On March 5, 2018, a three-judge panel on the US Court of Appeals for the Fourth Circuit issued a unanimous decision holding that Smithfield Packing Co. Inc. (Smithfield) could not be held liable under Title VII of the Civil Rights Act of 1964 (Title VII) for sexual harassment, which the employee alleged had been occurring for years because the employee resigned the day after she reported it. The Fourth Circuit, rejecting the amici arguments advanced by the Equal Employment Opportunity Commission, affirmed the trial court’s dismissal of the hostile work environment claim because the plaintiff did not establish that the supervisor subjecting her to harassment was a “supervisor” under Title VII. The court also based its decision on the fact that the plaintiff did not permit Smithfield an opportunity to provide meaningful redress, given that the company had no knowledge of the alleged harassment until she reported it and then quit shortly thereafter.

Under Title VII, whether an employer can be liable for an employee’s harassing conduct depends on whether the harasser is the victim’s supervisor or a co-worker. If the harasser is a supervisor, the employer is strictly liable for the harassment if it results in a “tangible employment action” against the victim. If the harasser is a supervisor and the harassment does not result in a “tangible employment action” against the victim, the employer is not strictly liable if it can show it exercised reasonable care to prevent and correct the harassing behavior and the victim of the harassment unreasonably failed to take advantage of those measures. In contrast, if the harasser is a co-worker, the employer is only liable if it knew or should have known about the harassment and failed to take effective action to stop it.

In dismissing the former Smithfield employee’s harassment claim, the Fourth Circuit found that she had failed to present evidence that her harasser was a supervisor, which under Title VII would have required her to show that he was “empowered by [Smithfield] to take tangible employment actions” against her, such as hiring, firing, demoting, promoting, transferring, or disciplining her. This definition comes from Vance v. BSU, a 6-3 decision issued by the US Supreme Court in 2013 (in which all three female justices dissented). The Vance decision rejected the definition of “supervisor” articulated in EEOC Guidance, which encompassed individuals—like the supervisor here—who were authorized to “direct the employee’s daily work activities.” Although the plaintiff’s alleged harasser did provide her with informal performance evaluations and had some control over her work schedule, the court found those facts insufficient to establish supervisory liability. Rather, the plaintiff’s alleged harasser was held to be a co-worker for liability purposes and his misconduct could not be imputed to Smithfield because the plaintiff did not establish that Smithfield knew or should have known about the harassment and that it turned a blind eye.

To the contrary, the court found that Smithfield had a written anti-harassment policy and a written code of conduct prohibiting harassment, provided annual anti-harassment training to all employees, required employees to report all violations of its code of conduct, and maintained an anonymous hotline that employees could use to report harassing behavior. As such, the court stated that it was clearly not a case where “Smithfield adopted a ‘see no evil, hear no evil strategy.’” Moreover, the court found that imputing liability to Smithfield under these circumstances would establish a precedent that requires employers to, essentially, “exercise an all-seeing omnipresence over the workplace,” which it would not do.

What Does This Mean for Employers?

The Fourth Circuit’s decision in the Smithfield case is a good reminder to employers that having robust anti-harassment policies, annual training, and clear reporting procedures is not only good practice, but can also minimize the legal risk associated with harassment claims where the employer does not have actual or imputed knowledge.

Employers should take this opportunity to review their training policies and practices and ensure that the anti-harassment training they offer is adequate and sufficiently frequent to ensure that (i) employees are aware of how to report workplace harassment; and (ii) managers know how to respond appropriately to any such reports.