GT Alert

U.S. Supreme Court Further Addresses the Standard for Employer Liability for Sexual Harassment in Hostile Work Environment Cases

June 2004
By Lawrence J. Rosenfeld and Leigh Anne Ciccarelli, Greenberg Traurig, Phoenix Office

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On June 14, 2002, the U.S. Supreme Court issued its 8-1 decision in Pennsylvania State Police v. Suders, No. 03-95, ___ U.S. ___ (2004), resolving a split among the circuit courts as to what constitutes a “tangible employment action.” This Alert will discuss the Suders ruling, along with the potential effects the ruling might have on employer liability.

"In 1998, the U.S. Supreme Court decided two significant sexual harassment cases... holding that an employer is strictly liable for supervisor harassment that 'culminates in a tangible employment action, such as discharge, demotion or undesirable reassignment.'"

Status of the Law Prior to Suders

In 1998, the U.S. Supreme Court decided two significant sexual harassment cases, Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S. Ct. 2257, and Faragher v. Boca Raton, 524 U.S. 775, 118 S. Ct. 2275, holding that an employer is strictly liable for supervisor harassment that “culminates in a tangible employment action, such as discharge, demotion or undesirable reassignment.” Ellerth, 524 U.S. at 765. The court further held that when no such tangible action is taken, the employer may raise an affirmative defense to liability. Id. Specifically, to prevail on the basis of this affirmative defense, the employer must prove that, “(a) [it] exercised reasonable care to prevent and correct promptly any sexually harassing behavior,” and (b) the employee “unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise.” Id.

The Facts in Suders

The plaintiff, Nancy Drew Suders, worked for the Pennsylvania State Police as a police communications officer, where her male supervisors allegedly subjected her to on-going sexual harassment. In June 1998, Suders complained to the police department’s Equal Opportunity Officer, but neither Suders nor the officer followed up on the conversation. Two months later, Suders contacted the officer again, this time specifically telling the officer that she was being harassed and was afraid. Two days later, Suders was arrested for theft. She had taken her own computer-skills exam papers after she concluded that her supervisors had falsely reported that she had repeatedly failed the exams, when, in fact, the exams were never turned in for grading. Suders then resigned and filed a lawsuit against the department alleging, among other things, that she had been subjected to sexual harassment and constructively discharged in violation of Title VII of the Civil Rights Act of 1964.

In the trial court, the police department filed a motion for summary judgment, asking the court to dismiss all of Suders’ claims. The court granted the department’s motion, noting that, although Suders’ testimony supported her claim that her supervisors had created a hostile work environment, the department could not be held vicariously liable for the supervisors’ conduct. The trial court based its ruling on the Ellerth/Faragher cases, holding that Suders’ hostile work environment claim failed as a matter of law because she unreasonably failed to take advantage of the department’s internal anti-harassment procedures. The trial court did not address Suders’ constructive discharge claim.

On appeal, the Third Circuit reversed and remanded the case, disagreeing with the trial court on two grounds: first, the Third Circuit held that, even if the department could assert the Ellerth/Faragher affirmative defense, genuine issues of fact existed regarding the effectiveness of the department’s anti-harassment procedures; and second, Suders had stated a claim of constructive discharge due to hostile work environment. The court ruled that a constructive discharge, if proved, constitutes a tangible employment action, thereby rendering the employer strictly liable and not eligible for the Ellerth/Faragher affirmative defense. Two other circuit courts, addressing this same issue, had ruled otherwise, thereby prompting the Supreme Court to accept the case for review.

The Supreme Court’s Decision

The Supreme Court granted certiorari to resolve the split among the circuit courts on this specific question: “whether a constructive discharge brought about by supervisor harassment ranks as a tangible employment action and thereby precludes assertion of the Ellerth/Faragher affirmative defense.” In considering this issue, the Court noted that its decision covered one particular subset of Title VII discharge claims: constructive discharge resulting from sexual harassment, or hostile work environment, attributable to supervisors. With this background, the Court was faced with deciding “into which Ellerth/Faragher category hostile-environment constructive discharge claims fall”—the strict liability category, or the category that affords the employer an affirmative defense.

Reviewing its decisions in Ellerth/Faragher, the Court again noted that, in harassment cases, when a supervisor takes a tangible employment action against the employee (such as termination or demotion), an employer is vicariously (and strictly) liable for the supervisor’s actions, as this is considered an official act. However, in cases involving constructive discharge, whether or not there is an “official act” by the employer is not always clear. Specifically, the Court noted that, while an actual termination is always effected through an official act, a constructive discharge need not be. Thus, the Court found that, “when an official act does not underlie the constructive discharge, the Ellerth and Faragher analysis . . . calls for extension of the affirmative defense to the employer.” In other words, these hostile work environment-“plus” cases will require a determination, based on the facts, as to whether or not the supervisor’s actions constitute “official” action. If there is no official action attributable to the employer, the employer will be afforded the chance to establish, through the Ellerth/Faragher affirmative defense, that it should not be held vicariously liable. Thus, the Supreme Court overruled the Third Circuit’s decision holding that the Ellerth/Faragher affirmative defense was unavailable in constructive discharge cases based on alleged supervisor harassment. The Court determined that when an employee quits and claims constructive discharge, the affirmative defense is precluded only where the action is a “reasonable response” to an adverse action officially changing the person’s employment status or situation.

The Court then remanded the case back to the trial court for reconsideration.

The Effect of the Ruling

The ruling in Suders expands somewhat the circumstances under which an employer can be held strictly liable for its supervisors’ actions. These circumstances now include, potentially, employees who resign and allege that they were constructively discharged; that is, situations where a supervisor who has subjected an employee to a hostile work environment takes official action which alters the employee’s employment status, thereby compelling the employee to quit. Under these circumstances, the affirmative defense made available to employers in the Faragher/Ellerth decisions cannot be asserted.

© 2004 Greenberg Traurig

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