Sexual Harassment By A Supervisor: Can An Employer Escape Liability?


by Steve Bogue

sbogue@mcgrathnorth.com
(402) 341-3070

Harassment by a supervisor can trigger absolute or “strict” liability for an employer under certain circumstances. The employer’s liability will depend on just what the supervisor did in the course of the harassment of an employee, whether sexual or other unlawful workplace harassment.

Tangible Harassment:

The U.S. Supreme Court has, for twenty years, provided companies with guidance in this area. In the Faragher and Ellerth cases, the Court found that acts of a supervisor which result in a “tangible” employment action against the employee can create strict liability for the employer. To explain, when a supervisor’s harassing action results in a significant change in the employee’s status such as a firing, failing to promote, reassignment with significantly different responsibilities, or something causing a significant negative change in benefits, particularly those which inflict direct economic harm, the Company will automatically be liable for the actions of the supervisor, regardless of whether it knew about them, and regardless of what steps it took to try to prevent them. The theory behind that holding is that the company has empowered the supervisor to take, on its behalf, economic actions, and thus must be absolutely responsible for them.

Non-tangible Harassment:

However, and at the same time, the Court recognized that there is a second type of harassment that a supervisor might engage in which might be the same sort of thing a co-employee would do. By and large, that includes statements or threats related to sexual harassment which do not result in actual economic damage to the employee. Thus, where there is no “tangible employment action,” a company may raise an affirmative defense to liability. That defense has two elements:

(1) that the employer exercised reasonable care to prevent and promptly correct any sexually harassing behavior; and

(2) that the employee unreasonably failed to take advantage of any protective or corrective opportunities provided by the employer.

 

Okay, that’s great, but what does it mean? It means that although not required in every instance as a matter of law, the Company should have a good written non-harassment policy suitable for the circumstances at the company, which should include an easy to follow complaint procedure.

However, the inquiry doesn’t end there. If there was a harassment policy and it had a complaint procedure, the Company must show that the employee “unreasonably” failed to use it. In everyday terms, that means that the employer’s policy must be actively and regularly applied. The consequences of not following up promptly when complaints are filed is that employees could conclude that the policy itself was useless, and a court may conclude that the employee’s failure or refusal to use the policy which was not uniformly and effectively used in the past, was “reasonable”. In that case, the affirmative defense would fail, and the Company could be liable for the supervisor’s actions.

Does that mean that companies which have learned of harassment by their supervisors which resulted in a tangible impact on employees should not follow up on subsequent employee complaints or upon their knowledge of the tangible harassment? No, clearly not! A company’s prompt investigation and action to remedy the harassment, even though it may not result in the company avoiding liability, will still impact the amount of damages that may be awarded the employee. Thus, a prompt and effective follow up is always advisable for sexual harassment complaints.

Who Is A Supervisor?

Finally, the question presents itself as to who is a “supervisor” for the purposes of the tests described above. With respect to those tests, it clearly matters as to whether the harasser is a “supervisor” or simply a co-worker. The Supreme Court once again stepped in to establish a test for answering this question. In Vance v. Ball State University, the court held that a supervisor is one who has been empowered by the employer to take tangible employment actions involving employees, such as making a significant change in employment status including hiring, firing, failing to promote, reassignment with significantly different responsibilities, or causing a significant change in benefits. The mere ability to tell employees what to do or to direct their day-to-day activities normally will not be enough to establish a person as a supervisor.

Harassment by Co-workers:

As most Companies know, there is a completely separate test for determining liability for sexual harassment inflicted by co-workers, clients, visitors, etc. This test requires that the company know about the activity and fail to respond properly. As noted above, that test is not applied to actions by supervisors.

Conclusion:

What employers can draw from the above is that its best defense against liability for harassing actions by supervisors lies in the creation and enforcement of a good non-harassment policy including a simple and usable complaint procedure. That policy should also be regularly and easily communicated to employees and supervisors alike with regular training sessions.

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