• Constructive Discharge is Tangible Job Action, the Third Circuit Rules
  • December 6, 2003 | Authors: Laura A. Candris; Elaina A. Smiley
  • Law Firm: Meyer, Unkovic + Scott llp - Pittsburgh Office
  • In a precedential decision, Suders v. Easton, decided on April 16, 2003, a panel of the United States Court of Appeals for the Third Circuit ruled that constructive discharge is a "tangible job action" such that the affirmative defense to supervisory harassment under the Supreme Court's decisions in Faragher and Ellerth is not available if the plaintiff proves that his or her resignation was a constructive discharge. (The Third Circuit decides appeals from federal trial courts in Pennsylvania, Delaware and New Jersey.)

    In Faragher and Ellerth, the Supreme Court addressed vicarious liability for discriminatory harassment by an employee's supervisors. In those decisions, the Court ruled that an employer is strictly liable to an employee for harassment by the employee's supervisor(s) when the harassment results in a "tangible employment action." The Supreme Court defined tangible employment action as a significant change in employment status, which often results in economic injury, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities or a decision causing a significant change in benefits. In Ellerth, the Supreme Court said that a supervisor's exercise of delegated authority to make decisions affecting employees economically renders the employer directly liable.

    Under Faragher and Ellerth, when harassment by an employee's supervisor(s) does not result in a tangible job action, employers can defend such claims by proving both that (1) the employer exercised reasonable care to prevent and correct promptly any harassing behavior; and (2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

    Suders alleged that she was forced to resign due to sexual harassment from supervisors who consistently made obscene gestures, engaged in explicit sexual discussions, and threatened her. The trial court granted the employer's motion for summary judgment, despite Plaintiff's evidence of a hostile work environment, because the employer proved that she had unreasonably failed to use its procedures for reporting and redressing harassment. The Third Circuit reversed, and ruled that when an employee raises a genuine issue of material fact as to whether his or her resignation was a constructive discharge, the employer may not assert or rely on the affirmative defense under Faragher and Ellerth to obtain summary judgment and, when constructive discharge is proved, the employer is directly liable for the harassment, just as if the employer had made the decision to discharge the employee.

    To establish constructive discharge, Plaintiffs must prove (1) harassment or discrimination so intolerable that a reasonable person in the same position would have been compelled to resign; and (2) the employee's decision to resign was reasonable given the totality of the circumstances, including any avenues for relief provided by the employer.

    The Third Circuit panel reasoned that a constructive discharge has the attributes of a tangible job action, as defined in Faragher and Ellerth, because it constitutes a significant change in employment status and inflicts direct economic harm. When an employee demonstrates that the work environment created by an employer was so intolerable that he or she had no choice but to resign, the constructive discharge is effectively the act of the employer.

    The Third Circuit judges were concerned that excluding constructive discharge from the category of tangible employment actions could have the perverse effect of discouraging employers from actively pursuing remedial measures and, possibly, of encouraging intensified harassment. If constructive discharges were not tangible job actions, the panel of judges feared that employers might not respond seriously to internal reports of harassment, and then assert the affirmative defense when an employee resigned due to intolerable working conditions the employer failed to address.

    To reduce the risk of constructive discharge claims and liability in light of the Suders decision, employers should: (1) redouble their efforts to ensure that every employee is aware of their no harassment and no discrimination policies, complaint procedures and commitment to redressing prohibited conduct; (2) intensify their training of supervisors and managers about their responsibilities to prevent, recognize, report and redress harassment and discrimination; (3) investigate all resignations, particularly abrupt resignations, for evidence of unlawful conduct; and (4) take remedial action, if such evidence is found.