U.S. Supreme Court Answers Question Left Open by Faragher and Ellerth: Adopts Definition of "Supervisor" for Purposes of Title VII Harassment Liability

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On June 24, 2013, the United States Supreme Court issued a decision in Vance v. Ball State, limiting the definition of "supervisor" as it relates to an employer's vicarious liability in Title VII harassment cases under the U.S. Supreme Court decisions in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and in Burlington Industries v. Ellerth, 524 U.S. 742 (1998). As made apparent by the Faragher and Ellerth decisions, an employer's liability for harassment depends, in part, on the supervisory status of the alleged harasser.

If the harasser is a non-supervisory co-worker, the employer is liable for the harassment only if the complaining employee can prove that the employer was negligent in either discovering or remedying the harassing conduct. If the alleged harasser is a "supervisor," however, the rules are different. If the harasser is a supervisor and the harassment culminates in a tangible employment action (e.g., demotion, termination), the employer is strictly liable for the harassment. If the alleged harasser is a supervisor, but the harassment does not involve a tangible employment action, an employer can avoid liability if it can establish, by affirmative proof, that (1) it exercised reasonable care to prevent and promptly correct the harassment; and (2) the employee unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided.

While the two decisions establish the rules for employer liability in harassment cases, they do not provide guidance on the key question as to who qualifies as a "supervisor" for Title VII purposes. In the Vance decision, the Court determined whether the "supervisor" liability rule established by Faragher and Ellerth applies to (1) harassment by those whom the employer vests with authority to direct and oversee their victims' daily work or (2) is limited to those harassers who have the power to hire, fire, demote, promote, transfer or discipline their victims.

In the Vance case, Maetta Vance, who is African-American, was employed as a catering assistant at Ball State University (BSU). Throughout 2005 and 2006, Vance submitted a number of complaints, both internally and to the Equal Employment Opportunity Commission (EEOC), alleging racial harassment and discrimination. Many of her complaints pertained to BSU employee Saundra Davis, a Caucasian who was employed as a catering specialist. While the parties vigorously disputed the precise nature and scope of Davis' duties relative to her ability to assign work to Vance, coach her or oversee her efforts, they agreed that Davis could not "hire, fire, demote, promote, transfer, or discipline." Despite BSU's efforts to resolve the issues, Vance filed this lawsuit in 2006 in the United States District Court for the Southern District of Indiana, claiming Title VII racial harassment. The district court held, and the Seventh Circuit later affirmed, that BSU could not be held vicariously liable for Davis' alleged racial harassment because Davis did not meet the definition of "supervisor" under the Seventh Circuit's interpretation, which required that Davis have the authority to "hire, fire, demote, promote, transfer, or discipline" Vance. Thus, the Court reasoned, BSU could be held liable only if Vance could show it was negligent in discovering or remedying the harassing conduct—a burden Vance failed to satisfy because BSU had responded reasonably to the incidents that Vance had reported.

On review, the Supreme Court affirmed the lower court's decisions and held that an employee qualifies as a "supervisor" for Title VII purposes only when the employer has empowered that employee to take tangible employment actions against the victim, i.e., 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 Court reasoned that the framework set out in Faragher and Ellerth presupposes a well-defined distinction between supervisors and co-workers, noting that, while co-workers can inflict psychological injuries by creating a hostile work environment, they cannot "dock another's pay, nor can one co-worker demote another." Furthermore, limiting the definition of "supervisor" to apply only to those individuals with the power to take tangible employment actions—as opposed to including those who, to some extent, direct or oversee daily work—yields a workable framework that can be applied without undue difficulty at both the summary judgment stage and at trial. Requiring parties to analyze whether an employee was sufficiently engaged in directing and overseeing work to qualify as a supervisor would "frustrate judges and confound jurors."

What This Means for Employers

The Vance decision appears favorable to employers in that it limits the pool of employees who qualify as supervisors under Title VII who would thereby subject employers to strict liability and higher burdens of proof. Employers may want to review their job descriptions to ensure that they accurately reflect the limits of their supervisory authority as laid out in Vance. In doing so, employers should still consider the impact such changes may have on other labor and employment contexts, such as eligibility to vote in a National Labor Relations Act election or exemption status under the Fair Labor Standards Act. Although this decision raises the bar in some circuits for supervisory status under Title VII, employers should be aware of state and local laws that may define supervisory status more broadly and laws like the New York City Human Rights Law and the California Fair Employment and Housing Act, which do not provide for the Faragher/Ellerth affirmative defense from liability at all in discriminatory harassment cases.