Spring Cleaning: Dealing with Increased Sexual Harassment Claims
Employment lawyers deal with more claims of sex harassment in the spring than at any other time all year (with the possible exception of the weeks immediately following company holiday parties). Whatever the reason, this is the time of year when employers are particularly worried about vicarious liability under Title VII (the federal law that outlaws discrimination in employment). Translated from legalese -- an employer may be vicariously liable for the acts of certain employees irrespective of whether it knew or should have known about the employee's behavior. Under federal law, such liability only attaches when the employee in question is a supervisor. The same rule pertains in most states. In Massachusetts, employers may be strictly liable for the acts of their supervisors. If the misdeed is committed by someone other than a supervisor, the employer only faces liability if it knew or should have known of the behavior and failed to take prompt action to correct it. In legalese, the standard in those cases is negligence.
Because so much depends on who is a supervisor for these purposes, you would expect that the law would be very clear. Indeed, depending on the rules, employers might well think about their business structure with an eye toward minimizing the chances of vicarious liability. It is a lot easier to defend against a claim premised on a negligence theory than it is to defend against one premised on vicarious liability. In the former, the employer can argue about what it knew and how it responded. In the latter, the employer may be stuck with responsibility for what its employee did, irrespective of the employer’s actual knowledge.
Prior to last summer, there was substantial discord among the courts about who was a supervisor for purposes of vicarious liability under federal law. Then the Supreme Court of the United States decided the case of Vance v. Ball State University, 570 U.S. (2013). In the case, the plaintiff argued that the employee who harassed her, Saundra Davis, was her supervisor. Davis's job description gave her leadership responsibilities and the plaintiff said that Davis sometimes led or directed her in her duties. The Supreme Court determined that she was not a supervisor, but (in so doing) adopted a standard that is far narrower than that applied internally by most employers.
The Court held that "an employee is a [s]upervisor for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim." Said differently, an employer only faces strict liability under Title VII when the employee engaging in the alleged misconduct has actual authority over the employee -- including hiring and firing. Although the limits are still subject to definition, an employee who cannot take disciplinary action against an employee will not be a supervisor for Title VII purposes.
As a consequence, employers can protect themselves against vicarious liability by being very cautious in delegating disciplinary authority. By ensuring that only a small group of people have that authority, employers can narrow the circumstances that give rise to claims premised on vicarious liability. Moreover, by making those delegations readily apparent, employers can increase their chances of prevailing at an early stage of litigation. Finally, by exercising great care in hiring the few people to whom it delegates such authority, an employer can even further limit the possibility of such exposure.
Think of this, then, as an invitation for some Spring cleaning. Vance is an invitation to revisit the structure of your business and shape it so as to reduce the likelihood of liability in sex harassment, and other, lawsuits brought under Title VII.