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Defense lawyers celebrate win on supervisor liability

Defense lawyers are touting the U.S. Supreme Court’s ruling on Title VII supervisor liability as a significant win for employers, providing a welcome clarification to the law while dealing a blow to the Equal Employment Opportunity Commission.

In the 5-4 decision in Vance v. Ball State University, the court ruled that an employer may be vicariously liable for an employee’s harassment only when the employer has empowered that employee to take “tangible employment actions” against the victim.

The decision will have an “incalculable impact” on hundreds and hundreds of cases litigated across the country every year, predicted attorney Manesh K. Rath of Keller & Heckman in Washington.

“Had the case gone the other way, the conduct of virtually every employee could arguably be attributable to the employer for purposes of imposing vicarious liability,” said Rath, who filed an amicus brief in Vance on behalf of the National Federation of Independent Business Small Business Legal Center.

 Clear guidance

Gregory G. Garre, a partner at Latham & Watkins in Washington, a former U.S. solicitor general and the winning lawyer in the case, said that the decision “provides clarity for employers and employees alike on who qualifies as a supervisor and what principles or situations trigger vicarious liability on the part of employers.”

In 2006, the Muncie, Ind., school was sued for maintaining a racially hostile work environment in its food services department. The plaintiff in the case, Maetta Vance, is an African-American woman who was employed by the school as a catering assistant. In her Title VII suit, Vance claimed she was subjected to racial harassment by the white catering specialist she was assigned to work with, Saundra Davis.

Because Vance could not show that Ball State responded negligently to her complaints of harassment, her entire case hinged on whether Davis qualified as a “supervisor” for the purpose of making Ball State vicariously liable under Title VII.

Plaintiffs’ attorneys often prefer to proceed under a supervisor theory because it may result in strict liability or place the burden on the employer to establish the well-known affirmative defense announced by the U.S. Supreme Court in 1998 in the twin landmark decisions in Burlington Industries v. Ellerth and Faragher v. Boca Raton.

Vance claimed that Davis was her supervisor because Davis directed her daily activities.

Answering a question left open in Ellerth and Faragher, the court in Vance ruled that it takes much more to show that a co-worker qualifies as a supervisor under Title VII.

“We hold that an 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,’” Justice Samuel A. Alito Jr. wrote for the court’s majority.

Daniel R. Ortiz of Charlottesville, Va., represented Vance in the case. Ortiz expressed concern that the court’s decision provides employers with a formula to insulate themselves from liability for violations of Title VII.

“We don’t think that the formalistic rule that the court adopted is responsive to the realities of the modern workplace,” Ortiz said.

But Garre welcomed the fact that, by announcing a bright-line rule, the court resolved an issue that has confused the courts since 1998.

“The most significant impact the decision will have is clarifying the rules and providing a more orderly and simpler way of disposing of these issues in Title VII litigation,” Garre said. “It’s going to help control the nature of this litigation by eliminating another issue that has to go through summary judgment and potentially a trial.”

Boston attorney Benjamin G. Robbins, who represents employers, also applauded the clear standard laid down by the court.

“What I liked about the decision is that, for purposes of ascribing vicarious liability to the employer, the definition of supervisor is limited to those employees who are deputized or empowered to make those crucial economic decisions actually affecting someone’s income,” said Robbins, the senior staff attorney for the pro-business New England Legal Foundation in Boston. Robbins filed an amicus brief in the case on behalf of the foundation.

EEOC rebuffed

Defense attorneys acknowledged the court’s decision in Vance marked a significant defeat for the EEOC. The EEOC appeared in the case in support of the employee, seeking to convince the court to adopt the agency’s own definition of supervisor.

Under a guideline issued in 1999, the EEOC tied supervisor status to the ability to exercise significant direction over an employee’s daily work, which plainly would have applied to the alleged harasser in Vance’s case. In the court’s decision, Alito rejected what he characterized as the EEOC’s “nebulous” definition.

“The majority was looking for a clear line,” explained Leslie E. Silverman of Proskauer in Washington. “The vagueness of the EEOC standard was a problem, and as a result they decided not to defer to it.”

Silverman filed an amicus brief in support of Ball State on behalf of the Society for Human Resource Management.

Robbins also was thankful that the court rebuffed the EEOC on the issue.

“Any definition that strays from the clear, predictable ‘tangible employment action’ definition would be too case-specific and open-ended,” Robbins said.

Rath agreed, adding that the Supreme Court “made it clear that employer liability should be addressed by the statute that Congress enacted, and not by the EEOC’s interpretation on a specific question.”

 Practical implications

The immediate effect of the court’s decision is that there will be less litigation over Title VII supervisor liability, with the emphasis shifting to claims alleging an employer was negligent in failing to respond to harassment complaints, Silverman said.

Ortiz said he feared that employers will cynically use the court’s decision to insulate themselves from liability, restructuring the workplace to place all hiring, firing and disciplinary decisions in the hands of remote human resource departments.

“If that happens, all the employees who have the power to make someone’s life hell won’t get the employer into trouble because they don’t have these other ‘tangible’ powers,” Ortiz said.

But Silverman responded that Ortiz’s nightmare scenario was far-fetched and itself ignored the realities of the modern workplace.

Rath agreed.

“Employers structure their workplaces to serve mission-critical needs or operational challenges,” he said. “They are not going to create a structural hierarchy simply to evade liability for discrimination suits or complaints.”

Silverman also pointed out that, even with the court’s decision to limit supervisor liability, harassed employees still have ample remedies under Title VII.

“When the dust settles, the way the decision is being portrayed by plaintiffs’ attorneys is not going to be the reality,” Silverman said. “The negligence standard is still there to protect employees from harassment. It will continue to encourage employers to promptly engage in investigation, mediation and remediation.”

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