1. What is tangible employment action in the context of a sexual harassment lawsuit?
2. Explain how an employer can be found to have “aided in the agency relation” and thus be liable for damages when the employer had no idea that a supervisor had turned down an employee for a position because the employee had rejected a sexual proposal.
3. Under what circumstances may an employer raise an affirmative defense to liability for damages in a sexual harassment case?

Kimberly Ellerth quit her job after 15 months as a salesperson in one of Burlington Industries' many divisions, allegedly because she had been subjected to constant sexual harassment by one of her supervisors, Ted Slowik. Slowik was a mid-level manager who had authority to hire and promote employees, subject to higher approval, but was not considered a policymaker. Against a background of repeated boorish and offensive remarks and gestures allegedly made by Slowik, Ellerth placed particular emphasis on three incidents when Slowik's comments could be construed as threats to deny her tangible job benefits. Ellerth refused all of Slowik's advances yet suffered no tangible retaliation and was, in fact, promoted. Moreover, she never informed anyone in authority about Slowik's conduct, despite knowing that Burlington had a policy against sexual harassment. In filing this lawsuit, Ellerth alleged that Burlington engaged in sexual harassment and forced her constructive discharge in violation of Title VII. The Supreme Court decided to hear the case.]
KENNEDY, J.…
[1.]
At the outset, we assume an important proposition yet to be established before a trier of fact. It is a premise assumed as well, in explicit or implicit terms, in the various opinions by the judges of the Court of Appeals. The premise is: a trier of fact could find in Slowik's remarks numerous threats to retaliate against Ellerth if she denied some sexual liberties.
The threats, however, were not carried out or fulfilled. 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.
Section 703(a) of Title VII forbids

"an employer-

"(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions or privileges of employment, because of such individual's … sex." 42 U.S.C. § 2000e-2(a)(1).
"Quid pro quo" and "hostile work environment" do not appear in the statutory text. The terms appeared first in the academic literature, see C. MacKinnon, Sexual Harassment of Working Women (1979); found their way into decisions of the Courts of Appeals, see, e.g., Henson v. Dundee, 682 F.2d 897, 909 (CA11 1982); and were mentioned in this Court's decision in Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57 (1986). See generally E. Scalia, The Strange Career of Quid Pro Quo Sexual Harassment, 21 Harv. J. L. & Pub. Policy 307 (1998)….
… As use of the terms grew in the wake of Meritor, they acquired their own significance. The standard of employer responsibility turned on which type of harassment occurred. If the plaintiff established a quid pro quo claim, the Courts of Appeals held, the employer was subject to vicarious liability. The rule encouraged Title VII plaintiffs to state their claim as quid pro quo claims, which in turn put expansive pressure on the definition. The equivalence of the quid pro quo label and vicarious liability is illustrated by this case. The question presented on certiorari is whether Ellerth can state a claim of quid pro quo harassment, but the issue of real concern to the parties is whether Burlington has vicarious liability for Slowik's alleged misconduct, rather than liability limited to its own negligence. The question presented for certiorari asks:
"Whether a claim of quid pro quo sexual harassment may be stated under Title VII … where the plaintiff employee has neither submitted to the sexual advances of the alleged harasser nor suffered any tangible effects on the compensation, terms, conditions or privileges of employment as a consequence of a refusal to submit to those advances?" Pet. for Cert. i.

We do not suggest the terms quid pro quo and hostile work environment are irrelevant to Title VII litigation. To the extent they illustrate the distinction between cases involving a threat which is carried out and offensive conduct in general, the terms are relevant when there is a threshold question whether a plaintiff can prove discrimination in violation of Title VII. When a plaintiff proves that a tangible employment action resulted from a refusal to submit to a supervisor's sexual demands, he or she establishes that the employment decision itself constitutes a change in the terms and conditions of employment that is actionable under Title VII. For any sexual harassment preceding the employment decision to be actionable, however, the conduct must be severe or pervasive. Because Ellerth's claim involves only unfulfilled threats, it should be categorized as a hostile work environment claim which requires a showing of severe or pervasive conduct. See Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75, 81 (1998); Harris v. Forklift Systems, Inc., 510 U.S. 17, 21 (1993)….
[2.]
We must decide, then, whether an employer has vicarious liability when a supervisor creates a hostile work environment by making explicit threats to alter a subordinate's terms or conditions of employment, based on sex, but does not fulfill the threat….
As Meritor acknowledged, the Restatement (Second) of Agency (1957) (hereinafter Restatement), is a useful beginning point for a discussion 

of general agency principles, 477 U.S., at 72….