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In Townsend v. Benjamin Enters., the Second
Circuit Court of Appeals ruled on two important issues under Title
VII of the Civil Rights Act of 1964 ("Title VII"). Both
plaintiff Martha Townsend (a former office manager for defendant)
and a former Human Resources Director (to whom Townsend complained
about harassment) sued for sexual harassment and retaliation,
respectively. The HR Director claimed that she was terminated for
discussing Townsend's internal sexual harassment complaint with
a management consultant hired by the company. Addressing this
specific issue for the first time, the Court held that
participation in only an internal employer investigation
– such as by a human resources officer – does
not qualify as protected activity under Title VII's
participation clause when it is not in conjunction with or
following a formal charge with the Equal Employment Opportunity
Commission ("EEOC"). Thus, the HR Director's
discussion with the management consultant about Townsend's
internal complaint was not protected activity, and she could not
maintain a retaliation cause of action under Title VII with respect
to her termination.
Second, the Court turned to Townsend's claims of sexual
harassment against the company's Vice President (who was the
husband of the company's President). At trial, plaintiff proved
that she had been subjected to a hostile work environment and the
jury concluded that the VP was the proxy or alter ego of the
company. As a result, the VP's misconduct was imputed to the
company. On appeal, the company argued that it had an affirmative
defense to liability based on the Supreme Court's decisions in
Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and
Burlington Industries, Inc. v. Ellerth, 524 U.S. 742
(1998), and that the trial court erred in concluding that there is
a proxy or alter ego exception to the affirmative defense.
Generally, employers have an affirmative defense to hostile work
environment claims under Title VII when the employer (i) exercises
reasonable care to prevent and promptly correct any harassing
behavior and (ii) the plaintiff unreasonably fails to take
advantage of the protective or corrective opportunities provided by
the employer or to otherwise avoid harm. The company argued that
the Faragher/Ellerth "affirmative defense remains
available even when the alleged harasser holds a sufficiently high
position within the hierarchy of an organization to be considered
the organization's proxy or alter ego." In another
question of first impression the Court disagreed, holding that this
defense is unavailable when the supervisor in question is the
employer's proxy or alter ego, such as here.
This case represents a split victory for employers. On one hand,
the Court explicitly limited the reach of Title VII's
participation clause for retaliation claims. On the other hand, the
Court created an exception to the Faragher/Ellerth
affirmative defense without setting forth a bright-line rule for
determining whether an actor holds a "sufficiently high
position within the hierarchy of an organization" to render
the defense unavailable. Accordingly, employers should remain
diligent in training supervisors, especially high-level managers,
about Title VII's prohibitions and the need to prevent and
promptly correct harassing behavior.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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