On June 24, 2013, a sharply divided Supreme Court handed down two decisions that will make harassment and retaliation claims under Title VII of the Civil Rights Act more difficult for plaintiffs to prove. In the first ruling, Vance v. Ball State University, the court confirmed an employer is “strictly” liable for its supervisor’s alleged discriminatory actions only if it previously gave the supervisor actual authority to take tangible employment actions against the victim (like hiring, firing, promoting, transferring, demoting, or disciplining her). The court settled a nationwide split among federal courts of appeal on this important issue, and directly rejected the EEOC’s efforts to adopt a broader approach to defining supervisors in hostile work environment cases. The decision undoubtedly strengthens an employer’s ability to defend against harassment actions at the summary judgment stage.

In the second ruling, University of Texas Southwestern Medical Center v. Nassar, the court clarified that, in order to win their retaliation claims, plaintiffs must show their employers would not have taken action against them “but for” an illegal retaliatory motive — a more demanding standard to meet. The court affirmed that it is not enough for employees to prove that an illegal bias played some part in their employer’s decision-making. Rather, the bias must have been the primary reason for the action.

Vance v. Ball State University

Under Title VII, an employer’s liability for harassment often hinges on whether the harasser was the victim’s supervisor or a co-worker. [1] The Vance decision affirmed what had already been the law in the First, Seventh, and Eighth Circuits for many years: in the context of harassment allegations, in order to be considered “supervisors,” alleged harassers must have actual authority to impose a significant change in employment status.

In that case, an African-American catering-department employee claimed she suffered race harassment by a female employee she alleged was her supervisor. While the alleged harasser had “leadership responsibilities” and at times led or directed Vance and other employees in their day-to-day activities, she did not have the actual authority to hire, fire, demote, promote, transfer, or discipline Vance. The Seventh Circuit accordingly concluded the harasser was not a supervisor and upheld summary judgment for the employer, noting that the mere “authority to direct an employee’s daily activities” did not establish supervisory status under Title VII because the case law regarding harassment referred to “[a] supervisor [as being] someone with power to directly affect the terms and conditions of the plaintiff’s employment . . . primarily consist[ing] of the power to hire, fire, demote, promote, transfer, or discipline an employee.”

The court rejected the petitioner’s request to adopt a “common sense” understanding of the term “supervisor,” as well as the EEOC’s suggestion that the court examine how much control the harasser exercised over the victim in daily tasks when making this determination. The court noted that its prior hostile work environment cases sought to ensure that employers would only be blamed for the actions of employees who were significantly aided in their harassing conduct by their position of authority. The Seventh Circuit was, therefore, correct in holding that employers should only be “strictly” liable for employees meeting this higher threshold — supervisors that they actually invested with real authority to “inflict direct economic injury” on the alleged victim. As the opinion noted: “It is because a supervisor has that authority [to inflict direct economic injury] — and its potential use hangs as a threat over the victim — that vicarious liability (subject to the affirmative defense) is justified.”

The court referred to the EEOC’s suggestion of a case-by-case, fact intensive approach to the question of who should be considered a supervisor as “nebulous” and “murky,” remarking several times that the Seventh Circuit’s definition was more “easily workable” for parties, judges, and juries. The opinion noted that supervisory status should now be “readily determin[able]” through basic discovery early on and routinely decided on summary judgment. The court did note, however, that for purposes of this definition, a supervisor has the power to make a tangible employment decision even where a higher-up supervisor or manager needed to approve that decision, and employers cannot insulate themselves from liability by consolidating decision-making power in only a few select employees. As for what specific decisions or actions such individuals must be responsible for in order to qualify, the court did not provide an exclusive list. However, the opinion quoted the Seventh Circuit's list of “example” actions (hiring, firing, promoting, transferring, demoting, or disciplining) numerous times, and gave no hint that the extensive case law developed in this area over the years should be disturbed.

In light of this ruling, employers should consider strengthening or re-evaluating their written job descriptions for “ground level” personnel that have leadership responsibilities, in order to clarify their decision-making power (or lack thereof) as the company sees fit. Employers should also be mindful that cases brought under state law may impose different standards for determining sexual harassment.

University of Texas Southwestern Medical Center v. Nassar

The court overturned a $3 million jury verdict for the plaintiff in Nassar, which had been affirmed by the Fifth Circuit. In that case, Nassar, a Middle Eastern doctor, had complained during his tenure as a university faculty member that one of his supervisors was prejudiced against him and had made several inappropriate comments about Middle Easterners. After complaining, Nassar decided to take a position with a nearby affiliated hospital, but that position was suddenly withdrawn after a hospital official became upset about Nassar’s allegations against his former supervisor.

Nassar claimed the withdrawal was retaliatory, and in its defense, the hospital asserted that its decision was based on not wanting to hire a physician who was not a member of the university’s faculty. The district court judge told the jury it needed only to find that retaliation was a “motivating factor” in the hospital official’s action, and the jury accordingly ruled in Nassar’s favor after concluding that retaliation had played “a role” in that decision.

In overturning that verdict, the court noted that the judge’s instructions were improper, and the verdict could not stand because Nassar failed to prove that illegal retaliation was the single motivating factor for the job withdrawal. The opinion clarified that a plaintiff’s burden was always to show that the prohibited bias was the motivating factor, and not merely one factor among several. Accordingly, Nassar effectively precludes plaintiffs from bringing so-called “mixed motive” claims for retaliation under Title VII, removing another means by which plaintiffs can haul their employers into court.

In light of this ruling, employers should consider reinforcing their anti-discrimination and anti-retaliation policies, and make sure that their employees are informed regarding every possible channel for filing complaints. And, as always, employers should always try to more intensively document any adverse actions against an employee who has previously filed a complaint, shoring up non-discriminatory reasons for the action. Employers should also take steps to minimize or avoid so-called “cat's paw” theories of retaliation by having a different manager or supervisor act on (or at least review and approve) such adverse actions. In light of Nassar, such steps will go a long way towards preventing a plaintiff from being able to prove that a retaliatory motive was the reason for an employment action.