SCOTUS Rulings Limit Discrimination Claims Against "Supervisors," Retaliation Claims and Use of Race in State University Admission Programs

Yesterday, the Supreme Court issued three highly anticipated opinions that have potential implications across the nation. Below, we have included commentary and analysis on each. Should you have any questions, please feel free to reach out to your Seyfarth attorney or to the respective authors of each section; they will be happy to answer any questions you may have.

Vance v. Ball State University:
The U.S. Supreme Court Clarifies "Supervisor" For Faragher/Ellerth Purposes

In a resounding victory for employers throughout the nation, the Supreme Court of the United States today narrowed the scope of the term "supervisors" — that is, those individuals for whom employers may be held strictly, and vicariously, liable for allegedly discriminatory actions — drawing a bright line around the term so that it encompasses only those management-level employees who "are empowered" to take "tangible employment actions" against lower-level employees, and not managers who merely oversee or direct employees' daily activities. Thus, the Court's holding in Vance v. Ball State University greatly increases an employer's ability to assert the affirmative defense against discrimination and harassment claims brought under Title VII of the Civil Rights Act of 1964, that the Court earlier had articulated in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). But perhaps just as important, the Court further explained that the clarified definition of "supervisor" (i) "is one that can be readily applied" by courts and litigants alike; (ii) can further allow parties to discern "even before litigation is commenced whether an alleged harasser was a supervisor"; and thus (iii) allow the parties to "be in a position to assess the strength of a case and to explore the possibility of resolving the dispute" before any suit is filed.

As relevant here, in Faragher and Ellerth the Supreme Court formulated a three-tiered examination to be used when determining whether an employer should be held vicariously liable for the discriminatory conduct of a "supervisor." First, employers are strictly liable for the discriminatory conduct of "supervisors" if the offending conduct resulted in a "tangible employment action." But under the second tier of the analysis, employers may then assert an affirmative defense to avoid strict liability by establishing that the supervisor's offending conduct did not result in a tangible employment action because (i) the employer exercised reasonable care to prevent and correct promptly any offending behavior caused by the "supervisor"; and (ii) the employee unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer. Finally, as to discriminatory conduct of an employee's co-workers, it falls on the employee to establish that the employer was "negligent either in discovering or remedying" the offending behavior. Consequently, and as the Vance Court pointed out, for Faragher/Ellerth purposes "it is obviously important whether an alleged harasser is a 'supervisor' or merely a co-worker."

The Supreme Court clarified that important distinction in Vance by limiting the scope of the term "supervisor". Specifically, the Court confirmed that the term "supervisor" encompasses only management-level employees who have the ability to effect "'a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change of benefits.'" In so holding, the Court expressly rejected the definition of "supervisor" that was advocated by the U.S. Equal Opportunity Commission Guidance, as well as adopted by several circuit courts of appeals: that "supervisor" status is equated with the ability to exercise "significant direction over another's daily work." That definition of "supervisor", the Court explained, would inevitably lead litigants, courts, and perhaps jurors to undertake "nebulous" and "murky" examinations of the so-called "supervisor's" daily duties, and which could be resolved only on case-by-case bases. In contrast, the definition embraced by the Court in Vance is "readily applicable" and clear enough to resolve the issue of "supervisory" status even before litigation commences. As the Court explained, "supervisory" status now can be determined "generally by written documentation," thus allowing parties to "be in a position to assess the strength of a case and to explore the possibility of resolving the dispute" before any potential lawsuit is brought.

For employers, Vance is a watershed decision in discrimination and harassment law on two levels. On its surface, the Supreme Court created much-needed certainty as to who qualifies as a "supervisor" for Faragher/Ellerth purposes. But on a deeper level, the Court has signaled that its clarification of "supervisor" was needed, in part, to simplify complicated Title VII lawsuits, if not resolve them altogether before any litigation begins. Vance, accordingly, will benefit litigants, courts, and jurors alike by streamlining — and, perhaps, truncating — harassment and discrimination cases that have grown more complicated since the Court decided Faragher and Ellerth fifteen years ago.

Seyfarth Shaw's coverage of this important case be found here, here and here.

By: Nathan T. Kipp, Camille A. Olson and Richard B Lapp

Supreme Court Requires "But For" Causation in Title VII Retaliation Cases

This morning, Supreme Court clarified the liability standard for Title VII retaliation cases. In University of Texas Southwestern Medical Center v. Nassar, the Court held that Title VII retaliation plaintiffs must prove that their protected activity was a "but for" cause of the adverse action they suffered. Merely showing that it was a "substantial motivating factor" in an employer's decision does not suffice.

For employers, the decision comes as a relief. As Justice Kennedy's decision notes, employees who suspect that they may be fired are sometimes "tempted to make an unfounded charge of racial, sexual, or religious discrimination," and then allege retaliation when the "unrelated adverse employment action" happens. Slip Op. at 18. In other cases, there may be conclusive evidence that a supervisor took action based on a plaintiff's poor performance. But the record may also reflect that the supervisor's understandable unhappiness about being accused of sexism or racism in an internal complaint. If a plaintiff needed to only meet a "lessened causation standard" for retaliation claims, it would "make it far more difficult to dismiss dubious claims at the summary judgment stage." Id.

The Supreme Court's decision in Nassar steers clear of this problem. The Court makes clear that a plaintiff alleging retaliation under Title VII must show that his or her complaints of discrimination were a "but for" cause of an adverse employment action. In other words, a plaintiff must show that he or she would not have suffered the adverse employment action if he or she had not complained. Accordingly, retaliation plaintiffs can no longer survive summary judgment, or prevail at trial, simply by pointing to a few nuggets of testimony in which a supervisor acknowledged being offended by an employee's accusations of racism, sexism, or anti-Semitism -- at least where an employer can show that it would have taken the adverse employment action anyway.

That being said, Nassar's effects should not be overstated. In Title VII discrimination cases, the "substantial motivating factor" standard remains intact. And, in most instances, a plaintiff alleging Title VII retaliation will also allege discrimination. Thus, employers seeking summary judgment will typically have to deal with a "lesser causation standard" for some of a plaintiff's claims. Additionally, Nassar's "but for" causation standard is already used in age discrimination cases under the ADEA, including for ADEA retaliation claims. Yet, in practice, employers have not found ADEA claims easier to defend. In most cases, the evidence supporting an employer's legitimate non-discriminatory reasons for an adverse employment action will either prevail or be found pretextual under both standards.

The biggest effect might be on jury verdict forms. Having clear "but for" language on verdict forms may result in less jury confusion than the nebulous, non-quantifiable "substantial motivating factor." And that, in turn, may lead to more jury verdicts for innocent defendants. On the whole, that is good news for employers.

By: Patrick J. Bannon, Jacob Oslick and Charles O. Thompson

Supreme Court Confirms Diversity May Be Used as Plus Factor In Public University Admissions and Clarifies Standard of Review

In a surprising 7-1 vote, today the United States Supreme Court issued the long-awaited Fisher v. University of Texas (570 U.S. ___ (2013)) decision. Although many speculated that Fisher may effectively end affirmative action programs in the state university admissions context, the Court's decision was confined to the strict scrutiny review standard courts must use when race or ethnicity is used as a factor in the admissions process. The Court vacated and remanded the Fifth Circuit's decision which had approved the use of race as a factor in the University of Texas's (the "UT") admissions process, because it failed to apply the demanding "strict scrutiny" standard articulated in Regents of Univ. of Cal. v. Bakke, 438 U.S. 265, 305 (1978), Grutter v. Bollinger, 539 U.S. 306 (2003), and Gratz v. Bollinger, 539 U.S. 244 (2003).

In reaching its conclusion, the Court recounted its guiding decisions in Bakke, Grutter and Gratz, all of which directly address the contours of how and when race may be used as a positive factor in a public university's admissions process as a means to achieve the "educational benefits of a more diverse student body." 570 U.S. ___, p. 5. The Court reiterated that the "attainment of a diverse student body" provides a "compelling interest" to justify the consideration of race in admissions because "it serves values beyond race alone." Id. at p. 6.

Notwithstanding, the Court cautioned that "[r]ace may not be considered unless the admissions process can withstand strict scrutiny." Id. at 7 (emphasis added). To meet this demanding standard, a public university must clearly demonstrate that "its 'purpose or interest is both constitutionally permissible and substantial, and that its use of the classification is necessary…to the accomplishment of its purpose.'" Id. at 7 quoting Bakke, 438 U.S. at 304. On this point, some deference may granted to a public university's judgment with respect to the impact of diversity on its educational goals.

But the analysis does not end there. The university thereafter bears the burden to establish that its diversity mechanism is "narrowly tailored" to meet that goal. Id. at 10. The Court elaborated that the "reviewing court must ultimately be satisfied that no workable race-neutral alternative would produce the educational benefits of diversity." Id. at 11. Put another way, the public university bears the ultimate burden to establish that "workable race-neutral alternatives do not suffice." Id. On this latter point, the university receives no deference. Id. at 10. The Court therefore held that the Fifth Circuit erred because it approved UT's use of race as a factor in admissions based only on its representation of "good faith," improperly bestowing a "degree of deference" to the school in its review of the program. Id. at 11-13.

Because the Court determined that the Fifth Circuit failed to consider whether UT's admissions program was sufficiently "narrowly tailored" under the mandatory "strict scrutiny" standard, it vacated the appeals decision, and remanded it for further review under the correct standard.

While Fisher is limited to the public university admissions context and is therefore not binding precedent on admissions programs of private universities, or hiring or employment practices of private employers, the private sector will look to the Supreme Court's decision as guidance as they develop and implement voluntary diversity programs. While the private sector has more latitude than public universities in fashioning diversity programs, employers may seek to reduce legal risks of such programs by following critical principles articulated in the line of cases referenced by the Court. A narrow approach to the scope and timing of diversity programs are such key concepts. There are still potholes for employers to be careful to avoid, even when following these principles closely.

Stay tuned for more on this topic, as the United States Supreme Court took another case concerning affirmative action in the higher education context, Schuette v. Coalition to Defend Affirmative Action, where it will review a lower court's decision that found Michigan's straight ban on the use of race in college acceptance decisions was unconstitutional.

By: Valerie J. Hoffman, Annette Tyman and Cassandra Hanley Carroll

Webinar

In the past few weeks, the Supreme Court has released a number of highly anticipated opinions that directly affect employers' rights in a wide variety of circumstances. Please join us on Thursday, July 11th, at 12:30 p.m. ET, for an insightful discussion that will recap the Supreme Court's most recent decisions and examine how those decisions will shape employment practices, affect employment litigation and impact the rights of employers and employees alike.

Please click here to register.