Employer Liability for Supervisors’ Actions


OOn November 26, 2012, the U.S. Supreme Court heard arguments in a case that raises the issue of who is a supervisor under Title VII of the Civil Rights Act of 1964. The answer will determine the extent to which an employer is vicariously liable for harassment in the workplace. This might seem like a simple question, but there are many definitions of “supervisor” under various employment laws and the common law.

The case in question, Vance v. Ball State University, involves an African American employee, Maetta Vance, who alleges another employee, Saundra Davis, subjected her to a racially hostile work environment.  The employer, Ball State University, investigated, but could not reconcile the two employees’ competing version of events, and therefore did not discipline Davis. Ball State clearly took prompt action to investigate, even though its response was not what Vance wanted.

Vance sued. The lower courts dismissed the case, finding that Davis was not Vance’s supervisor.  According to these lower courts, Davis did not fit the definition of a “supervisor,” because she did not have the power to hire, fire, demote, or discipline Vance. Therefore, the university was not automatically liable for Davis’s actions, and its prompt investigation absolved it of any negligence.

Vance appealed to the Supreme Court, claiming that Davis was in fact a supervisor and therefore an agent of Ball State, that the university was strictly liable for any actions by Davis, and that Vance should be permitted to pursue her lawsuit.

The Equal Employment Opportunity Commission (EEOC) says a supervisor is anyone who has authority to direct daily work activities — like making working assignments and schedules — or to recommend employment actions. It doesn’t matter whether the person can hire or fire or discipline. Many Circuit Courts of Appeals have accepted this broad definition of “supervisor.”

The last time the Supreme Court addressed employer responsibility for harassment by its employees was in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries Inc. v. Ellerth, 524 U.S. 742 (1998). In those decisions, the Supreme Court held that in cases of harassment under Title VII, employers are vicariously liable for acts of supervisors, who are deemed to be agents of the employer and to therefore act in the employer’s stead.

By contrast, the Court said that employers are not automatically liable for the actions of non-supervisory employers. For the employer to be liable for harassment by non-supervisors, the employer must be found to have known about the harassment and not taken appropriate action to correct it and to prevent future harassment.  The employer must have appropriate and well-communicated channels for reporting harassment, investigate promptly, and take appropriate corrective action when harassment is found.

Unfortunately, employment law today is a cobble of statutory and common law concepts. Statutes such as Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Labor Standards Act, and a myriad of other federal, state and local laws, contain some definitions. But behind these statutes stand common law cases on “master and servant” and “agency.” The master and servant of common law England each owed duties to the other. Agents owed duties to their principals. Those concepts often still apply in employment law today, as the Supreme Court held in Farragher and Burlington Industries. Thus, under the common law, it made sense to differentiate between the acts of managers (who could be “agents”) and other employees.

In the modern corporate workplace, however, almost no individual employee can act alone, particularly not in hiring, disciplining, and firing other employees. Even high-level managers with the title of Vice-President must involve Human Resources managers in making employment decisions under most corporate employment policies. These policies are typically well-documented and communicated. Employees are well-aware that if they have complaints about their managers, they should talk to HR.  Why, then, should a rogue VP make a company automatically liable for harassment, even when the employee has not filed a complaint with HR?

If an employer has good policies and follows those policies to investigate and respond to claims of discrimination and harassment (including making the employee whole for costs and losses arising from the discrimination or harassment), the company is doing all it can. There will be bad actors in any organization, and firing them should suffice.

Let’s hope the Supreme Court looks at the realities of the modern workplace – which has been developed in response to the many statutes and court decisions protecting employees – in deciding when a corporation should be automatically responsible when managers violate policy.

What do you think? Please leave a comment below.

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2 Comments

Filed under Human Resources, Law, Workplace

2 responses to “Employer Liability for Supervisors’ Actions

  1. UPDATE: On June 24, 2013, the Supreme Court adopted a narrow definition of supervisor in Vance v. Ball State. See http://www.supremecourt.gov/opinions/12pdf/11-556_11o2.pdf
    The Court stated: “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.’ [quoting Ellerth]”
    I predict there will still be debates in future cases over who is a supervisor, given the complexities of the modern workplace. But employers are on firmer ground to argue they should be held to a negligence standard, rather than strict liability for the acts of managers. Employers must still focus on training managers to avoid harassing behavior and on promptly investigating any complaints to avoid liability under a negligence standard.
    And it will be interesting to see whether Congress attempts to overrule this decision with expansive legislation.
    Sara Rickover

  2. Pingback: Workplace Investigations by Outside Counsel – Make Sure They’re Done Right | Sara Rickover, Behind the Corporate Veil

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