#MeToo movement and vicarious liability of employers

As the #MeToo debate rages in India, it may be instructive to look at American law on the subject, write Joyeeta Banerjee and Rajdeep Banerjee.

#MeToo movement and vicarious liability of employers

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The #MeToo movement is now one year old. #MeToo which started spreading in October 2017 as a hashtag on social media is a movement primarily aimed at highlighting the widespread prevalence of sexual harassment in workplaces. A prominent American film producer Harvey Weinstein was one of the many who were toppled by investigations which led to his dismissal from his company. Eventually on 25 May 2018, Weinstein was arrested in New York and charged with rape and other offenses. Now this movement has reached India and a plethora of personalities from various fields have been accused of serious sexual misconduct.

The American law on sexual harassment puts much emphasis on vicarious liability of the employers for the sexual misconduct of its employees. Federal as well as state laws have provisions dealing with the menace. The primary law is Title VII of the Civil Rights Act of 1964 which makes it unlawful for employers to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, colour, religion, sex, or national origin. This has been interpreted by the courts to deal with various aspects of sexual harassment.

The first U.S. Supreme Court judgment on sexual harassment was Meritor Savings Bank v. Vinson (477 U.S. 57 (1986)), wherein the supervisor requested sexual relations of his subordinate and out of fear of losing her job she eventually agreed to the demands. It was held that sexual harassment that results in a hostile work environment is a violation of Title VII of the Civil Rights Act of 1964 which prohibits sex discrimination by employers.


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The Supreme Court again dealt with the issue in Harris v. Forklift Systems (510 U.S. 17 (1993)) wherein Harris worked as a manager at Forklift Systems, Inc. and Hardy was Forklift’s president. The Magistrate found that, throughout Harris’ time at Forklift, Hardy often insulted her because of her gender and often made her the target of unwanted sexual innuendos.

The Supreme Court explained that in order to be actionable under the statute, a sexually objectionable environment must be both objectively and subjectively offensive, one that a reasonable person would find hostile or abusive, and one that the victim in fact did perceive to be so. It directed courts to determine whether an environment is sufficiently hostile or abusive by looking at all the circumstances, including the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interfered with an employee’s work performance.

In 1998, two companion landmark judgments were delivered by the U.S. Supreme Court: Faragher v. Boca Raton (524 U.S. 775 (1998)) and Burlington Industries, Inc. v. Ellerth (524 U.S.742 (1998)). These cases declared that when the harasser was the victim’s supervisor, and the actionable harassment also culminated in a ‘tangible employment action’ the employer would be strictly liable for the harassment but if the harasser was the victim’s supervisor, and the harassment was actionable but did not culminate in a tangible employment action, the employer can avail itself of an affirmative defense (Faragher- Ellerth defense) to avoid liability.

In Faragher v. Boca Raton (524 U.S. 775 (1998)) Faragher worked as an ocean lifeguard for the City of Boca Raton. During this period, Faragher’s immediate supervisors sexually harassed her as a result of which she resigned and brought an action against Terry, Silverman, and the City, asserting claims under Title VII, and local Florida law. The complaint alleged that Terry and Silverman created a sexually hostile atmosphere at the beach.

Asserting that Terry and Silverman were agents of the City, and that their conduct amounted to discrimination in the “terms, conditions, and privileges” of her employment, Faragher sought a judgment against the City for nominal damages along with costs. The District Court concluded that the conduct of Terry and Silverman was discriminatory harassment sufficiently serious to alter the conditions of Faragher’s employment and constituted an abusive working environment and consequently awarded Faragher one dollar in nominal damages on her Title VII claim.

But the Court of Appeals reversed the judgment against the City holding that Terry and Silverman were not acting within the scope of their employment when they engaged in the harassment, that they were not aided in their actions by the agency relationship and that the City had no constructive knowledge of the harassment by virtue of its pervasiveness or Gordon’s actual knowledge. In a 7-to-5 decision, the full Court of Appeals, sitting en banc, adopted the panel’s conclusion. But the Supreme Court held that sexual harassment so severe or pervasive as to alter the conditions of the victim’s employment and create an abusive working environment did violate Title VII.

The Supreme Court in these two cases held that an employer is subject to vicarious liability to an aggrieved woman for an actionable hostile environment created by a supervisor. When no tangible employment action is taken, a defending employer may raise an affirmative defense (often called the Faragher-Ellerth defense) to liability or damages, subject to proof by a preponderance of the evidence.

The defense comprise of two necessary elements: that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behaviour, and that the aggrieved woman unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

U.S. Courts generally examine whether the employer had a procedure for reporting harassment and whether the aggrieved woman was unreasonable in failing to avail herself of that process. No affirmative defense is available, however, when the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion or undesirable reassignment.

Under Title VII, an employer’s liability for harassment may depend on the status of the harasser. If the harassing employee is the victim’s co-worker, the employer is liable only if it was negligent in controlling working conditions. The burden of proof is then on the victim and to meet the required standard the victim has to show that the employer knew or should have known about the harassment and failed to take effective remedial action.

The question which gradually gained significance was ‘who can be considered as a supervisor?’. The question was answered by the Supreme Court in the year 2013 in the case of Vance v. Ball State University 133 S.Ct. 2434 (2013). The Supreme Court held that a supervisor is one who has the authority to take actions in the workplace such as hiring, firing, making promotion decisions, reassigning to positions with significantly different responsibilities or making decisions causing a significant change in benefits. But where the alleged harasser directed or assigned the victim’s work but lacked the authority to make decisions such as hiring or firing courts, following Vance, courts have held that the individual was not a supervisor.

Where there has been quid pro quo sexual harassment as in Holly D. v. Cal. Inst. of Tech., 339 F.3d 1158 (9th Cir. 2003) wherein the aggrieved woman in order to keep her job at Caltech was forced to engage in sexual relations with a professor for whom she worked, courts have held that the aggrieved woman who contends that she was coerced into performing unwanted sexual acts with her supervisor by threats that she would be discharged if she failed to comply with his demands, has alleged a tangible employment action under Title VII that, if proved, entitles her to relief against her employer.

Title VII also forbids retaliation by employers against employees who report workplace race or gender discrimination. The question before the Supreme Court in Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee (555 U.S. 271 (2009)) was whether this protection extended to an employee who spoke out about discrimination not on her own initiative, but in answering questions during an employer’s internal investigation.

The Supreme Court opined that it was “opposition” if an employee took a stand against an employer’s discriminatory practices not by “instigating” action, but by standing pat, say, by refusing to follow a supervisor’s order to fire a junior worker for discriminatory reasons. There was no reason to doubt that a person could oppose by responding to someone else’s question just as surely as by provoking the discussion, and nothing in the statute required a freakish rule protecting an employee who reported discrimination on her own initiative but not one who reported the same discrimination in the same words when her boss asked a question.

One of the prominent cases on constructive discharge is the Supreme Court judgment in Pennsylvania State Police v. Suders (542 U.S. 129 (2004)). Here Suders alleged sexually harassing conduct by her supervisors who were officers of the Pennsylvania State Police of such severity that she was forced to resign. The Supreme Court observed that under the constructive discharge doctrine, an employee’s reasonable decision to resign because of unendurable working conditions is assimilated to a formal discharge for remedial purposes.

The Courts of Appeals had recognized constructive discharge claims in a wide range of Title VII cases. The present case concerned an employer’s liability for one subset of Title VII constructive discharge claims: constructive discharge resulting from sexual harassment, or “hostile work environment,” attributable to a supervisor. The Court observed that constructive discharge stemmed from and could be regarded as an aggravated case of sexual harassment or hostile work environment.

For an atmosphere of sexual harassment or hostility to be actionable, the offending behaviour “must be sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment.” A hostile environment constructive discharge claim entailed something more: A plaintiff who advanced such a compound claim must show working conditions so intolerable that a reasonable person would have felt compelled to resign. Thus, if the plaintiff could not show actionable harassment, the plaintiff’s constructive discharge claim would fail.

The Supreme Court further observed that a constructive discharge was functionally the same as an actual termination in damages-enhancing respects. But when an ‘official act’ did not underlie the constructive discharge, the affirmative defense was available to the employer. Official directions and declarations are the acts most likely to be brought home to the employer, the measures over which the employer can exercise greatest control. Absent “an official act of the enterprise,” as the last straw, the employer ordinarily would have no particular reason to suspect that a resignation is not the typical kind daily occurring in the workforce.

Absent an official act, the extent to which the supervisor’s misconduct has been aided by the agency relation is less certain. That uncertainty justifies affording the employer the chance to establish, through the Ellerth/Faragher affirmative defense, that it should not be held vicariously liable. Thus, an employer may assert the Ellerth/Faragher affirmative defense to such a claim unless the plaintiff quit in reasonable response to an adverse action officially changing her employment status or situation, e.g., a humiliating demotion, extreme cut in pay, or transfer to a position in which she would face unbearable working conditions.

As millions of women are sharing their experiences of harassment, abuse and discrimination its high time that national governments and international agencies strengthen the legal frameworks to secure justice to aggrieved women.

The writers are Mumbai-based advocates and legal consultants.