On Monday, June 24, 2013, the Supreme Court issued two 5-4 rulings in important cases affecting the employment world, University of Texas Southwestern Medical Center v. Nassar and Vance v. Ball State University. By making it harder for plaintiffs to establish their claims and by providing judges with greater opportunities to dispose of cases before making it to the jury, the decisions in Nassar and Vance will undoubtedly result in reduced litigation costs to employers and will limit the pressure to settle otherwise frivolous claims.
The plaintiff in University of Texas Southwestern Medical Center v. Nassar, No. 12-484, brought a retaliation suit, claiming that he was denied permanent employment with the University of Texas Southwestern Medical Center after he made allegations that a supervisor was discriminating against him based on his race and religion. The employer argued that, regardless of any alleged retaliatory intent, it nonetheless would not have made the plaintiff a permanent employee for completely justifiable reasons. In other words, it argued that the plaintiff could not prevail because he could not show that he would have received a permanent position “but for” the retaliation. The Court was asked to clarify the standard of proof applied to retaliation claims—i.e., whether a plaintiff must prove only that the retaliation was a “motivating factor” or whether he or she must show that “but for” the illegal act, the plaintiff’s injury would not have occurred.
Previously, a plurality of the Court in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), adopted the “motivating factor” test for, specifically, sex discrimination cases brought under Title VII. Under this test, if a plaintiff could show that discrimination was a “motivating factor” in an employment action, the employer was required to show that it would have taken the same action regardless. Thereafter, this rule was codified, albeit modified, in 1991—“an unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for employment practice, enough though other factors also motivated the practice.” 42 USC § 2000e-2. Prior to this amendment, however, courts already were applying Price Waterhouse liberally to all Title VII claims, including retaliation claims. In 2009, however, the Court in Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009), held that the “but for” standard, not the “motivating factor” test, applied to retaliation claims brought under the Age Discrimination in Employment Act (ADEA). Gross led many to question what standard applied to Title VII retaliation claims—whether the “but for” standard applied to all retaliation claims or simply ADEA retaliation claims—and this ambiguity ultimately resulted in a split in lower court decisions.
The Court in Nassar addressed this ambiguity, holding that the “motivating factor” test only applied to “status-based” discrimination claims, not to retaliation claims. It first pointed to the language of the 1991 amendment, which specifically applied to “race, color, religion, sex, or national origin.” Moreover, the Court pointed out that Title VII contains separate provisions for status-based discrimination and for retaliation, and that the 1991 amendment was only passed for the status-based provision. As a result, the Court also rejected any argument that retaliation is essentially a subset of discrimination claims, noting that, if such was the case, there would be no need to treat the two differently under Title VII. The Court ultimately pointed to the “ever-increasing frequency” of retaliation claims and concluded that placing a stricter “but for” standard of proof on retaliation claims made sense and would limit the employee’s ability to concoct his or her own retaliation claims by making unfounded claims of discrimination in anticipation of getting terminated.
In Vance v. Ball State University, No. 11-556, the same majority as in Nassar also narrowed the scope of what constitutes a “supervisor” for purposes of Title VII liability. Under traditional agency law principles, an employer can be held vicariously liable under Title VII if one of its supervisors engages in discriminatory behavior. The Court in Vance, however, held that a supervisor is not simply an individual who directs the daily activities of other employees but instead is one who has the ability to take “tangible employment actions,” such as hiring, firing, disciplining, promoting, or reassigning.
The plaintiff in Vance was a 10-year employee in the university’s dining and catering department and the only African American in that department. The plaintiff alleged that, in 2001, co-workers began making racists comments. She also claimed that two staff member, whom the plaintiff regarded as supervisors, treated other workers more favorably and that one of them made inappropriate references to the Ku Klux Klan and accosted the plaintiff in an elevator. A lower court dismissed her claims, finding that the plaintiff had not shown that she was the subject of racial discrimination by a supervisor, and the plaintiff’s challenge eventually was heard by the Supreme Court on the issue of what constituted a “supervisor.”
The Court already had acknowledged in prior cases that an employer is directly liable for unlawful harassment by a supervisor but that employer liability is much more limited if the unlawful conduct is perpetrated by a co-worker. It would “go too far,” the Court noted, to hold employers strictly liable for a supervisor’s actions that do not result in a “tangible employment action” as long as the employer exercised reasonable care to prevent any illegal behavior and the plaintiff unreasonably failed to take advantage of any preventative or corrective opportunities. Although the definition of “supervisor” is important to determining employer liability in Title VII cases, lower courts as well as the Equal Employment Opportunity Commission (EEOC) were in conflict over what actually constituted a “supervisor.” The Seventh Circuit, for example, held that an employee was not a supervisor unless he or she had the power to hire, fire, etc., while the EEOC took a broader approach, tying supervisory status to an employee’s ability to exercise significant direction over another’s daily work.
In resolving this ambiguity, the Court held that an employee was not a “supervisor” unless “empowered by the employer to take tangible employment actions against the victim.” In other words, an employee’s authority must go beyond simply exercising control over another employee’s daily tasks but must be able to affect a significant change in employment status, such as hiring, firing, or disciplining. This ruling, the Court opined, was consistent with its prior precedent and also provided an easier standard to apply when determining an employee’s supervisory status.
Nassar and Vance already have been touted as a major victory for employers. Not surprisingly, they have also been strongly criticized, including in both dissents, for the striking blow delivered to an employee’s ability to bring (and sustain) claims against employers. While both cases undoubtedly burden plaintiffs with additional considerations not previously clarified in existing law, they also simplify the standard for bringing retaliation claims and elucidate the parameters of employers’ liability. Together, these cases provide a bit more clarity to a very vexing area of employment law.