Supreme Court Rules Employers May Be Held Liable For Construcive Discharge Resulting From Harassment

In an 8-1 decision, the United States Supreme Court in Pennsylvania State Police v. Suders held that employees may assert a claim for constructive discharge based on sexual harassment under Title VII, but also that, at least in some cases, an employer may assert the affirmative defense that the employee unreasonably failed to utilize internal reporting procedures prior to resigning from employment.  This decision resolves a split among the circuit courts over whether a constructive discharge -- in which the employee, not the employer, makes the decision to leave employment -- constitutes a "tangible employment action," thereby barring use of the affirmative defense.  In earlier cases (Faragher v. Boca Raton and Burlington Industries, Inc. v. Ellerth), the Court had held that an employer is strictly liable for supervisor harassment that culminates in a tangible employment action.

In its opinion, the Court took care to ensure that employers could be held strictly liable for constructive discharge only in those cases where it was certain that a supervisor's position aided him or her in committing the harassment, reasoning that such a rule would encourage employees to take advantage of internal grievance procedures and employers to take corrective measures.  In its opinion the Court held that "when an official act does not underlie the constructive discharge, the Ellerth and Faragher analysis calls for an extension of the affirmative defenses to the employer."  The Court made clear that actions by co-workers could not be deemed official action, but otherwise offered no clear definition of "official action."  It did provide certain examples of official action that might result in constructive discharge, however, including the following: 

• A humiliating demotion;  

• An extreme cut in pay; and  

• Transfer to a new department or position where the employee would face unbearable working conditions.

Unofficial supervisory conduct not aided by the supervisory relationship, however, including sexual advances, derogatory comments, and other acts not authorized by the Company, will not result in strict liability, even in the face of proof that a reasonable person would have resigned from employment.

For harassment to be actionable in the first instance, the offending behavior must be sufficiently severe or pervasive to alter the victim's employment conditions and creative abusive working conditions.  The Court was clear that when an employee claims the abuse resulted in constructive discharge, something more must be shown: working conditions so intolerable that a reasonable person would have felt compelled to resign.  In short, an employee may not resign and seek damages in response to any form of harassment; rather, constructive discharge requires a showing of something akin to "aggravated harassment" or, in the words of the Court, "harassment ratcheted up to the breaking point."

PA&C Policy Advisor:

To assert the affirmative defense discussed in this case, an employer must have a policy against harassment and discrimination and complaint procedure that is readily accessible and effective.  The Court's decision emphasized the importance of having a policy and an appropriate complaint procedure.  The policy should be included in the Company's employee handbook, emphasized to new hires, and republished at least annually to all employees.  The policy should provide for a complaint procedure, and employees should be allowed to make reports to individuals other than an allegedly offending supervisor.  (Large establishments may want to consider limiting the list of individuals to whom such a report may be made, however, to ensure that each such person is appropriately trained and experienced.)  Employees should be reassured that they will suffer no retaliation for making such a report.

Employers are advised to conduct annual employee training on their discrimination and harassment policies, and the appropriate action to be taken by any employee who believes he or she is being subjected to harassment.  Remember that "harassment" includes not just sexual harassment (which need not be sexual in nature), but also any harassment based on protected status such as race, color, national origin, religion, age, and disability.  Supervisors should receive separate training regarding their obligations under the policy and the correct response to any reports of harassment or observation of inappropriate conduct.  Employers should be clear that no harassment will be tolerated, so that employees are likely to report, and supervisors are likely to stop, misconduct long before it can become severe or pervasive enough to constitute a legal wrong.

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