HR Management & Compliance

New Jersey Harassment Case Ruling Leads to New Definition of ‘Supervisor’ and Other Surprises

The U.S. Court of Appeals for the 3rd Circuit—which covers Delaware, New Jersey, and Pennsylvania—recently broadened the definition of “supervisor” for purposes of Title VII of the Civil Rights Act of 1964 and the New Jersey Law Against Discrimination (NJLAD), in an expression of the court’s opinion that went beyond the facts before it. The court also rejected the application of the McDonnell Douglas burden-shifting framework to hostile work environment claims.

Sexual Harassment

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In November 2011, the Atlantic City Board of Education hired “Stacy” as a substitute custodian. The board didn’t guarantee work, but she could work when a full-time custodian wasn’t available at any number of schools. In October 2012, “Mike,” the custodial foreman at New York Avenue School, began to assign Stacy regular work. The board empowered Mike to determine who worked at the school, and he was the sole supervisor of Stacy’s work there.

In November and December 2012, Mike gave Stacy regular assignments. According to Stacy, during this time period, he also made sexual comments, promised more work in exchange for sexual favors, touched her inappropriately at the workplace, and, on one occasion, called her into his office, where she found him sitting unclothed on his office chair. After she rebuffed him in January 2013, he allegedly scaled back her hours.

On February 4, 2013, Stacy complained to the board that Mike had been sexually harassing her. The board’s HR department investigated the complaint but didn’t reach a conclusion about her allegations. She then filed a discrimination charge with the Equal Employment Opportunity Commission (EEOC). The board retained an outside law firm to investigate, and the firm found no sexual harassment or discrimination.

3rd Circuit Reverses District Court, Revives Stacy’s Claims

Stacy sued the board for sexual harassment and retaliation under Title VII and the NJLAD and proceeded under a hostile work environment theory. The district court ruled in the board’s favor before the case proceeded to trial on three grounds:

  • First, the court found that the board took prompt action upon receipt of Stacy’s complaint and therefore was entitled to the Ellerth/Faragher affirmative defense, which is available to shield employers from liability when an employee complains and the employer takes steps to prevent or correct the complained of conduct.
  • Second, the court found that Mike wasn’t Stacy’s supervisor, so the board couldn’t be liable for his actions.
  • Third, the court found that Stacy didn’t show she suffered a tangible employment action.

The 3rd Circuit reversed the district court, finding Stacy had demonstrated the elements for a hostile work environment claim sufficient to take the issue to trial (severe or pervasive intentional sex discrimination that detrimentally affected her and would detrimentally affect a reasonable person, and the existence of liability on the board’s part for Mike’s acts). The 3rd Circuit primarily focused on whether the board could be found liable, which turned on whether Mike was Stacy’s supervisor.

The 3rd Circuit found that the board authorized Mike to decide whether to summon Stacy to work, which directly controlled or eliminated her take-home pay. The board conceded that Mike was acting in a supervisory capacity while Stacy worked at the school, and no one else was identified as having authority over her at that school. The court thus found that Mike was Stacy’s supervisor and that the board could be found liable for his conduct.

The 3rd Circuit then looked at the Ellerth/Faragher affirmative defense, which is available only when the employee did not experience a tangible employment action. A “tangible employment action” is a decision that can “inflict direct economic harm” by “causing a significant change in benefits.” The court found that Mike might have caused a “tangible employment action” by withholding or eliminating Stacy’s hours after she rejected his sexual advances.

The 3rd Circuit sent the case back to the district court to determine whether Mike did in fact cause a “tangible employment action” after Stacy’s rejection and thus whether the board could invoke the Ellerth/Faragher defense.

In a footnote, the 3rd Circuit noted that it has never addressed whether the McDonnell Douglas burden-shifting framework could be applied to hostile work environment sexual harassment claims.

In brief, McDonnell Douglas provides that upon showing a prima facie (or initial) case of discrimination, the burden shifts to the employer to articulate a legitimate nondiscriminatory motive for its conduct. The burden then shifts back to the employee to prove that the motive is pretextual (an excuse).

Siding with other circuits (even though the issue wasn’t directly before the court), the 3rd Circuit stated that there can be no legitimate justification for a hostile work environment and thus there was no need to apply a burden-shifting framework.

Bottom Line

This case demonstrates why sexual harassment training is critical for all employees. The 3rd Circuit’s amplification of the term “supervisor” could result in a wide net cast over employees who assign hours and function in a “supervisory capacity” even though their employer doesn’t consider them to be “supervisors” within the organization.

This case also quietly creates a case against the McDonnell Douglas burden-shifting framework in sexual harassment actions in the 3rd Circuit, which could eliminate an avenue of defense against circumstantial evidence of hostile work environment sexual harassment.

Sylvia-Rebecca Gutierrez is an associate at Day Pitney, LLP and contributor to New Jersey Employment Law Letter.

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