U.S. Supreme Court Issues Two Favorable Rulings for Employers

Employers received two big wins in the U.S. Supreme Court last week. In two rulings, decided on June 24, 2013, both of which were 5-4 decisions, the U.S. Supreme Court adopted standards that will assist employers defending against employment claims.

First, in Vance v. Ball State University, the court adopted a narrow, bright-line standard for determining who is a supervisor in a Title VII harassment lawsuit. In doing so, the court limited when an employer can be held automatically liable for their managers’ discriminatory actions. For automatic liability to attach to the employer, the harassing supervisor must have authority to take “tangible employment action” against employees, which means the ability to hire, fire, promote, demote, reassign with significantly different responsibilities or cause a significant change in employment benefits. Managers who merely oversee or direct employees’ daily activities are not considered supervisors for the purposes of Title VII.

By making it easier for employers to identify who qualifies as a supervisor under Title VII, the Vance decision is expected to lessen the cost and difficulty for employers defending against harassment claims. It also places employers in a better position to avoid automatic liability for supervisory harassment in the first place. However, the ME Supreme Court has not yet defined who is a “supervisor” under the ME Human Rights Act, so it is difficult to predict whether the standard articulated in Vance would be the same under ME law.

In light of Vance, employers should review and update job descriptions to ensure that they clearly reflect who has—and does not have— authority to make tangible employment decisions. To limit their exposure under Title VII, employers should also take this opportunity to assess their workplace and consider limiting which individuals have this authority. Finally, it is critical that any individuals who qualify as supervisors under the Supreme Court’s new definition receive ongoing anti-harassment training.

In a second victory for employers, the U.S. Supreme Court ruled in University of Texas Southwestern Medical Center v. Nassar that employees alleging unlawful retaliation under Title VII are subject to a higher burden of proof than the standard applied in Title VII discrimination claims. Unlike in a Title VII discrimination case where an employee can prevail by showing that a discriminatory animus was a “motivating factor” in the employer’s decision, the court held that employees asserting a Title VII retaliation claim must prove that a retaliatory motive was the “but-for” cause of their adverse employment action. Accordingly, from now on, plaintiffs in a Title VII retaliation case will have to show that their employer would not have taken action against them if they had not complained of unlawful discrimination. By instituting this stricter causation standard, the Nassar decision makes it easier for employers to obtain summary judgment and avoid trial on Title VII retaliation claims.

It is important to note that ME may not adopt Nassar’s “but for” standard for retaliation claims brought under the ME Human Rights Act. Although ME’s highest court has not yet spoken on that issue, it has held that retaliation claims brought under the ME Whistleblower’s Protection Act are subject to the less stringent “substantial factor” or “motivating factor” causation standard. Thus, under state law, employees may still be able to prevail on a retaliation claim if they can show that retaliatory animus was a factor in the employer’s decision, even if not the sole reason.  

While Nassar is certainly a welcome ruling for employers, it is unlikely to lead to a significant decrease in the number of retaliation claims. As a result, employers should take steps to protect against retaliation claims and reduce their risk in the event that one gets brought. Specifically, employers should ensure that they have a strong anti-retaliation policy and their supervisors have been trained to enforce it. As importantly, employers should make sure to document their legitimate, non-discriminatory reasons for adverse employment actions. By implementing these practices, employers will be in a better position to take advantage of the Nassar decision to defeat a claim of retaliation.

If you have any questions about these rulings or any other labor or employment issues, please contact Kai McGintee at kmcgintee@bernsteinshur.com or 207 774-1200.