On February 11, 2015, the New Jersey Supreme Court decided Aguas v. New Jersey and established that New Jersey employers have an affirmative defense to claims of vicarious liability for supervisory harassment arising under the Law Against Discrimination (LAD). The court's ruling in Aguas underscores the importance of having meaningful and effective anti-harassment policies and procedures in place. The court's decision also clarifies how to determine who is a supervisor for purposes of harassment claims under the LAD.

For the first time since the United States Supreme Court's 1998 decisions in Faragher v. City of Boca Raton, 524 U.S. 775 (1998); and Burlington Industries v. Ellerth, 524 U.S. 742 (1998), the New Jersey Supreme Court adopted the analytical framework established in Faragher/Ellerth and applied it to a claim of supervisory harassment under the LAD. In Aguas, the New Jersey Supreme Court held that where no tangible employment action has been taken against the employee asserting a hostile work environment claim under the LAD, an employer has an affirmative defense to vicarious liability where the employer can prove: (1) that the employer exercised reasonable care to prevent and correct promptly sexually harassing behavior; and (2) that the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or failed to otherwise avoid the alleged harm. The court noted that its adoption of the long-standing affirmative defense recognized under federal law is consistent with legislative goals of the LAD and the court's prior jurisprudence.[1] The Aguas decision emphasizes now, more than ever, the significance of an effective anti-harassment policy to the defense of workplace harassment claims.

Notably, the New Jersey Supreme Court in Aguas defined the term "supervisor" for the purposes of a hostile work environment claim under the LAD. Rejecting the more restrictive definition of "supervisor" adopted by the United States Supreme Court in Vance v. Ball State University, 133 S. Ct. 2434 (2013), the court adopted the more expansive definition of supervisor established by the Equal Employment Opportunity Commission (EEOC). In Vance, the U.S. Supreme Court defined a "supervisor" as an individual who has the authority to take tangible employment action against an employee (i.e., to effect a "significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities or a decision causing a significant change in benefits"). In addition to those individuals with authority to take tangible action against an employee who are covered by Vance, the EEOC's definition of "supervisor" includes those placed in charge of the complaining employee's day-to-day activities in the workplace. Based on the New Jersey Supreme Court's adoption of the EEOC's more expansive definition of supervisor, the pool of personnel who can give rise to vicarious liability for supervisory workplace harassment has grown for New Jersey employers.

What This Means for Employers

New Jersey employers should consider establishing or revisiting the effectiveness of their anti-harassment policies to ensure that such policies are comprehensive, contain a complaint procedure and include mechanisms for monitoring the trustworthiness of the policies and complaint process. Based on the Aguas decision, it would be prudent for employers to identify and examine the personnel within their organizations with the authority to direct the day-to-day responsibility of subordinates, as those with such authority should be carefully selected and thoroughly trained on the employer's anti-harassment policy. While the Aguas case establishes the definition of "supervisor" under the LAD for purposes of hostile work environment claims, employers also have to navigate the varied definitions of supervisor under other statutes like the Fair Labor Standards Act and the National Labor Relations Act, as well as the implications of falling within the definition of supervisor under those laws.

Employers who want to avail themselves of the affirmative defense now available under the LAD in light of the Aguas decision should consider consulting with legal counsel and auditing their workplace practices. The following areas warrant employer review in light of the court's recent decision: (1) establishing or fine-tuning their anti-harassment policies; (2) examining the personnel falling within the definition of supervisor under various employment laws to make sure classification of such personnel as supervisors supports the employer's business objectives; (3) tailoring job descriptions and organizational charts, where appropriate; and (4) providing the required anti-harassment training. Instituting these measures may enable employers to reduce the likelihood of workplace harassment claims and may minimize exposure and liability when employers are properly positioned to avail themselves of the affirmative defense to claims of supervisory workplace harassment.