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Supreme Court Ruling Lessens Liability Exposure, Lane Report, September 2013

Attorneys

September 2013

Court clarifies confusing workplace harassment issue

By Jaron Blandford

Lane Report, September 2013

On June 24, 2013, the United States Supreme Court issued a very important ruling that weighs in favor of employers. Vance v. Ball State University centered on employers' liability for workplace harassment. The Supreme Court's decision in Vance is a welcome clarification to a long-confusing definition in the semantic landscape of employment law.

The U.S. Supreme Court ruled that an employee is considered a "supervisor" only if he or she is empowered by the employer to take "tangible employment actions" against the employee. A "supervisor must be able to 'effect a significant change in employment status.'"

The Supreme Court held many years ago that under Title VII of the 1964 Civil Rights Act, employers could be held liable for the acts of "supervisors" who harassed subordinate employees.

When the harassment culminates in a tangible employment action, strict liability is the standard.

When a tangible employment action is not involved, there is still a presumption that the employer is liable for the "supervisor's" harassing actions, which can only be disproved by establishing that the employer exercised reasonable care to prevent and correct any harassing behavior and that the plaintiff unreasonably failed to take advantage of the opportunities that the employer provided.

If the harasser is merely a co-worker, employers may only be held liable if the plaintiff shows that he/she gave the employer notice of the alleged harassment and the employer was negligent in controlling workplace conditions.

Thus, the accused harasser's status as a "supervisor" (versus a "co-worker") makes a big difference in determining the potential liability of an employer faced with a harassment suit. Until now, however, there has been little guidance on which employees could be deemed "supervisors" for purposes of determining what standard of liability applies.

In Vance vs. Ball State University, Maetta Vance was employed as a catering assistant at Ball State. Over the course of two years, Vance submitted several complaints, both to BSU and the Equal Employment Opportunity Commission, alleging discrimination and racial harassment. The majority of her complaints stemmed from incidents involving BSU employee Saundra Davis, a catering specialist.

It was stipulated by both parties that Davis did not have authority to "hire, fire, demote, promote, transfer, or discipline" Vance. However, Vance filed suit in the U.S. District Court for the Southern District of Indiana, claiming she was discriminated against and harassed because of her race under Title VII.

The district court held, and the Seventh Circuit affirmed, that BSU could not be held vicariously liable for Davis' alleged harassment because Davis was not a "supervisor" under the Seventh Circuit's "hire, fire, demote, promote, transfer, or discipline" framework. Thus, because Davis was merely a co-worker, the less stringent negligence standard applied.

The evidence showed BSU had reacted and responded to the complaints in a reasonable manner.

Vance then appealed to the Supreme Court, arguing that an employee should be considered a "supervisor" if he or she has authority to control someone else's daily activities and evaluate their performance. This definition for "supervisor" is not unheard of; in fact, the Equal Employment Opportunity Commission defines "supervisor" in its Enforcement Guidance as someone who has the ability to exercise significant direction over another's daily work. In response, BSU sought a narrower definition (in line with the Seventh Circuit's standard). It argued that the term "supervisor" should only include those individuals who possess more power, such as the ability to hire, fire or promote.

In a 5-4 decision, the U.S. Supreme Court held that an employee is considered a "supervisor" only if he or she is empowered by the employer to take "tangible employment actions" against the employee. Siding with the employer, the court stated that a "supervisor must be able 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 said its new and clearer definition will result in supervisory status being determined earlier in harassment cases, which may assist the trial court in determining whether summary judgment is appropriate. Further, when a harassment case does reach a trial, the new definition will assist juries to more easily determine liability.

In the wake of this ruling, employers should review their anti-harassment policies and procedures for investigating claims. If a clear anti-harassment policy has not been emphasized, training and enforcement should be a priority. There should be established protocol employees can rely on to call attention to harassing or discriminatory conduct.

In addition, employers should ensure that job definitions are clearly outlined and definitively decide what employees are empowered to take "tangible employment actions" against other employees.

Employers still hold the real key to limiting liability: They can demand a harassment-free workplace and properly handle claims as they arise, so that suits are less likely.

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