Risk Management and Harassment

One of the key areas of risk management in Title VII involves the handling of sexual and other forms of harassment. In 1998, the Supreme Court decided Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), involving a supervisor and victim away from the office on a business trip and Farragher v. Boca Raton, 524 U.S. 775 (1998), a case about  lifeguards who were harassed at a beach remote from the city employer. The key issue in the case was when employers would be held vicariously liable for the acts of their workers. The Court found employers responsible any time a  “supervisor” subjects plaintiff to “a tangible employment action, such as discharge, demotion, or undesirable reassignment.” Faragher, 524 U.S. at 808. But when there is no tangible employment action, the employer can raise an affirmative defense. Finally, when a co-worker or customer is involved with harassment, an employer may still be liable, but only for negligence. See Vance v. Ball State University, 570 U.S. 421, 427 (2013) (“[A]n employer is directly liable for an employee’s unlawful harassment if the employer was negligent with respect to the offensive behavior.”). 

In this section, we will study the Farragher-Ellerth defense and the incentives it creates for employers and employees.