You’re Not The Boss Of Me, Or Are You?

June 26, 2013 at 8:27 am Leave a comment

imagesThe Supreme Court case this term with the greatest impact on credit unions was decided a couple of days ago.  While it won’t change much of your day-to-day approach to preventing workplace harassment, it does make it more difficult for employees to successfully sue you.

Under Title 7, which bans discrimination on the basis of race, sex, religion, disability or national origin, no one disputes that employers are vicariously liable for the actions of their supervisors.  This means, for example, that where a supervisor gives consistently poor performance reviews out of prejudice against African Americans, for example, the employer can’t escape liability by arguing that it didn’t know what was happening and that such conduct is contrary to company policy.

But when the harassment involves someone who isn’t a supervisor, a different standard applies.  In this situation, an employer will be responsible for work place discrimination only to the extent that it acted negligently in not recognizing or responding to the workplace’s hostile environment.

In Vance v. Ball State University, the Supreme Court decided a case involving an African-American food service worker who did preparation work for the University’s catering service.  She complained that a woman who acted as her supervisor constantly harassed her because of her race.  For example, the putative supervisor would use racial epithets, menacingly stare at her, and occasionally block her entrance into the elevators when she was trying to deliver food.

The University was aware of these concerns, investigated them and even tried to resolve the situation with the alleged victim.  In 2006, Miss Vance started a law suit alleging discrimination under Title 7.  Two lower courts dismissed the case concluding that the alleged harasser was not a supervisor of the employee in question.  Since the University had effective procedures in place and aggressively addressed the complaints, it was not negligent in addressing this workplace situation.  And, since the harasser was not a supervisor, the employer could not be held directly responsible for the alleged misconduct.

So, the Supreme Court had to decide who exactly should be considered a supervisor.  The answer to this question is going to be easier than its application.  In a 5-4 decision, the Supreme Court held that an individual qualifies as a supervisor only if the person has the power to hire, fire, demote, transfer or discipline an employee.  If you think this is restrictive, you’re right.  It means that someone who has the authority to delegate work assignments to you and generally make your life a living hell if they want still doesn’t qualify as a supervisor, even if they manage your day-to-day work responsibilities.  The court’s holding reverses both the Equal Employment Opportunity Commission’s guidance on the issue and the majority of federal circuit court rulings including the Second Circuit, which has jurisdiction over New York.

Under the EEOC’s approach, which is the approach favored by the dissenting opinion in this case, a supervisor is not only an individual who has the authority to make tangible employment decisions, but also includes an individual who has authority to direct an employee’s daily activities.

A few quick thoughts.  The decision is a very significant one but it doesn’t mean that Mad Men can break out the Fedoras and the Scotch and start harassing their favorite secretaries.  The decision still makes employers responsible for a hostile work environment.  However, it is in everyone’s interest to clarify on those employee charts precisely who has responsibility for hiring, firing, promoting and disciplining people in the office.

The majority opinion argues that its rationale will promote clarity in an area of the law that badly needs it.  I doubt it.  There are plenty of supervisors out there whose opinions as to who should be hired, fired or disciplined carry a tremendous amount of weight, but who don’t make ultimate hiring and firing decisions. The Court’s decision will spawn litigation as to when a person exercises enough day-to-day influence to qualify as a supervisor.  These are fact sensitive inquiries and there is no way around it.

Finally, you will be hearing about this case for years to come as both Congress and probably future Presidential candidates  will use it to demonstrate their support for women or defend it as an example of a Court properly putting the brakes on regulatory activism.  No matter what side you’re on, Congress is free to amend Title VII and states such as New York are free to establish their own standards for supervisor liability under state law.  I’ll bet you right now that New York is one of the first states to respond to this decision by doing so.

Entry filed under: HR, Legal Watch, New York State. Tags: , , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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