The significance of the Vance case turns on the fact that under Title VII, the analysis of an employer's liability for unlawful harassment depends on the status of the harasser. If the harassing employee is a co-worker, the employer is liable only if it was negligent in controlling working conditions. But a different analysis applies if the harasser is a supervisor. If the supervisor's harassment results in a tangible employment action, the employer is strictly liable. If no tangible employment action is taken, the employer may escape liability by establishing, as an affirmative defense, that: (1) the employer 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.

Maetta Vance is an African-American woman who worked for Ball State University (BSU). She alleged that a fellow BSU employee, a white woman named Saundra Davis, subjected her to a racially hostile work environment in violation of Title VII. Although Vance alleged that Davis was her supervisor, it was undisputed that Davis did not have the power to hire, fire, demote, promote, transfer, or discipline Vance. The trial court ruled that a negligence standard governed the case because Davis was not a supervisor as the Seventh Circuit had defined that term in previous decisions. Applying the negligence standard, the trial court ruled that BSU could not be found liable because the evidence showed that BSU was not negligent – it had responded reasonably to the allegations of racial harassment. The Seventh Circuit Court of Appeals affirmed the trial court's dismissal of the case. 

The Supreme Court affirmed the Seventh Circuit's bright-line test for defining a supervisor:

We hold that an employer may be vicariously liable for an employee's unlawful harassment 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.

In so holding, the Court rejected as "nebulous" the "open-ended approach advocated by the EEOC's Enforcement Guidance, which ties supervisor status to the ability to exercise significant direction over another's daily work." The Court also addressed the dissenting justices' concern that the majority opinion will leave employees unprotected against harassment by co-workers who, though they are not supervisors, still have the authority to assign unpleasant tasks or alter the work environment in objectionable ways. In these cases, the majority noted, a victim of harassment can still prevail by showing that the employer was negligent in preventing the harassment. Negligence can be shown by evidence that an 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. The negligence standard, the court noted, "is thought to provide adequate protection for tort plaintiffs in many other situations."

Here are a few quick takeaways for employers in understanding the Vance decision:

• For employers in the First, Seventh and Eighth Circuits, Vance reaffirms the existing, narrow definition of supervisor that applied in those circuits before the Supreme Court decided Vance.

• For employers in the Second and Fourth Circuits, and in other circuits that had not addressed the issue squarely, the Vance decision's narrow definition of supervisor is good news and makes a finding of employer liability for harassment less likely. 

• All employers should nevertheless remain vigilant against unlawful harassment, as even co-worker harassment can result in employer liability if the employer is found negligent. Indeed, the Court in Vance expressed skepticism that there are many cases in which the actions of a co-worker who is able to direct the victim's daily work activities in a meaningful way, and who creates an unlawful hostile environment, would not result in a finding of negligence by the employer. 

• Vance may not be the final word on who is a supervisor under Title VII. In her dissenting opinion, Justice Ginsburg stated that "[t]he ball is once again in Congress' court to correct the error into which this Court has fallen, and to restore the robust protections against workplace harassment the Court weakens today." The last time Justice Ginsburg said that, the Lily Ledbetter Fair Pay Act was born.