The US Supreme Court in the case of Vance v. Ball State University issued on June 24, 2013 decided the question of who qualifies as a “supervisor” in a Title VII claim of harassment based on race.  The decision has been anxiously awaited because it impacts the standard by which an employer’s liability will be measured.

Under Title VII, a company is strictly liable for the actions of a supervisor which result in a “tangible employment action.” Such actions include hiring, firing, failing to promote, discipline, demotion or effecting significant changes in working conditions or benefits. Companies can also be held liable for harassment by a supervisor when a tangible employment action does not result if the supervisor has created a hostile work environment and the employer is unable to establish an affirmative defense. An employer establishes such a defense by showing 1) that it exercised reasonable care to prevent and promptly correct any harassing behavior or 2) that the plaintiff unreasonably failed to take advantage of any preventative or corrective opportunities provided by the company.

Where the alleged harasser is simply a coworker, however, the employer is liable only if it was negligent in controlling the employee’s working conditions.  If, for example, an employer failed to respond appropriately to a complaint of harassment by a co-worker, liability might result.

In hearing the Vance case the Court took the opportunity to resolve a conflict  among the circuit courts of appeals as to the definition of “supervisor.”   In a 5-4 decision authored by Justice Alito, the Court adopted the more conservative of the approaches and held that an employer is vicariously liable for an employee’s harassment  “only when the employer has empowered that employee to take tangible employment actions against the victim.”  In doing so, the court rejected the definition promoted by the Equal Employment Opportunity Commission (“EEOC”) which definition had previously been relied on by several circuit courts.

The matter originated with the claim by Maetta Vance, an African-American employee of Ball State University, alleging that she was the victim of discrimination by a fellow food service worker, Saundra Davis.  The parties agreed that Davis did not have the power to hire, fire, demote, promote, transfer or discipline Vance although they largely disagreed about the extent of power Davis otherwise had over Vance.  Under the definition adopted by the Court, Davis was not a supervisor, and Vance’s action against her employer was dismissed.

The practical impact of this decision is quite favorable to employers for two reasons.  First, it adopts a more limited definition of supervisor narrowing the scope of employees for whose conduct a company might be liable even if it is unaware of their specific actions.  Second, it increases the opportunity for lawsuits to be decided early on by summary judgment since there is far less subjectivity in the determination.  Employers in the First Circuit (i.e. New Hampshire and Massachusetts) will see less impact from this decision since this circuit has long been in the camp now joined by the Supreme Court.  Cases like this, however, are always a reminder to employers about the need to train supervisors and managers (and indeed all employees) about anti-discrimination and anti-harassment laws and appropriate workplace behavior.  Adequate training and clear policies are by far the best shield from liability.