Why it is Better to be Harassed by Your Boss than Just Any Old Boss

One of the more common issues I deal with when employees contact my office regarding workplace harassment is whether their employer can be liable to the harassment to which they are being subject. The reason this is an issue is that not all harassment that occurs within the workplace results in employer liability. There are a number of potential reasons for that, including whether the harassment was severe or pervasive and whether the harassment was based upon an unlawful reason (i.e. sex, race, religion, national origin, etc.). This blog entry deals with a less common question – to what extent is an employer liable when an employee is being harassed by a supervisor?

The answer to the above question was recently clarified by the United States Supreme Court in the case of Vance v. Ball State University, 133 S.Ct. 2434 (2013). Before I talk about Vance, it is worth noting that the courts have historically employed a different standard to harassment by a co-worker and harassment by a supervisor. In situations where the employee is being harassment by a co-worker(s), the employer is liable only if it was negligent in controlling working conditions. Generally, in order to establish such negligence, an employee is required to demonstrate that their employer knew about the harassment and failed to take prompt action to remedy the situation. In other words, unless and until management, human resources, and/or ownership are made aware of the harassment, the employer is unable to be held liable for the actions of co-workers. So an employee could face daily racial slurs from co-workers but unless the employee reports those comments to the appropriate parties or can demonstrate the higher-ups were aware of the harassment, the employer will not be held liable for the conduct. Given the fact that there is no individual liability in Indiana for this type of conduct, that often means the employee is left without any legal recourse.

In cases in which the harasser is a supervisor, however, different rules apply. If the supervisor’s harassment results in a tangible employment action (i.e. pay cut, demotion, or termination), the employer is strictly liable which means if the employee can prove that the supervisor’s harassment resulted in a tangible employment action, the employer is liable for the employee’s damages regardless of any reports, complaints, knowledge, etc. If no tangible employment action is taken, the employer may escape liability by establishing that the employer exercised reasonable care to prevent and correct any harassing behavior and that the employee unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided. In non-legal terms, that typically means the employer is required to demonstrate that it had policies and procedures in place for preventing harassment, that those policies and procedures were reasonable and effective, and that the employee failed to follow the established policies and procedures to prevent harassment. For instance, a company may have a policy in place that requires an employee who believes he or she is being harassed to call an employee hotline to report the violation at which time the employer will conduct an anonymous investigation into the complaint. In this scenario, if the employee fails to call the hotline and make a report, the employer can escape liability for supervisor harassment that did not result in a tangible employment action. Either way, it is much easier for employees wishing to establish employer liability in a harassment case to prevail in cases involving supervisor harassment than those involving co-worker harassment.

With that in mind, let’s look at why Vance is important. In Vance, the Supreme Court tackled the following issue: Who qualifies as a supervisor in a case in which an employee asserts a claim for workplace harassment? Employees would want that definition to be as broad as possible and employers would prefer as narrow a definition as possible.

Maetta Vance is an African-American female who was employed by Ball State University. Ms. Vance’s case stemmed from allegations of harassment by a Caucasian employee of the University that Ms. Vance claimed resulted in a hostile work environment on the basis of her race. Although there was a dispute as to whether the Caucasian employee was employed in a supervisory capacity by Ball State, there was no dispute that the Caucasian employee did not have the ability to hire, fire, demote, promote, transfer, or discipline Ms. Vance. Both the United States District Court for the Southern District of Indiana and the United States Court of Appeals for the Seventh Circuit focused on the employee’s lack of ability to hire, fire, demote, promote, transfer, or discipline Ms. Vance and applied the co-worker standard of harassment to Ms. Vance’s case instead of the supervisor standard.

Ms. Vance took her case up to the United States Supreme Court which held: “[A]n employer may be vicariously liable for an employee’s unlawful harassment only when the employer has empowered that employee to take tangible employment actions against the victim, 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 other words, the Supreme Court sided with the lower courts in determining that even if Ms. Vance was harassed by a person employed in a supervisory capacity by the University, she was required to prove her claim under the more stringent co-worker standard because the Caucasian employee had no ability to take tangible employment actions with respect to Ms. Vance.

This case is troubling for employees because in many companies, the ability to take tangible employment actions against an employee is centralized in one or two employees such as a Plant Manager, a human resources employee, or a company President. In situations such as these, an employee being harassed by their direct supervisor or a higher-up in the company such as a Vice President or a District Manager will now be held to a higher standard in order to prove their case. So while a secretary may fear reprisal if she reports a Vice President for harassing her, she must follow the company policies and procedures with respect to reporting harassment in order to be protected by the law. If she choses to keep quiet out of fear for her job and continue to face the harassment, a decision which is very understandable and that many employees feel forced to make, she will likely find herself without any recourse at the end of the day.