Under Title VII, employers are vicariously liable for incidents of sexual harassment engaged in by supervisors. In its Faragher and Ellerth decisions, the U.S. Supreme Court acknowledged a limited defense to claims of supervisor harassment where the employer had in place effective harassment reporting and investigation procedures, and the employee unreasonably failed to take advantage of this process. Last month, the Seventh Circuit Court of Appeals found that the Faragher-Ellerth defense applies in situations where the supervisor had been previously accused of harassment by other female employees.

In Hunt v. Wal-Mart Stores, Inc., the plaintiff alleged that her night shift supervisor sexually harassed her over a five-month period. She reported the conduct at the end of this period, and Wal-Mart immediately investigated and addressed the claims. She later sued for harassment under Title VII, and the district court dismissed the claim on summary judgment, concluding that Wal-Mart had met its burden under the Faragher-Ellerth defense.

The Seventh Circuit affirmed this dismissal, noting that even though Wal-Mart was on notice of prior complaints against the supervisor, it had taken appropriate steps to address those claims and promptly acted once notified of the plaintiff’s allegations. The court also said the plaintiff unreasonably delayed in complaining about harassment. Her response that she was unaware of how to report such claims was undercut by multiple notices provided by Wal-Mart to its employees, including a publicized harassment complaint hotline number.

This decision demonstrates that employers who establish clear and effective harassment reporting practices, and then promptly investigate and resolve such complaints, can minimize or even avoid legal liability, even if they conclude that the harassment claims were valid. Anti-harassment policies, training, complaint mechanisms, and investigation capabilities are a crucial part of any employer’s legal risk management strategy.