Editor’s Note: Kyle R. Still is a member of the Labor and Employment Practice Group of Ward and Smith, P.A.

The United States Supreme Court generally reserves the last week of June, the end of the Court’s annual term, for handing down its most impacting (and sometimes controversial) decisions. For instance, in June 2012, the Supreme Court issued its opinion upholding the national healthcare provisions of the Patient Protection and Affordable Care Act. In June 2013, the Court issued important opinions regarding affirmative action and gay marriage.

Although it did not garner similar levels of national media attention, the Supreme Court also issued during this term’s last week two other important decisions related to employer’s rights and obligations under Title VII of the Civil Rights Act of 1964, commonly referred to simply as “Title VII.” Title VII prohibits employment discrimination and harassment based on an employee’s race, color, sex, religion, or national origin. It also prohibits employers from retaliating against employees for making a complaint related to these protections.

One of the Supreme Court’s recent opinions, Vance v. Ball State University, addressed who qualified as a supervisor in harassment cases. The other decision, University of Texas Southwest Medical Center v. Nassar, applied an arguably more difficult standard for employees to meet in order to be successful in retaliation claims. This article will address both opinions.

Who is a Supervisor Under Vance v. Ball State University

Maetta Vance was an African-American catering assistant at Ball State University’s banquet and catering division. Ms. Vance felt that Saundra Davis, another catering employee, had harassed her and retaliated against her as a result of her race. Ms. Vance claimed that Ms. Davis was her supervisor because Ms. Davis generally gave Ms. Vance assignments and tasks to do. That being said, Ball State University claimed that Ms. Davis was not a supervisor because she had no authority to hire, fire, demote, promote, or otherwise discipline Ms. Vance.

The issue of whether Ms. Davis was actually Ms. Vance’s supervisor was critical in resolving Ms. Vance’s racial harassment claim. Because supervisors are agents who act on behalf of the employer, courts use different standards to evaluate harassment claims depending on whether or not the alleged harasser is a supervisor.

If the harassed employee suffers a tangible employment action (such as termination, demotion, or a pay cut), courts impose vicarious and strict liability against employers for harassment caused by supervisors. If no tangible employment action occurs, employers who meet certain good faith requirements can utilize the so-called “Faragher-Ellerth Defense,” named for the Supreme Court cases that established it, to shield against claims of supervisory harassment. However, that defense requires the employer to prove that:

• No tangible adverse employment action was taken against the employee (for example, discharge, demotion, or undesirable reassignment);

• The employer exercised reasonable care to prevent and promptly correct the harassing behavior. For example, the employer had established anti-harassment policies demonstrating reasonable care to prevent harassing behavior; and,

• The employee unreasonably failed to take advantage of preventative or corrective opportunities provided by the employer or to otherwise avoid harm (for example, by not taking advantage of reporting procedures outlined in an anti-harassment policy).

These exacting standards, however, do not apply to coworker-on-coworker harassment. In the coworker situation, courts apply a simple negligence standard – that is, a court will impose liability upon the employer only if the employer knew (or should have known) about the harassment or if the employer learned of the harassing behavior, but negligently failed to correct it. Needless to say, the obligations of employers, while significant regardless, are greater in the cases of supervisory harassment.

For decades, the federal courts struggled with finding the appropriate test to determine exactly which employees qualify as supervisors. Different federal appellate courts came to different conclusions on the issue. For instance, some appellate courts applied a strict definition, determining that employees qualified as supervisors only if they could take tangible employment actions such as hiring, firing, promoting, demoting, transferring, or disciplining the employee alleging harassment. Other federal courts, including the Fourth Circuit, which has jurisdiction over federal cases arising in North Carolina, took a broader approach. They defined a supervisor as someone who can direct another employee’s day-to-day work activities.

The Supreme Court reviewed Ms. Vance’s case in order to reconcile the differing tests for supervisor status among the circuits and adopted the narrow view of who is a supervisor. The Supreme Court determined that the status of supervisor is limited to those individuals who can actually hire, fire, promote, demote, transfer, or discipline another employee. Justice Samuel Alito, writing for a 5-4 majority, noted that this bright line test would make it easier for employers to analyze their obligations. It also will be easier for judges and juries to apply.

Employers should consider the Court’s ruling in Vance when evaluating their next complaint of harassment. If the alleged harasser has the authority to hire, fire, promote, demote, transfer, or discipline the employee who alleges harassment, the employer must treat the alleged harasser as a supervisor and analyze the situation accordingly. If the alleged harasser is a coworker, the employer should promptly and thoroughly investigate the situation, taking appropriate corrective action to correct any offensive behavior.

Retaliation Protection Under Nassar

Title VII not only protects employees from employment discrimination and harassment. It also protects employees who have engaged in a Title VII protected activity from retaliation. For example, if an employee makes a good faith claim of workplace sexual harassment, Title VII protects the employee from being fired, demoted, or similarly impacted as a result of the complaint.

For years, courts debated the scope of this retaliation protection. For example, some courts took a strict approach, holding that employees could claim protection from retaliation only if their previous protected activity was the “but for” cause of the employer’s alleged retaliatory activity. Using the example above, the employee would only be protected if the employer’s sole reason for terminating the employee was the employee’s complaint of harassment. If the employer had other legitimate reasons for terminating the employee, the employee could not successfully prove retaliation in court.

Other courts took a more open-ended approach. These courts inquired as to whether the employee’s protected activity under Title VII was simply one of the motivating factors in the employer’s alleged retaliatory conduct. The Fifth Circuit applied this approach in University of Texas Southwest Medical Center v. Nassar. In that case, Naiel Nassar, a former faculty member of the University of Texas Southwest Medical Center, alleged that the university interfered with her job prospects at another facility in retaliation for her previous complaints about a supervisor’s alleged discriminatory actions against Muslims and Arabs. Ms. Nasser won at the trial court, and the Fifth Circuit affirmed that judgment on appeal.

The Supreme Court, however, reversed the decision. Justice Anthony Kennedy, writing for yet another 5-4 majority, held that the “motivating factor” or “mixed motive” analysis allowed for other forms of discrimination did not apply to retaliation claims. Instead, an employee attempting to prove retaliation must show that the employee’s protected activity was the “but for” cause of the retaliatory action. The Supreme Court majority based its decision on the “text, structure, and history” of Title VII.

Conclusion

Both Vance and Nassar give clearer guidance to employers faced with harassment or retaliation claims. Both cases give bright line tests that should be easier for employers to apply to real life situations in the workplace. For harassment claims, Vance clarifies that supervisors are limited to employees who have the authority to hire, fire, promote, demote, transfer, or discipline another employee. Employers should be able to determine more easily which harassment analysis to apply.

Nassar provides similar clarity to retaliation claims, holding that employees pursuing such claims must prove that their protected activity was the “but for” cause for the alleged retaliation. Nassar should assist employers who must deal with unrelated disciplinary issues regarding an employee who has previously made a complaint under the federal discrimination statutes.

© 2013, Ward and Smith, P.A.

Ward and Smith, P.A. provides a multi-specialty approach to the representation of technology companies and their officers, directors, employees, and investors. Kyle R. Still practices in the Labor and Employment Practice Group where he represents clients in a wide range of employment litigation and regulatory and legislative matters. Comments or questions may be sent to ks@wardandsmith.com.

This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.