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Legal Alert

New U.S. Supreme Court Decisions Immediately Affect Employer's Liability for Certain Wrongful Conduct by Supervisors

July 1, 2013

A deeply divided United States Supreme Court issued important decisions this past Monday regarding an employer's liability for the conduct of its supervisors and retaliation liability under federal anti-discrimination law. Maslon has long recommended that employers implement effective policies against discrimination, harassment and retaliation, and train all employees, including supervisors, on those policies. Training supervisors is critically important as a supervisor's wrongful acts have the ability to impose significant liability on an employer. For your reference, summaries of the Supreme Court decisions are provided below.

Supervisor Liability

Background. The federal anti-discrimination law is Title VII of the Civil Rights Act of 1964 ("Title VII"). Under Title VII, an employer is strictly liable for unlawful harassment if the perpetrator is a victim's "supervisor," and the supervisor's harassment results in a tangible adverse employment action. In lay terms, if such supervisory harassment results in something bad happening to the employee on the job (for example, termination of employment, demotion, bad review, pay cut, or denial of promotion), the employer is automatically liable for the conduct of the supervisor.

New Ruling. In Vance v. Ball State University, the Court provided valuable guidance for employers to identify who in their organizations are "supervisors." The Court held that to hold the employer "strictly" liable, the victim of alleged harassment must prove that the alleged perpetrator was "empowered by the employer" to take "tangible employment actions" against the victim. According to the Court, this means that the alleged harasser must be in a position 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." The fact that a supervisor's decisions are subject to approval of his or her superiors is not fatal to a claim of strict liability. However, the mere ability to direct another employee's tasks, by itself, is not sufficient to make the employer automatically liable. Interestingly, the Court rejected the approach recommended by enforcement guidelines issued by the Equal Employment Opportunity Commission (EEOC), which would make the determination of a supervisor's status dependent upon a case-specific multi-factor analysis.

The Court noted that even if the harasser is not a supervisor, a plaintiff can still prevail by showing that his or her employer was negligent in failing to prevent harassment from taking place. For example, a plaintiff can prove his or her case by introducing evidence that the employer did not monitor the workplace, failed to respond to complaints, failed to provide a system for registering complaints, or effectively discouraged complaints from being filed. In Vance, the plaintiff was an African-American woman who alleged that she was subject to racial harassment by a white co-worker. The parties agreed that the allegedly harassing co-worker did not have the power to hire, fire, demote, promote, transfer, or discipline her. Based on the Court's interpretation of Title VII, the employer was found not to be strictly liable for the conduct of the plaintiff's co-worker. The court also found that the employer was not negligent because it responded reasonably to the incidents of which it was aware.

Retaliation Liability

Background. Title VII, and virtually all federal, state and local anti-discrimination laws, prohibits retaliation against individuals who complain about discrimination or engage in other recognized types of protected conduct.

New Ruling. The Court decided in University of Texas Southwestern Medical Center v. Nassar that a Title VII retaliation claim must be proved according to what the law calls "but-for" causation. This is a tougher standard than applies in a typical case alleging illegal discrimination, in which the discriminatory motive need only be one of many motives for the adverse employment action (a so-called "mixed motive.") Instead, the Court ruled that in a retaliation case, the plaintiff must prove that "but for" the complaint about discrimination or engaging in other protected conduct, the employee would not have suffered a job loss or other type of adverse employment action. A "mixed motive" is not sufficient. In Nassar, the plaintiff alleged that his superior was biased against him because of his religion and ethnic heritage, based upon what the plaintiff believed was undeserved scrutiny of his billing practices and productivity, as well as statements reflecting biased attitudes toward people of Middle Eastern descent. Despite obtaining a promotion with the assistance of the alleged harasser, the plaintiff resigned his position and sent a letter accusing his supervisor of harassment. The employee then tried to arrange to continue working in a different position. The employer initially offered the plaintiff another position, but withdrew the offer after the supervisor of the accused harasser expressed consternation at the plaintiff's accusations and persuaded the employer to withdraw the offer.

The plaintiff won his case in the lower courts, but the Supreme Court reversed and ordered further proceedings that will require the plaintiff to prove the harm would not have occurred "but for" his complaints of harassment.

Next Steps for Employers

  1. Develop and publicize strong anti-harassment, anti-discrimination and anti-retaliation policies with clear and multiple avenues for employees to report concerns. 
  2. Provide supervisor training whereby supervisors learn the employer's policy and how to properly handle employee complaints.
  3. Thoroughly investigate complaints of discrimination and harassment and if there is any wrongdoing found, be sure to adequately document the effective remedial action taken by the employer. Even if the investigation finds no wrongdoing, be sure to document the investigation and findings to show the company's due diligence. 
  4. Review and revise job descriptions keeping in mind the Supreme Court's decision regarding who is and who is not a true supervisor for purposes of Title VII. 

We Can Help.
Please contact Maslon's Labor & Employment Group if you have questions about how to handle discrimination, harassment or retaliation complaints, or if you would like more information about how these developments may impact your firm's policies or practices.


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