Employment Law Report

The Other Supreme Court Decisions: Employers Should be Celebrating Too!

By Emily C. Lamb and Chelsea Painter*

The Supreme Court issued rulings in more than one case on Monday, June 24, 2013.  Rulings were issued in two important employment law cases, Vance v. Ball State University and University of Texas Southwestern Medical Center v. Nassar.  These rulings further define “Supervisor” under Title VII and approve a higher standard of proof for retaliation claims than for status-based discrimination claims, respectively.  Also, the Supreme Court granted the NLRB’s Petition for Certiorari in NLRB v. Noel Canning.

The U.S. Supreme Court Narrowly Defines “Supervisor” For the Purpose of Title VII

Under Title VII, an employer’s liability for workplace harassment is largely dependent upon whether the alleged harasser is the complainant’s supervisor.  If the harasser is merely the victim’s co-worker, an employer is liable only if it was negligent i.e., if the employer knew or reasonably should have known about the harassment but failed to take remedial action.  However, if the harasser is the victim’s supervisor, the employer’s liability depends on whether adverse action was taken against the victim.  If such action was taken, an employer is strictly liable for the harassment.  If not, an employer may escape liability under the reasoning of Burlington Industries, Inc. v. Ellerth and Faragher v. Boca Raton and their progeny if the employer can show that (1) the employer exercised reasonable care to prevent and correct any harassing behavior; and (2) that the plaintiff unreasonably failed to take advantage of the preventative or corrective opportunities offered by the employer.  The alleged harasser’s status as a supervisor is therefore crucial in determining the proper framework to analyze harassment claims.

On Monday, June 24, 2013, the United States Supreme Court resolved the dispute concerning the definition of “supervisor” with its Opinion in Vance v. Ball State University.  In a 5-4 majority opinion delivered by Justice Alito, the Court held that for the purpose of Title VII, only those employees who are empowered to take “tangible employment actions against the victim, i.e., to effect a 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” qualify as “supervisors” whose actions may make the employer vicariously liable under the Ellerth/Faragher framework.  If a harassing employee lacks such authority, the employer can only be held liable for negligently controlling work conditions.  The Court specifically rejected the “nebulous definition” of “supervisor” advocated in the EEOC Guidance and adopted by several courts of appeals.  “The ability to direct another employee’s tasks is simply not sufficient” to justify vicarious liability.  Instead, a negligence framework is appropriate in evaluating an employer’s liability for the acts of such employees.  It was also reasoned that in a “great many” cases, it will be known, prior to litigation, whether an alleged harasser was a supervisor.  In other cases, such will become clear after discovery or will be resolved at summary judgment, thus resulting in a more efficient legal system.

Justice Ginsburg’s dissenting opinion (in which Justices Breyer, Sotomayor and Kagan joined) argued that the Court’s decision to exclude those employees who control the day-to-day schedules and assignments of others from the definition of “supervisor” is out of touch with the realities of the workplace, “where individuals with the power to assign daily tasks are often regarded by other employees as supervisors.”  They argued that the holding “relieves scores of employers of responsibility” for the behavior of workers they employ and ignores EEOC Guidance suggesting that the authority to direct an employee’s daily activities establishes supervisory status under Title VII.  The majority dismissed these concerns, reasoning that the EEOC’s broad definition is unworkable and that a narrower definition limiting supervisors to those with the power to take tangible employment action still gives victims an opportunity to seek redress under the co-worker harassment theory.

The United States Supreme Court Approves a Higher Standard of Proof for Retaliation Claims than for Status-Based Discrimination Claims

On Monday, June 24, 2013, the U.S. Supreme Court decided University of Texas Southwestern Medical Center v. Nassar, in which a 5-4 majority led by Justice Kennedy held that retaliation plaintiffs must prove that retaliation was the “but-for” cause of the challenged employment action, not merely a “motivating factor” for the employer’s action.  Traditional status-based discrimination under 42 U.S.C. §2000e-2 need not show “but-for” causation.  Rather, it will suffice if it is shown that the motive to discriminate was one of the employer’s motives.  However, the Court reasoned that because the antiretaliation provision is located in a different section than the status-based discrimination provision,  the two claims are not interchangeable, and therefore, the standards of causation for each may be differentiated.  Furthermore, §2000e-2(m)’s plain language addresses only “race, color, religion, sex, and national origin discrimination and says nothing about retaliation,” whereas another part of the Civil Rights Act of 1991, §109, expressly refers to all unlawful employment actions.  Moreover, the detailed way Title VII was drafted differentiates it from other, more broad, and generalized statutes that have interpreted retaliation to be an “implicit corollary of status-based discrimination.”  Finally, the Court explained that Congress’s approach to the ADA further confirms the inapplicability of Section 2000e-2(m) to retaliation because the ADA (which was enacted just one year before Title VII) shows that when Congress elected to address retaliation as part of a detailed statute, “it did so in clear textual terms.”

A dissent led by Justice Ginsburg (in which Justices Breyer, Sotomayor and Kagan joined) criticized the use of a different standard for retaliation and discrimination claims, stating: “The court shows little regard for the trial judges who will be obliged to charge discrete causation standards when a claim of discrimination ‘because of,’ e.g., race is coupled with a claim of discrimination ‘because’ the individual has complained of race discrimination. And jurors will puzzle over the rhyme or reason for the dual standards.”

U.S. Supreme Court Grants the NLRB’s Petition for Certiorari in NLRB v. Noel Canning

On Monday, June 24, 2013, the U.S. Supreme Court granted certiorari, agreeing to “consider whether President Obama’s recess appointments to the panel (Board) heading the NLRB’s judicial processes and union election functions were valid under the U.S. Constitution.”  This means that the Supreme Court will address the validity of President Obama’s recess appointments to the Board, as well as the extent of the President’s power to appoint individuals to various federal agencies and departments without the advice and consent of the Senate.  In addition to the issues raised in the Board’s petition, the Court directed the parties to brief and argue whether the President may exercise such power when the U.S. Senate is convening every three days in pro forma sessions.

Although Noel Canning cast doubt on the hundreds of decisions the NLRB made in the past year, employers should not expect much change at the NLRB.  The Board has summarily rejected any arguments related to invalid appointments.  Employers can expect the Board to continue to issue decisions until Chairman Mark Pearce’s term expires on August 27, 2013, eliminating the NLRA-required three member quorum, or until the Senate confirms President Obama’s nominations or President Obama makes additional recess appointments to the Board.

Ms. Painter is a Summer Associate at Wyatt, Tarrant & Combs, LLP.