• Supreme Court Issues Four Decisions Favorable to Employers
  • September 5, 2013 | Authors: Rachael Jeanfreau; E. Fredrick Preis
  • Law Firms: Breazeale, Sachse & Wilson, L.L.P. - New Orleans Office ; Breazeale, Sachse & Wilson, L.L.P. - Baton Rouge Office
  • The U.S. Supreme Court issued four decisions in 2013 involving important questions of employment law that are being widely praised by corporate attorneys for their “pro-employer” rulings. Companies should be aware of these decisions so that they can take advantage of the potential defenses they offer. However, these decisions do not change the fundamental rules of employment law or the importance of maintaining an effective employee relations program. Companies must remain vigilant to ensure that their interests are protected.

    Every company that has defended itself against a harassment claim under employment discrimination laws understands that dealing with harassment allegations is time-consuming, expensive, and, at a minimum, unpleasant for all employees involved. Further, a company sued for harassment also may be exposed to bad press and an expensive settlement or a large court judgment. Fortunately, a recent Supreme Court decision has made it a little easier to defend your company against harassment allegations under federal employment discrimination laws.

    One of the most important issues in any harassment case is whether an alleged harasser is a “supervisor.” This is because the legal standards are different if the alleged harassment is committed by a supervisor or a co-employee. Pursuant to well-established Supreme Court precedent, it is much easier for an employee to obtain a judgment against a company if he or she was harassed by a supervisor because a company is “vicariously liable” (i.e., directly liable) for harassment committed by a supervisor. By contrast, when a non-supervisory co-employee is responsible for the alleged harassment, the company cannot be directly liable and can avoid exposure by asserting the so-called Faragher/Ellerth defense by showing that it exercised reasonable care to prevent and correct any harassment — usually by implementing and following a well-drafted anti-harassment policy.

    On June 24, the Supreme Court issued a decision in the Vance v. Ball State University case that clarified and narrowed the definition of “supervisor” for purposes of a harassment lawsuit brought under Title VII of the Civil Rights Act of 1964. This decision makes it more difficult for an employee to prove that an alleged harasser is a “supervisor” and, thus, more difficult for an employee to show that his or her employer is vicariously liable for harassment.

    The plaintiff in Vance, an African-American employee of a university, alleged that a Caucasian employee harassed her because of her race, and that the university was liable under Title VII. The plaintiff was a “catering assistant” working in the university’s Banquet and Catering Division, and the alleged harasser was a “catering specialist” working in the same division. The parties disputed the exact scope of the alleged harasser’s authority over the plaintiff, but they agreed that the alleged harasser did not have power to hire, fire, demote, promote or discipline the plaintiff.

    The district court awarded summary judgment in favor of the employer because the alleged harasser was not a “supervisor,” and, applying the Faragher/Ellerth defense applicable to co-employee harassment cases, held that the university reasonably responded to the incidents of harassment of which it was aware. The Seventh Circuit Court of Appeals and the Supreme Court affirmed.

    In its decision, the Supreme Court reaffirmed that an employer can be vicariously liable for an employee’s unlawful harassment only when the employee is a “supervisor.” Further, relying on its own precedent and principles of agency, the Court held that an employee is a “supervisor” in a Title VII retaliation case if he or she is empowered by the employer to take tangible employment actions against the victim, such as hiring, firing or demoting. In doing so, the Supreme Court rejected the definition established by the Equal Employment Opportunity Commission (EEOC) and certain courts, which would include as supervisors employees with authority merely to assign, to reward, to direct employees or to recommend tangible employment actions. Under the EEOC’s definition, many “first-line supervisors,” “assistant managers,” or “lead” workers would qualify as supervisors for purposes of Title VII harassment claims. But thanks to the Vance decision, employees will have a more difficult time proving that an alleged harasser is a supervisor whose actions expose a company to vicarious liability.

    Although the Vance decision is a positive development for employers overall, it reminds us how easy it is for an employee to make a costly claim against your company if he is subjected to harassment by an employee who qualifies as a supervisor. Accordingly, companies should work with experienced counsel to delineate which positions have authority to take tangible employment actions (as evidenced by clear, written job descriptions), to establish and implement effective, up-to-date harassment policies, and to conduct regular training for their supervisors in order to minimize the risk of direct liability for harassment.

    Standard for Proving ‘Causation’ Heightened in Retaliation Cases

    Retaliation claims against employers are on the rise. Every year since 2010, the EEOC has received more complaints based on retaliation than on any type of discrimination, such as that involving race or gender. For employers, one of the most important issues in every retaliation case is causation. Companies regularly defend themselves by arguing that the complaining employee failed to prove that an adverse employment action (e.g., discharge or suspension) was caused by some kind of action by the employee that is protected by law (e.g., reporting unlawful harassment or filing an EEOC Charge).

    Over the years, federal courts have disagreed about the standard of proof for retaliation claims under Title VII. Some courts required plaintiffs to prove that the employer would not have taken the adverse employment action but for the plaintiff’s protected activity. Other courts used a standard more easily met by employees, which required proof that the improper motive was just one of the reasons behind the adverse employment action.

    On June 24, the U.S. Supreme Court clarified the type of proof required for a plaintiff to establish a retaliation claim under Title VII in University of Texas Southwestern Medical Center v. Nassar. The Court held that a plaintiff must prove that the unlawful retaliation was the “but-for” cause of the challenged employment action, not simply a “motivating factor” for the employment action. In other words, to succeed on a Title VII retaliation claim, a plaintiff must prove that he would not have suffered an adverse employment action if he had not engaged in the protected activity.

    In Nassar, a physician of Middle Eastern descent complained to his employer that a supervisor harassed him based on his religion and ethnic heritage. Ultimately, a university affiliated with the employer denied the physician a permanent position, and he filed a lawsuit claiming that he experienced retaliation for filing a discrimination complaint, and also that he was subjected to race and religion discrimination. A jury found in favor of the physician on these claims, and the U.S. Fifth Circuit Court of Appeals affirmed the judgment on the retaliation claim because the physician had proved that retaliation was a “motivating factor” in the decision to deny the physician a permanent position.

    The Supreme Court reversed the Fifth Circuit’s decision, holding that the more burdensome “but-for” standard of causation was the appropriate test for causation in Title VII retaliation cases. The Court reasoned that Title VII’s anti-retaliation provision, which prohibits employers from taking adverse employment action “because of” certain criteria, is similar to language found in the section of the Age Discrimination in Employment Act (ADEA) that prohibits age discrimination. Because the Court recently held in Gross v. FBL Financial Services, Inc. that the appropriate standard for proving age discrimination under the ADEA was the “but-for” standard, the Court concluded that Title VII called for the same test of causation.

    The Court’s decision in Nassar is helpful for employers because it raises an employee’s burden for proving causation in retaliation cases, and courts now are more likely to dismiss such claims at the dispositive-motion stage. However, this decision does not necessarily mean that the recent spike in retaliation claims will plateau. Employers should continue to ensure that their Equal Employment Opportunity policies have effective anti-retaliation provisions, that managers receive regular training regarding these policies, and that employee complaints of discrimination are kept confidential.

    Potential Defense Against FLSA Collective Actions Recognized

    Just like retaliation claims, the number of claims brought under the Fair Labor Standards Act (the Federal law that guarantees non-exempt employees the right to a minimum wage and overtime wages) has increased dramatically in recent years. This increase can be attributed primarily to two causes. First, plaintiffs’ attorneys have begun aggressively pursuing potential wage claims because the FLSA allows successful plaintiffs to collect their attorneys’ fees.