In Chaloult v. Interstate Brands Corporation, the First Circuit affirmed a decision of the U.S. District Court for the District of Maine, granting summary judgment to an employer charged with vicarious liability for sexual harassment under Title VII. The First Circuit rejected the notion that an employer is strictly liable under federal law for a hostile work environment created by a complaining employee’s supervisor. The Court’s decision, interpreting Title VII, highlights this significant distinction between the federal statute and Chapter 151B. In Chaloult, the employer established the affirmative “composite” defense recognized by the U.S. Supreme Court in Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth (Faragher-Ellerth), avoiding liability for harassment by showing that it “exercised reasonable care” to avoid and eliminate harassment and the complaining employee failed to exercise reasonable care to “take advantage of the employer’s safeguards.”  

Bonnie Chaloult, an entry-level supervisor at Interstate Brands Corporation (IBC), submitted a letter of resignation to her department manager in which she accused her supervisor, Kevin Francoeur, of questioning whether she had an intimate relationship with co-worker Jim Anderson. Her department manager immediately conducted an investigation. IBC then sent Francoeur a letter that referenced the company’s sexual harassment policy and informed him that although it was unclear whether the allegations against him were true, IBC expected him to comply with the policy and would hold him accountable for any harassment that he committed, condoned, or failed to report. About a year after resigning, Chaloult filed suit in federal district court against IBC, alleging violations of Title VII. Her complaint included new allegations to support her claim that Francoeur sexually harassed her during the six months before her departure.

IBC’s sexual harassment policy includes methods for reporting harassment and requires supervisors to report any possible violation. It also imposes on supervisors an affirmative duty to “keep their work area free from sexual harassment” and to “prevent and eliminate harassment.” Chaloult knew that IBC had a confidential toll-free complaint line for employees. When asked at deposition why she did not come forward sooner with her complaints, she said she discussed certain of Francoeur’s sexually charged comments with Anderson, and he witnessed some of them. Anderson, a supervisor at Chaloult’s level who also reported to Francoeur, confirmed that he knew IBC expected supervisors to report claims of sexual harassment immediately, but testified that he was not aware of behavior in violation of the company’s policy, and he did not construe the conduct at issue to be sexual harassment.  

The Court evaluated IBC’s Faragher-Ellerth defense. Chaloult conceded that she knew of IBC’s policies regarding sexual harassment and unreasonably failed to take advantage of IBC’s preventive and corrective opportunities to prevent avoidable harm. She argued, however, that IBC acted unreasonably in failing to respond after she spoke to Anderson, because his “knowledge” of the harassment should be attributed to IBC. Chaloult did not claim that anyone above Anderson, an entry-level supervisor, had actual knowledge of the alleged harassment. Specifically, no one at the supervisory level of, or with authority over, Francoeur had knowledge of the new allegations Chaloult’s complaint raised. Nevertheless, Chaloult argued that the Court should impute to IBC her co-worker’s knowledge because he had a reporting obligation under the company’s own policy.  

The Court disagreed, holding the knowledge of an employee with the title “supervisor” concerning alleged harassment by a superior cannot be imputed to the employer simply because it voluntarily adopted an anti-harassment policy that required all “supervisors” to report such conduct. To hold otherwise, the Court concluded, would penalize companies for adopting anti-discrimination policies and would thwart the defense outlined by the Supreme Court, which encourages employers to develop sexual harassment reporting policies, educate employees, and promote compliance. The Court went on to state that even if Anderson’s knowledge were imputed to IBC, its actions were not unreasonable because Anderson did not consider himself to be on notice of harassment.  

This case demonstrates that under federal law, the knowledge of an entry-level supervisor who does not supervise the alleged harasser cannot be imputed to the employer simply because it voluntarily adopted anti-harassment policies that require reporting. The decision encourages employers to adopt anti-harassment policies, without fear of increased liability. By contrast, the defense at issue in this case would not prevent strict liability from attaching under the Massachusetts Fair Employment Practices Act, Chapter 151B.