May 28, 2014

50 for 50: Five Decades of the Most Important Discrimination Law Developments

Number 18: When Is An Employer Liable For Harassment By Its Employees?

Although Title VII was passed in 1964, it wasn’t until 1998 that the United States Supreme Court handed down two significant decisions in the companion cases of Faragher v. Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), that finally clarified certain issues of liability for employers.  Indeed, the Court noted in the Faragher decision that “[w]hile indicating the substantive contours of the hostile environments forbidden by Title VII, our cases have established few definite rules for determining when an employer will be liable for a discriminatory environment that is otherwise actionably abusive.” 

In Ellerth, the Court held that an employee was not required to demonstrate a tangible adverse action in order to state a claim against an employer for sexual harassment based on a hostile environment.   This landmark ruling substantially expanded protections for victims of sexual harassment due to its recognition of the fact that sexual harassment takes many forms, including the creation of a hostile work environment by supervisors and co-workers alike. No longer would employees have to endure sexual harassment that did not include a tangible employment action such as discharge, demotion, or undesirable reassignment.

In Faragher, the Supreme Court reviewed whether an employer may be held liable under Title VII for the acts of a supervisory employee whose sexual harassment of subordinates has created a hostile work environment amounting to employment discrimination.  As of 1998, employer liability for this misconduct was still an open question.

Resolving prior conflicting decisions and recognizing its expansion of liability as articulated in Ellerth, the Court held that “an employer is vicariously liable for actionable discrimination caused by a supervisor, but subject to an affirmative defense looking to the reasonableness of the employer’s conduct as well as that of a plaintiff victim.”  The Court explicitly circumscribed the availability of the defense, stating “[n]o affirmative defense is available…when the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment.”

Thus, in cases where no tangible employment action has been taken, an employer may raise an affirmative defense to liability or damages for a hostile wok environment, if it can show the following:

(a) that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and

(b) that the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

The Court further opined on potential means of establishing this affirmative defense, noting:

“While proof that an employer had promulgated an antiharassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense. And while proof that an employee failed to fulfill the corresponding obligation of reasonable care to avoid harm is not limited to showing an unreasonable failure to use any complaint procedure provided by the employer, a demonstration of such failure will normally suffice to satisfy the employer’s burden under the second element of the defense.”

With that statement, the Court endorsed the implementation of sexual harassment policies such as those used by employers across the country to this day.  So, when considering how accessible your sexual harassment policies must be for your employees, recall the origins of the policy and disseminate them widely.

A quick note for California employers:  As California employment lawyers, we would be remiss if we did not remind readers that in 2004, the California Supreme Court rejected the Faragher/Ellerth defense in the case of California Department of Health Services v. Superior Court of Sacramento County (McGinnis). Under McGinnis, California employers are strictly liable under the California Fair Employment & Housing Act for harassment committed by supervisors.


Category: EEO,