Vol. 77, No. 10, October 2004

Employer Defenses to Sexual Harassment Claims

by Jesús J. Villa

When may an employer be held liable to an employee who quits her job due to sexual harassment? The U.S. Supreme Court recently considered this question in Pennsylvania State Police v. Suders.¹ More specifically, the Court considered whether an employee who has been "constructively discharged" (that is, effectively forced to quit her employment) can pursue a harassment claim against the employer under Title VII of the Civil Rights Act of 1964 even when the employee had not used the employer's internal complaint procedures before quitting. The Court held that if the employee's quitting was in reasonable response to an "official act" of the employer itself (such as a "humiliating demotion, extreme cut in pay, or transfer to a position in which she would face unbearable working conditions"), the employer would be strictly liable for the harassing work environment. Even absent an official act by the employer, the employer may still defend itself by proving that it took reasonable steps to prevent and correct the harassment and that the employee unreasonably failed to avail herself of the corrective opportunities available. Although Suders involved federal, not state, antiharassment law, Wisconsin courts and agencies are likely to consider Suders as persuasive authority when interpreting similar provisions of the Wisconsin Fair Employment Act.

The Applicable Legal Standards

In two 1998 cases, the Supreme Court considered the circumstances in which an employer may be liable to a harassed employee. The Court laid out when an employer would be liable for the sexual harassment engaged in by a supervisor in Faragher v. Boca Raton² and Burlington Industries Inc. v. Ellerth.³ The Court held that liability depended greatly on whether the harassment involved a "tangible employment action." The Court described a tangible employment action as an official act of the employer such as discharge, demotion, or undesirable reassignment. If the alleged harassment involved such a tangible employment action, the employer would be strictly liable. But if no tangible employment action was involved, the employer could avoid liability by proving:

1) the employer exercised reasonable care to prevent and promptly correct any sexually harassing behavior; and

2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to otherwise avoid harm.

The intended effect of this affirmative defense was to encourage employers to implement mechanisms to address harassment in the workplace - mechanisms such as antiharassment policies, complaint procedures, and antiharassment training for supervisors. Employees, for their part, were directed to make use of these preventive mechanisms. Employees who failed to take advantage of these mechanisms would not be able to successfully recover in a legal action against the employer.

Since Faragher and Ellerth were decided, there has been a fair amount of litigation over what constitutes a "tangible employment action" that would prevent an employer from raising the two-pronged defense. Clearly, discharging an employee is a tangible employment action. Less clear is whether a constructive discharge is a tangible employment action. An employee is considered to have been constructively discharged when her working conditions become "so intolerable that a reasonable person in her position would have felt compelled to resign." A proven constructive discharge is treated the same as an actual discharge for many purposes, such as for calculating damages. But the courts have not agreed on whether a constructive discharge is, like an actual discharge, a tangible employment action that precludes an employer from raising the Faragher/Ellerth defense. This is the context in which Suders arose.

The Facts of Suders

Nancy Drew Suders was employed as a communications operator for the Pennsylvania State Police (PSP). Throughout her employment, Suders was subjected to a "continuous barrage" of sexual harassment by her three supervisors. This harassment included offensive comments regarding bestiality and oral sex and rude and intimidating gestures. A few months after she began working, Suders contacted the PSP's Equal Employment Opportunity (EEO) officer and told her she "might need some help." The EEO officer gave Suders her phone number, but Suders did not follow up for several months. When Suders finally called and told the EEO officer she was being harassed, the officer told her to file a complaint. Before Suders did so, her supervisors arrested her for suspected theft of a computer skills exam. Although the PSP never formally brought charges against Suders, she resigned from the force shortly after the arrest.

Suders filed a sexual harassment claim against the PSP. The PSP moved to dismiss the claim on summary judgment. The district court granted the PSP's motion, finding that Suders "unreasonably failed to avail herself of the PSP's internal procedures for reporting any harassment." The court noted that, by resigning just two days after she mentioned anything to management about harassment, Suders never gave the PSP an opportunity to respond to her complaints.

The Third Circuit Court of Appeals reversed and remanded the case for a trial. Among other reasons, the court of appeals reversed because the district court had failed to recognize Suders' constructive discharge claim. The Supreme Court granted certiorari to decide whether a constructive discharge brought about by a supervisor's harassment constitutes a tangible employment action.

The Supreme Court's Decision

The Court first affirmed that Title VII of the Civil Rights Act of 1964 encompasses employer liability for a constructive discharge. The Court then considered whether a constructive discharge constitutes a tangible employment action, and held that it sometimes does and sometimes does not. The Court recognized that, unlike an actual discharge, a constructive discharge need not involve an official act of the employer. A determination of whether a constructive discharge constitutes a tangible employment action requires examining the conduct that precipitated the employee's decision to leave. If that conduct constitutes an official act, it would be considered a tangible employment action. The Court explained:

"[W]hen an official act does not underlie the constructive discharge, the Ellerth and Faragher analysis ... calls for extension of the affirmative defense to the employer. ... [O]fficial directions and declarations are the acts most likely to be brought home to the employer, the measures of which the employer can exercise greatest control. ... Absent 'an official act of the enterprise' ... as the last straw, the employer ordinarily would have no particular reason to suspect that a resignation is not the typical kind daily occurring in the work force. ...[A]n official act reflected in company records - a demotion or a reduction in compensation, for example - shows 'beyond question' that the supervisor had used his managerial or controlling position to the employee's disadvantage. ... Absent such an official act, the extent to which the supervisor's misconduct has been aided by the agency relations ... is less certain. That uncertainty ... justifies affording the employer the chance to establish, through the Ellerth/Faragher affirmative defense, that it should not be held vicariously liable."

The Court then used two case law examples to illustrate what would and would not be considered an official act such as would make a constructive discharge a tangible employment action. In Robinson v. Sappington,⁴ the court noted that the constructive discharge was a tangible employment action when the plaintiff, who complained of sexual harassment, was subsequently transferred to a "hellish" assignment and was told that it was in her "best interest to resign." The transfer was the type of official act that transformed the constructive discharge into a tangible employment action. In contrast, in Reed v. MBNA Marketing Systems Inc.,⁵ the constructive discharge was not a tangible employment action because the harassment experienced by the plaintiff did not involve any "direct exercise of company authority." These circumstances involved exactly the kind of wholly unauthorized conduct for which the affirmative defense was designed.

The Impact on Employers

The Suders decision clarifies but does not significantly alter the standards for determining employer liability in a case involving harassment by a supervisor. Since Faragher and Ellerth, harassment that involves an abuse of supervisor authority in the form of a tangible employment action results in strict liability to the employer. Suders has now clarified that when such a tangible employment action is serious enough so that a reasonable person would be compelled to resign, the employer will be strictly liable for the resignation just as if it had directly discharged the employee. In such circumstances, it would not matter whether the employer took reasonable steps to prevent and correct the harassment, nor would it matter if the employee failed to complain of the harassment. Clearly, wise employers should take precautions to avoid getting into such a difficult situation.

It is now more important than ever for employers to:

• Maintain antiharassment policies that clearly communicate that the employer does not tolerate inappropriate conduct.
• Have clear procedures for employees to complain of harassment and encourage employees to take advantage of those procedures.
• Be proactive in identifying potential harassment liability threats without waiting for complaints.
• Train supervisors in the do's and don'ts of personal conduct and make it clear that harassment or other abuses of authority will have serious consequences.
• Conduct exit interviews whenever an employee resigns.
• Consider having upper management or human resources review tangible employment actions by supervisors to reduce the risk of abuse of supervisory authority.
• Take all harassment and discrimination complaints seriously and take steps to prevent retaliation.

Endnotes

¹124 S. Ct. 2342 (2004).

²524 U.W. 775 (1998).

³524 U.S. 742 (1998).

⁴351 F.3d 317 (7th Cir. 2003).

⁵333 F.3d 27 (1st Cir. 2003).

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