The Real World Lessons of Faragher and Ellerth in Harassment Claims
Cynthia Bremer and Shalanda Ballard
October 22, 2003
Cynthia Bremer, Contributing Author.
Ms. Bremer is a partner with the Minneapolis litigation firm of Flynn, Gaskins & Bennett, LLP, where she has practiced since 1999. She practices primarily in the employment law area, defending companies and employees in federal and state courts.
Shalanda Ballard, Contributing Author.
Ms. Ballard is an associate at Flynn, Gaskins & Bennett, LLP. She practices in the area of employment law.
Since the U.S. Supreme Court issued the now well-known Faragher1 and Ellerth2 decisions five years ago, many legal and human resources practitioners have struggled to determine how the affirmative defense established in those decisions applies in sexual harassment cases. In addition, two other important questions have emerged in the struggle to determine the scope of Faragher and Ellerth: First, does the Faragher and Ellerth affirmative defense apply to harassment involving other protected classes? Second, if the answer to the first question is yes, what does this mean in the real world?
Faragher and Ellerth: Understanding the Basics of the Affirmative Defense
Before answering those questions, it is important to start at the beginning and understand the basics of what is referred to throughout this article as the Faragher/Ellerth defense. In so doing, it is necessary to comprehend the basics of federal law before the Supreme Court issued those landmark decisions.
Prior to Faragher and Ellerth, federal courts disagreed as to the standard of liability for an employer in a sexual harassment claim against a supervisor. Numerous courts held that an employer was not liable for sexual harassment by a supervisor unless the employer "knew or should have known" of the harassment. Courts focused on the plaintiff’s burden of proving the harassment, rather than the employer’s burden of proving an affirmative defense that it acted reasonably.
But in 1998, two landmark U.S. Supreme Court cases changed the face of employer liability for sexual harassment in the workplace. In Faragher and Ellerth, decided on the same day, the Supreme Court made two important findings relating to employer liability in sexual harassment claims. The Supreme Court held that "[a]n employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee."3 If the conduct results in a tangible employment action, such as discharge or demotion, the employer has no affirmative defense to liability.
If, on the other hand, the supervisor’s harassment does not culminate in a tangible employment action, the Supreme Court established an affirmative defense that an employer may assert to avoid liability in certain circumstances.4 To establish the affirmative defense under Faragher and Ellerth, the employer must prove: (1) "that the employer exercised reasonable care to prevent and correct 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."5 The employer must establish both elements to avoid liability through this affirmative defense.6
Thus, although the change in the law imposed a much harsher standard upon the employer (because now the employer could be liable for sexual harassment by its supervisors even if it was unaware of the harassment), and although the decisions shifted the burden of proof to the employer in supervisor liability cases, the employer still has an opportunity, in certain circumstances, to avoid liability if it is able to establish the two-part affirmative defense made available under Faragher and Ellerth.
The first question posed in this article—whether or not the affirmative defense extends beyond the sexual harassment context—may be implicitly answered in these landmark decisions. The language used by the Supreme Court in both Faragher and Ellerth appears to support the establishment of a standard outside the context of sexual harassment claims. In Faragher, the Supreme Court suggested the affirmative defense may reach beyond sexual harassment claims by stating that there is good sense in harmonizing the racial and sexual harassment standards regarding actionable harassment. The Supreme Court also concluded in Ellerth that a uniform and predictable standard must be established as a matter of law for all Title VII claims. Given that Title VII covers other types of claims, such as claims based on race, religion, and national origin, the Supreme Court, in dicta, suggested that the Faragher/Ellerth affirmative defense was to reach beyond the sexual harassment context.
Applying Faragher and Ellerth in Other Types of Harassment Cases
In the years since the Faragher and Ellerth decisions, federal courts have almost uniformly applied the Faragher/Ellerth principles in cases involving all types of harassment and discrimination, including those based on race, religion, national origin, age, and disability.
Indeed, on the circuit court level, several circuits have applied the affirmative defense in nonsexual harassment cases. For example, in two unpublished decisions handed down just months after Faragher and Ellerth, the Sixth Circuit applied the Faragher/Ellerth affirmative defense to other types of harassment claims. First, the Sixth Circuit applied the defense to a retaliation claim brought in connection with a sexual harassment claim.7 The Sixth Circuit subsequently applied the defense to a claim of religious harassment in Daron v. Premdor Entry System.8 In Daron, despite the fact that the employer did not have a formal complaint procedure, the court affirmed the district court’s dismissal of the plaintiff’s complaint because the employee never complained about the harassing conduct to a supervisor or manager, and the employer took prompt corrective action. Thus, the Sixth Circuit cited Faragher in affirming the dismissal of the employee’s religious harassment claim on that basis.
The following year, the Sixth Circuit issued another decision applying the Faragher/Ellerth defense to a racial harassment claim. In Allen v. Michigan Dept. of Corrections, the district court had granted summary judgment in favor of the defendant, applying pre-Faragher and Ellerth law.9 The Sixth Circuit reversed the lower court’s grant of summary judgment, basing the reversal, at least in part, on the applicability of Faragher and Ellerth. The Sixth Circuit remanded the case to the lower court for a determination of whether or not the defendant could establish an affirmative defense to
liability on this claim.
Similarly, the Tenth Circuit Court of Appeals applied the Faragher/Ellerth affirmative defense in a racial harassment case in Wright-Simmons v. The City of Oklahoma City.10 In Wright-Simmons, the Tenth Circuit stated that, although Faragher and Ellerth both involved alleged sexual harassment, the principles established in those cases apply with equal force to a racial harassment case for at least four important reasons. First, the Supreme Court’s specific language in the Faragher opinion expressed a preference for "harmonizing the standards" applied to the two types of cases. Second, Faragher and Ellerth do not involve fact scenarios that are particularly unique to sexual harassment claims, such as the typical quid pro quo sexual harassment suit. Third, numerous court decisions have held that the same standard of employer liability applies in the two types of discrimination cases. Finally, Faragher and Ellerth interpreted the same language of Title VII at issue in a racial discrimination case. Thus, the Tenth Circuit unequivocally recognized the Faragher/Ellerth affirmative defense in a racial discrimination case.
Like the Tenth and Sixth Circuits, the Fifth Circuit relied on Faragher and Ellerth in awarding $75,000 in punitive damages to an employee subjected to racial harassment by his supervisor in Deffenbaugh-Williams v. Wal-Mart Stores, Inc.11 In that case, the Fifth Circuit stated that the Supreme Court’s purpose in Faragher and Ellerth was not to state a standard solely for sexual harassment claims, but rather "to accommodate the agency principles of vicarious liability for harm caused by misuse of supervisory authority, as well as Title VII’s equally basic policies of encouraging forethought by employers and saving action by objecting employees[.]"12 The Fifth Circuit then reasoned that the Supreme Court intended to apply the Faragher/Ellerth principles to all vicarious liability inquiries under Title VII. The Fifth Circuit therefore concluded that the affirmative defense enunciated in Faragher and Ellerth is equally controlling in a racial discrimination case, and affirmed the jury’s verdict in favor of the plaintiff.
The Eighth Circuit also recognized that the Faragher/Ellerth defense applies in the context of an age harassment claim in Breeding v. Arthur J. Gallagher and Co.13 In that case, the district court granted summary judgment to the defendant on the plaintiff’s claims of alleged sexual harassment and discrimination, age harassment and discrimination, and constructive discharge. The Eighth Circuit affirmed the lower court’s ruling on the age discrimination and constructive discharge claims, but reversed the decision as to the sexual harassment claim. Although the court did not reverse and remand the age harassment claim because the plaintiff could not prove that her supervisor harassed her because of age, the court nevertheless implicitly recognized that the Faragher/Ellerth defense applies to age claims. The Eighth Circuit has also recognized that the holdings in Faragher and Ellerth relating to non-supervisor sexual harassment claims apply outside of the sexual harassment context.14
In addition to circuit court decisions, numerous federal district courts have applied the Faragher/Ellerth defense to nonsexual harassment claims. For example, the Northern District of Illinois applied the Faragher/Ellerth affirmative defense in the national origin harassment case of Gotfryd v. Book Covers, Inc.15 The plaintiff employees in that case were of Polish national origin. The employer’s managers informed the Polish employees that they would be fired if they spoke Polish on the job again. The managers also changed the Polish employees’ break schedules so that the employees could no longer take their breaks at the same time. In denying the defendant’s motion for summary judgment, the Northern District of Illinois held that "[t]he Supreme Court standard of Ellerth and Faragher is applicable to national origin discrimination because the Court’s rationales for applying this standard to sex discrimination are equally relevant to national origin discrimination."16 The court reasoned that Title VII does not place a different value upon sexual discrimination than it places upon national origin discrimination. The Court further reasoned that, where a hostile work environment is found, an employer should not be relieved of liability simply because an employee is harassed about national origin rather than gender. Thus, the Northern District of Illinois concluded that the more stringent standard of Faragher and Ellerth encourages employers to create antiharassment policies and effective grievance mechanisms and, as such, applied the defense to these national origin claims and granted the defendant’s motion for summary judgment.
What Does This Mean in the Real World?
These are just a sampling of decisions from different jurisdictions that recognize the Faragher/Ellerth affirmative defense in harassment cases involving other protected classes. What we take away from these cases depends, in part, on whether we represent the plaintiff/employee or the defendant/employer, and further on what stage of the process we are in (pre-complaint, post-complaint, litigation).
For plaintiffs’ lawyers, the lessons are probably clear, but worth repeating. If someone seeking legal advice is still employed by the alleged harassing employer, and has experienced no other tangible job detriment, consider counseling that person to exhaust available internal procedures established by the employer. Assuming things do not improve for the employee (or so the employee perceives) and you ultimately represent the employee in a lawsuit against the employer, consider the Faragher/Ellerth implications in drafting the complaint.
For defense lawyers (which includes the authors), you should counsel your clients regarding the appropriateness of establishing effective policies regarding all types of harassment and discrimination, and the importance of following and enforcing those policies promptly and consistently in response to employee complaints and issues. These steps may be necessary to establish the exercise of reasonable care.
Preventive measures should be the first approach taken by an employer in its effort to exercise "reasonable care." A complete antiharassment policy and reporting procedure is an important first step, but preventive measures should also include "developing appropriate sanctions, informing employees of their right to raise and how to raise the issue of harassment under Title VII, and developing methods to sensitize all concerned."17
Although action should be taken as promptly as possible, there is case law suggesting that the employer should be allowed a reasonable amount of time to gauge the credibility of the complainant and the seriousness of the situation before deciding upon a proper course of action. However, a careful employer should err on the side of caution, promptly investigating every complaint or occurrence and taking remedial action as appropriate. The action taken must be reasonably (and realistically) designed to end the harassment as well as prevent any further incidents from occurring; thus, the employer must carefully examine the situation to determine the most effective approach.
If the employee fails to take preventive or corrective action (e.g., fails to file a complaint or grievance with the company), the court will determine whether that failure was reasonable. The failure may be deemed "reasonable" if, for example, the employee had a reasonable fear of retaliation or there were obstacles to filing a complaint, such as expensive or burdensome reporting requirements. The failure to make a complaint may also be deemed reasonable if the complaint mechanism is not practical and effective. For example, the Supreme Court noted in Faragher that a complaint procedure that does not provide a way for the employee to report to someone other than his or her own supervisor might make a failure to report reasonable.
As mentioned above, it is increasingly important for employers to establish antiharassment policies and complaint procedures covering all forms of unlawful harassment and to do so in a thoughtful and understandable fashion. Although the requirements of an effective antiharassment policy remain fluid, the EEOC’s June 1999 Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors18 suggests that an anti-harassment policy should contain:
• A clear explanation of prohibited conduct;
• Assurance that employees who make complaints of harassment or provide information related to such complaints will be protected against retaliation;
• A clearly described complaint process that provides accessible avenues of complaint;
• Assurance that the employer will protect the confidentiality of harassment complaints to the extent possible;
• A complaint process that provides a prompt, thorough, and impartial investigation; and
• Assurance that the employer will take immediate and appropriate corrective action when it determines that harassment has occurred.
In addition to the EEOC’s suggestions, consider including the following in creating and implementing an anti-harassment policy:
• Use easy-to-understand language to notify all employees and supervisors that any form of harassment, including, but not limited to, sexual harassment and all other types of harassment, is prohibited and will not be tolerated.
• Define types of conduct that may be "harassment." But be careful not to make admissions.
• Make sure the policy provides an alternate reporting method that allows an employee to complain to someone other than a harassing supervisor.
Even the best antiharassment policy and complaint procedure will not satisfy the affirmative defense if the
employer fails to implement its policy effectively. The employer should consider taking the following steps to ensure effective policy implementation:
• Post, distribute, and maintain the antiharassment policy. Give the policy to all employees and have them sign a statement indicating they have received and read the policy. Remember to distribute to new hires and have them sign the acknowledgement as well. Redistribute the policy periodically so that all employees are reminded of their rights and obligations.
• Provide training sessions for employees and management. Instruct all supervisors and managers to promptly address
any information they learn regarding an alleged incident of sexual or other harassment, and to promptly report such information or complaints to the appropriate department (e.g., administration, human resources). Monitor the workplace to make sure supervisors and managers are following established reporting procedures.
• Periodically train the employees. Advise them that unlawful harassment is not tolerated in any form or on any basis, and that it may result in discipline, up to and including termination. Remind the employees about mechanisms to report problems.
Regardless of how careful an employer is and how much training it gives to supervisors and employees, an employer may still receive employee complaints that require investigation. If that happens, the employer should immediately conduct an investigation. The employer must determine what needs to be done to preclude problems while the investigation is transpiring. For example, it should consider suspending the alleged harasser with pay pending the investigation or transfer the alleged harasser to a different shift. The employer should also consider using an outside investigator to enhance the quality and integrity of the investigation, making sure that the complaining employee, witnesses, alleged harasser, and applicable supervisory personnel are interviewed. After the factual investigation is completed, the company should promptly determine what action, if any, is appropriate to take, remembering to take action designed to end the harassment if harassment is found and/or to prevent future harassment. Finally, the employer should follow up to make sure the situation has in fact been remedied.
In the end, regardless of the employer’s efforts in exercising reasonable care to prevent and promptly correct harassing behavior, an employer may still find itself on the receiving end of a lawsuit claiming supervisor harassment. In that event, the employer will, no doubt, plead the affirmative defense, seek to establish the defense in summary judgment, and, if unsuccessful, request a Faragher/Ellerth jury instruction. The usefulness of the affirmative defense is not only that it may help the employer to limit or avoid damages, but also that it may assist in establishing a basis for avoidance of punitive damages.19 These are the types of real-world considerations that may apply to all types of harassment claims, whether they are based on sex or another protected class.
1 Faragher v. City of Boca Raton, 524 U.S. 775 (1998).
2 Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998).
3 Faragher, 524 U.S. at 807; Ellerth, 524 U.S. at 765.
4 The Supreme Court, in Faragher, recognized that certain individuals, because of their position, "may be treated as the organization’s proxy." 524 U.S. at 789. With those individuals, such as the president or owner of a company, an employer arguably has no Faragher/Ellerth affirmative defense to liability.
5 Faragher, 524 U.S. at 807; Ellerth, 524 U.S. at 765.
6 Numerous courts have addressed the many nuances of this two-part affirmative defense, including who qualifies as a "supervisor" and what is the definition of "reasonable care." These issues are beyond the scope of this article. Likewise, different standards may apply to claims involving alleged harassment by co-workers or third parties. This discussion is also beyond the scope of this article. This article also does not address employer liability under Minnesota state law.
7 Richmond-Hopes v. City of Cleveland, 1998 U.S. App. LEXIS 29572 (6th Cir. Nov. 16, 1998) (unpublished opinion).
8 1998 U.S. App. LEXIS 31017 (6th Cir. Dec. 3, 1998) (unpublished opinion).
9 165 F.3d 405 (6th Cir. 1999).
10 155 F.3d 1264 (10th Cir. 1998).
11 156 F.3d 581 (5th Cir. 1998), aff’d in part, rem’d in part on reh’g, 182 F.3d 333 (5th Cir. 1999).
12 Id. at 593.
13 164 F.3d 1151, 1158 (8th Cir. 1999).
14 See, e.g., Reedy v. Quebecor Printing Eagle, Inc., 333 F.3d 906, 908 (8th Cir. 2003) (in a racial hostile environment claim involving co-workers under 42 U.S.C. § 1981, the court outlined its continued reliance on the Faragher/Ellerth construct in nonsexual harassment claims and reversed summary judgment in favor of employer for failure to remedy a situation in response to a complaint); Wallin v. Minnesota Dept. of Corrections, 153 F.3d 681 (8th Cir. 1998) (without recognizing a disability harassment claim involving co-workers under the Americans with Disabilities Act, court upheld summary judgment because defendant took appropriate remedial action under an effective mechanism for resolving complaints of harassment), cert. denied, 119 S. Ct. 1141 (1999).
15 1999 U.S. Dist. LEXIS 235, *16-17 (N.D. Ill. Jan. 6, 1999).
17 29 C.F.R. § 1604.11(f).
18 The EEOC’s Enforcement Guidance also opines that "[t]he rule in Ellerth and Faragher regarding vicarious liability applies to harassment based on race, color, sex (whether or not of a sexual nature), religion, national origin, protected activity, age, or disability." Section II, p. 5.
19 Even if the employer cannot avoid liability altogether, under Faragher, it may be able to use the defense to limit damages. Further, in Kolstad v. American Dental Association, the Supreme Court addressed a standard for submitting punitive
damages in employment discrimination cases and, building on the language in Faragher and Ellerth, clarified that an employer may defend against a claim of punitive damages by showing that the supervisor’s actions were contrary to the employer’s "good-faith efforts to comply with Title VII." 527 U.S. 526, 545-46 (1999) (citations omitted). Although beyond the scope of this article, at a minimum, the Kolstad decision amplifies the need for an employer to implement and follow an effective antiharassment and complaint policy.