California has created additional protections for unpaid interns and created additional requirements for sexual harassment prevention training.  In addition, California has mandated a new requirement for most employers to provide their employees with paid sick leave.  This new sick-leave requirement will go into effect next summer on July 1, 2015. For a more detailed description of these changes, click here to review the Act Now Advisory written by our colleagues Jennifer L. Nutter and Marisa Ratinoff.

 

By Julie Saker Schlegel

In a 5-4 decision the dissent termed “decidedly employer-friendly,” the Supreme Court held on June 24, 2013 that only employees who have been empowered by the employer to take tangible employment actions against a harassment victim constitute “supervisors” for the purpose of vicarious liability under Title VII.  Per the holding in Vance v. Ball State University, employees who merely direct the work activities of others, but who lack the authority to take tangible employment actions, will no longer be considered supervisors under Title VII. 

Under long-standing precedent (Faragher and Ellerth), whether an employer can be found vicariously liable for harassment perpetrated by its employees is dependent on whether the harasser is a supervisor or merely a co-worker of the victim:

  • For co-worker harassment, the employer will only be found liable if it was negligent—that is, if it knew or should have known of the harassment and failed to take corrective action;
  • For supervisor harassment where the supervisor takes a tangible employment action against the victim (such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits), the employer will be considered strictly liable; and
  • For supervisor harassment where the supervisor does not take a tangible employment action against the victim, the employer may establish an affirmative defense to liability if it can prove that: (1) it exercised reasonable care to prevent and correct any harassing behavior; and (2) the victim unreasonably failed to take advantage of the preventive or corrective opportunities offered by the employer.

Despite this framework that is highly dependent on the status of the harasser, however, the Court had never definitively ruled on who constitutes a supervisor, until now.

As a consequence of the Court’s truncated conception of supervisory authority, the Faragher and Ellerth framework has shifted in a decidedly employer-friendly direction.”
—Justice Ginsburg, dissenting

In reaching this decision, the Court emphatically rejected the EEOC’s definition of supervisor, which had included both those who have the authority to take or recommend tangible employment actions and those who direct the daily work activities of others.  The Court noted that a significant advantage of its new definition is that supervisory status can now be readily determined early in the case, and will generally be capable of resolution on summary judgment.  Alternatively, if the issue should reach trial, the new definition will be easier for juries to apply.

While the new definition of supervisor should benefit employers, by leading to more cases being decided under the more lenient “negligence” standard, the Court’s opinion contained a few caveats.  While employees who merely direct the daily work activities of others will no longer be considered supervisors, the Court noted that the nature and degree of authority wielded by the harasser is an important factor to be considered in determining whether the employer was negligent in controlling workplace harassment.  Further, an employer who attempts to evade liability by concentrating all decision-making authority in a few individuals, who in turn rely upon the recommendations of others who actually work directly with the affected employees, may be found to have effectively delegated the power to take tangible employment actions to those employees on whose recommendations it relies.  Accordingly, while the new definition of supervisor has been distinctly narrowed, the Court has allowed some room for it to be expanded in particular cases, should the situation warrant.

In accordance with this decision, employers should ensure that their job descriptions clearly define which employees have the authority to take tangible employment actions against others, keeping in mind that employees who make recommendations regarding such employment actions may also be deemed supervisors in certain situations.

By Amy Messigian

Last month, the California Court of Appeal ruled that a former employee of Forever 21 must try her claims against the retailer in arbitration, enforcing the company’s employment arbitration policy and reversing a lower court decision finding the agreement unconscionable under California law.  The plaintiff, Maribel Baltazar, alleged that she had been discriminated against by the retailer due to her race and sexually harassed by a supervisor and coworker.  She filed a complaint against Forever 21 and several of its employees in the Los Angeles Superior Court and the retailer moved to compel Baltazar to arbitration.

Reversing the lower court, the Court of Appeal found that Baltazar had been given the opportunity to review the arbitration agreement, which was contained in her employment contract, and that the contract’s provision allowing the parties to seek injunctive relief in court did not unduly favor Forever 21.  The panel noted that six of the claims asserted in Baltazar’s suit were brought under the Fair Employment and Housing Act (“FEHA”), which authorizes injunctive relief, and that there was nothing to suggest that the employer would be more likely than the employee to seek provisional remedies.

Injunctive relief provisions have sounded the death knell for many employment arbitration agreements in California of late, with multiple appellate decisions citing an injunctive remedy as unduly favoring the employer.  Ostensibly, these courts are inclined to believe that an employer is more likely than an employee to seek injunctive relief.  The Baltazar court felt otherwise. Until this issue is considered by the California Supreme Court, it remains likely that the luck of the draw will ultimately decide whether an arbitration agreement is enforceable if it contains a provisional remedies provision that allows parties to seek an injunction in court.