The U.S. Supreme Court recently heard arguments in a case that could have a significant impact on employer liability.   Specifically, as the result of an appeal in Vance v. Ball State University, et al, 646 F.3d 461 (7th Cir. 2011), the Court is poised to decide who qualifies as a “supervisor” for purposes of liability under Title VII of the Civil Rights Act.

Background

Employers face Title VII liability when an employee is subjected to workplace harassment based on race, gender or other protected category and where there is a sufficient link between the harasser and the employer. Burlington Indus. v. Ellerth, 524 U.S. 742, 754-55 (1998); Harris v. Forklift Systems, Inc., 510 U.S. 17, 21 (1993).

The Supreme Court has held that this link is automatically established if a “supervisor” of the victim makes a tangible employment decisions — such as hiring or firing — based on the victim’s race or gender. See Ellerth, 524 U.S. 742, 755-58  (1998);  Faragher v. City of Boca Raton, 524 U.S. 775 (1998).   This link also can be established when a “co-worker” of the victim engages in racial or gender harassment, but only if the victim can demonstrate that the employer was “negligent either in discovering or remedying the harassment.” However, the link between “co-worker” harassment and employers can be broken if the employer (1) exercised reasonable care to prevent and promptly correct any harassing behavior, and (2) the employee “unreasonably failed to take advan- tage of any preventive or corrective opportunities provided by the employer.”  Ellerth, 524 U.S. at 765.

Consequently, employers are more likely to be found liable if an alleged harasser is classified as a “supervisor” of the victim.  This begs the question: Who, exactly, is the boss?

The Disagreement

The Equal Employment Opportunity Commission (“EEOC”) defines “supervisor” as an individual who has the authority to hire, fire, promote, or reassign the victim or as an individual who has the authority to direct the victim’s daily work activities.  This authority could include scheduling shifts or assigning daily projects.  Three federal courts of appeal — including the Fourth Circuit Court of Appeals, which covers North and South Carolina — agree with the EEOC’s definition.  See Whitten v. Fred’s, Inc., 601 F.3d 231 (4th Cir. 2010).   Thus, in North and South Carolina, employers are currently liable under Title VII if the harasser has the power to make the victim feel he or she cannot report the harassment — even if the harasser does not have the authority to fire the victim.

Conversely, three other courts of appeal consistently apply a restrictive — and more employer-friendly — defini- tion of “supervisor.”   Thus, in some parts of the country, the harasser’s’ behavior is not automatically linked to the employer unless the harasser has the direct power to “hire, fire, demote, promote, transfer or discipline”  the victim.  See Parkins v. Civil Constructors of Illinois, Inc., 163 F.3d 1027, 1034-35  (7th Cir. 1998).

Therefore, although liability  often hinges on whether an alleged harasser is a “supervisor”  or a “co-worker,” employers may encounter different definitions depending upon their location.   The Supreme Court has never decided which courts have it right; however, the frenzied environment of a large-scale catering department may have provided the perfect case to draw the line.

Maetta Vance and Ball State University

Maetta Vance, an African-American woman working in the Ball State University catering department, sued her employer under Title VII.  Vance claimed harassment from several white employees created a hostile work envi- ronment and caused her to work in a “constant state of fear.”  The trial court applied the restrictive definition of “supervisor” and agreed that Ms. Vance could not establish an automatic link to Ball State because her harassers did not have the authority to hire or fire her.  The Seventh Circuit Court of Appeals agreed. Vance v. Ball State University, et al., 646 F.3d 461 (7th Cir. 2011).   Vance appealed to the Supreme Court.  In November of last year, the Court heard arguments to decide who, exactly, is a “supervisor” once and for all.  A ruling is expected this spring.

Recommendations for Employers

Because the Fourth Circuit Court of Appeals takes a less- restrictive view of supervisor liability, employers in North and South Carolina could benefit from a more employer-friendly decision.  Regardless of the outcome, however, employers can and should take steps to avoid potential pitfalls in any case. For example, employers should:

1. Make employees aware that harassment will  not be tolerated.   This can be accomplished by drafting a thorough anti-harassment policy and making this policy known to all employees. Be sure to note that upper-level management encourages reporting harassment.
2. Take steps to clarify the roles and respective power of employees — especially those who schedule shifts, assign work, or determine how projects are completed — and communicate this information to all employees.
3. Take prompt and effective action to eliminate inappropriate behavior.

Stay tuned for future Employment Law Updates to find out “Who’s the Boss.”