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Supreme Court Decisions Reinforce Need for Harassment Policies

In June 1998, the United States Supreme Court issued two notable decisions addressing sexual harassment in the workplace. The decisions underscore the importance to employers of having comprehensive and effective anti-harassment policies to avoid liability for sexual harassment in some situations. These two decisions also emphasize that simply implementing a sexual harassment policy is not sufficient to protect employers from liability. Employers should train employees on the types of conduct considered to be sexual harassment and the Company's harassment complaint procedures. Training can strengthen an employer's defense to sexual harassment claims and, more importantly, may prevent harassment from occurring in the first place.

In the case of Burlington Industries, Inc. v. Ellerth, the complaining employee was hired as a salesperson in Burlington's Chicago division office. During her fourteen months of employment with the company, Ellerth was the recipient of repeated sexually offensive remarks and gestures by her supervisor's superior, Ted Slowik, who was based in New York. Ellerth admitted she was aware of Burlington's policy against sexual harassment, but she did not inform anyone in authority of Slowik's conduct. She did, however, tell Slowik on one occasion that she believed a comment he made was inappropriate. Soon after one of the alleged incidents involving sexual harassment by Slowik, Ellerth received corrective action by her immediate supervisor on an unrelated, job performance issue. In response to this performance counseling session, Ellerth resigned from her position. In her letter of resignation, she did not include any reference to alleged sexual harassment. Three weeks later, however, she sent a letter to Burlington in which she explained that she had resigned because of Slowik's behavior. Burlington prevailed at the district court level when an Illinois district court granted summary judgment to the employer, finding that Burlington neither knew nor should have known of Slowik's conduct.

The case of Faragher v. City of Boca Raton involved the conduct of two supervisory level employees, Bill Terry and David Silverman, to whom Beth Ann Faragher reported when she worked as an ocean lifeguard for the City of Boca Raton, Florida. Faragher worked on a part-time basis between 1985 and 1990. In February, 1986, the City adopted and issued to all employees a sexual harassment policy. However, when the policy was revised in 1990, the City did not disseminate its policy to the section to which Terry, Silverman, and many of the lifeguards were assigned. Terry and Silverman repeatedly made unwanted physical contact with and sexually offensive verbal comments to many female employees including Faragher. Although Faragher did not formally complain to higher management about the offensive conduct of Terry and Silverman, she did discuss her concerns with Robert Gordon, her immediate supervisor. She presented these concerns to Gordon, not in his role as her supervisor but as a person she held in high esteem. Despite similar conversations with other female lifeguards, Gordon did not report these conversations to Terry, his own supervisor, or any other city official.

The United States Supreme Court accepted these cases with the intention of clarifying the proper standards for employer liability in sexual harassment cases involving supervisors' misconduct where the employee has not suffered any tangible adverse employment action. In its decisions in the Burlington and Faragher cases, the Supreme Court ruled that an employer can be held liable to an employee for sexual harassment created by a supervisor with immediate or higher level authority over the employee even when the harassment is not reported. A hostile work environment exists where the employer, by its supervisors or employees and through severe or pervasive demeaning behavior, alters the employee's terms or conditions of employment.

The Court identified two instances in which unreported sexual harassment can lead to employer liability:
  1. where the supervisor's harassment includes an adverse "tangible employment action"; or
  2. where a supervisor creates a hostile environment and the employer failed to reasonably and promptly remedy unlawful sexually harassing behavior.
The Court provided examples of tangible employment action including hiring, firing, failing to promote, reassignment with significantly different responsibilities or a decision causing a significant change in benefits. The Court reasoned that typically a tangible employment action involves direct economic harm and that usually only a supervisor could cause this type of harm. As the supervisor can bring what the Court labels "the official power" of the company to the employees through these types of actions, the tangible employment action by the supervisor becomes the act of the employer and brings the corresponding liability. There is no defense available to an employer under these circumstances.

However, the Supreme Court fashioned a new legal defense for cases in which an employee does not suffer an adverse tangible employment but is the victim of a hostile environment created by a supervisor. To assert this new defense, employers must show that:
  • the employer exercised reasonable care to prevent and promptly correct any sexually harassing behavior; and
  • the complaining employee unreasonably failed to take advantage of any preventative or corrective opportunities that were provided by the employer.
The Supreme Court stressed the importance of developing, issuing and maintaining an anti-harassment policy with complaint procedures which can place the employer in the best position when addressing the reasonableness of the employee's conduct. However, the Court also indicated that more than just a written policy may be necessary under the circumstances. For example, in Faragher, the Court criticized the employer because the employees were at an isolated facility and the employer failed to monitor the behavior of its supervisors or provide access to higher management. The Court also noted that if the employer can demonstrate that the complaining employee unreasonably failed to take advantage of the protections provided by the employer through its anti-harassment policies and procedures, the employer can then invoke the defense.

With the Burlington and Faragher rulings, the Supreme Court has clarified the legal standards for employer liability related to sexual harassment carried out by supervisors. The newly-identified defense should be an encouragement to employers who proactively protect their organizations against unlawful harassment. By instituting and maintaining comprehensive sexual harassment policies; offering regular training to managers and supervisors on the effective management of sexual harassment issues; and giving prompt and effective attention to sexual harassment complaints by employees, employers can significantly reduce and limit their liability for unlawful sexual harassment.

The information contained in this article is not a substitute for legal advice. Individual questions should be directed to an employment law attorney.

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