Ellerth and Faragher: New Rules for an Old Game

Betsy K. Dorminey*

Sex always causes a sensation and rarely is conducive to clear thinking. In back-to-back decisions issued at the close of its 1997-1998 term, the Supreme Court revisited the foundations of Title VII jurisprudence and set out new rules for employer liability for sexual harassment by supervisory employees of their subordinates. Although initial reports suggested that these cases might vastly increase employer liability for such conduct, some courts (and defense counsel) have taken them as an opportunity to reassert a "back-to-the-Title (VII)" logic that in the long run may actually cause the pool of potential plaintiffs in the workplace to diminish.

The two decisions in question, of course, are Ellerth v. Burlington Indus., Inc., 118 S. Ct. 2257 (1998) (Kennedy, J., writing for the majority; Ginsberg, J., filing separate opinion, concurring in judgment; Thomas, joined by Scalia, JJ., dissenting), and Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998) (Souter, J., writing for the majority; Thomas, joined by Scalia, JJ., dissenting). These cases sweep aside the earlier McKinnonite analysis of "quid pro quo" and "hostile environment" and hold that an employer is vicariously liable to an employee who suffers sexual harassment at the hands of a supervisor. Negligence is out as a theory; agency principles are in. However, the decisions describe an "affirmative defense:" an employer may avoid liability if the employee suffers no tangible job detriment and the employer can show that (1) it had a policy against sexual harassment which provided an effective means for making complaints either through the chain of command or directly to human resources and took prompt corrective action; and (2) the employee unreasonably failed to take advantage of the procedure.

A brief review of the facts of each case will place them in context. The employee in Faragher, a lifeguard for the City of Boca Raton, quit because of constant harassment by her supervisors, but never complained to management until long after she had left employment. She sued the City for sexual harassment. Acknowledging that the City had not been negligent because it had not known about the problem, the Court nonetheless held it vicariously liable for the supervisor’s harassment, reasoning that an employer should be liable for sexual harassment engaged in by its supervisory employees to the same extent as it would be liable if those employees committed other torts, such as reckless driving.

In Ellerth, the Court held that under Title VII an employee who refuses the unwelcome and threatening sexual advances of a supervisor, yet suffers no adverse, tangible job consequences, may recover against the employer without having to show that the employer was negligent or otherwise at fault for the supervisor’s actions. The employee in this case had suffered no tangible job detriment, in fact had been promoted while the harassment was allegedly occurring, and never complained about her supervisor’s misconduct until after she resigned. The Court, focusing once again on the employer’s liability for acts by its subordinates rather than on the concept of whether or not the employer had been negligent, found for the employee but remanded the case to the District Court for a determination of whether the employer could make out a defense against her claims.

These two cases conjure up the ghastly specter of liability despite blissful ignorance on the part of the employer, but at the same time a ray of hope shines forth. Its source lies in Justice Thomas’ concurrence in another famous sex case decided this term, Oncale v. Sundowner Offshore Services, Inc., 118 S. Ct. 998 (1998). In that case, which held that Title VII prohibited same-sex sexual harassment, Justice Thomas offered the following concurrence which, on account of its admirable brevity, will be reproduced here in its entirety:

I concur because the Court stresses that in every sexual harassment case, the plaintiff must plead and ultimately prove Title VII’s statutory requirement that there be discrimination "because of . . . sex."

Oncale, 118 S. Ct. at 1003.

Justice Thomas, as usual, makes an excellent point that many may have missed. It is plain from the language of the statute that Title VII forbids only "discriminat[ion] because of . . . race, color, religion. sex, or national origin." 42 U.S.C. 2000e-2(a)(1); Albemarle Paper Co. v. Moody, 422 U.S. 405, 418 , 95 S. Ct. 2362, 2372 (1975) (Title VII seeks "to make persons whole for injuries suffered on account of unlawful employment discrimination.").

For discrimination to be actionable the plaintiff bears the burden of proving that there is a causal connection between the alleged harassment and his "race, color, religion, sex, or national origin." See Meritor Sav. Bank v. Vinson, 477 U.S. 57, 106 S. Ct. 2399, 2405 (1986). The majority in Oncale stated that "Title VII does not prohibit all verbal or physical harassment in the workplace; it is directed only at ‘discriminat[ion] . . . because of . . . sex.’" (original emphasis). Underscoring this point, the Oncale Court held that "[w]hatever evidentiary route the plaintiff chooses to follow, he or she must always prove that the conduct at issue was not merely tinged with offensive sexual connotations, but actually constituted "discriminat[ion] . . . because of . . . sex." Id.

Many plaintiffs will have no adequate answer to this fundamental, threshold question. Most harassment cases devolve into a tearful litany of wrongs done to the complaining party; all too often true, they nonetheless cannot always show that any person not a member of the plaintiff’s protected category was treated any better. On the contrary, the evidence often demonstrates rather that the plaintiff’s co-workers were treated equally badly and that the boorish conduct, although deplorable, is not actionable under Title VII. Where everyone is a victim at one time or another of rough horseplay and there is no evidence of sexual motivation there is no actionable discrimination. Oncale, 118 S. Ct. at 1002 ("The critical issue, Title VII’s test indicates, is whether members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not exposed.") (citation omitted). Thus many plaintiffs cannot meet what the Supreme Court in Ellerth described as the threshold question of showing actionable discrimination "because of . . . sex." Ellerth, 118 S. Ct. at 2264; see also Oncale, 118 S. Ct. at 1002 ("Title VII does not prohibit all verbal or physical harassment in the workplace; it is directed only at ‘discrimination . . . because of . . . sex.’").

Faragher and Ellerth hold that an employer, though vicariously liable for the acts of its supervisory employees, may invoke an affirmative defense to discrimination except "when the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment." Ellerth, 118 S. Ct. at 2270. What constitutes a "tangible job action" is certain to be a subject for lively litigation. The regrettable inclusion of "undesirable reassignment" with the more easily ascertained "discharge [or] demotion" provides considerable latitude to plaintiff’s lawyers. Is an assignment to clean-up detail enough to breathe life into a harassment charge? We’ll see.

Ellerth and Faragher leave many other questions hanging. For example, the decisions imply that for an employer to be vicariously liable for a supervisory employee’s harassment, the "tangible employment action" which is the culmination of the harassment must be attributable to the harasser. Ellerth, 118 S. Ct. at 2271 ("Although Ellerth has not alleged she suffered a tangible employment action at the hands of Slowik [her supervisor], which would deprive Burlington of the availability of the affirmative defense . . . ") (emphasis added). What if an employee is harassed by a supervisor but then laid off by someone else as part of a reduction in force? If a court holds that the layoff is a "tangible job action" then the employer is prohibited from presenting the affirmative defense, and liability that began as vicarious becomes strict.

The decisions appear to limit the class of employees whose acts may subject an employer to liability: "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." Ellerth, 118 S. Ct. at 2270 (emphasis added). This apparently completely absolves an employer for liability for harassment of an employee by another employee of equal or lesser rank, and also should settle in favor of the employer the question of employer liability for harassment of employees by customers or clients, which hitherto has been debated.

How to go about making out the affirmative defense itself is problematic. "When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability . . . subject to proof by a preponderance of the evidence . . . The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise." Ellerth, 118 S. Ct. at 2270. Is this a defense to liability or mitigation of damages? If we’re speaking the language of agency, whence this notion of "reasonable care" usually associated with negligence? What is the significance of the conjunction ("and") linking the two prongs of this defense? Of more immediate concern to both employers and employees is the role that prompt remedial action plays in the new regime. Is an employer to be given no credit for attempting to remedy a bad situation after the fact?

One of the most significant effects of these decisions may be to change corporate culture, though perhaps not in exactly the manner desired by many self-styled proponents of women’s rights. Ellerth and Faragher impose vicarious liability on employers, but (in the absence of tangible job action) not strict liability. The decisions recognize that an employee who believes he or she is being victimized has some duty and obligation to complain to the employer, and if the employer has taken reasonable steps to implement a procedure whereby such complaints may be made, it will not be liable to an employee who fails to use them. It is on this point that several District Courts and Courts of Appeals have focused to relieve an employer of liability for the alleged harassment of an employee who claimed to be afraid to complain for fear of losing his job.

One such case recently was reported in the Wall Street Journal (Tues., Sept. 22, 1998, A-1). This case, Montero v. Agco Corp., 1998 U.S. Dist. LEXIS 13956 (E.D. Cal. 1998), was brought by a plaintiff who worked for the employer from April 1993 until July 1995, when she resigned. The plaintiff contended that her supervisors began to harass her shortly after she was hired, but she did nothing until March 1995. When at last she did complain, the company promptly investigated and the harassers were duly terminated. The court found that at all relevant times the employer had maintained and enforced a policy against harassment and retaliation. Applying Faragher, the court concluded that the employer had met its burden of showing that it had exercised reasonable care to prevent and correct promptly the sexually harassing behavior, and that the plaintiff unreasonably failed to take advantage of the preventive and corrective measures the employer provided. Summary judgment was awarded to the employer.

Those who advise employers can take heart from this and similar decisions which to some extent use Faragher and Ellerth to turn the tables on plaintiffs. The message from the employer is loud and clear: if you have a problem, it’s your obligation to complain; and if you’re not going to complain, it’s not going to become our problem. This, of course, is precisely the kind of workplace change that Title VII was intended to produce, and while it may result in some courtroom losses for plaintiffs, in the long run it probably will produce a more civil climate in the workplace.

*Betsy K. Dorminey is an attorney with Wimberly & Lawson in Athens, Georgia and is also the vice chairman for programs of the Federalist Society’s Labor and Employment Practice Group.


2001 The Federalist Society