Supreme Court Issues Two Important Decisions Limiting Employer Liability In Harassment And Retaliation Cases

On June 24, 2013, the United States Supreme Court issued two (2) decisions that greatly impact employer liability in claims of harassment and retaliation under Title VII of the Civil Rights Act.  In Vance v. Ball State University et al., the Court addressed who qualifies as a “supervisor” for purposes of employer liability for hostile work environment claims.  Maetta Vance sued her employer, Ball State University, for workplace harassment by a supervisor, asserting that another catering employee subjected Vance to a hostile work environment.  Vance asserted the employee was a supervisor because he assigned Vance a daily list of work tasks.  Vance urged the Court to adopt the broad standard set by some Circuit Courts of Appeals that define a supervisor as any employee with authority to “direct and oversee” another employee’s daily work.  The Seventh Circuit Court of Appeals ruled in favor of Ball State, applying the stricter standard that a supervisor is someone with the authority to make tangible employment actions.

The Supreme Court affirmed the Seventh Circuit’s ruling and overruled the liberal standard used in some Circuits.  The Court held that, although the issue was not raised in its 1998 Ellerth and Faragher decisions addressing supervisor liability for harassment, the stricter standard is consistent with the Court’s previous rulings establishing the framework for analyzing hostile work environment claims.  Specifically, the Court affirmed that an employer can be vicariously liable under Title VII if the harasser is empowered by the employer to take tangible employment actions against the victim, i.e., hiring, firing, promoting, reassignment, or significant changes in benefits.

The Court also addressed concerns that employers may try to circumvent vicarious liability by limiting the decision-making authority to a small number of employees.  The Court held that, under the Ellerth and Faragher framework, the employer who makes hiring, firing, promotions, and other significant changes based on the recommendations of other employees can be vicariously liable for hostile work environment created by those employees.  While this ruling is significant for employers across the country, this standard previously was adopted by the Eighth Circuit Court of Appeals and has applied to Missouri employers for many years.

In the second case, University of Texas Southwestern Medical Center v. Nassar, the Court tackled the standard of proof required in Title VII retaliation claims.  In Nassar, the plaintiff employee lost a staff physician position at a hospital after he quit teaching at the University affiliated with the hospital.  Nassar alleged he lost the staff physician position in retaliation for complaining that he terminated his employment with the University because his supervisor harassed him based on his religion and ethnic heritage.  The University’s position was that the hospital was under an affiliation agreement which required the staff physician positions be filled by University faculty members.  A jury returned a verdict in favor of Nassar on his retaliation claim.  The Fifth Circuit affirmed the verdict, holding that the University was motivated, at least in part, to retaliate against Nassar for his complaints.

The Supreme Court disagreed, holding that the proper causation standard for Title VII retaliation claims is but-for causation.  The Court compared the Title VII statutory language prohibiting retaliation to the language found in the Age Discrimination in Employment Act of 1967 (ADEA).  Like the ADEA, Title VII’s anti-retaliation provision makes it unlawful for an employer to take adverse employment action against an employee “because of” an employee having opposed, complained of, or sought remedies for, unlawful workplace discrimination.  Accordingly, under the Court’s holding, employees must now prove that a complaint or other form of protected activity was the reason that the employer decided to act.  As is often seen in claims under the ADEA, an employer’s proof that the adverse action was taken for some other permissible reason should now defeat a Title VII retaliation claim.  For Nassar, the employer’s proffered explanation that it was holding the hospital to its affiliation agreement defeated his claim of retaliation.

In both cases, the Court mentioned the importance of fair and responsible allocation of judicial resources, suggesting the more liberal standards led to frivolous claims and detracted from the courts’ and administrative agencies’ ability to combat workplace harassment.