Supreme Court Limits Vicarious Liability In Harassment Cases

By Joe Leibovich
(901) 328-8269

The United States Supreme Court has narrowed the definition of who is a supervisor for purposes of sexual harassment cases.  The effect of this is that employers will have an easier time defending sexual harassment cases.

The Court in Vance v. Ball State University, 570 U.S. _____ (2013), took on a question left open by prior decisions Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998) and Faragher v. Boca Raton, 524 U.S. 775 (1998).

Both Ellerth and Faragher dealt with when a company can be held responsible for sexual harassment.  In these cases, the Court held that employers are vicariously liable for harassment by a supervisor when it leads to a tangible employment action, including firing, hiring, failure to promote, job reassignment, or loss in benefits.  In such cases, an employer is strictly liable for the harassment, whether or not the employer knew about the harassment.

Furthermore, the Court previously held that a company is vicariously liable for “hostile work environment” harassment by a supervisor, even where there is no tangible job employment action.  In such cases, employers can attempt to raise a defense (which is the employer’s burden to prove) that the employer exercised reasonable case to prevent and correct harassing behavior, and that the plaintiff failed to take advantage of such opportunities.

In cases of non-supervisor harassment, courts look to whether or not the employer knew or should have reasonably known about the harassment, but failed to take remedial action.

So, it becomes important to know who is and is not a supervisor when defending claims of sexual harassment.

Today’s decision in Vance stated:

“We hold that an employer may be vicariously liable for an employee’s unlawful harassment only when the employer has empowered that employee to take tangle employment actions against the victim…”

In doing this, the Court rejected the EEOC’s definition of “supervisor,” which lower courts had been utilizing.  Under that definition, a supervisor was one who had the ability to exercise significant direction over an employee’s work. This could have led to situations where a co-worker who had some oversight, even for a short period, could be deemed to be a supervisor.

The Court’s 5-4 decision by Justice Alito is a victory for employers, but by no means signals that employers can not be liable for non-supervisory harassment.  The Court stated “As an initial matter, an employer will always be liable when its negligence leads to the creation or continuation of a hostile work environment.  And even if an employer concentrates all decisionmaking authority in a few individuals, it will likely not isolate itself from heightened liability under Faragher and Ellerth.  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 actually interact with affected employees. … Under those circumstances, the employer may be held to have effectively delegated actions to the employees on whose recommendations it relies.”

Overall, Vance does not change the landscape much.  But it does provide some help to employers for the actions of individuals who can’t directly or indirectly take tangible job actions against employees or applicants.

While Vance gives employers some comfort, it is important for employers to continue to provide an avenue for reporting harassment that will lead to proper investigations and results.  An employer can not simply turn a blind eye to an atmosphere charged with sexual harassment.  And, employers still need to be aware that even if an individual can not directly fire or discipline an employee, that individual may still be a supervisor if their input is given weight in employment decisions.  Proper policies and training remain invaluable in this context.