The Third Circuit Court of Appeals just issued an important decision broadly interpreting the term “supervisor” for purposes of imposing liability under Title VII of the Civil Rights Act of 1964 (Title VII) and the New Jersey Law Against Discrimination (NJLAD). Moody v. Atl. City Bd. of Educ., No. 16-4373 (3d Cir. Sept. 6, 2017). As a result, employers should carefully determine who may be a supervisor for purposes of anti-discrimination laws and include them in their anti-discrimination and harassment training programs.

In Moody, a substitute custodian, Moody, sued the Atlantic City Board of Education under Title VII and NJLAD, alleging that a custodian foreman at one of the City’s schools sexually harassed and then retaliated against her when she rejected his advances. On a motion for summary judgment, the district court found that although the alleged harasser was a foreman at one of the schools within the district and had the authority to assign work to the substitute custodians, he was not Moody’s supervisor. Moody v. Atl. City Bd. of Educ., No. 14-4912 at 18, 20 (D.N.J. Dec. 13, 2016). The district court reasoned that although the custodian was able to call Moody into work when needed, there were other maintenance foremen at the other district schools that could call her as well. Id. at 17. It further reasoned that the custodian “did not have the authority to terminate Moody or make other personnel decisions.” Id. at 17. The Third Circuit reversed, holding that the custodian’s ability to assign work was enough to find that he was a supervisor under the law. Moody, supra, No. 16-4373 at 19.

The Court acknowledged the general rule that sexual harassment by a supervisor is conduct outside the scope of employment and would not typically expose an employer to liability. Id. at 15. In limited circumstances, however, an employer may “aid in the accomplishment” of the harassment by virtue of the agency relationship between the employer and the alleged harasser, which would then subject an employer to liability. Ibid. In this agency relationship, the court defined a supervisor as a person “empowered by the employer to take tangible employment actions.” Id. at 16 (citations omitted). It further defined a tangible employment action as “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.” Ibid. (citations omitted). This definitely expands the definition of who can be considered a supervisor.

Judge Rendell, concurring in part and dissenting in part, observed that the majority’s definition is a significant departure from Supreme Court precedent, particularly Vance v. Ball State University, 133 S. Ct. 2434 (2013), where the Supreme Court held that the proper inquiry was “whether the person in question [had] the authority—‘is empowered by the employer’—to alter the employee’s status.” Id. at 5. (Rendell, J., dissenting). Vance required courts to ask several discrete questions to determine whether the employee was a supervisor; namely (1) Can that person hire or fire the employee? (2) Can that person promote or demote the employee? and (3) Can that person reassign the employee with significantly different responsibilities or make a decision that causes a significant change in the employee’s benefits? Ibid. If none of these questions can be answered in the affirmative, the employee cannot be regarded as a supervisor. Ibid.

Judge Rendell considered these three questions posed by Vance and concluded that the alleged harasser in Moody was not a supervisor. Id. at 6. Judge Rendell took issue with the majority’s finding that the alleged harasser was plaintiff’s supervisor because he assigned her over seventy-percent of her hours she worked. She argued this conclusion “squarely contradicts Vance as Moody was [a substitute custodian and therefore] not entitled to any ‘benefits’ that could be change[d].” Id. at 7. She also added that the alleged harasser did not control Moody’s benefits to the point of being her supervisor. Though the alleged harasser could influence the hours Moody worked at New York Avenue School, he could not influence whether she received work from any of the district’s ten other foremen. Further, Moody’s hours were not “benefits” under Vance because, as a substitute custodian, she had no guarantee of work, Judge Rendell said.

The Bottom Line

This is a really important case. Moody’s sweeping definition of “supervisor” for purposes of Title VII and NJLAD means that employees previously understood not to be supervisors, like lead persons, can now, through their conduct, expose their employers to liability. What complicates matters, of course, is that while these employees may be supervisors under Title VII and the NJLAD, they may not be supervisors under other labor and employment laws, such as the National Labor Relations Act (“NLRA”) or the Fair Labor Standards Act. See, e.g., Bowne of Houston, 280 NLRB 1222, 1223 (1986) (Under the NLRA “the exercise of some supervisory authority in a merely routine, clerical, perfunctory, or sporadic manner does not confer supervisory status.”).

We recommend that employers immediately identify employees who may be classified as supervisors under Title VII and NJLAD and provide them with the necessary harassment and discrimination awareness training before a complaint of harassment occurs.