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eLABORate: Supreme Court Improves Employers' Ability To Defend Against Unlawful Discrimination Claims

June 27, 2013

On June 24, 2013, the United States Supreme Court rendered two decisions that make it easier for employers to defend Title VII harassment and retaliation cases, and perhaps in other discrimination cases beyond Title VII. The cases are Vance v. Ball State University and University of Texas Southwestern Medical Center v. Nassar.

Vance v. Ball State University
In Vance, the Supreme Court narrowed the definition of who is a "supervisor" for purposes of determining whether an employer is vicariously liable for workplace harassment. The Court held that an employee is a supervisor under Title VII only if he or she is empowered by the employer to take tangible employment actions against the victim. Tangible actions are those that result in significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits. The Court's decision resolves a circuit split as to how much authority the alleged harasser must have to be considered a supervisor for purposes of vicarious liability, and rejects the views of those circuits, and the EEOC, that a supervisor is one who merely controls the daily activities of the alleged victim of harassment.

The petitioner, Maetta Vance (an African-American female), sued her employer, Ball State University, alleging that her "supervisor" (a Caucasian female) subjected her to a racially hostile work environment in violation of Title VII, and as a result, the employer was vicariously liable. A lower court granted summary judgment in favor of the employer, reasoning that the employer could not be held vicariously liable because the alleged harasser did not have the power to hire, fire, demote, promote, transfer, or discipline the petitioner, and that the employer could not be liable for negligence because it responded reasonably to the petitioner's complaints. On appeal, the Seventh Circuit affirmed, largely following the district court's reasoning. The Supreme Court affirmed the Seventh Circuit's decision.

Under Title VII, an employer's liability for workplace harassment often hinges on the status of the allegedly harassing employee as the victim's co-worker or supervisor. The stakes increase for the employer if the harasser is the victim's supervisor. 

If the harassing employee is the victim's co-worker, the employer is liable only if it was negligent in controlling working conditions. Conversely, if the employee is the victim's supervisor (someone who is empowered by the employer to take tangible employment actions against the victim), and the supervisor's harassment culminates in a tangible employment action, the employer is strictly liable for the workplace harassment. If no tangible action is taken by the supervisor, the employer may escape liability by establishing, as an affirmative defense, that the employer exercised reasonable care to prevent and correct any harassing behavior and that the plaintiff unreasonably failed to take advantage of the preventative or corrective opportunities that the employer provided. The Supreme Court's narrowed definition of who is a supervisor is significant because it should winnow the pool of employees who can expose the employer to strict liability for workplace harassment. 

Based on the newly-minted definition of who is a supervisor, the Supreme Court explains that an alleged harasser's supervisor status should be capable of being discerned before (or soon after) litigation commences, and is likely to be resolved as a matter of law before trial.

University of Texas Southwestern Medical Center v. Nassar
In Nassar, the Supreme Court held that an employee must prove "but-for" causation in a Title VII retaliation case, holding that the less stringent mixed-motive causation standard that was codified in the Civil Rights Act of 1991 was limited to Title VII claims of discrimination, not retaliation.

The respondent, a physician, sued his former employer, a university medical center, for alleged violations of Title VII, claiming that he was constructively discharged from his faculty position because of racially and religiously motivated harassment by a superior, and that his former employer retaliated against him by preventing him from obtaining subsequent employment with an affiliated hospital. The jury rendered a verdict for the respondent on both claims. On appeal, the Fifth Circuit found insufficient evidence to support the jury's verdict on the constructive discharge claim, but upheld the verdict on the retaliation claim under a mixed-motive theory. The Supreme Court vacated and remanded the case, and explicitly rejected the Fifth Circuit's mixed-motive causation standard.

But-for causation requires the employee to prove that the employer would not have taken an adverse employment action, but for an improper motive. Mixed-motive causation requires the employee to prove that an improper motive was one of multiple reasons for the adverse employment action. The Supreme Court drew from and was influenced by its 2008 decision in Gross v. FBL Financial Services, where it held that a discrimination claim under the Age Discrimination in Employment Act must be proved by but-for causation, and that the mixed-motive standard from Title VII did not extend to the ADEA. The Supreme Court reasoned in Gross that "but-for" causation is the default rule, and that it would not infer a different standard absent a clear expression of congressional intent to do so. In Nassar, the Supreme Court reasoned that the text and structure of Title VII made clear that Congress chose to create a different causation standard — mixed motive — but limited application of that standard to claims for the "status based" discrimination proscribed by Title VII, namely race, color, religion, sex, and national origin. As in Vance, the Supreme Court rejected EEOC's interpretation set forth in its subregulatory guidance, refusing to grant deference to EEOC's interpretation.
The Vance ruling adds needed clarity to the definition of who is a "supervisor" for vicarious liability under Title VII, moving away from an amorphous standard of whether an employee controls another employee's daily activities, to one based on the authority of one employee over the other, an issue that can likely be resolved early in the charge process or in later litigation. Similarly, in Nassar, the Court made clear that but-for causation is the default rule, and that the mixed-motive standard from the Civil Rights Act of 1991 is a narrow exception to the general default rule and does not apply in retaliation claims. In doing so, the Court struck a blow at the practice of employees who get wind of a termination and make an eleventh-hour claim of "discrimination" to create an issue of fact over their otherwise lawful termination, a practice the Court cited and criticized in its ruling. Although the case was raised in the context of Title VII, given the Court's reasoning and its prior decision in Gross, it will be interesting to see whether lower courts take Nassar and Gross as a message that the mixed-motive standard is a creature of Title VII only, and a subsection at that, and therefore does not apply in other employment discrimination and retaliation statutes. 
If you have a question regarding the topic of this eLABORate or a previous issue, feel free to contact any member of the Phelps Dunbar Labor and Employment practice group.