Vance v. Ball State University: U.S. Supreme Court Decides When Employers Are Vicariously Liable for Workplace Harassment

August 13, 2013

Employment Law BookMy last post discussed University of Texas Southwestern Medical Center v. Nassar, __ U.S. __, 133 S.Ct. 2517 (June 24, 2013), in which the “conservative” majority on the United States Supreme Court adopted a strained interpretation of the federal employment discrimination laws in order to curtail what it characterized as “frivolous” retaliation claims against employers. This post discusses  Vance v. Ball State University,  __ U.S. __, 133 S.Ct. 2434 (June 24, 2013), another employment decision issued by the Court on the same day it decided Nassar. In Vance, the Court limited the circumstances in which an employer can be vicariously liable for workplace harassment.

The specific question before the Court in Vance was who qualifies as a “supervisor” whose discriminatory conduct is automatically imputed to the employer. In deciding the question, the Court was not constrained by the language of Title VII, as it was in Nassar. The term “supervisor” does not appear in Title VII. Rather, in previous decisions, the Court had unilaterally adopted the term as a label for the class of employees whose misconduct may give rise to vicarious employer liability for workplace harassment. The Court therefore was free to consider public policy in defining the “supervisor” and scope of vicarious liability under Title VII.

Legal Background: Employer Liability Depends on Whether Harasser Is Supervisor or Co-Worker

The United States Supreme Court established a framework for determining an employer’s liability for workplace harassment in Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998), and Faragher v. Boca Raton, 524 U.S. 775, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998). Under Title VII, as construed in Ellerth and Faragher, the ability of a victim of sexual or racial harassment in the workplace to recover damages from his or her employer is affected by whether the harasser is a “supervisor” or a “co-worker.”  If the harassing employee is the victim’s co-worker, the employer is liable only if it was negligent in controlling working conditions. By contrast, if the harasser is a supervisor, the employer will be held strictly liable for harassment that results in a tangible employment action.  If supervisor’s harassment does not result in tangible employment action, the employer is still presumptively liable unless it can make out an affirmative defense by showing that (1) it exercised reasonable care to prevent and correct any harassing behavior and (2) that the plaintiff unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided.

Both Ellerth and Faragher, however, left open the question of who qualifies as a “supervisor” for purposes of determining employer liability for workplace harassment. In the fifteen years since Ellerth and Faragher were decided, two distinct approaches to the question have emerged. Courts  in the Second and Fourth Circuits have adopted the EEOC’s position that anyone with authority to direct daily work activities is a supervisor, regardless of whether that person has the authority to hire, fire, demote and promote the victim. Courts in First, Seventh and Eighth Circuits have taken the position that only those with authority to take tangible employment action are supervisors. The Supreme Court granted review in Vance to settle the issue.

The Majority’s Opinion

The Court opted for a bright-line rule that conditions the employer’s vicarious liability on the employer having given the harasser the power to take tangible employment action against the victim. This means that the harasser must have the power 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 ability to direct another employee’s tasks is not sufficient.

Justice Alito, writing for the majority, extolls the virtues of a “unitary” rule that draws a clear distinction between supervisors and co-workers. A rule that allows for ready determination of whether the harasser is a supervisor permits the parties to assess the strength of the victim’s case and explore the possibility of early settlement. When early resolution is not possible, the parties can eliminate the question of supervisor status from trial through motions for summary judgment. Plaintiffs will then have a clearer understanding of what they have to prove at trial—negligence or merely the fact that harassment occurred. Employers will know whether they will have the burden of proving the elements of the Ellerth/ Faragher affirmative defense. Most important, according to Justice Alito, “the work of the jury, which is inevitably complicated in employment discrimination cases, will be simplified.”

Justice Alito contrasts the bright-line rule adopted by the Court with the EEOC rule, which he characterized as “nebulous” and “a study in ambiguity.” Under the EEOC rule, any harasser with authority over the victim “of sufficient magnitude . . . to assist the harasser in carrying out the harassment” qualifies as the victim’s supervisor. Determining what constitutes “sufficient” authority would, in his view, require a “highly case-specific evaluation of numerous factors” that “would frustrate judges and confound jurors.”  Moreover, with the issue of the harasser’s status still open when trial commences, “the parties would be compelled to present evidence and argument on supervisor status, the affirmative defense, and the question of negligence.”

Workplace Implications of Majority’s Ruling

Justice Ginsburg’s dissent, joined by Justices Breyer, Sotomayor, and Kagan, accuses the majority of being “blind to the realities of the workplace.” By “striking from the supervisory catagory employees who control the day-to-day schedules and assignments of others,” Ginsburg writes, the Court ignores “the conditions under which members of the work force labor.” She notes that Ellerth and Faragher initially adopted the distinction between supervisors and co-workers because, when “[e]xposed to a fellow employee’s harassment, one can walk away or tell the offender to ‘buzz off.’” By contrast, “[a]n employee who confronts her harassing supervisor risks, for example, receiving an undesirable or unsafe work assignment or an unwanted transfer.” This is true, she reasons, regardless of whether a “supervisor” has authority to take tangible employment actions because “[a] supervisor with authority to control subordinates’ daily work is no less aided in his harassment… by the power vested in [him] as [an] agent” of his employer “than is a supervisor with authority to fire, demote, or transfer.” The dissent warned that the majority opinion will result in “a diminished incentive to train those who control their subordinates’ work activities and schedules, i.e., the supervisors who ‘actually interact’ with employees.”

Justice Alito’s majority opinion goes out of its way to respond to the concerns of the dissenting justices. He points out that employees subject to harassment by co-workers can still prove the employer was negligent in permitting the harassment to occur, and advises trial courts to instruct the jury that “the nature and degree of authority wielded by the harasser is an important factor to be considered in determining whether the employer was negligent.” He further explains why employers cannot “insulate themselves from liability by empowering only a handful of individuals to take tangible employment actions.” Employers trying this gambit will find that the few decision makers “will likely rely on other workers who actually interact with the affected employee” in making their decisions. “Under these circumstances, the employer may be held to have effectively delegated the power to take tangible employment actions to the employees on whose recommendations it relies.”

Moreover, in discussing the facts of Faragher, Justice Alito seems to acknowledge that the line of demarcation between supervisors and co-workers is not as clear as other parts of his opinion suggest.  He notes that one of the harassers in Faragher may have qualified as a supervisor even though his job description did not include the authority to take tangible employment actions. This is because the assignment of “significantly different work responsibilities” by a higher level co-worker may rise to the level of a tangible employment action “[i]f that reassignment had economic consequences, such as foreclosing [the lower level employee’s] eligibility for promotion.”