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Supervisory and Coworker Harassment: Narrowing the Differences Between Separate Standards of Employer Liability

Monday, March 12, 2012
George Patterson | Bloomberg Law Federal courts have traditionally held employers to a much stricter standard when assessing liability for workplace harassment committed by supervisors than when the harassing employee is the plaintiff's mere coworker. Over time, however, many courts have rejected precise rules for distinguishing between supervisors and coworkers based on objective criteria. Several federal circuits continue to confer supervisory status only on those members of management with authority to take "tangible" employment actions against the complaining employee. Nevertheless, a number of state and federal courts have begun to prefer a more subjective method requiring an analysis of the specific work environment in each particular case. This approach holds employers to the more stringent standard governing supervisory harassment if the harasser has the ability to direct the victim's daily work activities — even in the absence of any authority to hire, fire, demote, reassign or alter pay and benefits. Moreover, courts adopting this view vary with respect to the amount of control that is necessary to render the harassing employee a supervisor. Consequently, employers subject to the more flexible, case-by-case approach to establishing supervisory status face substantial organizational and human resource challenges as they seek to identify the proper scope of managerial authority and anticipate which employees will be deemed supervisors in a dynamic labor force under an often imprecise standard. The United States Supreme Court recently requested the Solicitor General's views on the appropriate definition of "supervisor,"1 a clear sign that the high court will resolve this dispute in a case involving racial harassment under Title VII of the Civil Rights Act of 1964 (Title VII).2 Thus, employers and workers alike can soon expect long awaited guidance concerning their responsibilities with respect to workplace harassment, and litigants can hope for a more uniform standard in the federal courts for determining supervisory status and the contours of employer liability.

Meritor and the Origins of the Supreme Court's Harassment Jurisprudence

The United States Supreme Court first recognized sexual harassment as a form of sex discrimination actionable under Title VII in Meritor Savings Bank, FSB v. Vinson.3 Although the Meritor Court affirmed the D.C. Circuit's ruling in favor of a plaintiff who asserted claims of sexual harassment against her employer, it rejected the proposition that an employer is strictly liable for a supervisor's harassing conduct in all instances. Instead, the Court "decline[d] the parties' invitation to issue a definitive rule on employer liability," but agreed that "Congress wanted courts to look to agency principles for guidance in this area."4 Moreover, the Court found "Congress' decision to define 'employer' to include any 'agent' of an employer . . . surely evinces an intent to place some limits on the acts of employees for which employers under Title VII are to be held responsible."5 Accordingly, the Court determined that "the Court of Appeals erred in concluding that employers are always automatically liable for sexual harassment by their supervisors."6 The Court further distinguished between "quid pro quo" harassment, in which an employee is required to submit to sexual advances as a condition of employment or advancement, and "hostile environment" harassment, in which the harasser's conduct "has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment."7 In addition, the Court observed that, to be actionable, hostile environment harassment must be sufficiently "severe or pervasive" to alter the conditions of the plaintiff's employment and create "an abusive working environment."8 However, as the harassing employee in Meritor was the plaintiff's supervisor, the Court provided no further guidance regarding the differing standards of liability for coworker and supervisory harassment.

The Faragher/Ellerth Affirmative Defense

In 1998, the Supreme Court set forth a more comprehensive framework for evaluating employer liability for supervisory harassment in two landmark decisions, Faragher v. City of Boca Raton9 and Burlington Industries, Inc. v. Ellerth.10 Under the Faragher/Ellerth standard, employers are vicariously liable for supervisory harassment when the plaintiff experiences a tangible adverse employment action, such as termination, demotion or other changes to the terms or conditions of employment.11 However, if a supervisor harasses an employee without taking an adverse employment action — essentially by creating a hostile work environment — the employer is still subject to vicarious liability for the supervisor's conduct but may raise an affirmative defense to liability.12 In accordance with this affirmative defense, the employer must prove by a preponderance of the evidence that: (1) it exercised reasonable care to prevent and promptly correct any sexually harassing behavior; and (2) the plaintiff unreasonably failed to take advantage of preventive or corrective opportunities the employer provided.13 With respect to coworker harassment, the Supreme Court did not disturb precedent requiring the plaintiff to prove liability through general negligence principles, rather than through the imposition of vicarious liability. The negligence standard thus continues to be the rule in coworker harassment cases in the federal appellate courts.14 As the Ellerth Court explained, "[a]n employer is negligent with respect to sexual harassment if it knew or should have known about the conduct and failed to stop it."15 Accordingly, in a coworker harassment case, the employer must have reason to be aware of the harassing conduct and fail to take appropriate actions to remedy it before liability will attach. While courts nominally accept this negligence standard in coworker harassment cases in the post-Faragher/Ellerth environment, many have sought to expand protections for harassment victims by broadening the category of employees who fall within the definition of supervisor.

Defining "Supervisor"

One result of the Supreme Court's Faragher/Ellerth rulings was an increased focus in harassment cases on the type of power an employee must wield before that employee can be considered a "supervisor." Since neither Title VII nor the Supreme Court had actually defined supervisor, plaintiffs' attorneys encouraged courts to adopt the broadest possible interpretation to increase the likelihood that they would be able to benefit from the Supreme Court's more advantageous vicarious liability standard when claiming damages for harassment. Conversely, counsel for management sought to require a clearly identifiable level of managerial authority — preferably one formally acknowledged within the relevant corporate chain of command — before an employee could be legally deemed a supervisor. As courts grappled with the policy implications of these competing approaches, different jurisdictions began to diverge considerably with respect to the requirements necessary to establish supervisory status. — Parkins' Tangible Action Standard The Seventh Circuit's ruling in Parkins v. Civil Constructors of Ill., Inc.16 initially represented the majority view of supervisory status, defining supervisor as one who has "the power to hire, fire, demote, promote, transfer, or discipline an employee." In Parkins, a female truck driver sued her employer under Title VII for hostile environment sexual harassment and retaliation. The court affirmed summary judgment for the employer, holding that the two foremen who harassed the plaintiff were not her supervisors based on multiple factors, including that they: (1) were hourly laborers; (2) could not decide what work was to be done; (3) had no authority to decide how many employees to assign to their crews; (4) answered to a superintendent who made all significant decisions and handled employee evaluations; and, (5) could merely recommend, rather than order, employee terminations.17 The First and Eighth Circuits, and initially the Fourth Circuit, adopted the Seventh Circuit's straightforward definition requiring that supervisors have the authority to take some "tangible employment action," such as firing or demotion, against subordinates.18 The First Circuit explained that "[w]ithout some modicum of this authority [to take tangible employment actions], a harasser cannot qualify as a supervisor for purposes of imputing vicarious liability to the employer in a Title VII case, but, rather, should be regarded as an ordinary coworker."19 The Fourth Circuit took this view further in holding that a corporal in the Durham, North Carolina police force was not the supervisor of a private-level officer who sued the city for harassment because the corporal's "authority . . . did not include the power to take tangible employment actions against [the plaintiff] and her rank-peers. At most it would involve the occasional authority to direct her operational conduct while on duty."20 Similarly, the Eighth Circuit held that the harasser must have the power — even if not exercised — to take tangible employment actions.21 In addition, the Sixth Circuit and federal trial courts within its jurisdiction appear to favor a comparable approach, holding that supervisors should have "power to hire or fire."22 Parkins' requirement that a supervisor have authority to take tangible employment actions against the harassment victim before an employer can be held vicariously liable under Title VII provides clarity, as employees at all levels typically understand which members of the company retain the official power to hire, fire and demote. Moreover, this definition does not foreclose harassment victims from obtaining remedies since, as discussed, plaintiffs may still prove employer liability for coworker sexual harassment under negligence principles. — Mack: The Ability to Control Nevertheless, the Second Circuit found the Parkins approach too rigid and adopted a more expansive definition of the term supervisor in Mack v. Otis Elevator Co.23 Prior to Mack, some federal courts had already refused to limit the designation of supervisor to those who could take tangible employment actions against subordinate employees. The District of Minnesota, for example, noted that restricting employer vicarious liability to the acts of those with authority to fire and demote would allow "an employer to effectively insulate itself from the application of Faragher, and Ellerth, simply by directing all critical personnel decisions to be effected by a personnel department, which may have no direct, and only infrequent contact with the employee subject to the harassment."24 Moreover, in Dinkins v. Charoen Pokphand USA,25 the Middle District of Alabama explained that "an employee is a supervisor or 'agent' for purposes of Title VII if he has the actual authority to take tangible employment actions, or to recommend tangible employment actions if his recommendations are given substantial weight by the final decisionmaker, or to direct another employee's day-to-day work activities in a manner that may increase the employee's workload or assign additional or undesirable tasks."26 The court opined that this more flexible definition of supervisor was justified since a "harassing employee, endowed with limited actual authority to monitor co-employees, will sometimes fool his comrades for evil ends. Such misconduct is foreseeable, and liability will attach to the employer under the doctrine of apparent authority, provided that the victim reasonably believed that the harasser possessed supervisory powers."27 In Mack, the Second Circuit relied on the Equal Employment Opportunity Commission's (EEOC) Enforcement Guidance28 to explain that supervisors include individuals who can direct an employee's daily activities, regardless of whether they have authority to take tangible employment actions. Applying this rationale, the court found that the elevator "mechanic in charge" at the Metropolitan Life Building on Park Avenue in Manhattan was the supervisor of a "mechanic's helper" who sued the employer for sexual harassment. In reaching its decision, the court was untroubled by the fact that the mechanic in charge lacked the authority to take tangible employment actions or affect the plaintiff's terms or conditions of employment as those concepts were understood in Parkins.29 The Second Circuit rejected the Parkins standard and held that, under Faragher/Ellerth, "an employer may be vicariously liable even for the misbehavior of employees who do not take tangible employment actions against their subordinate victims. The question in such cases is not whether the employer gave the employee the authority to make economic decisions concerning his or her subordinates. It is, instead, whether the authority given by the employer to the employee enabled or materially augmented the ability of the latter to create a hostile work environment for his or her subordinates."30 Ninth Circuit opinions share this view and, after initially following the Parkins approach, the Fourth Circuit appears to have adopted the Mack analysis as well.31

Challenges of a More Subjective Standard

This shift away from focusing on the harasser's authority to hire, fire and demote in favor of an emphasis on the victim's "reasonable belief" that the harasser "possessed supervisory powers"32 represents a clear departure from the precise rule established in the Parkins line of cases. Further, it requires a much more fact-intensive inquiry, taking into consideration "the totality of the circumstances"33 in each particular workplace. Indeed, in some instances courts have relied on the analytical framework of Mack and Dinkins to redefine supervisor based on a wide-ranging set of subjective factors. For example, in Entrot v. BASF Corp.,34 the New Jersey Appellate Division, resolving a hostile environment sexual harassment claim under New Jersey's Law Against Discrimination,35 which is analogous to Title VII, established a far more flexible approach to determining supervisory authority. Reversing the trial court's ruling that the harasser was not the plaintiff's supervisor, the court explained that "instead of requiring a litmus test depending on specific factors (e.g., power to fire or power to control daily tasks)," the determination should "turn on whether the power the offending employee possessed was reasonably perceived by the victim, accurately or not, as giving that employee the power to adversely affect the victim's working life."36 Finding the power to take tangible employment actions as "probative of supervisory status," but not necessary to establish it, the court concluded that other relevant information might include "any evidence that the alleged harasser controlled the workplace in subtler and indirect ways, as long as the effect was to restrict the victim-employee's freedom to ignore sexually harassing conduct."37 The fact that a plaintiff's subjective perception — "accurate[] or not" — of the harasser as her supervisor may be enough to impose vicarious liability on an employer appears problematic in some respects. In jurisdictions in which this standard applies, plaintiffs who fail to alert their employers of harassment by those who are not clearly supervisors can later seek to avoid summary judgment by simply asserting that they felt helpless to resist the harasser's perceived authority. This result seems incompatible with the principle that a clear distinction should exist between supervisor and coworker harassment for purposes of establishing employer liability.38 Further, imputing liability to an employer based on a plaintiff's inaccurate perception that the harasser was a supervisor does not appear likely to promote the Supreme Court's goal of encouraging employers to institute anti-harassment policies and training. As the Court explained in Faragher, "the employer has a greater opportunity to guard against misconduct by supervisors than by common workers; employers have greater opportunity and incentive to screen them, train them, and monitor their performance."39 Since employers subject to the Mack approach will not know which employees should be trained as supervisors rather than rank and file workers — because they cannot anticipate a future plaintiff's subjective perceptions — they may adopt poorly targeted training policies despite their best efforts. While Mack originally represented the minority view, the trend in many jurisdictions appears to be toward a broader definition of supervisor. In fact, even the Seventh Circuit, which decided Parkins, held there was "no compelling need to make a dichotomous choice" between strict liability and negligence in a case involving a shift supervisor with some, but not all, of the powers of a "paradigmatic" supervisor who harassed a teenaged employee at an ice cream parlor.40 In addition, the EEOC's standard for determining supervisory status rejects the Parkins tangible action requirement in favor of the analysis described in Mack and Dinkins.41 Although courts are not obligated to follow the EEOC's guidelines, they often accord deference to federal agencies' interpretations of the laws those agencies are charged with enforcing.42 Accordingly, even employers in jurisdictions that follow the Parkins rule should be prepared to respond to variations of the argument that vicarious liability is warranted because the harasser "controlled the workplace in subtler and indirect ways."43

Relaxing the Plaintiff's Burden in Coworker Harassment Cases

Despite the judicial divide over the definition of supervisor, some courts have circumvented the issue by reframing the negligence standard in coworker harassment cases to incorporate elements of the affirmative defense normally applicable in cases of supervisory harassment. These decisions have made it easier for plaintiffs to recover damages for coworker harassment by finding negligence based on the absence of effective anti-harassment policies, not on whether the employer knew or should have known of the coworker's harassing acts. Such rulings appear contrary to the original understanding of Faragher/Ellerth as imposing an obligation on employers to demonstrate effective anti-harassment policies only in response to claims of supervisor harassment. In Ocheltree v. Scollon Prods.,44 the Fourth Circuit upheld a jury verdict for a sexual harassment plaintiff and found that, even though the employer lacked knowledge of the harassing coworkers' conduct, it was negligent in failing to maintain an effective anti-harassment policy. In the court's view, a jury could have determined that the employer did not provide the employee with reasonable opportunities to report sexual harassment, and thus, could be charged with "constructive knowledge" of the harassing acts.45 The Fourth Circuit reiterated this principle in 2011, explaining that under Faragher/Ellerth, "an employer may be charged with constructive knowledge of co-worker harassment when it fails to provide reasonable procedures for victims to register complaints."46 In addition, the Third Circuit's language in a 2009 opinion appears to provide a similar means of establishing liability for coworker harassment: ". . . employer liability for co-worker harassment exists only if the employer failed to provide a reasonable avenue for complaint or, alternatively, if the employer knew or should have known of the harassment and failed to take prompt and appropriate remedial action."47 On its face, this approach would appear to blur the distinction between Faragher/Ellerth's separate standards of employer liability for hostile environment harassment — in which coworker harassment requires the plaintiff to prove that the employer knew or should have known of the conduct and failed to remedy it, and supervisor harassment requires the employer to prove as an affirmative defense that it had effective anti-harassment policies in place that the plaintiff failed to utilize. However, courts that have accepted the absence of preventive measures as evidence of "constructive knowledge" in coworker harassment cases have noted that they are merely employing traditional tort law principles under Faragher/Ellerth's negligence prong.48 As the Fourth Circuit explained, nothing in Faragher/Ellerth or its progeny suggests that "[a]n employer [can] avoid Title VII liability for coworker harassment by adopting a 'see no evil, hear no evil' strategy."49 Finally, under a constructive knowledge theory, the burden of proving coworker harassment directly remains at all times with the plaintiff, in contrast to cases of supervisor harassment in which the employer must prove an affirmative defense to avoid vicarious liability. Therefore, it is probably an overstatement to claim that application of the constructive knowledge theory in coworker harassment cases represents a dramatic erosion of employer protections since defendants have never enjoyed a safe harbor from liability merely because the harasser is not a supervisor.

Supreme Court to Clarify Supervisory Authority

The Supreme Court is expected to clarify the definition of supervisor in response to the Seventh Circuit's decision in a racial harassment case, Vance v. Ball State University.50 In Vance, the plaintiff, who was the only African-American in her department, made numerous verbal and written complaints regarding her coworkers' use of racial epithets and other highly offensive conduct. After she filed a multi-count lawsuit, which included allegations that she was subjected to a racially hostile work environment, the district court granted summary judgment for the employer and the Seventh Circuit affirmed. The Seventh Circuit held that the plaintiff did not raise issues of material fact regarding whether one of the harassers was her supervisor merely by asserting that the harasser had the authority to tell plaintiff what to do and did not clock-in like other hourly employees. Evaluating the plaintiff's claim under the framework for coworker harassment, the court explained, "[w]e have not joined other circuits in holding that the authority to direct an employee's daily activities establishes supervisory status under Title VII."51 The specific question before the Supreme Court is: "Whether the 'supervisor' liability rule established by [Faragher/Ellerth] (i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim's daily work, or (ii) is limited to those harassers who have the power to 'hire, fire, demote, promote, transfer, or discipline" their victim.'"52 As discussed, courts are sharply divided on this issue, with those taking the approach favored by management holding that businesses cannot function without consistent, predictable guidelines as to which employees' actions are imputable to the company, and those focused on workers' rights concluding that employers should be vicariously liable for an employee's abuse of whatever degree of supervisory authority the employer vests in him or her.53 Although the Supreme Court's decision will necessarily benefit one interest group over another, employment attorneys should at least welcome the promulgation of uniform standards for employer liability in hostile environment cases, given the divergent approaches that federal courts have struggled to reconcile since Faragher/Ellerth.
1 Vance v. Ball State University, No. 11-556, Solicitor General invited to file a brief (Feb. 21, 2012). 2 42 U.S.C. § 2000e, et seq. 3 477 U.S. 57 (1986). 4 477 U.S. at 72. 5 Id. 6 Id. 7 Id. at 65, citing Equal Employment Opportunity Commission, Guidelines on Discrimination Because of Sex, 29 C.F.R. § 1604.11(a)(3). 8 Id. at 67. 9 524 U.S. 775 (1998). 10 524 U.S. 742 (1998). 11 Ellerth, 524 U.S. at 765; Faragher, 524 U.S. at 808. 12 Ellerth, 524 U.S. at 765; Faragher, 524 U.S. at 807. 13 Id. 14 See EEOC v. Prospect Airport Servs., Inc., 621 F.3d 991, 1001 (9th Cir. 2010) ("An employer is liable for an employee's sexual harassment of a coworker if it knew, or should have known, about the harassment and failed to take prompt and effective remedial action."); Williams v. General Motors Corp., 187 F.3d 553, 561 (6th Cir. 1999) ("To establish employer liability for harassment by a co-worker, a plaintiff must show that the employer 'knew or should have known of the charged sexual harassment and failed to implement prompt and appropriate corrective action.'") (internal citations omitted). 15 524 U.S. at 759. 16 163 F.3d 1027 (7th Cir. 1998). 17 Parkins, 163 F.3d at 1034. 18 Noviello v. City of Boston, 398 F.3d 76 (1st Cir. 2005); Mikels v. City of Durham, 183 F.3d 323 (4th Cir. 1999); Joens v. John Morrell & Co., 354 F.3d 938 (8th Cir. 2004). 19 Noviello, 398 F.3d at 96. 20 Mikels, 183 F.3d at 334. But see Whitten v. Fred's, Inc., 601 F.3d 231 (4th Cir. 2010) ("the existence of authority to take tangible employment action would establish that [the harasser] was [plaintiff's] supervisor, but the absence of that authority does not establish that [the harasser] was merely her co-worker.") 21 Joens, 354 F.3d at 940. See also Weyers v. Lear Operations Corp., 359 F.3d 1049, 1057 (8th Cir. 2004) (citing Joens for the proposition that "to be considered a supervisor, 'the alleged harasser must have had the power (not necessarily exercised) to take tangible employment action against the victim, such as the authority to hire, fire, promote, or reassign to significantly different duties'"). 22 Stevens v. U.S. Postal Serv., 21 Fed. Appx. 261 (6th Cir. 2001) (unpublished); Browne v. Signal Mountain Nursery, LP, 286 F. Supp. 2d 904 (E.D. Tenn. 2003). 23 326 F.3d 116 (2d Cir. 2003), cert. denied, 540 U.S. 1016 (2003). 24 Grozdanich v. Leisure Hills Health Center, Inc., 25 F. Supp. 2d 953, 973 (D. Minn. 1998) 25 133 F.Supp. 2d 1254 (M.D. Ala. 2001). 26 Id. at 1266 (internal citations omitted). 27 Id. 28 U.S. Equal Employment Opportunity Commission Enforcement Guidance, Vicarious Employer Liability for Unlawful Harassment by Supervisors, modified March 29, 2010. 29 326 F.3d at 126. 30 Id. 31 Dawson v. Entek International, 630 F.3d 928 (9th Cir. 2011); McGinest v. GTE Service Corp., 360 F.3d 1106 (9th Cir. 2004); Whitten, 601 F.3d 231 (4th Cir. 2010). 32 Dinkins, 133 F.Supp. 2d at 1266. 33 Id. at 1267. 34 359 N.J. Super. 162 (App. Div. 2003). 35 N.J.S.A. § 10:5-1, et seq. 36 359 N.J. Super. at 181. 37 Id. 38 Swinton v. Potomac Corp., 270 F.3d 794, 803 ("A plaintiff may state a case for harassment against the employer under one of two theories: vicarious liability or negligence. Which route leads to employer liability depends on the identity of the actual harasser, specifically whether he is a supervisor of the employee, or merely a co-worker"). 39 Faragher, 524 U.S. at 803. 40 Doe v. Oberweis Dairy, 456 F.3d 704, 717 (7th Cir. 2006). 41 U.S. Equal Employment Opportunity Commission Enforcement Guidance, Vicarious Employer Liability for Unlawful Harassment by Supervisors, modified March 29, 2010. 42 Mack, 326 F.3d at 127 ("While we are not bound by enforcement guidelines, they are entitled to respect to the extent that they are persuasive.") 43 Entrot, 359 N.J. Super. at 181. 44 335 F.3d 325 (4th Cir. 2003) cert. denied, 540 U.S. 1177 (2004). 45 335 F.3d 333. 46 Hoyle v. Freightliner, LLC, 650 F.3d 321, 335 (4th Cir. 2011) 47 Huston v. Procter & Gamble Paper Products Corp., 568 F.3d 100, 104 (3d Cir. 2009) 48 Ocheltree, 335 F.3d at 334 ("We limit our discussion to the negligence (or constructive knowledge) theory because the evidence is sufficient to support the jury's finding that [the employer] should have known that [plaintiff] was being harassed by her coworkers"). 49 Id. 50 646 F.3d 461 (7th Cir. 2011). 51 646 F.3d at 470. 52 Vance v. Ball State University, No. 11-556, Petition for Writ of Certiorari (Feb. 21, 2012). 53 Browne, supra, 286 F.Supp. 2d at 913 (E.D. Tenn. 2003). DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. 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