In Vance v. Ball State University, No. 11-556 (June 24, 2013), the United States Supreme Court held that an employee is a “supervisor” for purposes of vicarious liability under Title VII only if the employee is empowered by the employer to take tangible employment actions, 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, against the victim. In defining the term “supervisor” under the more narrow definition proposed by the parties, the Supreme Court refused to define “supervisor” as an employee who has the power to direct and oversee their victim’s daily work.
Why Vance Matters: As we previously discussed here, this case is important because an employer’s liability for a hostile work environment is contingent upon whether the harasser is the employee’s supervisor or co-worker. Between Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth, the Supreme Court defined how an employer may be vicariously liable under Title VII for the harassment of its employees.
- If the harasser is a co-worker, an employer can be liable for the actions of the co-worker if the employer was negligent in controlling working conditions;
- If the harasser is a supervisor and that supervisor takes a tangible employment action against the alleged victim, like terminating or demoting the victim, the employer is strictly, or automatically, liable; and
- If the harasser is a supervisor but the victim has not been subject to a tangible employment action, the employer can avoid liability by showing that it (1) "exercised reasonable care to prevent and correct promptly any sexually harassing behavior"; and (2) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise" i.e., failed to follow the employer's harassment reporting policy outlined in the employer's handbook.
Under this framework, for purposes of vicarious employer liability in the Title VII context, whether the harasser is a “supervisor” or just a co-worker literally can mean the difference between liability and no liability.
The Split Among the Circuit Courts: Vance got to the Supreme Court because there was split among the Circuit Courts as to what qualified as a “supervisor”. On one hand, the Second, Fourth, and Ninth Circuits held employers liable when supervisors have the authority to direct and oversee their victim’s daily work. On the other, the First, Seventh, and Eighth Circuits employed a stricter standard and limited an employer's liability to supervisors who have the power to “hire, fire, demote, promote, transfer, or discipline” the victim. Not surprisingly, the EEOC’s Enforcement Guidance followed the broader approach tying a supervisor to someone who exercised significant direction over another’s daily work, but not necessarily one who makes tangible employment decisions. Because of this conflict, the Supreme Court agreed to hear the appeal in Vance v. Ball State, which arose out of the Seventh Circuit.
In Vance, an African-American employee, who worked in BSU's dining service department, filed a complaint with the EEOC in 2006 claiming that she was harassed by co-workers with racial epithets, subjected to references to the Ku Klux Klan and threatened with physical harm under Title VII. Vance then filed suit in the Southern District of Indiana for harassment and made several specific allegations of hostile work environment, including that: a co-worker hit her and threatened her; her supervisor made her feel unwelcome; another co-worker used a racial epithet; another co-worker called her a "porch monkey"; and that a different supervisor made faces at her.
The district court granted BSU's motion for summary judgment and threw out Vance's claim. To establish a hostile work environment claim, Vance had to show:(1) the work environment is objectively and subjectively offensive; (2) the conduct was based on race; (3) the conduct was either severe and pervasive; (4) employer liability. The employer liability element was the key element because the district court found that to establish it Vance had to show that a supervisor had harassed her or that the employer was negligent in discovering or addressing the situation.
The court rejected supervisor liability and found that her co-workers – and not supervisors – had hurled racial epithets at Vance and subjected her to physical violence because the Seventh Circuit limited the term "supervisor" to those who with authority to directly affect the terms and conditions of employment. Specifically, the court held the harassers at issue did not have the ability to “hire, fire, demote, promote, transfer or discipline” plaintiff and the mere authority to oversee aspects of another employee’s job performance was insufficient to establish a Title VII supervisory relationship.
In June 2011, the Seventh Circuit (which covers Illinois, Indiana, and Wisconsin) affirmed the trial court. The three-judge panel found that Vance had not “established a basis for employer liability on her hostile work environment claim” and sided with the First and Eighth Circuits' stricter definition of "supervisor" in holding that BSU was not liable for the harassment because the harasser lacked the authority to take formal employment actions against the employee, even though the harasser did have the authority to direct and oversee the employee’s daily work.
The Issue for the Supreme Court: Vance's petition for review noted the division among the circuits: “the lower courts are sharply divided as to when the Faragher/Ellerth vicarious liability rule applies,” and “whether a harasser must have power over the formal employment status of the victim to be a supervisor is of large legal and practical significance.
BSU's response argued that since no circuit has ever held that an employee qualified as a supervisor under factual circumstances resembling those at issue, and because the harasser at issue would not qualify as a supervisor under any test adopted by the courts or the EEOC, that there is no conflict for the Supreme Court to resolve. Vance's filed a reply brief and supplemental brief.
Given the split, the Supreme Court certified the following issue for review:
In Faragher and Ellerth, this Court held that under Title VII, an employer is vicariously liable for severe or pervasive workplace harassment by a supervisor of the victim. If the harasser was the victim's co-employee, however, the employer is not liable absent proof of negligence. In the decision below, the Seventh Circuit held that actionable harassment by a person whom the employer deemed a "supervisor" and who had the authority to direct and oversee the victim's daily work could not give rise to vicarious liability because the harasser did not also have the power to take formal employment actions against her. The question presented is: Whether, as the Second, Fourth, and Ninth Circuits have held, the Faragher and Ellerth "supervisor" liability rule (i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim's daily work, or, as the First, Seventh, and Eighth Circuits have held (ii) is limited to those harassers who have the power to "hire, fire, demote, promote, transfer, or discipline" their victim.
The Supreme Court’s Holding: The Supreme Court affirmed the Seventh Circuit, and in doing so held that the term “supervisor” is to be read under the more narrow definition.
The Supreme Court expressly rejected, what it deemed the EEOC Guidance’s and several courts of appeals’ “nebulous definition” of “supervisor” and held “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.”
In explaining its reasoning, the Supreme Court went back to the heart of the Faragher/Ellerth framework and noted that under it, supervisory status can usually be readily determined, generally through written documentation. While the Supreme Court reviewed many sources before coming to its conclusion as to the definition of “supervisor”, and noted that Title VII does not define the term, the high Court was swayed most by the fact that while the concept of supervisor varies from one legal context to another, the law contemplates that the ability to supervise, includes the ability to take tangible employment actions.
The Supreme Court dove even deeper into the Faragher and Ellerth framework to explain its position and noted that the alleged harassers in those cases had the authority to make tangible employment decisions, i.e., in Ellerth the alleged harasser-supervisor hired and promoted his victim and was tied to the supervisor’s authority to inflict direct economic injury, and in Faragher, the alleged harasser-supervisor was a lifeguard who could hire, supervise, counsel and discipline other lifeguards. With that, and because the parties did not dispute the characterization of the alleged harassers in Vance, the Supreme Court found that it was not presented with the question of the degree of authority that an employee must have to be a supervisor and found that the question was effectively settled in by the Court’s treatment of the alleged harassers in Ellerth and Faragher. The majority squarely rejected the notion that it was enough for an employee to have the ability to direct another employee’s tasks to be deemed a “supervisor” and went on to explain “Employees with such powers are certainly capable of creating intolerable work environments…but so are many other co-workers. Negligence provides the better framework for evaluating an employer’s liability when a harassing employee lacks the power to take tangible employment actions.”
Takeaways: Vance v. Ball State University is another big win for employers from SCOTUS this term as the Supreme Court found that the more narrow definition of “supervisor” is the one to be “readily applied” in the Title VII vicarious liability context, it made clear its intent to limit and narrow litigation. With Vance, it expressly told employers it wants them to be able to determine who their supervisors are, “[i]n a great many cases, it will be known even before litigation is commenced….And once this is known, … be in a position to assess the strength of a case and to explore the possibility of resolving the dispute. Where this does not occur, supervisor status will generally be capable of resolution at summary judgment.”
This will certainly help employers shore up the issue of who is and is not a supervisor for training purposes and in fashioning a response to alleged harassment. It also clarifies that the employees that will create strict and vicarious liability for harassment under Title VII are those who have authority over tangible employment actions, e.g., have the power to cause “direct economic harm” by taking a tangible employment action and/or have been empowered by the company “as a distinct class of agent to make economic decisions affecting other employees under his or her control.”
The decision also makes clear that it does not leave victims of harassment unprotected from harassment from co-workers who have the ability to inflict psychological injury by assigning unpleasant tasks or by altering the victim’s work environment. In these situations, employees can prevail so long as they show that the employer was negligent in permitting the harassment to occur. While this will be reviewed in line with the negligence standard, the court noted that the nature and degree of authority possessed by the harassing employee is something to be considered when determining the negligence of the employer, i.e., what the employer knew or should have known. Though the Supreme Court did not say it, except in the most egregious of harassment situations, this almost puts a duty on employees to complain about harassment in order to prevail.
Had the Supreme Court gone with the broader definition of “supervisor,” employers would have had significantly less clarity on this issue and would be subject to greater potential liability. The biggest problem for employers would have been in trying to determine what to do with those semi-supervisory employees who are really non-supervisor employees, but who at times, have team or shift leader responsibilities and can direct the work of other employees at times. Had the Supreme Court adopted the broader definition, these semi-supervisory employees’ actions would have opened an employer up to greater Title VII liability and would have made this issue one that was highly case specific, meaning employers would have spent more time and money litigating cases through summary judgment.
Employers still need to keep in mind the true realities of the workplace. This means that regardless of what the job descriptions says or what title an employee has, an employer may be held vicariously liable for unlawful harassment committed by an employee who has the authority to make a tangible employment decision. Employers should review their workplaces in line with the Supreme Court’s definition of “supervisor” and provide those “supervisors” training to inform them of their status and educate them as to the potential risks under Title VII. This would also be a good time to remind them that state law definitions of “supervisor” may be a little different and, as in Ohio, may open the employee up to personal liability.
Significantly, the Supreme Court in Footnote 7, noted that the National Labor Relations Act (NLRA) has a different and broader definition of “supervisor”, which reflects “the NLRA’s unique purpose of preserving the balance of power between labor and management” and is different than Title VII’s purpose of eradicating discrimination. While the Supreme Court noted that the NLRA’s definition of supervisor is not controlling in the Title VII context, by distinguishing the NLRA’s definition in the Title VII context, employers are still left with two definitions of the term and cannot get too comfortable that only those employees that they empower with the ability to take “tangible employment actions” are “supervisors” in all facets of employment law.