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A big day at the Supreme Court for employers

By Lisa Milam-Perez, J.D., Lorene D. Park, J.D., and Cynthia L. Hackerott, J.D.

The Supreme Court’s 2012-2013 term is drawing to a close, and the significant employment law decisions issued yesterday, during what is scheduled to be the last week of the High Court’s term, were clear wins for employers. In Vance v Ball State University, the 5-4 majority endorsed a narrow definition of the meaning of “supervisor” for purposes of determining employer liability under Title VII. In University of Texas Southwestern Medical Center v Nassar, the divided Court rejected the notion that the reduced “motivating factor” standard of causation adopted for use in Title VII discrimination cases applied with equal force to claims of retaliation under the Act. And, while not an employment case, Fisher v University of Texas reflected the Court’s continuing willingness to revisit the wisdom of affirmative action, tightening the standards by which the government may implement race-conscious actions.

When is an employee a “supervisor” for Title VII purposes?

An employee is a “supervisor” for purposes of vicarious liability under Title VII only if he or she is empowered by the employer to take tangible employment actions against the alleged victim of harassment or other unlawful activities, a divided U.S. Supreme Court held, resolving a circuit court split and rejecting the EEOC’s guidance on the matter (Vance v Ball State University, June 24, 2013, Alito, S, Jr). As applied to the underlying suit, summary judgment for an employer was affirmed with respect to liability for alleged race-based harassment by an individual who did not have the power to take tangible employment actions against the employee.

Under Title VII, an employer’s liability for workplace harassment may depend on the status of the harasser. If the harasser is the victim’s coworker, the employer is liable only if it was negligent (i.e., if the employer knew or should have known about the harassment but failed to take remedial action). If the harasser is a “supervisor,” different rules apply. If the harassment involves a tangible employment action, the employer is strictly liable. If not, the employer may avoid liability by establishing, as an affirmative defense, that (1) it exercised reasonable care to prevent and correct any harassing behavior and (2) the employee unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided.

In a divided opinion, the Supreme Court held that “an employee is a ‘supervisor’ for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim.” Because there was no evidence that the employer empowered the individual in question to take any tangible employment actions against the employee, she was not a supervisor, and the lower courts correctly applied the negligence framework used for coworker conduct.

In reaching this conclusion, the Court discussed the reasoning behind the Faragher and Ellerth decisions and noted the obvious importance of whether an alleged harasser is a “supervisor” or merely a coworker. The Court rejected “the nebulous definition of a ‘supervisor’ advocated in the EEOC Guidance,” and found the employee’s “colloquial uses of the term ‘supervisor’” misplaced. In contrast, it found that the Ellerth/Faragher framework draws a sharp line between coworkers and supervisors, with the latter being an individual who has the power to cause direct economic harm by taking a tangible employment action. The Court further explained that this more clearly defined concept of “supervisor” can readily be applied.

Dissent. Justices Ginsburg, Breyer, Sotomayor, and Kagan dissented, reasoning that, by striking from the supervisory category employees who control the day-to-day schedules and assignments of others, the majority diminished the force of Faragher and Ellerth and ignored the “conditions under which members of the work force labor.” The dissent would follow the EEOC’s Guidance and hold that the authority to direct an employee’s daily activities establishes supervisory status under Title VII.

What standard of causation applies to Title VII retaliation claims?

Title VII retaliation claims must be proved according to traditional principles of but-for causation, a divided U.S. Supreme Court ruled, not the lessened “motivating factor” causation test provided for discrimination claims under the statute (University of Texas Southwestern Medical Center v Nassar, June 24, 2013, Kennedy, A). Looking to both the plain language and the structure of Title VII and the Civil Rights Act of 1991 compels the conclusion that while allegations of discrimination are subject to the lower causation standard, retaliation claims are not, the 5-4 majority held. Justice Ginsburg filed a dissent.

Motivating factor test inapplicable. In arguing that the motivating factor test should apply to retaliation claims under Title VII, the employee (and the United States, as amicus) cited decisions standing for the general proposition that Congress, in enacting a “broadly phrased antidiscrimination statute,” had signaled a “concomitant intent to ban retaliation against individuals who oppose that discrimination,” even where not expressly stated in the statute. But those cases do not support a “a quite different rule that every reference to race, color, creed, sex or nationality in an antidiscrimination statute is to be treated as a synonym for ‘retaliation,’” wrote Justice Kennedy. “The approach respondent and the Government suggest is inappropriate in the context of a statute as precise, complex, and exhaustive as Title VII.”

The Court declined to give Skidmore deference to the EEOC’s causation standard as set forth in its guidance manual, finding the agency’s explanations for its position lacked persuasive force. The majority also noted that, particularly in light of the increasing number of retaliation claims, a lessened causation standard would mean more frivolous claims and would “siphon resources from efforts by employers, administrative agencies, and courts to combat workplace harassment.”

Dissent. Justice Ginsburg dissented, joined by Justices Breyer, Sotomayor, and Kagan. According to Ginsburg, the majority showed “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.”

“Of graver concern,” she wrote that the majority has seized on a statutory provision that was adopted to strengthen Title VII “and turned it into a measure reducing the force of the ban on retaliation.”

Was university’s consideration of race in admissions process narrowly tailored?

In applying the narrow tailoring aspect of strict scrutiny, the Fifth Circuit erred in giving deference to the University of Texas’ assertion that its way of considering race in its admissions process was constitutionally permissible, ruled the U.S. Supreme Court in a 7-1 decision (Fisher v University of Texas at Austin, June 24, 2013, Kennedy, A). Strict scrutiny does not permit a court to accept a school’s assertion that its admissions process uses race in a permissible way without closely examining how the process works in practice, yet that is what the lower courts did in their rulings. Thus, the Fifth Circuit’s decision affirming the district court’s grant of summary judgment to the university was incorrect, and the High Court remanded the case back to the Fifth Circuit for a correct analysis of the admissions process. In so doing, the Fifth Circuit must assess whether the university has offered sufficient evidence to prove that its admissions program is narrowly tailored to obtain the educational benefits of diversity.

The Supreme Court explained that the lower courts were correct in finding that Grutter calls for deference to the university’s experience and expertise about its educational mission. However, once the university has established that its goal of diversity is consistent with strict scrutiny, the university must prove that the means it chose to attain that diversity are narrowly tailored to its goal, and no deference is afforded to the university on this point. The university must demonstrate that its admissions processes “ensure that each applicant is evaluated as an individual and not in a way that makes an applicant’s race or ethnicity the defining feature of his or her application.”

In addition, narrow tailoring requires a reviewing court to verify that it is necessary for the university to use race to achieve the educational benefits of diversity. The reviewing court must ultimately be satisfied that no workable race-neutral alternatives would produce the educational benefits of diversity. Here, the Fifth Circuit erred in presuming that the school had acted in good faith and gave the plaintiff the burden of rebutting that presumption, thus allowing the university undue deference as to the narrow tailoring requirement in violation of the standards set forth in Grutter.