In June 2013, the Supreme Court issued two decisions that make it significantly more difficult for plaintiffs to pursue federal harassment and retaliation claims against employers under Title VII of the Civil Rights Act of 1964.
In Vance v. Ball State University, the court held an employee is considered a "supervisor" for purposes of determining an employer's vicarious liability for workplace harassment only if the employee is empowered by the employer to take tangible employment actions against the alleged victim (defined as hiring, firing, failing to promote, reassigning with "significantly different responsibilities" or causing a "significant change in benefits").
In University of Texas Southwestern Medical Center v. Nassar, the court held claims alleging an employer retaliated against an employee for complaining about or opposing discrimination under Title VII must be analyzed under a "but-for" causation standard, meaning the employee must prove "but-for" his or her opposition to an employer's alleged discriminatory conduct, the retaliatory adverse employment action would not have occurred.
The Vance decision
The court's ruling in the Vance case turned heavily on the court's interpretation of the Faragher/Ellerth framework (named for the two Supreme Court cases from which it developed), which establishes that under Title VII, an employer's liability may depend on the harasser's status.
If the harassing employee is the complainant's co-worker, the employer is liable only if it was negligent in controlling work conditions. However, if the harassing employee is the complainant's supervisor and the supervisor's harassment culminates in a tangible employment action, the employer is liable even if it did not act negligently. If no tangible employment action results from the supervisor's conduct, the employer may be insulated from liability by asserting, as an affirmative defense, that the employer exercised reasonable care to prevent and correct any harassing behavior and the plaintiff unreasonably failed to take advantage of employer-provided preventive or corrective opportunities.
In the Vance case, the plaintiff, an African-American catering assistant, alleged her employer, a university, was vicariously liable under Title VII for the creation of a racially hostile work environment by a fellow university employee, whom the plaintiff claimed to be her supervisor. According to the plaintiff, the accused employee, who was white, had given her a difficult time at work by "glaring at her, slamming pots and pans around her, and intimidating her."
The lower district court and Seventh Circuit found for the employer, explaining the university could not be held vicariously liable for the alleged harassment because the purported harasser did not have the ability to "hire, fire, demote, promote, transfer or discipline" the plaintiff, and as a result, could not be considered the plaintiff's supervisor under Title VII.
The Supreme Court agreed, holding that to qualify as a supervisor under Title VII, the alleged harasser must be empowered by the employer to affect a "significant change" in another employee's employment status. In its ruling, the court expressly rejected the "nebulous" and more easily satisfied characterization of the term previously articulated in guidance issued by the Equal Employment Opportunity Commission, which defines the term "supervisor" as encompassing employees who lack the authority to take tangible employment actions against others but have the ability to exercise "significant direction" over the daily work activities of fellow employees.
The court emphasized the Faragher/Ellerth framework rests on a clear demarcation between co-workers and supervisors and the distinguishing characteristic of a supervisor to have the ability to cause direct economic harm by taking tangible employment actions against other employees. Such actions, the court reasoned, are the "means by which a supervisor brings the official power of the enterprise to bear on subordinates" and which justify the imposition of vicarious liability on an employer.
Furthermore, the court found its supervisor definition to be the more workable interpretation of the term.
The Nassar decision
In the Nassar case, the plaintiff, a physician of Middle Eastern descent, claimed his employer, a university, had retaliated against him for complaining about his supervisor's alleged bias against Arabs and Muslims by sabotaging his employment prospects at a university-affiliated hospital that previously offered the plaintiff a job as a staff physician. The jury found for the plaintiff, and the Fifth Circuit affirmed, holding retaliation claims brought under Title VII, much like status-based claims alleging discrimination because of race, color, sex, etc., require only a showing that retaliation was a motivating factor for the adverse employment action rather than its "but-for" cause.
The Supreme Court reversed, drawing a clear distinction between claims alleging discrimination based on protected traits (status-based claims) and claims alleging retaliation for opposing unlawful discrimination. The court explained the section of the act prohibiting status-based discrimination specifically sets forth the standard under which such claims are to be evaluated; it states an "unlawful employment practice" is established when the complaining party demonstrates the protected trait was a motivating factor for any employment practice even though other factors also motivated the practice.
Title VII's anti-retaliation provision, on the other hand, appears in an entirely different section of the statute and provides only that "[i]t shall be an unlawful employment practice for an employer to discriminate against any of his employees because he has opposed" any discriminatory practice. It contains no language establishing the appropriate standard of causation for retaliation claims.
The court found the statute's silence on this point significant and rejected the plaintiff's contention that the more lenient motivating-factor standard used to analyze status-based discrimination claims should be applied to his retaliation claim. First, it found the text of the act's motivating-factor provision specifically references status-based discrimination but mentions nothing about retaliation claims. Second, the court noted when the act was amended in 1991 to include the motivating-factor language, the provision was inserted as a subsection to the act's ban on status-based discrimination rather than under a section of the statute that applies to all claims the act covers, including those related to retaliation.
Instead, the court looked to the act's text for guidance on the proper standard of causation to be applied. It found the use of the term "because" in the act's anti-retaliation provision indicated Congress' intent for retaliation claims to be proved under a "but-for" standard. In support of its position, the court cited the ordinary meaning of the word "because," which various dictionaries define to mean "by reason of" or "on account of." The court also looked to the interpretation of the phrase "because of" as it is used in a similar statute, the Age Discrimination in Employment Act (ADEA).
In ADEA, the phrase "because of" has been interpreted to mean the "but-for cause of the employer's adverse decision." As such, the court held that to prevail on a Title VII retaliation claim, a plaintiff must prove the unlawful retaliation would not have occurred in the absence of the plaintiff's protected opposition activity.
What the rulings mean
The Vance and Nassar decisions are likely to profoundly affect the landscape of employment litigation and will afford significant advantages to employers facing harassment and/or retaliation claims. The Vance decision has effectively narrowed the circumstances under which an employer may be found vicariously liable for an employee's allegedly harassing conduct, and employers now may be able to avoid protracted litigation and resolve harassment and/or retaliation claims at the summary judgment stage as a result of the bright-line definition of the term "supervisor" articulated in the court's ruling.
To that end, supervisory job descriptions and titles should be reviewed to ensure the duties and authority of each position are clearly delineated and accurately reflect actual responsibilities and power.
The court's holding in the Nassar case also is beneficial to employers because it requires plaintiffs to isolate any protected activity undertaken in opposition to perceived discrimination as the "but-for" cause of any retaliatory action alleged, thereby imposing a higher evidentiary hurdle for plaintiffs to clear to recover on retaliation claims.
Despite these victories, you should continue to maintain and strictly enforce strong policies against harassment and retaliation and respond promptly and appropriately to any complaints received to minimize liability under Title VII.
Jason C. Kim is a partner and Judith Kong is an associate in the Labor and Employment Practice Group of Chicago-based law firm Neal, Gerber & Eisenberg LLP.