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July 12, 2013

California Public Employers Unlikely to Benefit From Two Recent Rulings by the U.S. Supreme Court


The United States Supreme Court recently handed down two employer-friendly decisions that may make it more difficult for employees to sue employers for harassment and retaliation — at least with respect to claims brought under Title VII. In the first case, Vance v. Ball State University, the Court narrowed the definition of “supervisor” for purposes of vicarious liability in Title VII harassment cases; and, in the second case, University of Texas Southwestern Medical Center v. Nassar, the Court adopted a more stringent standard of proof for employees to meet when proving a Title VII retaliation claim. Unfortunately, these holdings may have limited applicability to California employers under California law.

Definition of Supervisor is Narrowly Defined in Title VII Harassment Cases

In Vance v. Ball State University, the Court resolved a split among the Federal Circuit Courts over how to define a supervisor for Title VII harassment liability. The Court held that a person is a supervisor only if he or she can “take tangible employment actions against the victim, “such as hiring or firing and promoting and demoting.” The ruling further clarifies that merely overseeing and directing the alleged plaintiff’s daily work is insufficient to deem a person a supervisor.

In Vance, the Court rejected the more open-ended “supervisor” standard advocated by the Equal Employment Opportunity Commission (“EEOC”) in its Enforcement Guidance definition and the standard that had been adopted in the Second, Fourth, and Ninth Circuits. This standard tied the supervisor status to the ability to exercise significant direction over another’s daily work.  Instead, the Court adopted the more narrow definition favored in the First, Seventh, and Eighth Circuits that concluded a “supervisor” is limited to those employees who have the power to “hire, fire, demote, promote, transfer, or discipline” the employee.

Under Title VII, an employer’s liability for workplace harassment depends on whether the alleged harasser is a supervisor or a co-worker. An employer is strictly liable for a supervisor’s harassment if it results in a tangible employment action, and the employer is presumed liable for other alleged supervisor harassment unless it can prove that (1) the employer exercised reasonable care to prevent and promptly correct any harassing behavior and (2) the plaintiff unreasonably failed to take advantage of preventative or corrective remedies that the employer provided.  If the harasser is a co-worker, an employer is only liable if the employer was negligent in controlling its working conditions.

Vance is significant in that it gives employers a clearer definition in regards to which employees are supervisors in Title VII harassment cases. The narrow standard will prevent costly litigation battles over the definition of who is actually a “supervisor” and will allow Courts to end these disputes as a matter of law before trial.  The EEOC will also be forced to issue new guidance on the definition of supervisor that is compliant with the Vance decision.

While this decision is extremely important to employers with respect to Title VII harassment claims, the Court’s decision in Vance likely does not have any impact on how California courts will interpret the term “supervisor” in harassment claims made by employees under California’s Fair Employment and Housing Act (“FEHA”). Under FEHA, the term “supervisor” is broadly defined to include persons who have the “responsibility to direct” employees.  Since FEHA’s definition of “supervisor” is more lenient than the definition accepted in Vance, California employees will likely continue to bring harassment claims against employers under the FEHA instead of Title VII.

Nevertheless, Vance also serves as a friendly reminder for all employers to review job descriptions to make sure any and all employees defined as a “supervisor” receive proper management training.  Employers should also review their anti-harassment policies and in-house complaint procedures to make sure they are compliant with federal and state law.

Plaintiff Must Show That Protected Activity Was the But-For Cause of an Alleged Adverse Action in Title VII Retaliation Cases

In University of Texas Southwestern Medical Center v. Nassar, the Court resolved a dispute regarding the proper causation standard (i.e. the employee’s burden of proof) for Title VII retaliation claims. The Court held that an employee making a retaliation claim under Title VII must establish that his or her protected activity was a but-for cause of the alleged adverse action by the employer. In other words, a plaintiff bringing a Title VII retaliation claim must demonstrate that he or she would not have suffered an adverse employment action but for his or her protected activity.

In Nassar, the Court refused to extend the statutory burden of proof in a Title VII discrimination claim, where an employee need only show that improper motive was a motivating factor for the adverse employment action, to a Title VII retaliation case. Concerned in part that adopting the a lesser standard would result in an increase of frivolous retaliation claims, the Court adopted the tort-based but for causation standard, which requires the plaintiff to show “that the harm would not have occurred” but for the defendant’s conduct. Under this standard, an employee in a Title VII retaliation claim must prove that retaliation for the employee engaging in protected activity was the "but-for" cause of the challenged employment action, not merely a "motivating factor" for the employer's action.

Nassar is significant because it differentiates between the standards of proof in a Title VII discrimination claim and a Title VII retaliation claim — claims that were traditionally treated as having the same burden of proof. Now, under Nassar, it is clear that to prove a discrimination claim, employees must meet a lower standard that discriminatory intent was one of the motivating factors in the adverse employment action; whereas, to prove a retaliation claim, employees must meet the heightened “but for” causation standard and show that if it were not for the employee's protected activity, the adverse employment action would not have occurred.

With a heightened burden of proof, it will be easier for employers to defeat an employee’s retaliation claim under Title VII because an employer merely has to show that it would have acted in the same manner even if it had not taken into consideration the employee’s protected activity. In addition, this heightened causation standard may cause a reduction in the number of Title VII retaliation claims filed.

Like with Vance, Nassar is a federal decision interpreting federal law; therefore, its impact on FEHA-based retaliation claims is currently unknown as federal court decisions (even decisions by the United States Supreme Court) are referenced to aid in interpreting California law. Therefore, California employers may see an increase of FEHA-based retaliation claims as plaintiff’s attorneys attempt to convince California courts that a lesser standard applies under California law.

This does not, however, mean that Nassar is insignificant. The anti-retaliation provisions in Title VII and FEHA are very similar and, the California Supreme Court has not specifically ruled on this issue.   Only time will tell how California courts will address this issue. Until such time, California employers should continue to consult with legal counsel before terminating an employee who has recently engaged in protected activity.

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