October 1999
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October 1999 |
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Classifieds
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Dazed and Confused:
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In June 1998, the United States Supreme Court issued two monumental decisions concerning prohibited employment discrimination under Title VII. Those decisions, Burlington Industries, Inc. v. Ellerth1 and Faragher v. City of Boca Raton,2 created an entirely new employer liability standard for harassment by workplace supervisors. Because Title VII is a federal law covering employers with 15 or more employees that prohibits discrimination based on race, color, religion, sex or national origin, these decisions affect workplaces everywhere. In the last year, the manner in which federal courts have construed Ellerth and Faragher has been nothing short of schizophrenic. While some key case principles have been interpreted consistently, most have been haphazardly applied to produce erratic and contradictory results. The recent publication by the Equal Employment Opportunity Commission (EEOC) of a new Enforcement Guidance -- setting forth its own interpretation of Title VII vicarious liability for unlawful supervisor harassment under Ellerth and Faragher -- will likely cause further chaos. This article discusses the status of Title VII employment discrimination law one year after Ellerth and Faragher, and examines the extent to which Ellerth and Faragher affect employment harassment claims brought outside of Title VII, including under the Minnesota Human Rights Act (MHRA). In Faragher v. City of Boca Raton, the Court determined whether an employer might be vicariously liable under Title VII for a hostile work environment created by a supervisor where no tangible employment action was taken against the harassed employee. The Court concluded that where otherwise actionable sexual harassment by a supervisor does not result in a tangible employment action involving the harassed employee, the employer can avoid liability only by successfully proving both elements of a new affirmative defense. The employer must show: (1) it exercised reasonable care to prevent and promptly correct any sexually harassing behavior; and (2) the harassed employee unreasonably failed to utilize the preventive/corrective opportunities provided by the employer or to otherwise avoid harm. The failure to successfully demonstrate both elements will result in employer liability. Similarly, no affirmative defense is available, and employer liability is established, where actionable sexual harassment by a supervisor results in tangible employment action involving the harassed employee. 3 Burlington Industries, Inc. v. Ellerth primarily resolved whether a legal distinction exists under Title VII between employer liability for "hostile environment" and "quid pro quo" sexual harassment. The Court concluded no such distinction exists.4 Title VII employer liability is established if sexual harassment by a supervisor culminated in a tangible employment decision such as demotion, discharge or undesirable reassignment.5 Since supervisors are agents empowered to make decisions affecting employees under their control, employers are liable for the illegal tangible employment actions of their supervisors.6 Where no tangible employment actions are taken, employers may avail themselves of the earlier-mentioned affirmative defense.7 The Supreme Court's new Title VII liability framework for workplace discrimination is premised on the acts of supervisors. "An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee."8 (emphasis added) Before reaching the issue of whether an employer is vicariously liable for harassment perpetrated by its employees, a Title VII claimant must first show: (1) the conduct was unwelcome; (2) it was based on the sex of the plaintiff; and (3) it was sufficiently severe or pervasive to alter the plaintiff's conditions of employment and to create an abusive work environment. "Otherwise actionable" or "actionable" sexual harassment, as it appears in this article, therefore refers to situations wherein a claimant has successfully made this prima facie case. Who Is A "Supervisor"? Ellerth and Faragher make evident that once a plaintiff's prima facie case of harassment is made, the first inquiry in determining employer liability is necessarily whether the alleged harasser is a supervisor. Though a seemingly perfunctory assessment, determining who is a supervisor under Title VII has proven problematic. Indeed, no bright-line distinctions exist. During the past year, courts have labored with little consensus to define "supervisor" within the meaning of Ellerth and Faragher. Some courts have relied on traditional notions of supervision, concluding that absent the actual entrustment of "the power to hire, fire, demote, promote, transfer, or discipline an employee . . . [one] does not qualify as a supervisor for purposes of imputing liability to the employer."9 Other courts have concluded that "supervisory authority does not begin and end with the actual power to hire, fire, or otherwise affect the terms or conditions of employment; an employer may be liable where an employee has apparent authority to alter the employment terms and conditions of subordinates."10 The EEOC has gone further, maintaining that one is a supervisor even if authorized simply to "direct another employee's daily work activities . . . ."11 Finally, at least one court has read the supervisor requirement out of Ellerth and Faragher entirely, stating,
Somewhere between these extremes are courts that have passed the buck altogether, opting not to define the parameters of "supervisor" at all. The 8th Circuit Court of Appeals recently did just that, stating, "[t]he contours of the term 'supervisor' as used in the new Ellerth/Faragher standard is . . . [a] question more appropriately addressed by the district court . . . ."13 But even district courts have declined to define "supervisor," maintaining that jurors can best determine the issue.14 Ultimately, whether one is a supervisor under Ellerth and Faragher is intensely fact-specific. Caselaw during the past year makes evident that those with actual authority to make tangible employment decisions are clearly supervisors. It is less clear whether those with broad powers but no direct line authority over harassed employee can also be considered supervisors. Similarly, where a purported supervisor possesses no actual authority to tangibly affect a harassed employee's job, the latter's belief of apparent authority must at least be reasonable. Even then, however, it is uncertain whether courts will impute liability to the employer for conduct that is otherwise actionable under Title VII. Claims of Coworker Harassment As discussed, employer liability under Ellerth and Faragher hinges first on whether the harasser is a supervisor. In creating this threshold, the Supreme Court appears to have affirmed that a negligence standard should continue to be used when determining whether an employer is liable for workplace harassment perpetrated by coemployees.15 In the last year, with one limited exception, courts have refused to extend the new liability framework to claims of coworker harassment. That exception occurred in Coates v. Sundor Brands, Inc.,16 where a three-judge panel of the 11th Circuit Court of Appeals concluded the new liability framework does apply equally to claims of supervisor and coworker harassment. However, the 11th Circuit later vacated that opinion in its entirety.17 At this writing, no other court, either before or after Coates, has extended the Ellerth/Faragher liability framework to claims of coworker harassment. Likewise, the EEOC has promulgated regulations providing that employers are liable for illegal coworker harassment under Title VII if "the employer (or its agents or supervisory employees) knows or should have known of the conduct, unless it can show that it took immediate and appropriate corrective action."18 This standard is synonymous with a negligence standard. |
 Sheila Engelmeier is a partner and chair of the Employment Department at Mackall, Crounse & Moore PLC in Minneapolis.  Jonathan J. Hegre is an associate with Mackall, Crounse & Moore practicing primarily in the areas of employment and commercial litigation. |
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"courts have labored
with little consensus to define 'supervisor' within the meaning
of Ellerth and Faragher." |
Tangible Employment Actions Ellerth and Faragher held that where actionable supervisor harassment results in tangible employment action against the harassed employee, employer liability is automatically established. As a result, whether tangible employment action -- and thereby automatic employer liability -- can be established is an issue of primary concern to litigants. The Supreme Court defined tangible employment actions as acts constituting "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." The Court then implied, but did not confirm, that employment actions resulting in mere bruised egos, demotions without corresponding reductions in pay, duties or prestige, and reassignments to more inconvenient jobs do not rise to the level of tangible employment action.19 Lower courts have since toiled confusedly to define tangible employment actions. Some courts appear to agree that the mere assignment of different or more difficult job duties does not, alone, constitute tangible employment action resulting in automatic employer liability.20 Other courts have reached the opposite conclusion, maintaining that tangible employment action may result from "deprivation of a position or an opportunity, or a loss of prestige ... ."21 Similarly, the EEOC maintains that "significantly changing an individual's duties in his or her existing job constitutes a tangible employment action regardless of whether the individual retains the same salary and benefits."22 Disagreement also exists when the nature of the employee's work shift, rather than job duties, is involved. Whereas one court has concluded no tangible employment action is taken where an employer modifies a harassed employee's shifts to avoid contact with the harasser, another has held that a change from working weekday afternoons to weekends and night shifts at the same rate of pay is a tangible employment action.23 Consensus does appear to exist, however, in concluding that constructive discharge and the underlying harassment, itself, do not constitute tangible employment action under any circumstances.24 Amid Summary Judgment As noted above, Ellerth and Faragher provide that where a supervisor's otherwise actionable harassment does not result in tangible employment action against the harassed employee, the employer may avail itself of a new affirmative defense. In light of this new affirmative defense, at least one federal judge, dissenting in Lissau v. Southern Food Service Inc., has openly questioned whether summary judgment will remain a viable tool for employers defending against Title VII harassment claims. Noting that the affirmative defense hinges on the reasonableness of the parties' actions, Fourth Circuit Judge Michael wrote, "[w]hen the reasonableness of conduct is in question, summary judgment is rarely appropriate because juries have 'unique competence in applying the reasonable person standard' to the facts of the case. . . . If Faragher and Ellerth signal anything, it is that fewer sexual harassment cases will be resolved on summary judgment."25 The Lissau majority dismissed Judge Michael's argument by focusing on Fed.R.Civ.P. 56, observing that neither Ellerth nor Faragher "indicate that a variation from the normal requirements of Rule 56 is appropriate or that grants of summary judgment will be infrequent."26 The jury is still out on whether Judge Michael's words will prove prophetic. In the year following Ellerth and Faragher, courts have varied widely in their handling of the reasonableness inquiry at summary judgment where the affirmative defense has been offered. Some courts have implicitly agreed with Judge Michael's analysis, concluding that questions of reasonableness are best suited for jury determination.27 Others have reached completely contradictory results when presented with virtually the same facts. In denying the employer's summary judgment motion, at least two federal courts have ruled that whether the plaintiff's three-month delay in reporting allegations of harassment constituted an unreasonable failure to avail herself of the employer's corrective measures was ultimately a jury question.28 Another federal court reached the exact opposite conclusion, ruling that a three-month delay in reporting allegations of sexual harassment was unreasonable as a matter of law.29 Similarly, whereas some courts have ruled that the failure to ever report allegations of sexual harassment to the employer is unreasonable as a matter of law, at least one court has ruled and the EEOC maintains that Ellerth and Faragher do not absolutely require such a report.30 Two lessons are apparent from the divergent manner in which courts have applied the reasonableness component of the Ellerth/Faragher affirmative defense on summary judgment. First, plaintiffs hoping to avoid summary judgment should always argue that determinations of reasonableness under the affirmative defense are, by nature, for the jury to decide. Second, defendants hoping to secure summary judgment should not despair. If they want to badly enough, courts will find a way to rule as a matter of law on whether the plaintiff's and defendant's acts were reasonable under the affirmative defense. |
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of the Affirmative Defense Another question arising under the affirmative defense concerns what happens when the employee reasonably avails herself of the employer's reporting procedure and the employer promptly responds to end the harassment. A literal reading of Ellerth and Faragher suggests the employer is still liable due to the presence of the conjunction "and" between elements (1) and (2) of the new affirmative defense. That is, under the affirmative defense, if the employer cannot show the harassed employee unreasonably failed to avail herself of corrective opportunities or to otherwise avoid harm, it appears liability is established and the employer's response to the harassment is irrelevant. The 5th Circuit Court of Appeals squarely addressed this issue in Indest v. Freeman Decorating, Inc.31 In granting summary judgment for the employer on the plaintiff's Title VII claim of supervisor sexual harassment, the court opined that the employer could avoid liability even where it failed to show the second element of the affirmative defense:
Whether Indest reached the correct result under Faragher and Ellerth remains to be seen. In a special concurrence to the Indest decision, Judge Wiener vehemently disagreed, maintaining that under Ellerth and Faragher "an employer is vicariously liable for a supervisor's actionable hostile environment sexual harassment of an employee unless the employer can prove both elements of the one and only affirmative defense now permitted by the Court."33 He stated further, cases "in which an employee promptly reports, and an employer rapidly responds to, harassing behavior by a supervisor, [do not] fall into some unarticulated lacuna in the Ellerth/Faragher framework."34 The EEOC has officially endorsed the reasoning of Judge Wiener's concurrence.35 However, at least one court has held that even where an employer meets its obligations under prong one of the affirmative defense but fails to show prong two, liability may be avoided provided the harassing supervisor was not "aided [in perpetrating the illegal harassment] by the agency relation."36 In his dissent in Ellerth, Justice Thomas disagreed with the majority's decision in part because he believed it created different frameworks for determining employer liability under Title VII based on "whether a sexually or racially hostile work environment is alleged." Prior to Ellerth and Faragher, Title VII claims were treated similarly for liability purposes whether based on race, sex, religion or national origin. Ellerth and Faragher, however, were issued in the context of sexual harassment claims, and created an entirely new framework for determining employer liability under Title VII. In Justice Thomas's mind, that meant the majority in Ellerth and Faragher purported to create a liability standard for sexual harassment claims different from that utilized for claims of racial harassment. In hindsight, Justice Thomas's concerns have proven unwarranted. Though at least one federal court has openly doubted whether the Ellerth/Faragher liability framework applies to claims of racial harassment,37 an overwhelming majority of courts have unflinchingly applied the framework outside the context of sexual harassment claims. In the year following Ellerth and Faragher, courts have applied the new liability framework to harassment claims based on race, religion, and national origin.38 The EEOC has interpreted the new liability framework even more broadly, to also encompass supervisor harassment based on protected activity, age and disability.39 |
"In the last year, with one limited
exception, courts have refused to extend the new liability framework
to claims of coworker harassment" |
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"whether tangible
employment action -- and thereby automatic employer liability
-- can be established has become an issue of primary concern
to litigants." |
Like Title VII, the Minnesota Human Rights Act (MHRA) proscribes discriminatory practices in employment. Due to the perceived similarities between both statutes, Minnesota courts formerly looked to Title VII law when resolving claims under the MHRA.40 Following Ellerth and Faragher, however, Minnesota courts will likely discontinue interpreting the MHRA in this manner.41 The current differences between Title VII and the MHRA in the context of employer liability for workplace harassment derive from the express language of the former statute. Under Minnesota law, an employer is vicariously liable for workplace harassment where it "knows or should know of the existence of the harassment and fails to take timely and appropriate action."42 This liability standard differentiates the MHRA from Title VII in three ways. First, the MHRA liability standard is identical to that employed under federal law for coworker harassment, yet it also applies to supervisors. Second, prompt remedial action under the MHRA, unlike under the new Title VII affirmative defense, presumably absolves employers of all liability even where the harassment results in tangible employment action against the harassed employee. Finally, whereas the Title VII affirmative defense to intangible employment action evaluates whether the harassed employee responded reasonably to the harassment, no such inquiry exists under the MHRA. These differences could prove critical for practitioners, who should be mindful of which statute the litigant is seeking redress under before advising employers, arguing on summary judgment, or proposing jury instructions. One year after Ellerth and Faragher, employment discrimination law finds itself amid continuing change. Consensus apparently exists in applying the new liability framework to more than just sex harassment claims under Title VII, and in refusing to apply the framework to Title VII coworker harassment claims. However, with regard to who is a supervisor, what acts constitute tangible employment action, and application of the new affirmative defense, confusion abounds. Meanwhile, Ellerth and Faragher have differentiated Title VII from state antidiscrimination law under the MHRA, making the choice to litigate under either statute or both a critical one. What happens during the second year after Ellerth and Faragher may yet provide practitioners with more certainty as they usher clients into the 21st century. |