Employer’s Liability for Sexual Harassment by Supervisors

By Danna McKitrick

Charges of Sexual Harassment Are a Small Business Nightmare – Statistics Bare This Out.

Last year, 15,222 charges of sexual harassment were filed with the EEOC and state FEPA’s with which the EEOC has work sharing agreements – 12.1% of them by males.

Last year, charging parties recovered some $50.3 million dollars through resolution of sexual harassment charges by these agencies. This does not include amounts received through litigation.

Last year, 19,694 charges of retaliation, amounting to 25.4% of all charges, were filed with the EEOC.

What should an employee do to minimize its liability, to minimize its chances of becoming a Title VII statistic?

Federal law governing sexual harassment liability is set out in Title VII and the five (5) U.S. Supreme Court cases cited in the handout, namely: Meritor (1986), Harris (1993), Oncale (1998) and the companion cases of Faragher (1998) and Ellerth (1998).

What is Sexual Harassment

It is a form of sex discrimination prohibited by Title VII of the Civil Rights Act of 1964 and by most state Fair Employment Practices laws. The Equal Employment Opportunity Commission has defined sexual harassment:

“Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when (1) submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment, (2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual or (3) such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment. 29 C.F.R. 1604.11.

How Severe Must The Unwelcomed Conduct Be To Create a Hostile Environment

There is no “bright line test” for recognizing sexual harassment. However, in Faragher the Supreme Court provides the following guidelines:

  • To be actionable under the statute a sexually objectionable environment must be both objectively and subjectively offense, one that a reasonable person would find hostile or abusive, and one that the victim in fact did perceive to be so.
  • Courts will determine whether an environment is sufficiently hostile or abusive by looking at all of the circumstances, including: frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee’s work performance.
  • Title VII does not prohibit genuine but innocuous differences in the ways men and women routinely interact with members of the same sex and of the opposite sex.
  • Simple teasing, offhand comments, and isolated incidents (unless extremely serious) will not amount to discriminatory changes in the terms and conditions of employment.
  • Conduct must be extreme to amount to a change in the terms and conditions of employment.

The Supreme Court standard for judging liability are sufficiently demanding to insure that Title VII does not become a “general civility code”. Properly applied, they will filter out complaints attacking the ordinary tribulations of the workplace, such as the sporadic use of abusive language, gender related jokes and increased teasing.

The New Standard of Liability

By identical rulings in Faragher and Ellerth, the Supreme Court established a new standard of liability for sexual harassment by supervisors. It held that:

When a supervisor’s sexual harassment of an employee results in a tangible employment action, such as discharge, demotion, or undesirable reassignment, the employer is strictly liable to the employee; and

When no tangible employment action is taken, the employer will be strictly liable to a victimized employee for an actionable hostile environment created by a supervisor unless the defending employer can prove by a preponderance of the evidence two things:

    1. “That the employer exercised reasonable care to correct and prevent promptly any sexually harassing behavior,” and
    2. “That the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.”

The court defined a “tangible employment action” to include: “hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.”

The two decisions substantially remake the law of employer liability in the context of supervisor harassment. They adopt the same holding and cover much of the same analytical ground. Both observe that the labels “quid pro quo” and “hostile environment” are neither helpful nor enlightening:

“Cases based on threats which are carried out are referred to often as quid pro quo cases, as distinct from bothersome attentions or sexual remarks that are sufficiently severe or pervasive to create a hostile work environment. The terms quid pro quo and hostile work environment are helpful, perhaps, in making a rough demarcation between cases in which threats are carried out and those where they are not or are absent altogether, but beyond this are of limited utility.”

Rather, for employer liability purposes in the supervisor/subordinate context, the court draws a distinction between harassment that does and harassment that does not lead to “tangible employment action.” In either scenario employers may be held vicariously liable under Title VII. However, when the plaintiff does not suffer a “tangible employment action”, an employer can avoid liability by affirmatively proving that: (1) it exercised reasonable care to prevent and promptly correct sexual harassment, and (2) plaintiff unreasonably failed to take advantage of opportunities to prevent or avoid harm. In contrast, where the supervisor’s harassment results in a “tangible employment action” such as discharge, demotion or undesirable reassignment, the affirmative defense is not available. Where there is no tangible employment action, but a threat to take adverse action for rejection of sexual advances which is not acted on, you have a hostile environment case, not what has been commonly referred to as a quid pro quo case.

Tangible Employment Action

The Court in Reinhold v. Virginia, 151 F.3d 172, 77 FEP Cases 1017 (4th Cir. 1998), vacated its prior decision in light of the Supreme Court’s recent decisions in Faragher & Ellerth, vacated the District Court’s judgment and remanded for further proceedings. Plaintiff’s evidence did not support the conclusion that she suffered a “tangible employment action” sufficient to give rise to automatic imputation of liability against the employer for a supervisor’s actions. As the Supreme Court made clear in Ellerth, a “tangible employment action” requires “a significant change in employment status…” while Reinhold alleged that she was assigned extra work and suffered other harm as a result of her rejection of sexual advances, she did not allege that she experienced a change in her employment status a kin to a demotion or a reassignment entailing significantly different job responsibilities. The employer conceded the existence of a hostile work environment. The question of whether the employer exercised reasonable care to prevent and correct the supervisor’s sexually harassing behavior, and whether the plaintiff unreasonably failed to avail herself of any preventative or corrective opportunities, had not been at issue at the District Court; therefore, the case had to be remanded to the District Court to take evidence as to the employer’s affirmative defenses. (1297)

What Employers Must Do To Minimize Exposure and Liability

  • Publish Written Policy

The policy should explain what sexual harassment is and give examples of what it is and what it is not. It should prohibit offensive and discriminatory conduct and bar pornographic and other offensive materials from the workplace. The policy must include an effective complaint procedure that enables an employee to bypass his or her supervisor including anyone in top management. It should state that there will be no retaliation for filing a complaint, and that complaints will be handled with discretion. Top management must demonstrate that it fully supports the program! The policy and complaint procedure should be posted and a copy given to each employee. Employees should be reminded of it periodically. Each employee should be required to sign an acknowledgment of receipt.

  • Training

Periodic training sessions should be held for supervisors and for other employees. These sessions should focus on what conduct is prohibited, explain the complaint procedure and emphasize top management’s commitment to the program. It should be made clear that there will be no retaliation for filing a complaint.

  • Prompt and Thorough Investigation of Complaint

A procedure including assignment of responsibility for carrying it out should be in place for prompt investigation of complaints and prompt corrective action. The accused should be informed of the complaint and have an opportunity to present his or her side of the story. Ideally the investigation should be conducted by two individuals, one male and one female. The investigators should be briefed by legal counsel on how to proceed and the importance of confidentiality. Both the complainant and the accused should be informed of the results of the investigation.

  • Corrective Action

Prompt action as appropriate must be taken on the basis of the results of a thorough investigation. If the situation warrants, appropriate interim corrective action should be taken.

  • Screening Job Applicants

The backgrounds and prior employment histories of job applicants should be checked, especially of applicants for supervisory or management positions.

  • Monitoring Supervisors

The performance of supervisors and managers should be monitored, especially their actions or recommendations affecting the pay, promotion, job evaluation, job assignment etc. of employees under their supervision.


In Skouby v. Prudential Insurance Co., of America, 130 F.3d 794, 795 (7th Cir.), a Title VII Case, Judge Evans writing for the court stated:

“. . . we have become almost a super-personnel department, examining the employment history of various workers, reading about the risqué jokes they tell one another, and looking to see what a company has done or not done to discourage the employment of persons protected by discrimination laws.”

Title VII is designed to encourage the resolution of these problems in the workplace rather than by litigation.

The Supreme Court’s message is loud and clear. Employers must be pro-active in eliminating sexual harassment in the workplace. Complaints of sexual harassment are to be resolved promptly by employers without litigation to the extent possible. Employers must adopt, publish and enforce policies prohibiting discrimination and providing a clear and effective complaint procedure. They must take prompt, appropriate and effective action on any complaint. Failure to do so will almost guarantee employer liability for any sexual harassment of an employee by a supervisor. While the new standard of liability requires both employers and employees to act responsibly, it places the primary burden of eliminating sexual harassment in the workplace on the employer. Although employers will incur a cost in maintaining an effective program against sexual harassment it will be time and money well spent.

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