Supreme Court Sets Guidelines
for Constructive Discharge Cases and
Rules on Availability of Employer Defense
In
an important ruling on sexual harassment, the U.S. Supreme Court recently clarified
the law surrounding constructive discharge claims and the availability of
employers to assert an affirmative defense to such claims.
Employees
who are compelled to quit because of sexual harassment resulting in
intolerable working conditions and a hostile work environment have a right
to sue their employers under a constructive discharge theory. However, the
Supreme Court, in an 8-1 decision, held that an employer can assert a
defense in such situations by demonstrating that it exercised reasonable
care to prevent and promptly correct the wrongful behavior and that the
employee failed to take advantage of preventative or corrective measures.
If,
however, the hostile work environment leads to a tangible employment
action, such as a demotion or cut in pay, the affirmative defense is not
available. Pennsylvania
State Police
v. Suders, No. 03-95 (June 14, 2004).
Existing Precedent
Federal sexual harassment laws generally holds an
employer automatically liable if an employee has suffered a tangible adverse
employment action, such as termination or demotion, as a result of being
harassed by a supervisor.
Under
existing Supreme Court precedent, however, if the sexual harassment led to
a hostile work environment but did not result in a tangible adverse employment
action, employers can avoid responsibility by showing they have an
effective anti-harassment policy in place and the employee failed to take
advantage of it. Employers will not be held liable for complaints of
hostile work environment harassment that they were not in a position to
prevent and that they promptly and effectively addressed upon receiving a
complaint.
This
defense was first set forth in two 1998 Supreme Court decisions that
clarified the legal duties with which employers must comply to avoid
liability for hostile work environment harassment: Faragher
v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries
Inc. v. Ellerth, 524 U.S. 742 (1998). The
defense is unavailable if the employer took any tangible, adverse job
action against the employee.
Employee Encountered Hostile Work Environment and Quit
The
case before the Supreme Court involved a female communications operator for
the Pennsylvania State Police. Nancy Suders
claimed that three of her supervisors subjected her to a barrage of sexual
harassment. One supervisor allegedly made sexually explicit comments every
time she went into his office. Another supervisor allegedly grabbed his
genitals and make obscene comments and gestures
several times a shift.
Suders mentioned she might need help to the
department's internal Equal Employment Opportunity Officer, but neither the
EEO Officer nor Suders followed up on the
conversation. Two months later, Suders complained
to the EEO Officer again and reported harassment. She was told to file a
complaint, but the EEO Officer did not tell Suders
how to obtain the necessary forms. Suders
resigned claiming she had been subjected to sexual harassment and
constructively discharged in violation of Title VII.
A
federal trial court initially threw out Suders'
suit on the ground that she had not taken advantage of the department's
internal anti-harassment procedures and had complained only two days before
she quit.
Last
year the 3rd Circuit Court of Appeals reversed and ruled in Suders' favor, holding that a work environment that was
so intolerable due to sexual harassment as to lead
an employee to quit was tantamount to an official firing. The 3rd Circuit
concluded that constructive discharge is a tangible adverse employment
action and that the employer's affirmative defense was not available in
such constructive discharge cases.
The
Supreme Court set aside this ruling.
Courts Will Examine the Conduct Underlying the Constructive
Discharge Claim
Justice
Ginsburg, writing for the majority, held that the availability of the
employer's affirmative defense will turn on what lead to the constructive
discharge.
"Unlike
an actual termination, which is always effected through an official
act of the company, a constructive discharge need not be," said the
Court. "A constructive discharge involves both an employee's decision
to leave and precipitating conduct: The former involves no official action;
the latter, like a harassment claim without any constructive discharge
assertion, may or may not involve official action."
The
affirmative defense will not be available if the employee quits "in
reasonable response to an employer-sanctioned adverse action officially
changing her employment status or situation," the Court stated.
Examples would include "a humiliating demotion, extreme cut in pay, or
transfer to a position in which she would face unbearable working
conditions." In these cases, the employer would be strictly liable.
If,
however, the sexual harassment led to a hostile work environment without an
official tangible adverse employment action, the employer could defend
itself by showing it had set up a system for reporting and correcting
harassment that the employee had failed to use. Without the presence of an
official act, the employer's involvement in the supervisor's misconduct
becomes less certain. The employer should be allowed to attempt to
establish the affirmative defense and not be held vicariously liable.
Impact of the Case
The
case highlights the importance of having effective anti-harassment policies
in place and in promptly investigating and correcting any complaints of
harassment. Employers' pro-active policies and practices are the first line
of defense and provide employers with the most protection.
The
decision may ultimately lead even more California employees to choose to
sue in state court because the Fair Employment and Housing Act imposes
strict liability on employers for all acts of sexual harassment by a
supervisor. Recently, the California Supreme Court in Department of Health
Services v. Superior Court (McGinnis) (2003) 31 Cal.4th 1026, held that
"strict liability is not absolute liability in the sense that it
precludes all defenses." Although the defense in California is still not as strong as
that provided in Title VII cases by Burlington/Faragher,
it does not grant a complete defense to liability, but allows an employer
to avoid some damages.
There
are several important steps employers can take to limit constructive
discharge claims:
- Enact
an "open door policy" and take it seriously. A true
"open-door policy" provides a means for employees to
disclose their job-related concerns or problems with supervisors or
other members of management and provides a complaint resolution
mechanism.
- Adopt
and implement appropriate anti-harassment policies.
- Investigate
all allegations of harassment. The depth and extent of the
investigations may vary, but all allegations should be looked
into.
- Prohibit
retaliation against employees who bring complaints to management's
attention.
- Closely
review requests for demotions, cuts in pay, and transfers to less
desirable positions to root out any ill-motive.
- Conduct
exit interviews of all employees to determine why the employee quit, identify
problem supervisors or employees or other problem policies or
practices.
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