment actions in the hands of a few.
Modern organizations . . . have abandoned a highly hierarchical management structure, it is common for employees to have overlapping authority with respect to the assignment of work tasks. Members of a team may each have the responsibility for taking the lead with respect to a particular aspect of the work and thus may have the responsibility to direct each other in that area of responsibility.
Even in relatively flat organizations where the employees sometimes direct each other on a project, the employer can still be held liable for a hostile work environment under a negligence standard. Moreover, the risk seems to be overblown:
If an employer does attempt to confine decisionmaking power to a small number of individuals, those individuals will have a limited ability to exercise independent discretion when making decisions and will likely rely on other workers who actu- ally interact with the affected employee. . . . Under those circumstances, the employer may be held to have effectively delegated the power to take tangible employment actions to the employees on whose recommendations it relies.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
