Why it matters

Holding that a store manager was not a supervisor for purposes of Title VII and that the employer could therefore not be vicariously liable for his sexual harassment, the U.S. Court of Appeals, Sixth Circuit affirmed summary judgment in favor of the employer. The manager at a Tennessee AutoZone store had the authority to hire new hourly employees and write up existing workers for misconduct, but did not have the power to fire, demote, promote or transfer employees. After multiple women complained about sexual harassment, the company investigated the manager and ultimately terminated him. When the women filed charges with the Equal Employment Opportunity Commission (EEOC), the agency brought suit. AutoZone moved for summary judgment, arguing that it could not be vicariously liable because the manager was not a supervisor under Title VII. A district court agreed, and the federal appellate panel affirmed. The store manager did not take any tangible employment action against the women and had no authority to do so, the Sixth Circuit said in an unpublished opinion. Even if that were not the case, the court said the employer established an affirmative defense to the claim.

Detailed discussion

Three women were hired at different times for various positions at the Cordova, TN, AutoZone store and all reported to Gustavus Townsel when he was transferred as store manager in May 2012. Townsel was authorized to hire new hourly employees and write up employees at the store for misbehaving, but did not have the power to fire, demote, promote or transfer employees. That authority rested with the district manager, who visited the store on a weekly basis.

Within months, Townsel began making lewd and obscene sexual comments to the women. However, none of them reported the conduct until October 2012, when they complained about Townsel’s harassing conduct as well as other operational issues. Human resources followed up on the harassment complaints the next day and AutoZone transferred Townsel out of the store in November, terminating him in December 2012.

The women filed a charge with the EEOC and the agency filed suit against AutoZone, alleging the employer was vicariously liable under Title VII for Townsel’s conduct. But a district court judge granted the employer’s motion for summary judgment, ruling that Townsel was not a supervisor under the statute. The EEOC appealed.

Beginning with the comment that “Townsel’s behavior was repulsive,” the U.S. Court of Appeals, Sixth Circuit nevertheless affirmed summary judgment in favor of AutoZone because “he did not take any tangible employment action against his co-workers and indeed had no authority to do so,” letting the employer off the hook.

Pursuant to Title VII, if the harassing employee is the victim’s coworker, the employer is liable only if it was negligent in controlling working conditions. Alternatively, if the harasser is the victim’s supervisor, the employer may become vicariously liable if the agency relationship aids the victim’s supervisor in his harassment, the court explained.

A supervisor has been interpreted by the courts to be a worker “empowered by the employer to take tangible employment actions against the victim,” the Sixth Circuit said, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities or a decision causing a significant change in benefits.

Under this rubric, “AutoZone is not vicariously liable for Townsel’s harassment because Townsel did not supervise any of the employees he harassed,” the panel wrote. “AutoZone did not empower Townsel to take any tangible employment action against his victims. Townsel could not fire, demote, promote, or transfer any employees. And he could not hire employees that AutoZone already employed, such as [the three women]. Townsel’s ability to direct the victims’ work at the store and his title as store manager do not make him the victims’ supervisor for purposes of Title VII.”

The store manager could initiate disciplinary process and recommend demotion or promotion, but the district manager had vigorous oversight of the location, the court said, visiting the store once a week, actively participating in its management, scheduling shifts and interacting with the workers.

“Were there record evidence that Townsel had the ability to effect tangible employment decisions against the employees he harassed, the appeal would come out differently,” the panel wrote. “But both sides agree that [the district manager] did not have to consider Townsel’s advice at all. [The district manager] gave Townsel’s input, at most, deference to the extent that it had the power to persuade. That does not suffice.”

Even if the court determined Townsel was a supervisor, the Sixth Circuit found that the employer had established an affirmative defense to liability. Employers can avoid liability where they exercise “reasonable care to prevent and correct promptly any sexually harassing behavior” and the harassed employees “unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.”

AutoZone met both requirements, the panel determined. “First, it exercised reasonable care to prevent harassment and promptly fired Townsel when it learned of his behavior,” the court wrote.

The company had an appropriate anti-harassment policy in place, and the record confirmed that each of the women signed forms acknowledging that she had read and understood the AutoZone employment handbook. The company also promptly corrected the harassment with its investigation and termination of Townsel, the court said. “This is not a case where several supervisors observed and participated in harassment while ignoring the victims’ complaints over months or years,” the panel said.

“Second, the harassed employees failed to report Townsel’s behavior for several months,” the court added, waiting until October to report the harassment that had begun in August. Two of the women didn’t even take advantage of corrective opportunities, the court noted, only reporting the harassment when interviewed by human resources after the third complained.

“Each of the victims had a responsibility to report Townsel’s behavior up the ladder, to human resources, or to the AutoZone hotline,” the panel wrote. “We cannot impute the victims’ knowledge to AutoZone when none of them took any actions that would alert someone with the power to stop Townsel until [one woman] belatedly talked to [the district manager] in October.”

To read the decision in EEOC v. AutoZone, Inc., click here.