This case calls for identification of the circumstances under which an employer may be held liable under

Question:

This case calls for identification of the circumstances under which an employer may be held liable under Title VII of the Civil Rights Act of 1964, [citation], for the acts of a supervisory employee whose sexual harassment of subordinates has created a hostile work environment amounting to employment discrimination. We hold that an employer is vicariously liable for actionable discrimination caused by a supervisor, but subject to an affirmative defense looking to the reasonableness of the employer’s conduct as well as that of a plaintiff victim.

I

   Between 1985 and 1990, while attending college, petitioner Beth Ann Faragher worked part time and during the summers as an ocean lifeguard for the Marine Safety Section of the Parks and Recreation Department of respondent, the City of Boca Raton, Florida (City). During this period, Faragher’s immediate supervisors were Bill Terry, David Silverman, and Robert Gordon. In June 1990, Faragher resigned.

***

   In February 1986, the City adopted a sexual harassment policy, which it stated in a memorandum from the City Manager addressed to all employees. [Citation.] In May 1990, the City revised the policy and reissued a statement of it. Although the City may actually have circulated the memos and statements to some employees, it completely failed to disseminate its policy among employees of the Marine Safety Section, with the result that Terry, Silverman, Gordon, and many lifeguards were unaware of it. [Citation.]

   From time to time over the course of Faragher’s tenure at the Marine Safety Section, between 4 and 6 of the 40 to 50 lifeguards were women. During that 5-year period, Terry repeatedly touched the bodies of female employees without invitation, [citation], would put his arm around Faragher, with his hand on her buttocks, [citation], and once made contact with another female lifeguard in a motion of sexual simulation, [citation]. He made crudely demeaning references to women generally, and once commented disparagingly on Faragher’s shape, [citation]. During a job interview with a woman he hired as a lifeguard, Terry said that the female lifeguards had sex with their male counterparts and asked whether she would do the same. [Citation.]

   Silverman behaved in similar ways. He once tackled Faragher and remarked that, but for a physical characteristic he found unattractive, he would readily have had sexual relations with her. [Citation.] Another time, he pantomimed an act of oral sex. [Citation.] Within ear-shot of the female lifeguards, Silverman made frequent, vulgar references to women and sexual matters, commented on the bodies of female lifeguards and beachgoers, and at least twice told female lifeguards that he would like to engage in sex with them. [Citation.]

   Faragher did not complain to higher management about Terry or Silverman. Although she spoke of their behavior to Gordon, she did not regard these discussions as formal complaints to a supervisor but as conversations with a person she held in high esteem. [Citation.] Other female lifeguards had similarly informal talks with Gordon, but because Gordon did not feel that it was his place to do so, he did not report these complaints to Terry, his own supervisor, or to any other city official. [Citation.] Gordon responded to the complaints of one lifeguard by saying that ‘‘the City just [doesn’t] care.’’ [Citation.]

   In April 1990, however, two months before Faragher’s resignation, Nancy Ewanchew, a former lifeguard, wrote to Richard Bender, the City’s Personnel Director, complaining that Terry and Silverman had harassed her and other female lifeguards. Following investigation of this complaint, the City found that Terry and Silverman had behaved improperly, reprimanded them, and required them to choose between a suspension without pay or the forfeiture of annual leave. [Citation.]

   On the basis of these findings, 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 constitute an abusive working environment. [Citation.] The District Court then ruled that there were three justifications for holding the City liable for the harassment of its supervisory employees. First, the court noted that the harassment was pervasive enough to support an inference that the City had ‘‘knowledge, or constructive knowledge’’ of it. [Citation.] Next, it ruled that the City was liable under traditional agency principles because Terry and Silverman were acting as its agents when they committed the harassing acts. [Citation.] Finally, the court observed that Gordon’s knowledge of the harassment, combined with his inaction, ‘‘provides a further basis for imputing liability on [sic] the City.’’ [Citation.] The District Court then awarded Faragher one dollar in nominal damages on her Title VII claim. [Citation.]

   A panel of the Court of Appeals for the Eleventh Circuit reversed the judgment against the City. [Citation.] Although the panel had ‘‘no trouble concluding that Terry’s and Silverman’s conduct * * * was severe and pervasive enough to create an objectively abusive work environment,’’ [citation], it overturned the District Court’s conclusion that the City was liable. The panel ruled 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, [citation], and that the City had no constructive knowledge of the harassment by virtue of its pervasiveness or Gordon’s actual knowledge, [citation].

   In a 7-to-5 decision, the full Court of Appeals, sitting en banc, adopted the panel’s conclusion. [Citation.]

***
  II
  A

   Thus, in Meritor we held that sexual harassment so ‘‘severe or pervasive’’ as to ‘‘alter the conditions of [the victim’s] employment and create an abusive working environment’’ violates Title VII. [Citation.]

   In thus holding that environmental claims are covered by the statute, we drew upon earlier cases recognizing liability for discriminatory harassment based on race and national origin, [citations], just as we have also followed the lead of such cases in attempting to define the severity of the offensive conditions necessary to constitute actionable sex discrimination under the statute. [Citations.]

   So, in Harris, we 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. [Citation.] We 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 interferes with an employee’s work performance.’’ [Citation.] Most recently, we explained that 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.’’ Oncale, [citation]. A recurring point in these opinions is that ‘‘simple teasing,’’ [citation], ‘‘offhand comments, and isolated incidents (unless extremely serious) will not amount to discriminatory changes in the ‘‘terms and conditions of employment.’’

   These standards for judging hostility are sufficiently demanding to ensure that Title VII does not become a ‘‘general civility code.’’ [Citation.] 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 occasional teasing.’’ [Citations.]

   While indicating the substantive contours of the hostile environments forbidden by Title VII, our cases have established few definite rules for determining when an employer will be liable for a discriminatory environment that is otherwise actionably abusive. * * * There have, for example, been myriad cases in which District Courts and Courts of Appeals have held employers liable on account of actual knowledge by the employer, or high-echelon officials of an employer organization, of sufficiently harassing action by subordinates, which the employer or its informed officers have done nothing to stop. * * *

   Nor was it exceptional that standards for binding the employer were not in issue in Harris. In that case of discrimination by hostile environment, the individual charged with creating the abusive atmosphere was the president of the corporate employer, [citation], who was indisputably within that class of an employer organization’s officials who may be treated as the organization’s proxy. [Citations.]

   Finally, there is nothing remarkable in the fact that claims against employers for discriminatory employment actions with tangible results, like hiring, firing, promotion, compensation, and work assignment, have resulted in employer liability once the discrimination was shown. [Citations.]

***

   The soundness of the results in these cases (and their continuing vitality), in light of basic agency principles, was confirmed by this Court’s only discussion to date of standards of employer liability, in Meritor, which involved a claim of discrimination by a supervisor’s sexual harassment of a subordinate over an extended period. In affirming the Court of Appeals’s holding that a hostile atmosphere resulting from sex discrimination is actionable under Title VII, we also anticipated proceedings on remand by holding agency principles relevant in assigning employer liability and by rejecting three per se rules of liability or immunity. * * *

   We then proceeded to reject two limitations on employer liability, while establishing the rule that some limitation was intended. We held that neither the existence of a company grievance procedure nor the absence of actual notice of the harassment on the part of upper management would be dispositive of such a claim; while either might be relevant to the liability, neither would result automatically in employer immunity.

***
 B

   The Court of Appeals identified, and rejected, three possible grounds drawn from agency law for holding the City vicariously liable for the hostile environment created by the supervisors.

***

   We therefore agree with Faragher that in implementing Title VII it makes sense to hold an employer vicariously liable for some tortious conduct of a supervisor made possible by abuse of his supervisory authority, and that the aided-by-agency-relation principle embodied in §219(2)(d) of the Restatement provides an appropriate starting point for determining liability for the kind of harassment presented here.

***

   There is certainly some authority for requiring active or affirmative, as distinct from passive or implicit, misuse of supervisory authority before liability may be imputed.

***

   In order to accommodate the principle 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, we adopt the following holding in this case and in Burlington Industries, Inc. v. Ellerth, [citation], also decided today. An 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. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence, see [citation]. The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. While proof that an employer had promulgated an antiharassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense. And while proof that an employee failed to fulfill the corresponding obligation of reasonable care to avoid harm is not limited to showing an unreasonable failure to use any complaint procedure provided by the employer, a demonstration of such failure will normally suffice to satisfy the employer’s burden under the second element of the defense. No affirmative defense is available, however, when the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment. [Citation.]

   Applying these rules here, we believe that the judgment of the Court of Appeals must be reversed. The District Court found that the degree of hostility in the work environment rose to the actionable level and was attributable to Silverman and Terry. It is undisputed that these supervisors ‘‘were granted virtually unchecked authority’’ over their subordinates, ‘‘directly controll[ing] and supervis[ing] all aspects of [Faragher’s] day-to-day activities.’’ [Citation.] It is also clear that Faragher and her colleagues were ‘‘completely isolated from the City’s higher management.’’ [Citation.] The City did not seek review of these findings.

   While the City would have an opportunity to raise an affirmative defense if there were any serious prospect of its presenting one, it appears from the record that any such avenue is closed. The District Court found that the City had entirely failed to disseminate its policy against sexual harassment among the beach employees and that its officials made no attempt to keep track of the conduct of supervisors like Terry and Silverman. The record also makes clear that the City’s policy did not include any assurance that the harassing supervisors could be bypassed Chapter 43 Employment Law 915 in registering complaints. Under such circumstances, we hold as a matter of law that the City could not be found to have exercised reasonable care to prevent the supervisors’ harassing conduct. Unlike the employer of a small workforce, who might expect that sufficient care to prevent tortious behavior could be exercised informally, those responsible for city operations could not reasonably have thought that precautions against hostile environments in any one of many departments in far-flung locations could be effective without communicating some formal policy against harassment, with a sensible complaint procedure.

III

   The Court of Appeals also rejected the possibility that it could hold the City liable for the reason that it knew of the harassment vicariously through the knowledge of its supervisors. We have no occasion to consider whether this was error, however. We are satisfied that liability on the ground of vicarious knowledge could not be determined without further factfinding on remand, whereas the reversal necessary on the theory of supervisory harassment renders any remand for consideration of imputed knowledge entirely unjustifiable (as would be any consideration of negligence as an alternative to a theory of vicarious liability here).

IV

   The judgment of the Court of Appeals for the Eleventh Circuit is reversed, and the case is remanded for reinstatement of the judgment of the District Court.

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Smith and Roberson Business Law

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