What Vance v. Ball State Tells Us About Employment Discrimination

By Richard B. Lapp and Camille A. Olson

The United States Supreme Court has made it more difficult for workers to sue their employers for alleged workplace harassment. The Court’s 5-4 decision last week in Vance v. Ball State narrowed the definition of the term “supervisor,” ruling against a catering assistant employed at an Indiana university who claimed she had been discriminated against because of her race.

The decision in Vance upholds a June 2011 ruling by the 7th Circuit Court of Appeals in favor of Ball State University, but the impact of the decision extends well beyond the University’s bucolic setting of Muncie, Indiana. The Vance ruling, for the first time in the history of the high court, defines the term “supervisor” for the purposes of employment discrimination and harassment litigation.

What’s in a Title? -- Why Vance Matters

Most of us who have jobs have supervisors -- so why do we need the Supreme Court to give us a definition of a word we encounter every day? The answer dates back to 1998, when two cases, Faragher v. Boca Raton and Burlington Industries, Inc. v. Ellerth, set forth important legal standards that have since shaped how would-be litigants on both sides of potential harassment disputes approach Title VII litigation.

• Faragher and Ellerth established that employers could be held liable when a “tangible employment action,” such as termination or demotion, resulted from the discriminatory conduct of supervisors.

• On the flip side, the ruling also provided relief for employers by way of a potential affirmative defense based on a reasonable care theory; employers may avoid liability even when a supervisor’s discriminatory behavior resulted in harmful employment actions if they can show (i) that reasonable care was taken to prevent or promptly correct offending behavior from supervisors; and (ii) that the employee unreasonable failed to take advantage of prevetative and corrective opportunities provided by the employer.

• Finally, Faragher and Ellerth established a key distinction between offending behavior by a supervisor and similar behavior by a co-worker. While the defending employer retained the burden of proof in establishing reasonable care when supervisors engage in discriminatory conduct, the duty to prove employer negligence in correcting or remedying the offensive behavior by co-workers fell to the suing employee.

In effect, the Court’s 1998 decisions created important precedent where the test for employer liability hinges upon the employment status of the alleged harasser: the Faragher/Ellerth Court reasoned that supervisors were extensions of the company’s management and that supervisor behavior was a manifestation of company policy, qualities that did not extend to co-workers. As the Vance Court would point out 15 years later, the Faragher/Ellerth lent significance to the distinction between supervisor and co-worker, but without providing a clear definition for the term “supervisor.”

Following the 1998 decision, the U.S. Equal Employment Opportunity Commission (EEOC) offered guidance, suggesting that “supervisor” status is synonymous with the ability to exercise "significant direction over another's daily work." This fairly loose definition, subsequently adopted by some circuit courts of appeals, contributed to the rising number of harassment-by-supervisor cases brought under Title VII. With the majority decision in Vance last week, the Supreme Court expressly discarded this open-ended definition, opting instead to draw a bright line around the term. The Vance ruling holds that true supervisors are management-level employees who “are empowered” to take “tangible employment actions” against lower-level employees, “such as” having the authority to hire and fire.

The Impact of Vance -- What It Means for Employers

Through this landmark decision, the high court sought to provide a definition that “can be readily applied” by courts and litigants; the Supreme Court’s intent here was to simplify and streamline and encourage parties to resolve disputes without resorting to courtroom battles. The Court explained that the clarified definition of “supervisors” would allow parties to discern “even before litigation is commenced whether an alleged harasser was a supervisor,” positioning parties “to assess the strength of a case and to explore the possibility of resolving the dispute” prior to litigation while preventing jurors from undertaking “nebulous,” “murky,” and necessarily individualized examinations of the alleged harasser’s daily duties on a case-by-case basis.

Although the decision marks a win for employers by both clarifying and tightening the definition of “supervisor,” employers should guard against any assumptions that Vance makes them immune to legal action for discriminatory workplace environments. Companies should remain diligent in efforts to create and foster a positive workplace; to that end, employers should:

• Review and revise job descriptions and performance expectations for management-level employees to clarify supervisory responsibilities.

• Undertake prompt investigations of any allegations of harassment, discrimination or retaliation to demonstrate reasonable care in addressing or correcting inappropriate conduct.

• Institute periodic audits to ensure anti-harassment, anti-discrimination and anti-retaliation policies are in compliance with current law.

• Design and administer EEO training for all employees—particularly those in management-level positions—to communicate updated policies.

Ultimately, what remains unchanged under Vance is the employer’s responsibility to guard against discriminatory, harassing behavior in the workplace -- and remain equally diligent in documentation of such efforts.

Richard Lapp is an equity partner at Seyfarth Shaw LLP; his practice focuses on defense-side representation of national employers in complex class and collection actions in all areas of labor and employment law, with particular emphasis on high-risk, high-profile litigation. Camille Olson is an equity partner and the National Chair of the Complex Litigation Department at Seyfarth Shaw LLP. She often represents national companies in challenges to employment and operational practices, internal investigations of highly sensitive matters, and high-consequence litigation through trial and appellate phases.