Caseflicks

Supreme Court of the United States • 1998

Burlington Industries, Inc. v. Ellerth

524 U.S. 742 | 118 S. Ct. 2257 | 141 L. Ed. 2d 633 | 1998 U.S. LEXIS 4217

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Takeaway

In short, this case makes employers vicariously liable for actionable supervisor harassment, with no defense after a tangible employment action and a two-part prevention-and-reporting defense when no such action occurs.

Background

Kimberly Ellerth worked as a salesperson for Burlington Industries. She alleged that Ted Slowik, a midlevel manager with authority to make hiring and promotion decisions subject to higher approval, repeatedly made sexually offensive comments and gestures. She highlighted several incidents in which Slowik allegedly coupled sexual remarks with threats or suggestions that her job would be easier if she complied with his desires.

Slowik's threats were never carried out. Ellerth received the promotion for which she was being considered, and she did not allege that Slowik denied her a raise, demoted her, fired her, or otherwise imposed a concrete job penalty. She resigned after her immediate supervisor cautioned her about returning customer calls promptly. Although Burlington had an antiharassment policy and Ellerth knew of it, she did not report Slowik's conduct while employed. She later wrote that she had resigned because of his behavior.

The District Court granted Burlington summary judgment. It found the alleged harassment severe or pervasive enough to create a hostile work environment, but held Burlington was not liable because it neither knew nor should have known of Slowik's conduct. The en banc Seventh Circuit reversed, although its judges offered multiple and conflicting rationales. The Supreme Court granted review to establish the governing standard for employer liability for a supervisor's harassment.

Issues

Issue #1

Whether unfulfilled threats by a supervisor to deny job benefits in return for sexual compliance are treated as quid pro quo harassment for purposes of employer liability.

Holding

No. Unfulfilled threats, without a resulting tangible employment action, are properly analyzed as hostile-work-environment harassment; the quid pro quo and hostile-environment labels do not themselves determine employer liability.

Reasoning

Title VII does not use the terms "quid pro quo" or "hostile work environment." The terms are useful shorthand for deciding whether conduct changed the terms or conditions of employment: a tangible job action resulting from refusal of sexual demands is directly actionable, while harassment unconnected to such an action must be severe or pervasive to be actionable.

Slowik's alleged threats were not carried out. Ellerth received her promotion and did not suffer a denial of pay, demotion, discharge, undesirable reassignment, or comparable concrete job consequence. Her claim therefore remained a hostile-work-environment claim, for which the District Court had already assumed the alleged conduct was severe or pervasive.

The traditional labels had improperly become proxies for the separate question of employer responsibility. The Court held that agency principles and the existence or absence of a tangible employment action—not the label attached to the harassment claim—control the employer-liability inquiry.

Issue #2

Whether an employer is vicariously liable for an actionable hostile work environment created by a supervisor when the supervisor takes no tangible employment action against the employee.

Holding

Yes, subject to an affirmative defense. An employer is vicariously liable for actionable harassment by a supervisor with immediate or successively higher authority over the employee, but may assert a two-part defense when no tangible employment action occurred.

Reasoning

Title VII defines an employer to include its agents, and Meritor directs courts to apply general agency principles. Negligence remains a minimum basis for employer liability: an employer is liable for harassment it knew or should have known about and failed to stop. But negligence is not the exclusive basis for liability arising from a supervisor's misuse of delegated authority.

A supervisor's sexual harassment usually falls outside the traditional scope of employment because it commonly serves personal motives rather than the employer's business. Apparent-authority analysis also ordinarily does not fit, because the usual case concerns a supervisor's misuse of actual authority, not a false appearance that the supervisor possesses authority.

The relevant agency principle is that an employee may be aided in accomplishing a tort by the existence of the agency relationship. A supervisor's authority can give harassing conduct a distinctive coercive and threatening character. At the same time, Title VII's policies favor effective prevention and prompt internal correction, as well as reasonable efforts by employees to avoid or report harm. The Court balanced those considerations through vicarious liability coupled with a limited affirmative defense.

Issue #3

When is the employer barred from asserting the affirmative defense, and what must the employer prove when the defense is available?

Holding

The defense is unavailable when the supervisor's harassment culminates in a tangible employment action. Otherwise, the employer must prove both reasonable preventive and corrective care and the employee's unreasonable failure to use available preventive or corrective opportunities or otherwise avoid harm.

Reasoning

A tangible employment action is a significant change in employment status, including hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits. Such an action ordinarily causes direct economic harm and is within the special province of supervisors or others empowered to make official company decisions.

When a supervisor takes a tangible employment action, the action is effectively an official act of the enterprise. The supervisor uses authority delegated by the employer and generally invokes the company's formal processes. The agency relationship therefore necessarily aided the misconduct, and the employer cannot avoid vicarious liability through an affirmative defense.

When no tangible employment action occurs, the employer may prove that it exercised reasonable care to prevent and promptly correct sexual harassment and that the employee unreasonably failed to take advantage of preventive or corrective opportunities or otherwise avoid harm. An antiharassment policy with a complaint procedure is not invariably required, but its adequacy is highly relevant. Likewise, an employee's unreasonable failure to use a provided complaint mechanism will normally establish the defense's second element.

Issue #4

Whether Burlington was entitled to summary judgment on the record before the Court.

Holding

No. The Seventh Circuit's reversal of summary judgment was affirmed, and the case was remanded so Burlington could attempt to prove the newly articulated affirmative defense.

Reasoning

Ellerth did not allege a tangible employment action, so Burlington was not automatically barred from invoking the affirmative defense. But the Court announced the governing liability framework after the parties had litigated the case under the quid pro quo and hostile-environment labels used by lower courts.

Because Burlington remained potentially vicariously liable for Slowik's alleged conduct and had not yet had a proper opportunity to establish the affirmative defense, summary judgment for Burlington could not stand. On remand, the District Court could permit amendment of the pleadings or additional discovery as appropriate.

Concurrences

Justice Ginsburg

Reasoning

Justice Ginsburg agreed with the judgment and expressly joined the Court's conclusion that the quid pro quo and hostile-work-environment labels do not control employer liability. She also agreed that the Court's rule was substantively identical to the rule adopted the same day in Faragher v. Boca Raton. Her separate opinion did not offer an alternative analysis.

Dissents

Justice Thomas

Reasoning

Justice Thomas, joined by Justice Scalia, would have applied a negligence-only standard to a supervisor-created hostile work environment. In his view, an employer should be liable only if it knew or should have known of the harassment and failed to take reasonable remedial action, just as courts traditionally treated racially hostile work environment claims.

He agreed that a supervisor's tangible employment action—such as firing or demoting an employee—may be treated as a company act and trigger vicarious liability. But a supervisor who merely creates a hostile environment acts outside the scope of employment, does not exercise apparent authority, and acts contrary to the employer's interests. Thus, Justice Thomas found no agency-law basis for imposing vicarious liability absent employer fault.

Justice Thomas argued that Restatement § 219(2)(d), concerning a servant aided by the agency relationship, did not support the majority's rule. He understood that provision to depend on a victim's reasonable belief that the agent was acting in the ordinary course of business or within apparent authority—something a sexually harassed employee could not reasonably believe about the harassment itself.

The dissent also criticized the affirmative defense as vague and insufficiently protective of employers that adopt and publicize antiharassment policies. Burlington had such a policy, Ellerth knew of it, and she never reported Slowik's conduct. Under a negligence standard, Justice Thomas concluded, Burlington could not be held liable; the majority's new framework instead invited further litigation and treated sexual harassment differently from other hostile-environment claims under Title VII.