Do You Know Who Your 'Supervisors' Are?

Against this backdrop, in Mack v. Otis Elevator Company, 326 F.3d 116 (2d Cir. 2003), the United States Court of Appeals for the Second Circuit recently altered the legal landscape by refining the test of supervisory status for purposes of imputing liability to employers in sexual harassment cases. Specifically, the court adopted a broader, more fact-specific inquiry that is bound to expand the universe of Title VII “supervisors,” thus increasing employers' exposure to liability for claims of sexual harassment.

In Mack, the plaintiff, an elevator mechanic for Otis Elevator Company (Otis), alleged that she was forced to endure a hostile work environment as a result of the sexually-charged acts and comments of the elevator “mechanic in charge” at her worksite. The district court ruled as a matter of law in favor of Otis, concluding that the plaintiff had failed to establish she had been harassed by an Otis “supervisor” and, therefore, Otis could not be held vicariously liable.

The Second Circuit reversed, ruling that the test utilized by the district court to determine supervisory status was too restrictive because it narrowly focused on whether the employee in question is empowered to take tangible employment actions with respect to his or her subordinates. The court reasoned that while the existence of a tangible employment action affects whether the Faragher-Ellerth affirmative defense is available to the employer, it does not affect the preliminary question of whether the employer may be held vicariously liable for the actions of the accused harasser. Accordingly, the court stated that the test of supervisory status does not turn solely on whether the employee has authority to make economic decisions regarding his or her subordinates. Instead, the question is whether “the authority given by the employer to the employee enabled or materially augmented the ability of the employee to create a hostile work environment for his subordinates.”

Applying the test to the facts of this case, the Mack court found the alleged harasser to be the plaintiff's supervisor for purposes of imputing Title VII liability to Otis. Specifically, the court observed that the alleged harasser directed the particulars of the plaintiff's workdays, including her work assignments, and he was the senior employee on the work site. As a result, the accused harasser possessed a special dominance over on-site employees, including the plaintiff, arising out of their remoteness from others with authority to exercise power on behalf of Otis. The court also observed there was no single superior to the alleged harasser at the work site whose continuing presence might have served to chill his coercive behavior toward other Otis employees working under his general direction, such as the plaintiff. The court concluded that Otis could, therefore, be held vicariously liable, subject to the Faragher-Ellerth affirmative defense since the plaintiff had suffered no tangible employment action.

The Second Circuit's rejection of the district court's test for determining whether an employee is a “supervisor” heightens a pre-existing division among the courts as to the scope of vicarious liability in sexual harassment cases. Other courts have deemed it critical for an employee to have economic or “hire/fire” power over the plaintiff in order to be considered a supervisor for Title VII purposes. Indeed, the test employed by the district court in Mack was derived from Parkins v. Civil Construction, Inc., 163 F.3d 1027 (7th Cir. 1998), a case decided shortly after the Supreme Court issued the Faragher and Ellerth opinions. The Parkins court reasoned that the “essence of supervisory status is the authority to affect the terms and conditions of the victim's employment.” According to the Seventh Circuit, that authority “primarily consists of the power to hire, fire, demote, promote, transfer or discipline an employee.” Appealing in part because it established a simple, bright line test to be applied even in complex cases, most courts have adopted the Parkins test, including the Fourth, Sixth, Seventh and Eighth Circuits, as had district courts in the Second Circuit, prior to Mack.

In contrast with the Parkins approach is, as one district court has described it, a “more indulgent line of case authority” represented by lower court decisions in the Eleventh Circuit. This more exacting approach is probably best articulated in Dinkins v. Charoen Pokphand USA, Inc., 133 F. Supp. 2d 1254, an Alabama district court case that rejected the Parkins test outright as being overly simplistic. According to the Dinkins court, an employee may be a supervisor if he or she is empowered to recommend tangible employment actions or his or her recommendations are given substantial weight by the final decision maker, or he or she is empowered to direct another employee's day to day work activities in a manner that may increase the employee's workload or assign additional or undesirable tasks. The Dinkins approach has also found some support outside of the Eleventh Circuit, including at least one district court in the Third Circuit, and now the Second Circuit in Mack. In addition, and perhaps most notably, the Equal Employment Opportunity Commission (EEOC) has adopted the Dinkins test for supervisory status in its enforcement guidelines. While courts are not obligated to follow the EEOC's guidelines, to the extent that they are persuasive the guidelines are generally given deference. For example, in the Mack case, the Second Circuit cited to the EEOC guidelines as support for its adoption of the Dinkins test.

One thing is sure: The less exacting and more subjective test adopted by the Second Circuit in Mack makes it tougher to predict whether a given employee will be deemed to be a supervisor for purposes of imputing Title VII liability to his or her employer. While the Parkins test, with its focus on the power to hire/fire and take other such tangible employment actions, comports with most employers' notion of supervisory status, the Dinkins and Mack tests will almost certainly expand the universe of employees who are potential sources of vicarious employer liability for sexual harassment to include some falling outside the traditional definition of a supervisor. This provides just one more reason for employers to train all of their employees regarding appropriate workplace behavior, since the inappropriate behavior of even those not vested with authority to make tangible employment decisions could conceivably result in vicarious liability under Title VII.

Historically, the federal courts have been far from uniform in their views regarding the circumstances under which employers may be held liable for sexually harassing conduct committed by their supervisory personnel. In June of 1998, however, the United States Supreme Court issued two decisions, Faragher v. City of Boca Raton , 524 U.S. 775 and Burlington Industries, Inc. v. Ellerth , 524 U.S. 742, in which the Court clarified the standard to be employed in determining employer liability for a sexually hostile work environment created by a supervisor. In Faragher and Ellerth, the Supreme Court ruled that employers are strictly liable for acts of sexual harassment perpetrated by their supervisory-level employees that are so egregious as to violate Title VII. Notably, the Court left open the definition of “supervisor.”

The Supreme Court also recognized an affirmative defense in the Faragher and Ellerth cases, which is available where an employer exercised reasonable care to prevent and promptly correct any sexually harassing behavior and where the complaining employee unreasonably failed to take advantage of the preventive or corrective opportunities provided by the employer, or to avoid harm otherwise. Thus, an employer who successfully asserts the Faragher-Ellerth affirmative defense may be able to avoid liability for the sexually harassing conduct of its supervisors. Both elements of the defense must be satisfied for the employer to avoid liability. The defense is not available, however, where the complaining employee alleges that he or she suffered a “tangible employment action,” such as a termination, reduction in pay or demotion, as a consequence of the alleged sexual harassment.

As distinguished from cases of supervisory harassment, an employer may not be held liable for a sexually hostile environment created by a victim's co-worker unless the employer knew or should have known about the sexual harassment and failed to take appropriate corrective action. Accordingly, in assessing the potential for employer liability it is important to determine, in the first instance, whether the alleged harasser is properly classified as a supervisor or a co-worker for Title VII purposes.

Against this backdrop, in Mack v. Otis Elevator Company , 326 F.3d 116 (2d Cir. 2003), the United States Court of Appeals for the Second Circuit recently altered the legal landscape by refining the test of supervisory status for purposes of imputing liability to employers in sexual harassment cases. Specifically, the court adopted a broader, more fact-specific inquiry that is bound to expand the universe of Title VII “supervisors,” thus increasing employers' exposure to liability for claims of sexual harassment.

In Mack, the plaintiff, an elevator mechanic for Otis Elevator Company (Otis), alleged that she was forced to endure a hostile work environment as a result of the sexually-charged acts and comments of the elevator “mechanic in charge” at her worksite. The district court ruled as a matter of law in favor of Otis, concluding that the plaintiff had failed to establish she had been harassed by an Otis “supervisor” and, therefore, Otis could not be held vicariously liable.

The Second Circuit reversed, ruling that the test utilized by the district court to determine supervisory status was too restrictive because it narrowly focused on whether the employee in question is empowered to take tangible employment actions with respect to his or her subordinates. The court reasoned that while the existence of a tangible employment action affects whether the Faragher-Ellerth affirmative defense is available to the employer, it does not affect the preliminary question of whether the employer may be held vicariously liable for the actions of the accused harasser. Accordingly, the court stated that the test of supervisory status does not turn solely on whether the employee has authority to make economic decisions regarding his or her subordinates. Instead, the question is whether “the authority given by the employer to the employee enabled or materially augmented the ability of the employee to create a hostile work environment for his subordinates.”

Applying the test to the facts of this case, the Mack court found the alleged harasser to be the plaintiff's supervisor for purposes of imputing Title VII liability to Otis. Specifically, the court observed that the alleged harasser directed the particulars of the plaintiff's workdays, including her work assignments, and he was the senior employee on the work site. As a result, the accused harasser possessed a special dominance over on-site employees, including the plaintiff, arising out of their remoteness from others with authority to exercise power on behalf of Otis. The court also observed there was no single superior to the alleged harasser at the work site whose continuing presence might have served to chill his coercive behavior toward other Otis employees working under his general direction, such as the plaintiff. The court concluded that Otis could, therefore, be held vicariously liable, subject to the Faragher-Ellerth affirmative defense since the plaintiff had suffered no tangible employment action.

The Second Circuit's rejection of the district court's test for determining whether an employee is a “supervisor” heightens a pre-existing division among the courts as to the scope of vicarious liability in sexual harassment cases. Other courts have deemed it critical for an employee to have economic or “hire/fire” power over the plaintiff in order to be considered a supervisor for Title VII purposes. Indeed, the test employed by the district court in Mack was derived from Parkins v. Civil Construction, Inc. , 163 F.3d 1027 (7th Cir. 1998), a case decided shortly after the Supreme Court issued the Faragher and Ellerth opinions. The Parkins court reasoned that the “essence of supervisory status is the authority to affect the terms and conditions of the victim's employment.” According to the Seventh Circuit, that authority “primarily consists of the power to hire, fire, demote, promote, transfer or discipline an employee.” Appealing in part because it established a simple, bright line test to be applied even in complex cases, most courts have adopted the Parkins test, including the Fourth, Sixth, Seventh and Eighth Circuits, as had district courts in the Second Circuit, prior to Mack.

In contrast with the Parkins approach is, as one district court has described it, a “more indulgent line of case authority” represented by lower court decisions in the Eleventh Circuit. This more exacting approach is probably best articulated in Dinkins v. Charoen Pokphand USA, Inc. , 133 F. Supp. 2d 1254, an Alabama district court case that rejected the Parkins test outright as being overly simplistic. According to the Dinkins court, an employee may be a supervisor if he or she is empowered to recommend tangible employment actions or his or her recommendations are given substantial weight by the final decision maker, or he or she is empowered to direct another employee's day to day work activities in a manner that may increase the employee's workload or assign additional or undesirable tasks. The Dinkins approach has also found some support outside of the Eleventh Circuit, including at least one district court in the Third Circuit, and now the Second Circuit in Mack. In addition, and perhaps most notably, the Equal Employment Opportunity Commission (EEOC) has adopted the Dinkins test for supervisory status in its enforcement guidelines. While courts are not obligated to follow the EEOC's guidelines, to the extent that they are persuasive the guidelines are generally given deference. For example, in the Mack case, the Second Circuit cited to the EEOC guidelines as support for its adoption of the Dinkins test.

One thing is sure: The less exacting and more subjective test adopted by the Second Circuit in Mack makes it tougher to predict whether a given employee will be deemed to be a supervisor for purposes of imputing Title VII liability to his or her employer. While the Parkins test, with its focus on the power to hire/fire and take other such tangible employment actions, comports with most employers' notion of supervisory status, the Dinkins and Mack tests will almost certainly expand the universe of employees who are potential sources of vicarious employer liability for sexual harassment to include some falling outside the traditional definition of a supervisor. This provides just one more reason for employers to train all of their employees regarding appropriate workplace behavior, since the inappropriate behavior of even those not vested with authority to make tangible employment decisions could conceivably result in vicarious liability under Title VII.