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WASHINGTON -- The U.S. Supreme Court has the chance to more clearly define an employer's liability for supervisors who sexually harass other employees without the employer's knowledge.

That opportunity came last week when the high court accepted a Florida sexual harassment case for review. The suit was brought by Beth Ann Faragher, who worked part-time as a lifeguard for the city of Boca Raton, Fla., between September 1985 and June 1990, when she resigned to enter law school.

Ms. Faragher held that two supervisors -- Bill Terry and David Silverman -- subjected her to unwanted sexual advances, comments and gestures. Although she did complain to another supervisor about the conduct, she never formally complained to the city.

In 1992, Ms. Faragher and another female lifeguard sued the two supervisors and the city in U.S. District Court for the Southern District of Florida under the Civil Rights Act of 1964. Both supervisors were ordered to pay significant damages, but the city was hit with nominal damages of $1 because the court found it only indirectly responsible for the supervisors' conduct. Ms. Faragher and the city appealed to the 11th U.S. Circuit Court of Appeals, seeking an opinion on whether the city was directly or indirectly liable for the supervisors' actions.

The entire -- and divided -- appeals court issued its ruling in Beth Ann Faragher vs. the City of Boca Raton in April of this year. The majority held that Boca Raton should not be held directly or indirectly liable for the actions of the supervisors.

"The harassment here consisted of offensive comments, gestures and touching. However, the nature of Terry's and Silverman's acts and comments towards Faragher does not support a finding that they were acting within the scope of their employment in subjecting Faragher to offensive language, gestures and touching," wrote Judge Emmitt R. Cox for the majority.

"Indeed there is no evidence that Terry and Silverman harassed Faragher in order to perform any service for the city, or that they were either explicitly or implicitly authorized by the city to engage in such harassment. This case provides the archetypical example of employees stepping outside of the scope of their employment and seeking to further personal ends. Consequently, under this theory of vicarious liability, the city cannot be held liable for Terry's and Silverman's harassing conduct," he wrote.

Judge Cox also noted that Ms. Faragher never was threatened with dismissal or demotion for refusing the supervisors' advances.

In a partial dissent, Judge Rosemary Barkett -- joined by two others -- wrote that "For an employer to be charged with knowledge, it is clearly not necessary for the head of the company, its president or chairman of the board to have known of the harassment. Indeed, generally the ultimate head of governing board does not have actual knowledge of the action. The very point of ascribing knowledge on a constructive basis is to recognize that liability can be imputed even when the employer has not been 'told,' i.e., even when there is no actual knowledge. The relevant inquiry for constructive knowledge is what the employer should have known in the exercise of reasonable care. Thus, an employer cannot insulate itself from liability by abandoning its employees in a remote location to be supervised by someone who makes their work lives miserable by offensive touching and an atmosphere of sexually offensive comments, suggestions and innuendo."

Two other judges wrote their own partial concurrences and dissents as well.

Such confusion needs to be cleared up by the Supreme Court, said Gerald L. Maatman Jr., a partner with Baker & McKenzie in Chicago in charge of the firm's employment law practice.

"Faragher is a huge case, because right now, employers operating multistate facilities are potentially subject to inconsistent standards of liability for the No. 1 employment practices liability risk in the workplace, which is when a supervisor sexually harasses a worker. So this has been to my mind the most vexing issue in the courthouse," he said.

"A good example is the Jansen case in the 7th U.S. Circuit Court of Appeals, where the 7th Circuit tried to explain what the Supreme Court will hopefully rule upon, which is what the standard of liability ought to be," Mr. Maatman said in reference to Alice Jansen vs. Packaging Corp. of America.

"Jansen is an en banc opinion of the full 7th Circuit that examined the issue of when a company is liable under Title VII of the Civil Rights Act for hostile environment sexual harassment, perpetrated by a supervisor. The 202-page opinion is the longest ruling in the history of the 7th Circuit and contains 11 different opinions setting forth the views of the individual judges as to this complex question. The ruling is hopelessly fractured in that none of the judges could agree upon a uniform standard of liability," said Mr. Maatman.

"All of the circuits have been struggling since 1986. It's different in every courtroom," he said.

Robin Conrad, vp of the U.S. Chamber of Commerce's National Chamber Litigation Center Inc. in Washington, agreed that Faragher is an extremely important case for business.

"The standard for supervisory liability is split all over the board. The Supreme Court needs to provide business with the kind of guidance that they need in order to do the right thing," she said. The center will file a brief in the case arguing that employers should not be vicariously liable for the acts of supervisors, she added.