U.S. Supreme Court Imposes Significant Restrictions on Employee Claims

The U.S. Supreme Court released two important decisions this week that are likely to have a significant negative impact on employee claims. The extent of the damage done by the Court’s decision will be determined as the lower federal courts and the state courts interpret the decisions. However, on the face of things, the two decisions do not appear to have silver linings for employee’s bringing certain claims against their employers.

In Vance v. Ball State University, the Court addressed the question of who is a “supervisor” for purposes of vicarious liability under Title VII of the Civil Rights Act. Under Title VII, an employer can only be held liable for the discriminatory acts of one of its employees if that employee is a “supervisor,” a term that has been defined in different ways by various courts. The Equal Employment Opportunity Commission (“EEOC”) has defined “supervisor” as an employee who has authority over the victim employee “of sufficient magnitude so as to assist the harasser explicitly or implicitly in carrying out the harassment.” The Court, in a 5-4 decision written by Justice Alito, rejected that “nebulous definition” in favor of what the majority felt was a standard that could be “readily implied” by the lower courts. The decision held that a fellow employee is a “supervisor” for purposes of vicarious liability under Title VII only if that employee is empowered by the employer to take “tangible employment actions” against the victim. The Court adopted this definition in part to allow a trial court to determine whether the harasser was a “supervisor” as a matter of law. Therefore, the decision leaves the determination whether an employee is a supervisor in the hands of the trial judge and not those of the jury.

The Vance decision does not foreclose actions for harassment by a fellow employee who is not a “supervisor.” Victim employees may still bring an action based on the employer’s negligence in allowing the harassment to occur. The Court’s decision specifically indicated that a jury should be instructed that the harassing employee’s “nature and degree of authority” is an important factor in determining whether the employer was negligent. Nonetheless, negligence causes of action are generally more difficult to prove and offer the defendant employer more substantial defenses than other claims.

In discrimination claims based on the employee’s status (e.g., race, sex, religion, ethnicity), an employee may prove discrimination occurred by proving that the motivation to discriminate was one of the motivating factors in the employer’s decision to impose an adverse employment action against the victim employee. That standard has allowed for successful claims of discrimination even where the employer may have had some legitimate motives for the adverse action, but where a discriminatory motive was even a small factor in the decision. In University of Texas Southwestern Medical Center v. Nasser, the Court, again in a 5-4 decision this time written by Justice Kennedy, held that standard does not apply to retaliation claims. The case involved a claim by a the plaintiff that he was retaliated against as a result of his having made an earlier complaint against his supervisor alleging discrimination. The majority opinion reversed the lower court decisions, which had applied the standard from status-based discrimination claims and found for the plaintiff. The Court held that a traditional “but-for” causation standard must be applied in retaliation cases. As such, an employee must prove that the unlawful retaliation, the adverse employment action, “would not have occurred in the absence of the alleged wrongful action or actions of the employer.” The Court relied on the language of Title VII, which, in the case of a status-based claims, specifically states that discrimination need only be a “motivating factor”, even among other legitimate motivations, in the employer’s decision. In contrast, Title VII’s retaliation provision establishes liability only where the employer’s decision or acts occurred “because of” the retaliatory motive.

The Nasser decision will inevitably make retaliation claims more difficult. The more stringent “but-for” standard, if strictly applied, will burden plaintiffs with proving that an employer had no other legitimate bases for the adverse actions taken against the victim employee. The decision also makes it clear that a relatively simple legislative fix is available to Congress if it chooses to correct the inconsistency between the status-based claims and retaliation claims under Title VII.