Edwards Wildman Client Advisory - "Who's the Boss?" The Supreme Court Decides in Favor of Employers

    Today the U.S. Supreme Court, in two 5-4 rulings, handed employers a pair of welcome victories that refine and limit the way that courts must interpret Title VII of the Civil Rights Act of 1964. In the first case, Vance v. Ball State University, the Court was asked to define more precisely exactly who is a supervisor for purposes of determining an employer’s liability in a case of alleged workplace harassment. In the second, University of Texas Southwestern Medical School v. Nassar, the Court was asked to decide what kind of evidence a plaintiff needed to provide in order to prevail in a retaliation claim. In both cases, the majority opinions rejected interpretations of Title VII developed by the Equal Employment Opportunity Commission (EEOC).

    The Court’s clarification of who is a supervisor in Vance is important because the standards for liability in harassment cases are different when the harasser is a supervisor than when the harasser is a co-worker. In a pair of 1998 cases, the Supreme Court had ruled that if a supervisor takes a “tangible employment action” against an employee in the context of unlawful harassment, the employer is vicariously liable for that action, whether or not the employer was aware of the harassment. If no “tangible employment action” has been taken against the target of harassment, then the employer can assert an affirmative defense (called the Faragher/Ellerth defense) that it took reasonable steps to prevent or respond to the harassment and the employee did not take advantage of those preventive or corrective policies. Under that same doctrine, an employer is not vicariously liable for harassment for the acts of non-supervisory co-workers of which it was unaware, unless the employer was negligent.

    In Vance, the plaintiff had complained that a co-worker who occasionally directed her work had engaged in racial harassment, and sought to hold the university liable for the allegedly hostile work environment. The lower courts had ruled that the co-worker was not a “supervisor” under the Faragher/Ellerth doctrine, and thus the university had prevailed below. The Supreme Court agreed, stating that an individual is a supervisor “if he or she is empowered by the employer to take tangible employment actions against the victim.” The Court, quoting Ellerth, stated that supervisory status attaches “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.’” It rejected the argument of the EEOC (and the four dissenting Justices) that any employee who has “the ability to exercise significant direction over another’s daily work” should be a considered a supervisor for Title VII purposes.

    In Nassar, the Court was asked to decide whether, in asserting a claim of retaliation under Title VII, a plaintiff could use a “mixed motive” theory, or whether the plaintiff must prove that an unlawful motive was the “but for” reason for the retaliation. In a “mixed motive” claim, a plaintiff need only demonstrate that an unlawful motive was “a” factor in the negative employment action, rather than the “but-for” reason. This theory has been applied to discrimination claims, but the Court had not yet been asked to decide whether the mixed motive theory applied to retaliation claims under Title VII. In 2009, the Supreme Court ruled in Gross v. FBL Financial Services, Inc. that plaintiffs bringing discrimination or retaliation claims under the Age Discrimination in Employment Act (ADEA) may prevail only if they can demonstrate that age was the “but-for” reason for the challenged employment action. In other words, the Court eliminated the ability of plaintiffs to use a “mixed-motive” theory for claims brought under the ADEA. The defendant in Nassar argued that result in Gross should be applied to Title VII retaliation claims as well.

    The Court explained that the mixed-motive theory, which Congress added to Title VII in the Civil Rights Act of 1991, applies only to status-based discrimination, not to retaliation, and that if Congress had intended that theory to extend to retaliation, it could have done so when it amended the law. Retaliation is prohibited in a different section of Title VII than status-based discrimination, and the Court explained that a plain reading of the statute indicated that the mixed motive theory explicitly applies only to status-based discrimination. With respect to the plaintiff’s argument that the EEOC’s Enforcement Manual requires that retaliation claims be evaluated under the mixed motive theory, the majority responded that the EEOC’s reasoning “lacked persuasive force.”

    In defending its reasoning and result in Nassar, the majority noted that the number of retaliation claims filed with the EEOC has skyrocketed in recent years, and that employers would now be more likely to win summary judgment awards for “dubious” claims. The dissenters, led by Justice Ginsburg, criticized both the reasoning and the result in Nassar, arguing that discrimination and retaliation claims have “traveled together,” are frequently raised together by plaintiffs, and should be evaluated under the same standard of proof. The dissenters were concerned that juries would likely be confused because the standard for determining whether conduct is “status discrimination” will now be quite different from the standard for determining whether or not the employer engaged in retaliation.

    These clarifications of Title VII should make the outcome of workplace discrimination and harassment claims more predictable. Both Vance and Nassar will aid employers in avoiding litigation and, where litigation does ensue, these cases should help employers prevail either on summary judgment or at trial. Vance will make it more difficult for employees to win claims involving non-supervisory co-worker discrimination or harassment unless the employer was aware of the alleged misconduct and chose to tolerate or ignore it.  Nassar will now require employees attempting to sue for alleged retaliation to prove that a protected characteristic, such as race, was the sole reason for their alleged mistreatment.  The cases fill significant gaps in Title VII jurisprudence and are clear victories for employers.

    If you would like further information, please contact the Edwards Wildman lawyer responsible for your matters or one of the authors linked above.

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