United States: Supreme Court Issues Two Employer-Friendly Decisions On Title VII

Last Updated: July 30 2013
Article by David Leishman and Nancy A. Johnson

The United States Supreme Court issued two significant opinions at the end of June 2013 interpreting Title VII of the Civil Rights Act of 1964, both of which can largely be seen as wins for employers. Specifically:

  • The Supreme Court held in Vance v. Ball State University that a "supervisor" for purposes of determining vicarious liability under Title VII is one who has the authority to take a "tangible employment action" against the alleged victim, resolving a split of authority in the lower courts in favor of narrowing liability for employers.
  • The Supreme Court in University of Texas Southwestern Medical Center v. Nassar addressed the proper causation standard for Title VII retaliation cases, approving a heightened standard for plaintiffs in retaliation cases.

Vance Decision

In Vance v. Ball State University, 2013 U.S. LEXIS 4703 (U.S. June 24, 2013), an African-American employee of Ball State University alleged that she was the victim of a hostile work environment in violation of Title VII. It was undisputed, however, that the alleged harasser lacked the power to hire, fire, demote, promote, transfer or discipline the plaintiff.

Under Title VII, an employer's liability for harassment depends, in part, on the status of the alleged harasser. If the harassing employee is a co-worker, the employer is liable only if it was negligent in controlling working conditions (e.g., when it know or should have known of the alleged harassment and failed to take appropriate action). If the harasser is a "supervisor", different rules apply: the employer is strictly liable if the supervisor's harassment culminates in a tangible employment action and related damage. However, if no tangible employment action is taken, the employer may rely on an affirmative defense that it exercised reasonable care to prevent and correct harassing behavior, but the plaintiff unreasonably failed to take advantage of preventative or corrective opportunities.

Before Vance, lower courts split as to who was a "supervisor" for purposes of the strict liability standard. The Seventh Circuit, among others, limited "supervisors" to those with the power to hire, fire, promote, transfer or discipline. The EEOC and other courts more broadly defined "supervisor" to include those individuals with authority to direct an employee's daily work activities.

In Vance, the federal District Court for the Southern District of Indiana entered summary judgment in favor of the University and the Seventh Circuit affirmed, dismissing plaintiff's suit and holding that a "supervisor" is one with the power to hire, fire, demote, promote, transfer or discipline. The Supreme Court then affirmed.

Justice Alito, writing for a five-to-four majority, held that for purposes of vicarious liability under Title VII, a "supervisor" is one who "is empowered by the employer to take tangible employment actions against the victim." As there was no evidence that the alleged harasser in Vance had such power, the Court affirmed summary judgment for the employer.

Nassar Decision

In University of Texas Southwestern Medical Center v. Nassar, 2013 U.S. LEXIS 4704 (U.S. June 24, 2013), the Supreme Court addressed a Title VII issue that has been back-and-forth between the Court and Congress (with Congress overruling a number of the Court's pro-employer interpretations of the statute in the past). Specifically:

  • One interpretation of Title VII construed Title VII to require an employee to establish that discrimination was the "but-for" cause of the adverse action at issue. Thus, even where an employer admitted that discrimination motivated an employment decision, the employer could prevail if the jury believed that the employer would have taken the same action without the impermissible motive.
  • In 1991, Congress responded to such ruling by amending Title VII to make clear that a plaintiff need only establish that the alleged impermissible discrimination was a "motivating factor" in the employment decision. If the employee could make this showing, the employer could still avoid most damages (but not liability) by showing that it would have taken the same action anyway.

In Nassar, the Supreme Court held that the "motivating factor" analysis does not apply to retaliation claims. Writing for a five-Justice majority, Justice Kennedy explained that the "motivating factor" provision of the 1991 amendment to Title VII only applies to claims of discrimination, not retaliation. Thus, employers facing Title VII retaliation claims can prevail, even if the employment action was motivated by retaliation, by showing that it would have taken the action even without the impermissible motive.

Employer Take-Aways

Both Vance and Nassar are good news for employers.

  • Under Vance, employers should be able to obtain dismissal or summary judgment on hostile work environment claims more frequently on the basis that an alleged harasser was not a supervisor.
  • Similarly, under Nassar, employers should be able to prevail on retaliation claims more easily now that employees will need to establish that retaliatory intent was the "but-for" causation reason for taking adverse employment action

In light of Vance, employers should review job descriptions and titles to ensure that employees who lack the power to take tangible employment actions do not have such authority referenced in their job description (or are not inappropriately labeled as "managers"). Also, in light of Nassar, employers should continue to maintain robust anti-harassment and anti-retaliation policies and review their internal complaint procedures for overall compliance

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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