By: Oyvind Wistrom

Last week, the United States Supreme Court decided two highly anticipated Title VII employment cases, with both coming as significant victories for employers. Both decided by narrow 5-4 majorities, the first case distinguish between supervisors and coworkers for the purpose of vicarious liability under Title VII harassment claims. The Court held that for an employer to be vicariously liable for harassment by a supervisor, the supervisor must have the power to take tangible employment actions. The second case, which determined the appropriate standard of causation for Title VII retaliation claims, found that plaintiffs must show “but for” causation.

While both decisions were significant victories for employers, they should not drastically alter business decisions by Wisconsin employers, particularly because both decisions upheld the legal approaches currently applied within the Seventh Circuit.

“Supervisor” Status Requires The Power To Hire, Fire, Demote, Promote, or Discipline

In Vance v. Ball State University, the Court found that for the purposes of vicarious liability under a Title VII harassment claim, an employee is a “supervisor” only if he or she is empowered by the employer to take tangible employment actions against the plaintiff.

Under Title VII, an employer’s liability for workplace harassment is closely related to the status of the harasser. If the harassment is from a plaintiff’s coworker, the employer is only liable if it was negligent in controlling the work conditions. However, if the harassment is perpetrated by a supervisor the employer may be vicariously liable for the supervisor’s actions – therefore making it much easier for the plaintiff to prove liability.

In the case, Maetta Vance, an African-American substitute banquet server, claimed to have experienced racial harassment by Saundra Davis, a white catering specialist. While Davis had some authority to direct actions

within the facility, she did not have the power to hire, fire, demote, promote, transfer, or discipline Vance. Vance, attempting to gain vicarious liability, argued in favor of a broader definition of “supervisor” proposed by the EEOC’s Enforcement Guidance, which tied supervisor status to the ability to exercise significant discretion over the employee’s daily work.

The Court, upholding a decision by the Seventh Circuit, rejected Vance’s argument calling it “simply wrong.” Instead, the Court turned to previous decisions in Ellerth and Faragher where the term “supervisor” was adopted to describe a class of employees who “could bring the official power of the enterprise to bear on subordinates.” With the new holding, the Court explained that the reduction in ambiguity would allow all parties to be better positioned to know as a matter of law before a lawsuit began, the strength of their case – something not possible under the ambiguous EEOC guidance.

This decision should not however, be viewed as eliminating employer liability for coworker harassment. A plaintiff can still prevail by simply showing that the employer was negligent in permitting the harassment to occur. Evidence that an employer did not monitor the workplace, failed to respond to complaints, failed to provide a system for registering complaints, or effectively discouraged complaints from being filed is all still relevant to employer liability.

Furthermore, the Court quashed any concern that this holding may be used by employers to insulate themselves from liability by empowering only a handful of individuals to take tangible employment actions. The Court explained that realistically, those individuals would have a limited ability to exercise independent discretion when making decisions, and would likely be forced to rely on other workers who actually interact with

the affected employee. In doing so, the employer would likely be held to have effectively delegated the power to take tangible employment action to the employees on whose recommendations it relies and therefore would retain similar liability.

Title VII Retaliation Claims Require “But for” Causation

In University of Texas Southwestern Medical Center v. Nassar, the Court held that Title VII retaliation claims must be proved by showing that “but for” the retaliatory motive, the adverse employment action would not have occurred – rather than the reduced “motivating factor” standard associated with status-based discrimination claims.

Under Title VII, an employer is prohibited from retaliating “because [an employee] has opposed . . . an unlawful employment practice . . . or . . . made a [Title VII] charge.” Prior to this case, there was a split between circuits on whether an employee had to show “but for” causation, or simply that the protected activity was a motivating factor, among other factors, for the employment decision.

In the case, Dr. Naiel Nassar, a physician of Middle Eastern descent, claimed his supervisor discriminated against him based on his background. Following the discrimination Nassar sought, and received, a transfer within the hospital system, at which time he sent a letter to the medical school’s chair explaining his transfer was because of the claimed discrimination. The chair, upset over the claims and because the university and hospital had an agreement that prevented the transfer Nassar received, caused the transfer offer to be withdrawn. Nassar then sued claiming status-based discrimination and retaliation under Title VII. Because the decision to withdraw the offer was based both on Nassar’s discrimination claim in the letter, and on the agreement between the University and the hospital, Nassar argued that he only needed to show retaliation was a motivating factor.

Mirroring its prior decision in Gross v. FBL Financial (deciding causation under the ADEA), the Court found the language from the Civil Rights Act of 1991 that the plaintiff relied on to support his motivating factor argument, did not apply to retaliation claims under Title VII. The Court explained that neither the textual nor structural choices of the language could support lowering the standard of causation. Rather, Court found the term “because” implied a “but for” standard, meaning the plaintiff must establish that the unlawful action would not have occurred in the absence of the unlawful retaliation.

The holding was a significant victory for employers because it increases the burden on the employee and the likelihood of dismissal at the summary judgment stage. In coming to its conclusions, the Court explained the higher standard of causation was essential to the fair and responsible allocation of resources within the litigation system. It acknowledged that employers are experiencing an ever increasing frequency of retaliation claims and that lessening the standard could lead to more frivolous claims, ultimately diverting funds away from efforts by employers to combat workplace harassment.

If you have questions about the recent Title VII decisions, or any other issue, feel free to call Oyvind Wistrom at 414-226-4811, or any other Lindner & Marsack attorney at 414-273-3910.