On March 24, 2017, the U.S. Court of Appeals for the Seventh Circuit ruled that the family of a woman murdered by her Home Depot supervisor at a family event could proceed against her former employer(s) on a theory of negligent supervision, hiring, and retention. In so holding, the Seventh Circuit adopted a broad and novel view of employers’ duty to control managers who engage in criminal activity off the employer’s premises and outside the scope of their employment by abusing their supervisory authority. Continue Reading Seventh Circuit: Negligence Lawsuit May Proceed Against Employer Regarding Supervisor’s Off-Site Murder Of Female Subordinate

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.

Summer internships provide employers the valuable opportunity to evaluate individuals  for potential future employment positions without having to pay wages.   The internship process also has been a rewarding  way for students to gain real life experience in a field of their interest.  A win- win for everyone, right?   Not so fast – certain requirements must be met to reap the benefits of a valid internship program.

The Fair Labor Standards Act (FLSA) defines the term “employ” broadly as including to “suffer or permit to work.”   Individuals considered employed must be compensated for services performed for the employer, including payment of minimum wage and overtime.

Interns are not employees and not subject to those FLSA requirements.  The U.S. Department of Labor has warned employers that the internship exclusion is narrow.  The test for determining whether individuals are interns includes meeting the following six criteria:

  1. Internship is similar to training which would be given in an educational environment
  2. Internship experience is for the intern’s benefit;
  3. Intern does not displace regular employees, but works under close supervision of existing staff;
  4. Employer that provides the training derives no immediate advantage from the activities of the intern (and on occasion its operations may actually be impeded);
  5. Intern is not necessarily entitled to a job at the conclusion; and
  6. Employer and intern understand that the intern is not entitled to wages for the time spent in the internship.

New Hampshire state law is similar to federal law in the restrictions it places on unpaid internships at for-profit businesses.

Before considering a summer intern, employers should carefully review the internship program to determine whether it complies with federal and state laws.  Recent lawsuits and government monitoring present potential wage and hour risks for employers.

Employer liability for harassment in the workplace is before the U.S. Supreme Court.  On November 26, 2012, the Supreme Court heard oral argument in Vance v. Ball State University.  At issue is the scope of the “Supervisor” Liability Rule in discrimination cases under Title VII.  This is a long awaited case on who qualifies as a “supervisor” for purposes of establishing employer liability in the workplace context.

The determination of whether there is a basis for employer liability under Title VII depends on whether the harasser is a supervisor or a co-worker.  In Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), the Supreme Court held that an employer is vicariously liable under Title VII for severe or pervasive harassment of an employee by a supervisor.  This Supervisor Liability Rule applies even if the employer is unaware of the discrimination.  On the other hand, if the employee’s harasser is a co-employee, the employer is not liable unless the employer was negligent in allowing the conduct.

In Vance, an African-American server in the Banquet & Catering Department at Ball State University complained that she was continually harassed at work due to her race by her co-workers.  One of those co-workers oversaw and directed plaintiff’s daily work but did not have the power to hire or fire plaintiff.  In upholding summary judgment for the employer, the Seventh Circuit held that harassment by an employee who was considered a supervisor by the employer because of the authority to direct and oversee the plaintiff’s daily work was not sufficient to make the employer strictly liable because the harasser did not have the power to take formal employment actions against the plaintiff.

Vance will decide a split in the Circuit Courts since Faragher and Ellerth.  The First, Seventh, and Eight Circuits limit the scope of “supervisor” liability to those harassers who have the power to hire, fire, demote, promote, transfer,  or discipline the victim.  The Second, Fourth, and Ninth Circuits expand liability to include harassment by those with oversight authority in the workplace generally.

A decision is expected before the end of the term in June 2013.  If the Supreme Court holds a “supervisor” includes the broader category of employees with authority to direct and oversee another employee’s daily work, employers could see an increase in claims of discrimination for hostile work environment.  Employers should continue to  implement anti-harassment training for all employees, including those with any supervisor or managerial job duties.

See Vance v. Ball State University, No. 11-556.