• Supreme Court Restores Ellerth/Faragher Affirmative Defense to Employers in Most Constructive Discharge Cases
  • June 25, 2004
  • Law Firm: Nixon Peabody LLP - New York Office
  • Employers have every reason to be pleased with the Supreme Court's June 14, 2004, eight-to-one decision in Pennsylvania State Police v. Suders, No. 03-95. The Court overturned a Third Circuit ruling that the important affirmative defense the Court granted employers in its 1998 Ellerth/Faragher decisions was never available in constructive discharge cases. Under the Third Circuit's rejected rationale, employers were automatically liable and lost this important defense once the employees proved they were constructively discharged. Thanks to the Supreme Court, the employer in this case, the Pennsylvania State Police, can defeat Ms. Suders' workplace harassment claims using the restored affirmative defense that the district court previously held required dismissal of those claims.

    The Supreme Court recognized employers can be liable under Title VII for a constructive discharge. Many lower courts have so held, but this was the first time the Supreme Court has done so. The Court also confirmed (footnote 8) that the employee who successfully proves constructive discharge is entitled to the same Title VII damages, including front pay and compensatory and punitive damages, as a terminated employee.

    Ms. Suders alleged a hostile work environment created by her supervisors and other employees that eventually forced her to resign after five months' employment. The Third Circuit's fundamental error was to separate hostile work environment constructive discharge claims from ordinary hostile work environment claims and to hold that the Ellerth/Faragher affirmative defense was not available for the former cases but remained available to employers only for the latter cases. This analysis turned matters on their head. Justice Ginsburg, for the Court, noted Ms. Suders' constructive discharge claim was actually "an aggravated case of sexual harassment or hostile work environment" and "harassment ratcheted up to the breaking point." Whereas an employee claiming hostile work environment must show severe or pervasive conditions, a constructive discharge claimant must show "something more," i.e., that the abusive work environment "became so intolerable that her resignation qualified as a fitting response."

    The Third Circuit wrongly isolated constructive discharge cases. They are merely a subset of hostile work environment cases. Indeed, since constructive discharge cases require a "further showing," the affirmative defense that is concededly available to employers in regular hostile work environment cases should have also been made available, not cancelled as the Third Circuit held, to employers in the "aggravated" constructive discharge cases. Generally speaking, the important affirmative defense is available to employers in both types of hostile work environment cases, regular and aggravated.

    The Supreme Court in Suders strongly endorses its prior holdings, especially Ellerth/Faragher, requiring employers to establish antiharassment procedures and requiring employees to use those complaint procedures. The Third Circuit decision stripping employers of their important affirmative defense was properly vacated because it incentivized employees to resign rather than complaining about workplace harassment and giving the employer an opportunity to correct any problems.

    The restored affirmative defense will likely once again lead to dismissal of Ms. Suders' workplace harassment claims. Although she knew the state police had a complaint procedure and she had met the individual responsible for processing harassment complaints, Ms. Suders did not complain about the harassment she experienced until two days before she resigned.

    Ellerth and Faragher introduced us to "tangible employment actions." Workplace harassment unaccompanied by a tangible employment action activates the employer's affirmative defense. However, if a tangible employment action occurs, the employer is automatically liable and cannot use the affirmative defense. The Supreme Court's famous 1998 list of tangible employment actions ("hiring, firing, failing to promote, reassignment with significant different responsibilities or a decision causing a significant change in benefits") was shunted aside as simply "illustrative" by the Third Circuit, which then boldly added "constructive discharge" to that list. In Suders, the Court not only rejected that addition but suggested (footnote 9) the omission of constructive discharge was purposeful, as Ms. Ellerth, like Ms. Suders, also alleged constructive discharge.

    The Court did not make the restored affirmative defense available in every constructive discharge case. The affirmative defense, the Court ruled, will not be available to employers "if a plaintiff quits in reasonable response to an employer-sanctioned adverse action officially changing her employment status." Where an "official act" underlies the constructive discharge or where a supervisor's "official act" precipitates that constructive discharge, the employer is automatically liable, as in the tangible employment action cases. The new phrase, "official act," borrowed from the Department of Justice's amicus brief, is never defined. We are left to speculate as to the differences, if any, between an "official act" and a "tangible employment action."

    Whatever "official act" may mean, the Court is again emphasizing the difference between the usual hostile work environment case (supervisory harassment unaccompanied by an adverse official act) and cases where some official act of the enterprise renders the employer vicariously liable. Absent an official act, an employer would have no reason to suspect that one resignation, a typical daily occurrence, is somehow different from another resignation.

    Unofficial supervisory harassment remains subject to the Ellerth/Faragher affirmative defense. The Court cites with approval the First Circuit's decision in Reed v. MBNA Marketing Systems, 333 F.3d 27 (1st Cir. 2003). There, the employee resigned, claiming constructive discharge following repeated sexual comments and a sexual assault by her supervisor. The Court agreed with the First Circuit's holding that MBNA could use the affirmative defense because "the supervisor's behavior involved no official actions." The Court also pointed to the First Circuit's dictum that the affirmative defense would become unavailable if an employee resigned because her supervisor transferred her to an extremely dangerous job because she spurned his advances. That would be a constructive discharge precipitated by the supervisor's official act, the transfer.

    The Pennsylvania State Police should win this case on remand. The Supreme Court specifically noted (footnote 11) that "most" of the conduct cited by Ms. Suders involved unofficial conduct, thereby making the restored affirmative defense available. The only exception, the Court noted, were the events surrounding Ms. Suder's computer-skills exam. She alleged her supervisors were purposely altering those results so she would be fired for failing the exam. Those events, the Court observed, "were less obviously unofficial" presumably because the supervisors were trying to force her to resign.

    In Suders, the Supreme Court strongly reaffirms the Ellerth/Faragher principles encouraging employers to establish harassment complaint procedures. This is particularly appropriate in constructive discharge cases. If the employee must complain instead of simply resigning (as the Third Circuit decision contemplated), the employer has the opportunity to change the working conditions before they become intolerable. That will defuse the situation and give the employer a stronger defense against any constructive discharge claim should the employee refuse the offer of changed conditions and resign anyway. The bottom line continues to be that employers must have effective and accessible harassment complaint procedures in place. Having the restored affirmative defense available does not help employers if their complaint procedures are ineffective or if they do nothing after an employee complains. Finally, since some constructive discharge cases can still impose vicarious employer liability, employers may wish to conduct exit interviews for all employee resignations if they are not already doing so.