June 15, 2004 The Supreme Court Applies the Ellerth/Faragher Defense to Constructive Discharge Claims

Summary

An employer is generally strictly liable for sexual harassment committed by a supervisor. However, in 1998, the United States Supreme Court established what has become known as the Ellerth/Faragher defense. This defense allows an employer to avoid liability in sexual harassment cases brought under federal law if it can show that:

  • the plaintiff did not suffer a “tangible employment action,” such as a discharge, demotion, or undesirable reassignment;
  • the employer had an effective, well-publicized, harassment prevention program; and
  • the plaintiff unreasonably failed to take advantage of the prevention program.

Since the creation of the Ellerth/Faragher defense, lower courts have disagreed as to whether a “constructive discharge” (which occurs when a plaintiff resigns due to intolerable harassment) constitutes a “tangible employment action” and precludes employers from invoking the defense. In Pennsylvania State Police v. Suders, decided June 14, 2004, the Supreme Court resolved this disagreement.

In Suders, the Supreme Court held that a constructive discharge does not constitute a “tangible employment action” unless a supervisor’s “official act of the enterprise” caused the constructive discharge. The Court pointed to two examples of how this “official act” criterion is to apply:

  • First, where a plaintiff claims constructive discharge based on a supervisor’s repeated sexual comments and sexual assault, the employer can assert the Ellerth/Faragher defense. This is because the supervisor’s behavior involved no official acts.
  • On the other hand, where a plaintiff claims constructive discharge based on a supervisor’s sexual harassment that culminated in transferring plaintiff to a less desirable job position, the employer cannot assert the Ellerth/Faragher defense because the transfer was an official act.

What this Means

The Suders case is good news for employers. It confirms that employers may be rewarded under federal law for their efforts to prevent harassment, even if the harassment was severe enough to cause the plaintiff’s resignation. Thus, employers should remain vigilant about implementing and communicating effective anti-harassment policies. While Suders confirms that the defense is not available when harassment takes the form of an "official act," training and education about harassment is still critical to help employers avoid situations that can lead to these dangerous, strict liability claims.

Finally, although the Suder decision will have a direct impact on claims brought under federal law, its effect on state law claims is not yet known, because under California law employers are strictly liable for all harassment committed by supervisors, subject only to damages limitations based on the state analog to the Faragher/Ellerth defense.

If you have any questions about this or any other topic, please contact Corry Watrous at (619) 237-5200 at Paul, Plevin, Sullivan & Connaughton.