Burlington Industries, Inc. v. Ellerth

Facts

The statutory framework. Title VII makes it unlawful for an employer “‘to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions or privileges of employment, because of such individual’s … sex.’” (42 U.S.C. § 2000e-2(a)(1); Ellerth, supra, 524 U.S. at pp. 751–752.) The terms “quid pro quo” and “hostile work environment” “do not appear in the statutory text”; they originated in the academic literature and migrated into the case law and into the Court’s decision in Meritor Savings Bank, FSB v. Vinson (1986) 477 U.S. 57. (Ellerth, supra, at p. 752.) Critically, Title VII defines “employer” to include any “agent” of the employer (42 U.S.C. § 2000e(b)), an express direction the Court read as a command to interpret employer liability through agency principles. (Ellerth, supra, at p. 754.)

The parties and the harasser. Because summary judgment had been granted for the employer, the Court took the employee’s alleged facts as true. (Ellerth, supra, 524 U.S. at p. 747.) Kimberly Ellerth worked from March 1993 until May 1994 as a salesperson in one of Burlington Industries’ Chicago divisions; she alleged she was “subjected to constant sexual harassment by her supervisor, one Ted Slowik.” (Ibid.) Slowik was “a mid-level manager” and a vice president in one of five business units within one of Burlington’s eight divisions. (Ibid.) He “had authority to make hiring and promotion decisions subject to the approval of his supervisor, who signed the paperwork,” but his position was “‘not considered an upper-level management position’” and he was “‘not amongst the decision-making or policy-making hierarchy.’” (Ibid.) Slowik was not Ellerth’s immediate supervisor; she worked in a two-person office and answered to a colleague who, in turn, answered to Slowik. (Ibid.)

The three threatening incidents. Against “a background of repeated boorish and offensive remarks and gestures,” Ellerth emphasized three incidents in which Slowik’s comments “could be construed as threats to deny her tangible job benefits.” (Ellerth, supra, 524 U.S. at pp. 747–748.) On a 1993 business trip, after Ellerth gave no encouragement to remarks Slowik made about her breasts, he told her to “loosen up” and warned, “you know, Kim, I could make your life very hard or very easy at Burlington.” (Id. at p. 748.) In March 1994, while Ellerth was being considered for a promotion, Slowik said she was not “loose enough,” reached over and rubbed her knee, and — after she received the promotion — told her she would “‘be out there with men who work in factories, and they certainly like women with pretty butts/legs.’” (Ibid.) In May 1994, when Ellerth sought permission to insert a customer’s logo into a fabric sample, Slowik responded, “‘I don’t have time for you right now, Kim — unless you want to tell me what you’re wearing,’” and later added that wearing “shorter skirts” would “‘make your job a whole heck of a lot easier.’” (Id. at pp. 748–749.)

No tangible action — and no complaint. Ellerth “refused all of Slowik’s advances, yet suffered no tangible retaliation and was, in fact, promoted once.” (Ellerth, supra, 524 U.S. at p. 748.) After her immediate supervisor cautioned her about returning customer calls promptly, she quit, initially giving unrelated reasons and only weeks later attributing her departure to Slowik’s behavior. (Id. at p. 748.) During her tenure she “did not inform anyone in authority about Slowik’s conduct, despite knowing Burlington had a policy against sexual harassment.” (Id. at pp. 748–749.) She declined to tell her immediate supervisor because “‘it would be his duty as my supervisor to report any incidents of sexual harassment.’” (Id. at p. 749.)

Procedural history

After obtaining a right-to-sue letter from the EEOC, Ellerth sued in the United States District Court for the Northern District of Illinois, alleging sexual harassment and forced constructive discharge in violation of Title VII. (Ellerth, supra, 524 U.S. at p. 749.) The District Court granted Burlington summary judgment. It found Slowik’s behavior “severe and pervasive enough to create a hostile work environment,” but found Burlington “neither knew nor should have known about the conduct,” noting Ellerth had not used the internal complaint procedures; though the claim was framed as a hostile-environment complaint, the court observed “there was a quid pro quo ‘component’” and applied a negligence standard. (Ibid.)

The Seventh Circuit, sitting en banc, reversed “in a decision which produced eight separate opinions and no consensus for a controlling rationale.” (Ellerth, supra, 524 U.S. at pp. 749–750.) The judges agreed the real issue was vicarious liability, not breach of a duty of care, and most agreed the claim could be labeled “quid pro quo” even though Ellerth received her promotion and suffered no other tangible retaliation. (Id. at p. 750.) The court fractured, however, on the liability standard: six judges favored vicarious liability for divergent reasons, while Chief Judge Posner (joined by Judge Manion) would have limited the employer to liability for its own negligence, and Judge Coffey favored a uniform negligence standard. (Id. at pp. 750–751.) The Supreme Court granted certiorari “to assist in defining the relevant standards of employer liability” and affirmed. (Id. at p. 751.)

Issue

The Court framed the question as “whether, under Title VII of the Civil Rights Act of 1964 …, an employee who refuses the unwelcome and threatening sexual advances of a supervisor, yet suffers no adverse, tangible job consequences, can recover against the employer without showing the employer is negligent or otherwise at fault for the supervisor’s actions.” (Ellerth, supra, 524 U.S. at pp. 746–747.) Although the question presented on certiorari was cast in terms of whether Ellerth could “state a claim of quid pro quo … harassment,” the Court recognized that “the issue of real concern to the parties is whether Burlington has vicarious liability for Slowik’s alleged misconduct, rather than liability limited to its own negligence.” (Id. at pp. 753–754.) The Court expressly accepted the District Court’s finding that the conduct was severe or pervasive and “express[ed] no opinion as to whether a single unfulfilled threat is sufficient to constitute discrimination in the terms or conditions of employment.” (Id. at p. 754.)

Holding

Reasoning

The labels do not control liability — but they matter at the threshold. The Court began by dismantling the premise that had driven the litigation. “Quid pro quo” and “hostile work environment” “do not appear in the statutory text,” and in Meritor they “served a specific and limited purpose” — to confirm that Title VII is violated by both “explicit or constructive alterations in the terms or conditions of employment.” (Ellerth, supra, 524 U.S. at pp. 752–753.) “The distinction was not discussed for its bearing upon an employer’s liability,” which Meritor said “agency principles controlled.” (Id. at p. 753.) Post-Meritor, the lower courts attached automatic vicarious liability to “quid pro quo” claims, which “encouraged Title VII plaintiffs to state their claims as quid pro quo claims, which in turn put expansive pressure on the definition.” (Ibid.) The Court preserved the labels only at the threshold: where “a tangible employment action resulted from a refusal to submit to a supervisor’s sexual demands,” the employment decision “itself constitutes a change in the terms and conditions of employment that is actionable,” whereas harassment short of a tangible action “must be severe or pervasive.” (Id. at p. 754.) Because Ellerth’s claim “involves only unfulfilled threats, it should be categorized as a hostile work environment claim.” (Ibid.)

Agency law supplies a uniform federal standard. Because Title VII defines “employer” to include “agents,” the Court turned to “principles of agency law,” concluding that “a uniform and predictable standard must be established as a matter of federal law” drawn from “the general common law of agency, rather than … the law of any particular State.” (Ellerth, supra, 524 U.S. at pp. 754–755.) The Court treated the Restatement (Second) of Agency as “a useful beginning point,” while cautioning that “‘common-law principles may not be transferable in all their particulars to Title VII.’” (Id. at p. 755.) The resulting rule “is statutory interpretation pursuant to congressional direction,” not “federal common law in ‘the strictest sense.’” (Ibid.)

Supervisor harassment is generally outside the scope of employment. Although “[a]n employer may be liable for both negligent and intentional torts committed by an employee within the scope of his or her employment,” and harassment under Title VII “presupposes intentional conduct,” conduct is within scope only when “‘actuated, at least in part, by a purpose to serve the [employer].’” (Ellerth, supra, 524 U.S. at p. 756.) “A supervisor acting out of gender-based animus or a desire to fulfill sexual urges may not be actuated by a purpose to serve the employer,” often acting “for personal motives, motives unrelated and even antithetical to the objectives of the employer.” (Id. at pp. 756–757.) Hence “the general rule is that sexual harassment by a supervisor is not conduct within the scope of employment.” (Id. at p. 757.)

Negligence is a floor; apparent authority is the wrong frame. Scope of employment “does not define the only basis for employer liability.” (Ellerth, supra, 524 U.S. at p. 758.) Under Restatement section 219(2), an employer may be liable where it “was negligent or reckless,” or where the servant “purported to act … on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation.” (Ibid.) Negligence — an employer who “knew or should have known about the conduct and failed to stop it” — “sets a minimum standard for employer liability under Title VII,” but Ellerth sought “the more stringent standard of vicarious liability.” (Id. at pp. 758–759.) The Court rejected apparent authority because that doctrine fits cases where an agent “purports to exercise a power which he or she does not have,” whereas “a supervisor’s harassment involves misuse of actual power, not the false impression of its existence.” (Id. at p. 759.) The proper analysis was the “aided in the agency relation” standard. (Id. at pp. 759–760.)

The tangible-employment-action pivot. The “aided in the agency relation” standard “requires the existence of something more than the employment relation itself,” because mere “[p]roximity and regular contact” afford every workplace tortfeasor a “captive pool of potential victims” — a reading that would extend liability even to all co-worker harassment, a result no court or the EEOC endorses. (Ellerth, supra, 524 U.S. at p. 760.) The “something more” exists “when a supervisor takes a tangible employment action against the subordinate.” (Ibid.) Such an action “constitutes 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.” (Id. at p. 761.) Because “a tangible employment action in most cases inflicts direct economic harm” that “only a supervisor … can cause,” such an action “becomes for Title VII purposes the act of the employer,” and “its requirements will always be met” in that circumstance. (Id. at pp. 761–762.) Where there is no tangible action, however, “it is not obvious the agency relationship aids in commission of the tort.” (Id. at p. 763.)

Reconciling vicarious liability with Title VII’s policies — the affirmative defense. The Court acknowledged the “tension” that “a supervisor’s power and authority invests his or her harassing conduct with a particular threatening character,” so that “a supervisor always is aided by the agency relation,” yet some supervisor harassment differs little from co-worker conduct. (Ellerth, supra, 524 U.S. at p. 763.) Bound by Meritor’s holding that “agency principles constrain the imposition of vicarious liability in cases of supervisory harassment” — a rule Congress left undisturbed — and mindful that Title VII “is designed to encourage the creation of antiharassment policies and effective grievance mechanisms” and “borrows from tort law the avoidable consequences doctrine,” the Court fashioned the affirmative defense. (Id. at pp. 763–764.) “In order to accommodate the agency principles of vicarious liability for harm caused by misuse of supervisory authority, as well as Title VII’s equally basic policies of encouraging forethought by employers and saving action by objecting employees,” the Court adopted its two-element defense, available only where no tangible employment action was taken. (Id. at pp. 764–765.)

Disposition and remand. Because Ellerth “focused all her attention in the Court of Appeals on proving her claim fit within” the quid pro quo category, the Court held she “should have an adequate opportunity to prove she has a claim for which Burlington is liable.” (Ellerth, supra, 524 U.S. at pp. 765–766.) Although she “has not alleged she suffered a tangible employment action,” Burlington “is still subject to vicarious liability” but “should have an opportunity to assert and prove the affirmative defense.” (Id. at p. 766.) The Court affirmed the Seventh Circuit’s reversal of summary judgment and remanded. (Ibid.)

The Ginsburg concurrence. Justice Ginsburg concurred in the judgment, agreeing that the quid pro quo and hostile-environment labels “are not controlling for purposes of establishing employer liability” and subscribing to “the Court’s statement of the rule governing employer liability,” which she noted “is substantively identical to the rule the Court adopts in Faragher v. Boca Raton.” (Ellerth, supra, 524 U.S. at p. 766 (conc. opn. of Ginsburg, J.).)

The Thomas dissent. Justice Thomas, joined by Justice Scalia, dissented. He charged that the Court “manufactures a rule that employers are vicariously liable if supervisors create a sexually hostile work environment, subject to an affirmative defense that the Court barely attempts to define.” (Ellerth, supra, 524 U.S. at p. 766 (dis. opn. of Thomas, J.).) Tracing the doctrine to the racial-harassment cases beginning with Rogers v. EEOC (5th Cir. 1971) 454 F.2d 234, he argued that in race cases employer liability for a hostile environment had always turned on negligence — liability “only if the employer is blameworthy in some way” — and that “[t]his distinction applies with equal force in cases of sexual harassment.” (Id. at pp. 767–769.) Because a supervisor who creates a hostile environment acts neither within the scope of employment nor with apparent authority, Thomas insisted section 219(2)(d) “provides no basis whatsoever” for vicarious liability; liability under that subsection “depends upon the plaintiff’s belief that the agent acted in the ordinary course of business or within the scope of his apparent authority,” and “no sexually harassed employee can reasonably believe that a harassing supervisor is conducting the official business of the company.” (Id. at pp. 771–772.) The majority’s rule, he wrote, “is a product of willful policymaking, pure and simple.” (Id. at p. 772.) He would have held an employer liable for a hostile environment “only if the employer is truly at fault,” restoring “parallel treatment of employer liability for racial and sexual harassment.” (Id. at p. 774.)

Significance

Ellerth and its same-day companion, Faragher v. City of Boca Raton (1998) 524 U.S. 775, restructured the law of employer liability for supervisor harassment. The decision’s enduring contribution is the bifurcation now universally known as the “Ellerth/Faragher framework”: where a supervisor’s harassment culminates in a tangible employment action, the employer is strictly (vicariously) liable with no defense; where it does not, the employer is vicariously liable subject to the two-element affirmative defense. (Ellerth, supra, 524 U.S. at pp. 760–765.) By demoting the quid pro quo and hostile-environment labels from liability tests to threshold proof categories, the Court ended the “expansive pressure on the definition” of quid pro quo that had distorted Title VII pleading. (Id. at p. 753.)

The framework’s influence extends well beyond Title VII. California courts construing the Fair Employment and Housing Act look to Ellerth and Faragher in analyzing supervisor-harassment liability, and the structure of the model jury instructions — including CACI No. 2520 on quid pro quo harassment and the companion hostile-environment and supervisor-liability instructions — reflects the same tangible-action/affirmative-defense architecture. The decision is also a landmark in the Court’s method: it treats Title VII employer liability as “statutory interpretation pursuant to congressional direction” to apply agency law, not free-floating common law. (Ellerth, supra, 524 U.S. at p. 755.) Its limits are equally important. The Court accepted the severe-or-pervasive finding below and “express[ed] no opinion as to whether a single unfulfilled threat” suffices, leaving that boundary for later cases. (Id. at p. 754.) And the defense’s contours — what counts as “reasonable care” and what an employee must do to be “reasonable” — were left for the lower courts, the very vagueness the dissent decried. (Id. at pp. 765, 772–773 (dis. opn. of Thomas, J.).)

Key quotes

“An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence … . The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.” (Ellerth, supra, 524 U.S. at p. 765.)

“When a supervisor makes a tangible employment decision, there is assurance the injury could not have been inflicted absent the agency relation. … Tangible employment actions fall within the special province of the supervisor.” (Id. at pp. 761–762.)

“No affirmative defense is available, however, when the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment.” (Id. at p. 765.)

Read the full opinion (Justia)→

Practice pointer

Open questions

The single unfulfilled threat. The Court accepted that Slowik’s conduct was severe or pervasive and “express[ed] no opinion as to whether a single unfulfilled threat is sufficient to constitute discrimination in the terms or conditions of employment.” (Ellerth, supra, 524 U.S. at p. 754.)

The full contours of the “aided in the agency relation” standard. The Court declined “to render a definitive explanation of our understanding of the standard,” describing it as “a developing feature of agency law” with “malleable terminology, which can be read to either expand or limit liability.” (Ellerth, supra, 524 U.S. at pp. 763–764.)

How the affirmative defense plays out at summary judgment. The opinion left district courts to apply the two-element defense without elaboration — what proof of “reasonable care” and of an employee’s “unreasonabl[e] fail[ure]” will carry the day “remains a mystery,” as the dissent observed. (Ellerth, supra, 524 U.S. at pp. 765, 773 (dis. opn. of Thomas, J.).)

High-rank and nondelegable-duty theories. The Court “put aside” the agency theories that an agent’s high rank makes him the employer’s alter ego and that a nondelegable duty was involved, because no party advanced them. (Ellerth, supra, 524 U.S. at p. 758.)