The U.S. Equal Employment Opportunity Commission

NOTICE

Number

EEOC

915.002

Date

6/18/99

1. SUBJECT: Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors

2. PURPOSE: This document provides guidance regarding employer liability for harassment by supervisors based on sex, race, color, religion,

national origin, age, disability, or protected activity.

3. EFFECTIVE DATE: Upon receipt.

4. EXPIRATION DATE: As an exception to EEOC Order 205.001, Appendix B, Attachment 4, § a(5), this Notice will remain in effect until rescinded

or superseded.

5. ORIGINATOR: Title VII/EPA/ADEA Division, Office of Legal Counsel.

6. INSTRUCTIONS: File after Section 615 of Volume II of the Compliance Manual.

6/18/99 /s/

Date Ida L. Castro

Chairwoman

Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by

Supervisors

Table of Contents

I. Introduction

II. The Vicarious Liability Rule Applies to Unlawful Harassment on All Covered Bases

III. Who Qualifies as a Supervisor?

A. Harasser in Supervisory Chain of Command

1. Authority to Undertake or Recommend Tangible Employment Actions

2. Authority to Direct Employee's Daily Work Activities

B. Harasser Outside Supervisory Chain of Command

IV. Harassment by Supervisor That Results in a Tangible Employment Action

A. Standard of Liability

B. Definition of "Tangible Employment Action"

C. Link Between Harassment and Tangible Employment Action

V. Harassment by Supervisor That Does Not Result in a Tangible Employment Action

A. Standard of Liability

B. Effect of Standard

C. First Prong of Affirmative Defense: Employer's Duty to Exercise Reasonable Care

1. Policy and Complaint Procedure

a. Prohibition Against Harassment

b. Protection Against Retaliation

c. Effective Complaint Process

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d. Confidentiality

e. Effective Investigative Process

i. Questions to Ask Parties and Witnesses

ii. Credibility Determinations

iii. Reaching a Determination

f. Assurance of Immediate and Appropriate Corrective Action

2. Other Preventive and Corrective Measures

3. Small Businesses

D. Second Prong of Affirmative Defense: Employee's Duty to Exercise Reasonable Care

1. Failure to Complain

a. Risk of Retaliation

b. Obstacles to Complaints

c. Perception That Complaint Process Was Ineffective

2. Other Efforts to Avoid Harm

VI. Harassment by "Alter Ego" of Employer

A. Standard of Liability

B. Officials Who Qualify as "Alter Egos" or "Proxies"

VII. Conclusion

Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by

Supervisors

I. Introduction

In Burlington Industries, Inc. v. Ellerth, 118 S. Ct. 2257 (1998), and Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998), the Supreme Court

made clear that employers are subject to vicarious liability for unlawful harassment by supervisors. The standard of liability set forth in these

decisions is premised on two principles: 1) an employer is responsible for the acts of its supervisors, and 2) employers should be encouraged to

prevent harassment and employees should be encouraged to avoid or limit the harm from harassment. In order to accommodate these

principles, the Court held that an employer is always liable for a supervisor's harassment if it culminates in a tangible employment action.

However, if it does not, the employer may be able to avoid liability or limit damages by establishing an affirmative defense that includes two

necessary elements:

(a) the employer exercised reasonable care to prevent and correct promptly any harassing behavior, and

(b) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm

otherwise.

While the Faragher and Ellerth decisions addressed sexual harassment, the Court's analysis drew upon standards set forth in cases involving

harassment on other protected bases. Moreover, the Commission has always taken the position that the same basic standards apply to all types

of prohibited harassment.1 Thus, the standard of liability set forth in the decisions applies to all forms of unlawful harassment. (See section II,

below.)

Harassment remains a pervasive problem in American workplaces. The number of harassment charges filed with the EEOC and state fair

employment practices agencies has risen significantly in recent years. For example, the number of sexual harassment charges has increased

from 6,883 in fiscal year 1991 to 15,618 in fiscal year 1998. The number of racial harassment charges rose from 4,910 to 9,908 charges in the

same time period.

While the anti-discrimination statutes seek to remedy discrimination, their primary purpose is to prevent violations. The Supreme Court, in

Faragher and Ellerth, relied on Commission guidance which has long advised employers to take all necessary steps to prevent harassment.2 The

new affirmative defense gives credit for such preventive efforts by an employer, thereby "implement[ing] clear statutory policy and

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complement[ing] the Government's Title VII enforcement efforts."3

The question of liability arises only after there is a determination that unlawful harassment occurred. Harassment does not violate federal law

unless it involves discriminatory treatment on the basis of race, color, sex, religion, national origin, age of 40 or older, disability, or protected

activity under the anti-discrimination statutes. Furthermore, the anti-discrimination statutes are not a "general civility code."4 Thus federal law

does not prohibit simple teasing, offhand comments, or isolated incidents that are not "extremely serious."5 Rather, the conduct must be "so

objectively offensive as to alter the 'conditions' of the victim's employment."6 The conditions of employment are altered only if the harassment

culminated in a tangible employment action or was sufficiently severe or pervasive to create a hostile work environment.7 Existing Commission

guidance on the standards for determining whether challenged conduct rises to the level of unlawful harassment remains in effect.

This document supersedes previous Commission guidance on the issue of vicarious liability for harassment by supervisors.8 The Commission's

long-standing guidance on employer liability for harassment by co-workers remains in effect - - an employer is liable if it knew or should have

known of the misconduct, unless it can show that it took immediate and appropriate corrective action.9 The standard is the same in the case of

non-employees, but the employer's control over such individuals' misconduct is considered.10

II. The Vicarious Liability Rule Applies to Unlawful Harassment on All Covered Bases

The rule in Ellerth and Faragher regarding vicarious liability applies to harassment by supervisors based on race, color, sex (whether or not of a

sexual nature11), religion, national origin, protected activity,12 age, or disability.13 Thus, employers should establish anti-harassment policies

and complaint procedures covering all forms of unlawful harassment.14

III. Who Qualifies as a Supervisor?

A. Harasser in Supervisory Chain of Command

An employer is subject to vicarious liability for unlawful harassment if the harassment was committed by "a supervisor with immediate (or

successively higher) authority over the employee."15 Thus, it is critical to determine whether the person who engaged in unlawful harassment

had supervisory authority over the complainant.

The federal employment discrimination statutes do not contain or define the term "supervisor."16 The statutes make employers liable for the

discriminatory acts of their "agents,"17 and supervisors are agents of their employers. However, agency principles "may not be transferable in all

their particulars" to the federal employment discrimination statutes.18 The determination of whether an individual has sufficient authority to

qualify as a "supervisor" for purposes of vicarious liability cannot be resolved by a purely mechanical application of agency law.19 Rather, the

purposes of the anti-discrimination statutes and the reasoning of the Supreme Court decisions on harassment must be considered.

The Supreme Court, in Faragher and Ellerth, reasoned that vicarious liability for supervisor harassment is appropriate because supervisors are

aided in such misconduct by the authority that the employers delegated to them.20 Therefore, that authority must be of a sufficient magnitude

so as to assist the harasser explicitly or implicitly in carrying out the harassment. The determination as to whether a harasser had such

authority is based on his or her job function rather than job title (e.g., "team leader") and must be based on the specific facts.

An individual qualifies as an employee's "supervisor" if:

a. the individual has authority to undertake or recommend tangible employment decisions affecting the employee; or

b. the individual has authority to direct the employee's daily work activities.

1. Authority to Undertake or Recommend Tangible Employment Actions

An individual qualifies as an employee's "supervisor" if he or she is authorized to undertake tangible employment decisions affecting the

employee. "Tangible employment decisions" are decisions that significantly change another employee's employment status. (For a detailed

explanation of what constitutes a tangible employment action, see subsection IV(B), below.) Such actions include, but are not limited to, hiring,

firing, promoting, demoting, and reassigning the employee. As the Supreme Court stated,"[t]angible employment actions fall within the special

province of the supervisor."21

An individual whose job responsibilities include the authority to recommend tangible job decisions affecting an employee qualifies as his or her

supervisor even if the individual does not have the final say. As the Supreme Court recognized in Ellerth, a tangible employment decision "may

be subject to review by higher level supervisors."22 As long as the individual's recommendation is given substantial weight by the final

decisionmaker(s), that individual meets the definition of supervisor.

2. Authority to Direct Employee's Daily Work Activities

An individual who is authorized to direct another employee's day-to-day work activities qualifies as his or her supervisor even if that individual

does not have the authority to undertake or recommend tangible job decisions. Such an individual's ability to commit harassment is enhanced

by his or her authority to increase the employee's workload or assign undesirable tasks, and hence it is appropriate to consider such a person a

"supervisor" when determining whether the employer is vicariously liable.

In Faragher, one of the harassers was authorized to hire, supervise, counsel, and discipline lifeguards, while the other harasser was responsible

for making the lifeguards' daily work assignments and supervising their work and fitness training.23 There was no question that the Court

viewed them both as "supervisors," even though one of them apparently lacked authority regarding tangible job decisions.24

An individual who is temporarily authorized to direct another employee's daily work activities qualifies as his or her "supervisor" during that time

period. Accordingly, the employer would be subject to vicarious liability if that individual commits unlawful harassment of a subordinate while

serving as his or her supervisor.

On the other hand, someone who merely relays other officials' instructions regarding work assignments and reports back to those officials does

not have true supervisory authority. Furthermore, someone who directs only a limited number of tasks or assignments would not qualify as a

"supervisor." For example, an individual whose delegated authority is confined to coordinating a work project of limited scope is not a

"supervisor."

B. Harasser Outside Supervisory Chain of Command

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In some circumstances, an employer may be subject to vicarious liability for harassment by a supervisor who does not have actual authority over

the employee. Such a result is appropriate if the employee reasonably believed that the harasser had such power.25 The employee might have

such a belief because, for example, the chains of command are unclear. Alternatively, the employee might reasonably believe that a harasser

with broad delegated powers has the ability to significantly influence employment decisions affecting him or her even if the harasser is outside

the employee's chain of command.

If the harasser had no actual supervisory power over the employee, and the employee did not reasonably believe that the harasser had such

authority, then the standard of liability for co-worker harassment applies.

IV. Harassment by Supervisor That Results in a Tangible Employment Action

A. Standard of Liability

An employer is always liable for harassment by a supervisor on a prohibited basis that culminates in a tangible employment action. No

affirmative defense is available in such cases.26 The Supreme Court recognized that this result is appropriate because an employer acts through

its supervisors, and a supervisor's undertaking of a tangible employment action constitutes an act of the employer.27

B. Definition of "Tangible Employment Action"

A tangible employment action is "a significant change in employment status."28 Unfulfilled threats are insufficient. Characteristics of a tangible

employment action are:29

A tangible employment action is the means by which the supervisor brings the official power of the enterprise to bear on subordinates,

as demonstrated by the following:

it requires an official act of the enterprise;

it usually is documented in official company records;

it may be subject to review by higher level supervisors; and

it often requires the formal approval of the enterprise and use of its internal processes.

1.

2. A tangible employment action usually inflicts direct economic harm.

A tangible employment action, in most instances, can only be caused by a supervisor or other person acting with the authority of the

company.

3.

Examples of tangible employment actions include:30

hiring and firing;

promotion and failure to promote;

demotion;31

undesirable reassignment;

a decision causing a significant change in benefits;

compensation decisions; and

work assignment.

Any employment action qualifies as "tangible" if it results in a significant change in employment status. For example, significantly changing an

individual's duties in his or her existing job constitutes a tangible employment action regardless of whether the individual retains the same

salary and benefits.32 Similarly, altering an individual's duties in a way that blocks his or her opportunity for promotion or salary increases also

constitutes a tangible employment action.33

On the other hand, an employment action does not reach the threshold of "tangible" if it results in only an insignificant change in the

complainant's employment status. For example, altering an individual's job title does not qualify as a tangible employment action if there is no

change in salary, benefits, duties, or prestige, and the only effect is a bruised ego.

34 However, if there is a significant change in the status of

the position because the new title is less prestigious and thereby effectively constitutes a demotion, a tangible employment action would be

found.35

If a supervisor undertakes or recommends a tangible job action based on a subordinate's response to unwelcome sexual demands, the employer

is liable and cannot raise the affirmative defense. The result is the same whether the employee rejects the demands and is subjected to an

adverse tangible employment action or submits to the demands and consequently obtains a tangible job benefit.36 Such harassment previously

would have been characterized as "quid pro quo." It would be a perverse result if the employer is foreclosed from raising the affirmative defense

if its supervisor denies a tangible job benefit based on an employee's rejection of unwelcome sexual demands, but can raise the defense if its

supervisor grants a tangible job benefit based on submission to such demands. The Commission rejects such an analysis. In both those

situations the supervisor undertakes a tangible employment action on a discriminatory basis. The Supreme Court stated that there must be a

significant change in employment status; it did not require that the change be adverse in order to qualify as tangible.37

If a challenged employment action is not "tangible," it may still be considered, along with other evidence, as part of a hostile environment claim

that is subject to the affirmative defense. In Ellerth, the Court concluded that there was no tangible employment action because the supervisor

never carried out his threats of job harm. Ellerth could still proceed with her claim of harassment, but the claim was properly "categorized as a

hostile work environment claim which requires a showing of severe or pervasive conduct." 118 S. Ct. at 2265.

C. Link Between Harassment and Tangible Employment Action

When harassment culminates in a tangible employment action, the employer cannot raise the affirmative defense. This sort of claim is analyzed

like any other case in which a challenged employment action is alleged to be discriminatory. If the employer produces evidence of a nondiscriminatory explanation for the tangible employment action, a determination must be made whether that explanation is a pretext designed to

hide a discriminatory motive.

For example, if an employee alleged that she was demoted because she refused her supervisor's sexual advances, a determination would have

to be made whether the demotion was because of her response to the advances, and hence because of her sex. Similarly, if an employee

alleges that he was discharged after being subjected to severe or pervasive harassment by his supervisor based on his national origin, a

determination would have to be made whether the discharge was because of the employee's national origin.

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A strong inference of discrimination will arise whenever a harassing supervisor undertakes or has significant input into a tangible employment

action affecting the victim,38 because it can be "assume[d] that the harasser . . . could not act as an objective, non-discriminatory

decisionmaker with respect to the plaintiff."39 However, if the employer produces evidence of a non-discriminatory reason for the action, the

employee will have to prove that the asserted reason was a pretext designed to hide the true discriminatory motive.

If it is determined that the tangible action was based on a discriminatory reason linked to the preceding harassment, relief could be sought for

the entire pattern of misconduct culminating in the tangible employment action, and no affirmative defense is available.40 However, the

harassment preceding the tangible employment action must be severe or pervasive in order to be actionable.41 If the tangible employment

action was based on a non-discriminatory motive, then the employer would have an opportunity to raise the affirmative defense to a claim

based on the preceding harassment.42

V. Harassment by Supervisor That Does Not Result in a Tangible Employment Action

A. Standard of Liability

When harassment by a supervisor creates an unlawful hostile environment but does not result in a tangible employment action, the employer

can raise an affirmative defense to liability or damages, which it must prove by a preponderance of the evidence. The defense consists of two

necessary elements:

(a) the employer exercised reasonable care to prevent and correct promptly any harassment; and

(b) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to

avoid harm otherwise.

B. Effect of Standard

If an employer can prove that it discharged its duty of reasonable care and that the employee could have avoided all of the harm but

unreasonably failed to do so, the employer will avoid all liability for unlawful harassment.43 For example, if an employee was subjected to a

pattern of disability-based harassment that created an unlawful hostile environment, but the employee unreasonably failed to complain to

management before she suffered emotional harm and the employer exercised reasonable care to prevent and promptly correct the harassment,

then the employer will avoid all liability.

If an employer cannot prove that it discharged its duty of reasonable care and that the employee unreasonably failed to avoid the harm, the

employer will be liable. For example, if unlawful harassment by a supervisor occurred and the employer failed to exercise reasonable care to

prevent it, the employer will be liable even if the employee unreasonably failed to complain to management or even if the employer took prompt

and appropriate corrective action when it gained notice.44

In most circumstances, if employers and employees discharge their respective duties of reasonable care, unlawful harassment will be prevented

and there will be no reason to consider questions of liability. An effective complaint procedure "encourages employees to report harassing

conduct before it becomes severe or pervasive,"45 and if an employee promptly utilizes that procedure, the employer can usually stop the

harassment before actionable harm occurs.46

In some circumstances, however, unlawful harassment will occur and harm will result despite the exercise of requisite legal care by the employer

and employee. For example, if an employee's supervisor directed frequent, egregious racial epithets at him that caused emotional harm virtually

from the outset, and the employee promptly complained, corrective action by the employer could prevent further harm but might not correct the

actionable harm that the employee already had suffered.47 Alternatively, if an employee complained about harassment before it became severe

or pervasive, remedial measures undertaken by the employer might fail to stop the harassment before it reaches an actionable level, even if

those measures are reasonably calculated to halt it. In these circumstances, the employer will be liable because the defense requires proof that

it exercised reasonable legal care and that the employee unreasonably failed to avoid the harm. While a notice- based negligence standard

would absolve the employer of liability, the standard set forth in Ellerth and Faragher does not. As the Court explained, vicarious liability sets a

"more stringent standard" for the employer than the "minimum standard" of negligence theory.48

While this result may seem harsh to a law abiding employer, it is consistent with liability standards under the anti-discrimination statutes which

generally make employers responsible for the discriminatory acts of their supervisors.

49 If, for example, a supervisor rejects a candidate for

promotion because of national origin-based bias, the employer will be liable regardless of whether the employee complained to higher

management and regardless of whether higher management had any knowledge about the supervisor's motivation.50 Harassment is the only

type of discrimination carried out by a supervisor for which an employer can avoid liability, and that limitation must be construed narrowly. The

employer will be shielded from liability for harassment by a supervisor only if it proves that it exercised reasonable care in preventing and

correcting the harassment and that the employee unreasonably failed to avoid all of the harm. If both parties exercise reasonable care, the

defense will fail.

In some cases, an employer will be unable to avoid liability completely, but may be able to establish the affirmative defense as a means to

limit damages.51 The defense only limits damages where the employee reasonably could have avoided some but not all of the harm from the

harassment. In the example above, in which the supervisor used frequent, egregious racial epithets, an unreasonable delay by the employee in

complaining could limit damages but not eliminate liability entirely. This is because a reasonably prompt complaint would have reduced, but not

eliminated, the actionable harm.52

C. First Prong of Affirmative Defense: Employer's Duty to Exercise Reasonable Care

The first prong of the affirmative defense requires a showing by the employer that it undertook reasonable care to prevent and promptly correct

harassment. Such reasonable care generally requires an employer to establish, disseminate, and enforce an anti-harassment policy and

complaint procedure and to take other reasonable steps to prevent and correct harassment. The steps described below are not mandatory

requirements - - whether or not an employer can prove that it exercised reasonable care depends on the particular factual circumstances and, in

some cases, the nature of the employer's workforce. Small employers may be able to effectively prevent and correct harassment through

informal means, while larger employers may have to institute more formal mechanisms.53

There are no "safe harbors" for employers based on the written content of policies and procedures. Even the best policy and complaint procedure

will not alone satisfy the burden of proving reasonable care if, in the particular circumstances of a claim, the employer failed to implement its

process effectively.54 If, for example, the employer has an adequate policy and complaint procedure and properly responded to an employee's

complaint of harassment, but management ignored previous complaints by other employees about the same harasser, then the employer has

not exercised reasonable care in preventing the harassment.55 Similarly, if the employer has an adequate policy and complaint procedure but an

official failed to carry out his or her responsibility to conduct an effective investigation of a harassment complaint, the employer has not

discharged its duty to exercise reasonable care. Alternatively, lack of a formal policy and complaint procedure will not defeat the defense if the

employer exercised sufficient care through other means.

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1. Policy and Complaint Procedure

It generally is necessary for employers to establish, publicize, and enforce anti-harassment policies and complaint procedures. As the Supreme

Court stated, "Title VII is designed to encourage the creation of anti-harassment policies and effective grievance mechanisms." Ellerth, 118 S.

Ct. at 2270. While the Court noted that this "is not necessary in every instance as a matter of law,"

56 failure to do so will make it difficult for an

employer to prove that it exercised reasonable care to prevent and correct harassment.

57 (See section V(C)(3), below, for discussion of preventive and corrective

measures by small businesses.)

An employer should provide every employee with a copy of the policy and complaint procedure, and redistribute it periodically. The policy and

complaint procedure should be written in a way that will be understood by all employees in the employer's workforce. Other measures to ensure

effective dissemination of the policy and complaint procedure include posting them in central locations and incorporating them into employee

handbooks. If feasible, the employer should provide training to all employees to ensure that they understand their rights and responsibilities.

An anti-harassment policy and complaint procedure should contain, at a minimum, the following elements:

A clear explanation of prohibited conduct;

Assurance that employees who make complaints of harassment or provide information related to such complaints will be protected

against retaliation;

A clearly described complaint process that provides accessible avenues of complaint;

Assurance that the employer will protect the confidentiality of harassment complaints to the extent possible;

A complaint process that provides a prompt, thorough, and impartial investigation; and

Assurance that the employer will take immediate and appropriate corrective action when it determines that harassment has occurred.

The above elements are explained in the following subsections.

a. Prohibition Against Harassment

An employer's policy should make clear that it will not tolerate harassment based on sex (with or without sexual conduct), race, color, religion,

national origin, age, disability, and protected activity (i.e., opposition to prohibited discrimination or participation in the statutory complaint

process). This prohibition should cover harassment by anyone in the workplace – supervisors, co- workers, or non-employees.58 Management

should convey the seriousness of the prohibition. One way to do that is for the mandate to "come from the top," i.e., from upper management.

The policy should encourage employees to report harassment before it becomes severe or pervasive. While isolated incidents of harassment

generally do not violate federal law, a pattern of such incidents may be unlawful. Therefore, to discharge its duty of preventive care, the

employer must make clear to employees that it will stop harassment before it rises to the level of a violation of federal law.

b. Protection Against Retaliation

An employer should make clear that it will not tolerate adverse treatment of employees because they report harassment or provide information

related to such complaints. An anti- harassment policy and complaint procedure will not be effective without such an assurance.59

Management should undertake whatever measures are necessary to ensure that retaliation does not occur. For example, when management

investigates a complaint of harassment, the official who interviews the parties and witnesses should remind these individuals about the

prohibition against retaliation. Management also should scrutinize employment decisions affecting the complainant and witnesses during and

after the investigation to ensure that such decisions are not based on retaliatory motives.

c. Effective Complaint Process

An employer's harassment complaint procedure should be designed to encourage victims to come forward. To that end, it should clearly explain

the process and ensure that there are no unreasonable obstacles to complaints. A complaint procedure should not be rigid, since that could

defeat the goal of preventing and correcting harassment. When an employee complains to management about alleged harassment, the employer

is obligated to investigate the allegation regardless of whether it conforms to a particular format or is made in writing.

The complaint procedure should provide accessible points of contact for the initial complaint.60 A complaint process is not effective if employees

are always required to complain first to their supervisors about alleged harassment, since the supervisor may be a harasser.61 Moreover,

reasonable care in preventing and correcting harassment requires an employer to instruct all supervisors to report complaints of harassment to

appropriate officials.62

It is advisable for an employer to designate at least one official outside an employee's chain of command to take complaints of harassment. For

example, if the employer has an office of human resources, one or more officials in that office could be authorized to take complaints. Allowing

an employee to bypass his or her chain of command provides additional assurance that the complaint will be handled in an impartial manner,

since an employee who reports harassment by his or her supervisor may feel that officials within the chain of command will more readily believe

the supervisor's version of events.

It also is important for an employer's anti-harassment policy and complaint procedure to contain information about the time frames for filing

charges of unlawful harassment with the EEOC or state fair employment practice agencies and to explain that the deadline runs from the last

date of unlawful harassment, not from the date that the complaint to the employer is resolved.63 While a prompt complaint process should

make it feasible for an employee to delay deciding whether to file a charge until the complaint to the employer is resolved, he or she is not

required to do so.64

d. Confidentiality

An employer should make clear to employees that it will protect the confidentiality of harassment allegations to the extent possible. An

employer cannot guarantee complete confidentiality, since it cannot conduct an effective investigation without revealing certain information to

the alleged harasser and potential witnesses. However, information about the allegation of harassment should be shared only with those who

need to know about it. Records relating to harassment complaints should be kept confidential on the same basis.65

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A conflict between an employee's desire for confidentiality and the employer's duty to investigate may arise if an employee informs a supervisor

about alleged harassment, but asks him or her to keep the matter confidential and take no action. Inaction by the supervisor in such

circumstances could lead to employer liability. While it may seem reasonable to let the employee determine whether to pursue a complaint, the

employer must discharge its duty to prevent and correct harassment.66 One mechanism to help avoid such conflicts would be for the employer

to set up an informational phone line which employees can use to discuss questions or concerns about harassment on an anonymous basis.67

e. Effective Investigative Process

An employer should set up a mechanism for a prompt, thorough, and impartial investigation into alleged harassment. As soon as management

learns about alleged harassment, it should determine whether a detailed fact-finding investigation is necessary. For example, if the alleged

harasser does not deny the accusation, there would be no need to interview witnesses, and the employer could immediately determine

appropriate corrective action.

If a fact-finding investigation is necessary, it should be launched immediately. The amount of time that it will take to complete the investigation

will depend on the particular circumstances.68 If, for example, multiple individuals were allegedly harassed, then it will take longer to interview

the parties and witnesses.

It may be necessary to undertake intermediate measures before completing the investigation to ensure that further harassment does not occur.

Examples of such measures are making scheduling changes so as to avoid contact between the parties; transferring the alleged harasser; or

placing the alleged harasser on non-disciplinary leave with pay pending the conclusion of the investigation. The complainant should not be

involuntarily transferred or otherwise burdened, since such measures could constitute unlawful retaliation.

The employer should ensure that the individual who conducts the investigation will objectively gather and consider the relevant facts. The

alleged harasser should not have supervisory authority over the individual who conducts the investigation and should not have any direct or

indirect control over the investigation. Whoever conducts the investigation should be well-trained in the skills that are required for interviewing

witnesses and evaluating credibility.

i. Questions to Ask Parties and Witnesses

When detailed fact-finding is necessary, the investigator should interview the complainant, the alleged harasser, and third parties who could

reasonably be expected to have relevant information. Information relating to the personal lives of the parties outside the workplace would be

relevant only in unusual circumstances. When interviewing the parties and witnesses, the investigator should refrain from offering his or her

opinion.

The following are examples of questions that may be appropriate to ask the parties and potential witnesses. Any actual investigation must be

tailored to the particular facts.

Questions to Ask the Complainant:

Who, what, when, where, and how: Who committed the alleged harassment? What exactly occurred or was said? When did it occur and is

it still ongoing? Where did it occur? How often did it occur? How did it affect you?

How did you react? What response did you make when the incident(s) occurred or afterwards?

How did the harassment affect you? Has your job been affected in any way?

Are there any persons who have relevant information? Was anyone present when the alleged harassment occurred? Did you tell anyone

about it? Did anyone see you immediately after episodes of alleged harassment?

Did the person who harassed you harass anyone else? Do you know whether anyone complained about harassment by that person?

Are there any notes, physical evidence, or other documentation regarding the incident(s)?

How would you like to see the situation resolved?

Do you know of any other relevant information?

Questions to Ask the Alleged Harasser:

What is your response to the allegations?

If the harasser claims that the allegations are false, ask why the complainant might lie.

Are there any persons who have relevant information?

Are there any notes, physical evidence, or other documentation regarding the incident(s)?

Do you know of any other relevant information?

Questions to Ask Third Parties:

What did you see or hear? When did this occur? Describe the alleged harasser's behavior toward the complainant and toward others in

the workplace.

What did the complainant tell you? When did s/he tell you this?

Do you know of any other relevant information?

Are there other persons who have relevant information?

ii. Credibility Determinations

If there are conflicting versions of relevant events, the employer will have to weigh each party's credibility. Credibility assessments can be

critical in determining whether the alleged harassment in fact occurred. Factors to consider include:

Inherent plausibility: Is the testimony believable on its face? Does it make sense?

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Demeanor: Did the person seem to be telling the truth or lying?

Motive to falsify: Did the person have a reason to lie?

Corroboration: Is there witness testimony (such as testimony by eye-witnesses, people who saw the person soon after the alleged

incidents, or people who discussed the incidents with him or her at around the time that they occurred) or physical evidence (such as

written documentation) that corroborates the party's testimony?

Past record: Did the alleged harasser have a history of similar behavior in the past?

None of the above factors are determinative as to credibility. For example, the fact that there are no eye-witnesses to the alleged harassment

by no means necessarily defeats the complainant's credibility, since harassment often occurs behind closed doors. Furthermore, the fact that the

alleged harasser engaged in similar behavior in the past does not necessarily mean that he or she did so again.

iii. Reaching a Determination

Once all of the evidence is in, interviews are finalized, and credibility issues are resolved, management should make a determination as to

whether harassment occurred. That determination could be made by the investigator, or by a management official who reviews the investigator's

report. The parties should be informed of the determination.

In some circumstances, it may be difficult for management to reach a determination because of direct contradictions between the parties and a

lack of documentary or eye-witness corroboration. In such cases, a credibility assessment may form the basis for a determination, based on

factors such as those set forth above.

If no determination can be made because the evidence is inconclusive, the employer should still undertake further preventive measures, such as

training and monitoring.

f. Assurance of Immediate and Appropriate Corrective Action

An employer should make clear that it will undertake immediate and appropriate corrective action, including discipline, whenever it determines

that harassment has occurred in violation of the employer's policy. Management should inform both parties about these measures.69

Remedial measures should be designed to stop the harassment, correct its effects on the employee, and ensure that the harassment does not

recur. These remedial measures need not be those that the employee requests or prefers, as long as they are effective.

In determining disciplinary measures, management should keep in mind that the employer could be found liable if the harassment does not

stop. At the same time, management may have concerns that overly punitive measures may subject the employer to claims such as wrongful

discharge, and may simply be inappropriate.

To balance the competing concerns, disciplinary measures should be proportional to the seriousness of the offense.70 If the harassment was

minor, such as a small number of "off-color" remarks by an individual with no prior history of similar misconduct, then counseling and an oral

warning might be all that is necessary. On the other hand, if the harassment was severe or persistent, then suspension or discharge may be

appropriate.71

Remedial measures should not adversely affect the complainant. Thus, for example, if it is necessary to separate the parties, then the harasser

should be transferred (unless the complainant prefers otherwise).72 Remedial responses that penalize the complainant could constitute unlawful

retaliation and are not effective in correcting the harassment.73

Remedial measures also should correct the effects of the harassment. Such measures should be designed to put the employee in the position

s/he would have been in had the misconduct not occurred.

Examples of Measures to Stop the Harassment and Ensure that it Does Not Recur:

oral74 or written warning or reprimand;

transfer or reassignment;

demotion;

reduction of wages;

suspension;

discharge;

training or counseling of harasser to ensure that s/he understands why his or her conduct violated the employer's anti-harassment policy;

and

monitoring of harasser to ensure that harassment stops.

Examples of Measures to Correct the Effects of the Harassment:

restoration of leave taken because of the harassment;

expungement of negative evaluation(s) in employee's personnel file that arose from the harassment;

reinstatement;

apology by the harasser;

monitoring treatment of employee to ensure that s/he is not subjected to retaliation by the harasser or others in the work place because

of the complaint; and

correction of any other harm caused by the harassment (e.g., compensation for losses).

2. Other Preventive and Corrective Measures

An employer's responsibility to exercise reasonable care to prevent and correct harassment is not limited to implementing an anti-harassment

policy and complaint procedure. As the Supreme Court stated, "the employer has a greater opportunity to guard against misconduct by

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supervisors than by common workers; employers have greater opportunity and incentive to screen them, train them, and monitor their

performance." Faragher, 118 S. Ct. at 2291.

An employer's duty to exercise due care includes instructing all of its supervisors and managers to address or report to appropriate officials

complaints of harassment regardless of whether they are officially designated to take complaints75 and regardless of whether a complaint was

framed in a way that conforms to the organization's particular complaint procedures.76 For example, if an employee files an EEOC charge

alleging unlawful harassment, the employer should launch an internal investigation even if the employee did not complain to management

through its internal complaint process.

Furthermore, due care requires management to correct harassment regardless of whether an employee files an internal complaint, if the conduct

is clearly unwelcome. For example, if there are areas in the workplace with graffiti containing racial or sexual epithets, management should

eliminate the graffiti and not wait for an internal complaint.77

An employer should ensure that its supervisors and managers understand their responsibilities under the organization's anti-harassment policy

and complaint procedure. Periodic training of those individuals can help achieve that result. Such training should explain the types of conduct

that violate the employer's anti-harassment policy; the seriousness of the policy; the responsibilities of supervisors and managers when they

learn of alleged harassment; and the prohibition against retaliation.

An employer should keep track of its supervisors' and managers' conduct to make sure that they carry out their responsibilities under the

organization's anti-harassment program.78 For example, an employer could include such compliance in formal evaluations.

Reasonable preventive measures include screening applicants for supervisory jobs to see if any have a record of engaging in harassment. If so,

it may be necessary for the employer to reject a candidate on that basis or to take additional steps to prevent harassment by that individual.

Finally, it is advisable for an employer to keep records of all complaints of harassment. Without such records, the employer could be unaware of

a pattern of harassment by the same individual. Such a pattern would be relevant to credibility assessments and disciplinary measures.79

3. Small Businesses

It may not be necessary for an employer of a small workforce to implement the type of formal complaint process described above. If it puts into

place an effective, informal mechanism to prevent and correct harassment, a small employer could still satisfy the first prong of the affirmative

defense to a claim of harassment.80 As the Court recognized in Faragher, an employer of a small workforce might informally exercise sufficient

care to prevent harassment.81

For example, such an employer's failure to disseminate a written policy against harassment on protected bases would not undermine the

affirmative defense if it effectively communicated the prohibition and an effective complaint procedure to all employees at staff meetings. An

owner of a small business who regularly meets with all of his or her employees might tell them at monthly staff meetings that he or she will not

tolerate harassment and that anyone who experiences harassment should bring it "straight to the top."

If a complaint is made, the business, like any other employer, must conduct a prompt, thorough, and impartial investigation and undertake swift

and appropriate corrective action where appropriate. The questions set forth in Section V(C)(1)(e)(i), above, can help guide the inquiry and the

factors set forth in Section V(C)(1)(e)(ii) should be considered in evaluating the credibility of each of the parties.

D. Second Prong of Affirmative Defense: Employee's Duty to Exercise Reasonable Care

The second prong of the affirmative defense requires a showing by the employer that the aggrieved employee "unreasonably failed to take

advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise." Faragher, 118 S. Ct. at 2293;

Ellerth, 118 S. Ct. at 2270.

This element of the defense arises from the general theory "that a victim has a duty 'to use such means as are reasonable under the

circumstances to avoid or minimize the damages' that result from violations of the statute." Faragher, 18 S. Ct. at 2292, quoting Ford Motor Co.

v. EEOC, 458 U.S. 219, 231 n.15 (1982). Thus an employer who exercised reasonable care as described in subsection V(C), above, is not liable

for unlawful harassment if the aggrieved employee could have avoided all of the actionable harm. If some but not all of the harm could have

been avoided, then an award of damages will be mitigated accordingly.82

A complaint by an employee does not automatically defeat the employer's affirmative defense. If, for example, the employee provided no

information to support his or her allegation, gave untruthful information, or otherwise failed to cooperate in the investigation, the complaint

would not qualify as an effort to avoid harm. Furthermore, if the employee unreasonably delayed complaining, and an earlier complaint could

have reduced the harm, then the affirmative defense could operate to reduce damages.

Proof that the employee unreasonably failed to use any complaint procedure provided by the employer will normally satisfy the employer's

burden.83 However, it is important to emphasize that an employee who failed to complain does not carry a burden of proving the

reasonableness of that decision. Rather, the burden lies with the employer to prove that the employee's failure to complain was unreasonable.

1. Failure to Complain

A determination as to whether an employee unreasonably failed to complain or otherwise avoid harm depends on the particular circumstances

and information available to the employee at that time.

84 An employee should not necessarily be expected to complain to management

immediately after the first or second incident of relatively minor harassment. Workplaces need not become battlegrounds where every minor,

unwelcome remark based on race, sex, or another protected category triggers a complaint and investigation. An employee might reasonably

ignore a small number of incidents, hoping that the harassment will stop without resort to the complaint process.85 The employee may directly

say to the harasser that s/he wants the misconduct to stop, and then wait to see if that is effective in ending the harassment before

complaining to management. If the harassment persists, however, then further delay in complaining might be found unreasonable.

There might be other reasonable explanations for an employee's delay in complaining or entire failure to utilize the employer's complaint

process. For example, the employee might have had reason to believe that:86

using the complaint mechanism entailed a risk of retaliation;

there were obstacles to complaints; and

the complaint mechanism was not effective.

To establish the second prong of the affirmative defense, the employer must prove that the belief or perception underlying the employee's

failure to complain was unreasonable.

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a. Risk of Retaliation

An employer cannot establish that an employee unreasonably failed to use its complaint procedure if that employee reasonably feared

retaliation. Surveys have shown that employees who are subjected to harassment frequently do not complain to management due to fear of

retaliation.87 To assure employees that such a fear is unwarranted, the employer must clearly communicate and enforce a policy that no

employee will be retaliated against for complaining of harassment.

b. Obstacles to Complaints

An employee's failure to use the employer's complaint procedure would be reasonable if that failure was based on unnecessary obstacles to

complaints. For example, if the process entailed undue expense by the employee,88 inaccessible points of contact for making complaints,89 or

unnecessarily intimidating or burdensome requirements, failure to invoke it on such a basis would be reasonable.

An employee's failure to participate in a mandatory mediation or other alternative dispute resolution process also does not does not constitute

unreasonable failure to avoid harm. While an employee can be expected to cooperate in the employer's investigation by providing relevant

information, an employee can never be required to waive rights, either substantive or procedural, as an element of his or her exercise of

reasonable care.90 Nor must an employee have to try to resolve the matter with the harasser as an element of exercising due care.

c. Perception That Complaint Process Was Ineffective

An employer cannot establish the second prong of the defense based on the employee's failure to complain if that failure was based on a

reasonable belief that the process was ineffective. For example, an employee would have a reasonable basis to believe that the complaint

process is ineffective if the procedure required the employee to complain initially to the harassing supervisor. Such a reasonable basis also

would be found if he or she was aware of instances in which co- workers' complaints failed to stop harassment. One way to increase employees'

confidence in the efficacy of the complaint process would be for the employer to release general information to employees about corrective and

disciplinary measures undertaken to stop harassment.91

2. Other Efforts to Avoid Harm

Generally, an employer can prove the second prong of the affirmative defense if the employee unreasonably failed to utilize its complaint

process. However, such proof will not establish the defense if the employee made other efforts to avoid harm.

For example, a prompt complaint by the employee to the EEOC or a state fair employment practices agency while the harassment is ongoing

could qualify as such an effort. A union grievance could also qualify as an effort to avoid harm.92 Similarly, a staffing firm worker who is

harassed at the client's workplace might report the harassment either to the staffing firm or to the client, reasonably expecting that either

would act to correct the problem.93 Thus the worker's failure to complain to one of those entities would not bar him or her from subsequently

bringing a claim against it.

With these and any other efforts to avoid harm, the timing of the complaint could affect liability or damages. If the employee could have

avoided some of the harm by complaining earlier, then damages would be mitigated accordingly.

VI. Harassment by "Alter Ego" of Employer

A. Standard of Liability

An employer is liable for unlawful harassment whenever the harasser is of a sufficiently high rank to fall "within that class . . . who may be

treated as the organization's proxy." Faragher, 118 S. Ct. at 2284.94 In such circumstances, the official's unlawful harassment is imputed

automatically to the employer.95 Thus the employer cannot raise the affirmative defense, even if the harassment did not result in a tangible

employment action.

B. Officials Who Qualify as "Alter Egos" or "Proxies"

The Court, in Faragher, cited the following examples of officials whose harassment could be imputed automatically to the employer:

president96

owner97

partner98

corporate officer

Faragher, 118 S. Ct. at 2284.

VII. Conclusion

The Supreme Court's rulings in Ellerth and Faragher create an incentive for employers to implement and enforce strong policies prohibiting

harassment and effective complaint procedures. The rulings also create an incentive for employees to alert management about harassment

before it becomes severe and pervasive. If employers and employees undertake these steps, unlawful harassment can often be prevented,

thereby effectuating an important goal of the anti-discrimination statutes.

1 See, e.g., 29 C.F.R. § 1604.11 n. 1 ("The principles involved here continue to apply to race, color, religion or national origin."); EEOC

Compliance Manual Section 615.11(a) (BNA 615:0025 ("Title VII law and agency principles will guide the determination of whether an employer

is liable for age harassment by its supervisors, employees, or non-employees").

2 See 1980 Guidelines at 29 C.F.R. § 1604.11(f) and Policy Guidance on Current Issues of Sexual Harassment, Section E, 8 FEP Manual 405:6699

(Mar. 19, 1990), quoted in Faragher, 118 S. Ct. at 2292.

3

Faragher, 118 S. Ct. at 2292.

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4 Oncale v. Sundowner Offshore Services, Inc., 118 S. Ct. 998, 1002 (1998).

5

Faragher, 118 S.Ct. at 2283. However, when isolated incidents that are not "extremely serious" come to the attention of management,

appropriate corrective action should still be taken so that they do not escalate. See Section V(C)(1)(a), below.

6 Oncale, 118 S. Ct. at 1003.

7 Some previous Commission documents classified harassment as either "quid pro quo" or hostile environment. However, it is now more useful

to distinguish between harassment that results in a tangible employment action and harassment that creates a hostile work environment, since

that dichotomy determines whether the employer can raise the affirmative defense to vicarious liability. Guidance on the definition of "tangible

employment action" appears in section IV(B), below.

8 The guidance in this document applies to federal sector employers, as well as all other employers covered by the statutes enforced by the

Commission.

9 29 C.F.R. § 1604.11(d).

10 The Commission will rescind Subsection 1604.11(c) of the 1980 Guidelines on Sexual Harassment, 29 CFR § 1604.11(c). In addition, the

following Commission guidance is no longer in effect: Subsection D of the 1990 Policy Statement on Current Issues in Sexual

Harassment("Employer Liability for Harassment by Supervisors"), EEOC Compliance Manual (BNA) N:4050-58 (3/19/90); and EEOC Compliance

Manual Section 615.3(c) (BNA) 6:15-0007 - 0008.

The remaining portions of the 1980 Guidelines, the 1990 Policy Statement, and Section 615 of the Compliance Manual remain in effect. Other

Commission guidance on harassment also remains in effect, including the Enforcement Guidance on Harris v. Forklift Sys., Inc., EEOC

Compliance Manual (BNA) N:4071 (3/8/94) and the Policy Guidance on Employer Liability for Sexual Favoritism, EEOC Compliance Manual (BNA)

N:5051 (3/19/90).

11 Harassment that is targeted at an individual because of his or her sex violates Title VII even if it does not involve sexual comments or

conduct. Thus, for example, frequent, derogatory remarks about women could constitute unlawful harassment even if the remarks are not sexual

in nature. See 1990 Policy Guidance on Current Issues of Sexual Harassment, subsection C(4) ("sex- based harassment - that is, harassment not

involving sexual activity or language - may also give rise to Title VII liability . . . if it is 'sufficiently patterned or pervasive' and directed at

employees because of their sex").

12 "Protected activity" means opposition to discrimination or participation in proceedings covered by the anti-discrimination statutes.

Harassment based on protected activity can constitute unlawful retaliation. See EEOC Compliance Manual Section 8 ("Retaliation") (BNA)

614:001 (May 20, 1998).

13 For cases applying Ellerth and Faragher to harassment on different bases, see Hafford v. Seidner, 167 F.3d 1074, 1080 (6th Cir. 1999) (religion

and race); Breeding v. Arthur J. Gallagher and Co., 164 F.3d 1151, 1158 (8th Cir. 1999) (age); Allen v. Michigan Department of Corrections, 165

F.3d 405, 411 (6th Cir. 1999) (race) ; Richmond-Hopes v. City of Cleveland, No. 97-3595, 1998 WL 808222 at *9 (6th Cir. Nov. 16, 1998)

(unpublished) (retaliation); Wright- Simmons v. City of Oklahoma City, 155 F.3d 1264, 1270 (10th Cir. 1998) (race); Gotfryd v. Book Covers, Inc.,

No. 97 C 7696, 1999 WL 20925 at *5 (N.D. Ill. Jan. 7, 1999) (national origin). See also Wallin v. Minnesota Department of Corrections, 153 F.3d

681, 687 (8th Cir. 1998) (assuming without deciding that ADA hostile environment claims are modeled after Title VII claims), cert. denied, 119

S. Ct. 1141 (1999).

14 The majority's analysis in both Faragher and Ellerth drew upon the liability standards for harassment on other protected bases. It is therefore

clear that the same standards apply. See Faragher, 118 S. Ct. at 2283 (in determining appropriate standard of liability for sexual harassment by

supervisors, Court "drew upon cases recognizing liability for discriminatory harassment based on race and national origin"); Ellerth, 118 S. Ct. at

2268 (Court imported concept of "tangible employment action" in race, age and national origin discrimination cases for resolution of vicarious

liability in sexual harassment cases). See also cases cited in n.13, above.

15 Ellerth, 118 S. Ct. at 2270; Faragher, 118 S. Ct. at 2293.

16 Numerous statutes contain the word "supervisor," and some contain definitions of the term. See, e.g., 12 U.S.C. § 1813(r) (definition of

"State bank supervisor" in legislation regarding Federal Deposit Insurance Corporation); 29 U.S.C. § 152(11) (definition of "supervisor" in

National Labor Relations Act); 42 U.S.C.. § 8262(2) (definition of "facility energy supervisor" in Federal Energy Initiative legislation). The

definitions vary depending on the purpose and structure of each statute. The definition of the word "supervisor" under other statutes does not

control, and is not affected by, the meaning of that term under the employment discrimination statutes.

17 See 42 U.S.C. 2000e(a) (Title VII); 29 U.S.C. 630(b) (ADEA); and 42 U.S.C. §12111(5)(A) (ADA) (all defining "employer" as including any

agent of the employer).

18 Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 72 (1986); Faragher, 118 S. Ct. at 2290 n.3; Ellerth, 118 S. Ct. at 2266.

19 See Faragher, 118 S. Ct. at 2288 (analysis of vicarious liability "calls not for a mechanical application of indefinite and malleable factors set

forth in the Restatement . . . but rather an inquiry into the reasons that would support a conclusion that harassing behavior ought to be held

within the scope of a supervisor's employment . . . ") and at 2290 n.3 (agency concepts must be adapted to the practical objectives of the

anti-discrimination statutes).

20 Faragher, 118 S. Ct. at 2290; Ellerth, 118 S. Ct. at 2269.

21 Ellerth, 118 S. Ct. at 2269.

22 Ellerth, 118 S. Ct. at 2269.

23 Faragher, 118 S. Ct. at 2280. For a more detailed discussion of the harassers' job responsibilities, see Faragher, 864 F. Supp. 1552, 1563

(S.D. Fla. 1994).

24 See Grozdanich v. Leisure Hills Health Center, 25 F. Supp.2d 953, 973 (D. Minn. 1998) ("it is evident that the Supreme Court views the term

'supervisor' as more expansive than as merely including those employees whose opinions are dispositive on hiring, firing, and promotion"; thus,

"charge nurse" who had authority to control plaintiff's daily activities and recommend discipline qualified as "supervisor" and therefore rendered

employer vicariously liable under Title VII for his harassment of plaintiff, subject to affirmative defense).

25 See Ellerth, 118 S. Ct. at 2268 ("If, in the unusual case, it is alleged there is a false impression that the actor was a supervisor, when he in

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fact was not, the victim's mistaken conclusion must be a reasonable one."); Llampallas v. Mini-Circuit Lab, Inc., 163 F.3d 1236, 1247 (11th Cir.

1998) ("Although the employer may argue that the employee had no actual authority to take the employment action against the plaintiff,

apparent authority serves just as well to impute liability to the employer for the employee's action.").

26 Of course, traditional principles of mitigation of damages apply in these cases, as well as all other employment discrimination cases. See

generally Ford Motor Co. v. EEOC, 458 U.S. 219 (1982).

27 Ellerth, 118 S. Ct. at 2269; Faragher, 118 S. Ct. 2284-85. See also Durham Life Insurance Co., v. Evans, 166 F.3d 139, 152 (3rd Cir. 1999) ("A

supervisor can only take a tangible adverse employment action because of the authority delegated by the employer . . .and thus the employer is

properly charged with the consequences of that delegation.").

28 Ellerth, 118 S. Ct. at 2268.

29 All listed criteria are set forth in Ellerth, 118 S. Ct. at 2269.

30 All listed examples are set forth in Ellerth and/or Faragher. See Ellerth, 118 S. Ct. at 2268 and 2270; Faragher, 118 S. Ct. at 2284, 2291, and

2293.

31 Other forms of formal discipline would qualify as well, such as suspension. Any disciplinary action undertaken as part of a program of

progressive discipline is "tangible" because it brings the employee one step closer to discharge.

32 The Commission disagrees with the Fourth Circuit's conclusion in Reinhold v. Commonwealth of Virginia, 151 F.3d 172 (4th Cir. 1998), that the

plaintiff was not subjected to a tangible employment action where the harassing supervisor "dramatically increased her workload," Reinhold, 947

F. Supp. 919, 923 (E.D Va. 1996), denied her the opportunity to attend a professional conference, required her to monitor and discipline a

co-worker, and generally gave her undesirable assignments. The Fourth Circuit ruled that the plaintiff had not been subjected to a tangible

employment action because she had not "experienced a change in her employment status akin to a demotion or a reassignment entailing

significantly different job responsibilities." 151 F.3d at 175. It is the Commission's view that the Fourth Circuit misconstrued Faragher and

Ellerth. While minor changes in work assignments would not rise to the level of tangible job harm, the actions of the supervisor in Reinhold

were substantial enough to significantly alter the plaintiff's employment status.

33 See Durham, 166 F.3d at 152-53 (assigning insurance salesperson heavy load of inactive policies, which had a severe negative impact on her

earnings, and depriving her of her private office and secretary, were tangible employment actions); Bryson v. Chicago State University, 96 F.3d

912, 917 (7th Cir. 1996) ("Depriving someone of the building blocks for . . . a promotion . . . is just as serious as depriving her of the job

itself.").

34 See Flaherty v. Gas Research Institute, 31 F.3d 451, 457 (7th Cir. 1994) (change in reporting relationship requiring plaintiff to report to former

subordinate, while maybe bruising plaintiff's ego, did not affect his salary, benefits, and level of responsibility and therefore could not be

challenged in ADEA claim), cited in Ellerth, 118 S. Ct. at 2269.

35 See Crady v. Liberty Nat. Bank & Trust Co. of Ind., 993 F.2d 132, 136 (7th Cir. 1993) ("A materially adverse change might be indicated by a

termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits,

significantly diminished material responsibilities, or other indices that might be unique to the particular situation."), quoted in Ellerth, 118 S. Ct.

at 2268-69.

36 See Nichols v. Frank, 42 F.3d 503, 512-13 (9th Cir. 1994) (employer vicariously liable where its supervisor granted plaintiff's leave requests

based on her submission to sexual conduct), cited in Faragher, 118 S. Ct. at 2285.

37 See Ellerth, 118 S. Ct. at 2268 and Faragher, 118 S. Ct. at 2284 (listed examples of tangible employment actions that included both positive

and negative job decisions: hiring and firing; promotion and failure to promote).

38 The link could be established even if the harasser was not the ultimate decision maker. See, e.g., Shager v Upjohn Co., 913 F.2d 398, 405

(7th Cir. 1990) (noting that committee rather than the supervisor fired plaintiff, but employer was still liable because committee functioned as

supervisor's "cat's paw"), cited in Ellerth, 118 S. Ct. at 2269.

39 Llampallas, 163 F.3d at 1247.

40 Ellerth, 118 S. Ct. at 2270 ("[n]o affirmative defense is available . . . when the supervisor's harassment culminates in a tangible employment

action . . ."); Faragher, 118 S. Ct. at 2293 (same). See also Durham, 166 F.3d at 154 ("When harassment becomes adverse employment action,

the employer loses the affirmative defense, even if it might have been available before."); Lissau v. Southern Food Services, Inc., 159 F.3d 177,

184 (4th Cir. 1998) (the affirmative defense "is not available in a hostile work environment case when the supervisor takes a tangible

employment action against the employee as part of the harassment") (Michael, J., concurring).

41 Ellerth, 118 S. Ct. at 2265. Even if the preceding acts were not severe or pervasive, they still may be relevant evidence in determining

whether the tangible employment action was discriminatory.

42 See Lissau v. Southern Food Service, Inc., 159 F.3d at 182 (if plaintiff could not prove that her discharge resulted from her refusal to submit

to her supervisor's sexual harassment, then the defendant could advance the affirmative defense); Newton v. Caldwell Laboratories, 156 F.3d

880, 883 (8th Cir. 1998) (plaintiff failed to prove that her rejection of her supervisor's sexual advances was the reason that her request for a

transfer was denied and that she was discharged; her claim was therefore categorized as one of hostile environment harassment); Fierro v. Saks

Fifth Avenue, 13 F. Supp.2d 481, 491 (S.D.N.Y. 1998) (plaintiff claimed that his discharge resulted from national origin harassment but court

found that he was discharged because of embezzlement; thus, employer could raise affirmative defense as to the harassment preceding the

discharge).

43 See Faragher, 118 S. Ct. at 2292 ("If the victim could have avoided harm, no liability should be found against the employer who had taken

reasonable care.").

44 See, e.g., EEOC v. SBS Transit, Inc., No. 97-4164, 1998 WL 903833 at *1 (6th Cir. Dec. 18, 1998) (unpublished) (lower court erred when it

reasoned that employer liability for sexual harassment is negated if the employer responds adequately and effectively once it has notice of the

supervisor's harassment; that standard conflicts with affirmative defense which requires proof that employer "took reasonable care to prevent

and correct promptly any sexually harassing behavior and that the plaintiff employee unreasonably failed to take advantage of preventative or

corrective opportunities provided by the employer").

45 Ellerth, 118 S. Ct. at 2270.

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46 See Indest v. Freeman Decorating, Inc., 168 F.3d 795, 803 (5th Cir. 1999) ("when an employer satisfies the first element of the Supreme

Court's affirmative defense, it will likely forestall its own vicarious liability for a supervisor's discriminatory conduct by nipping such behavior in

the bud") (Wiener, J., concurring in Indest, 164 F.3d 258 (5th Cir. 1999)). The Commission agrees with Judge Wiener's concurrence in Indest that

the court in that case dismissed the plaintiff's claims on an erroneous basis. The plaintiff alleged that her supervisor made five crude sexual

comments or gestures to her during a week-long convention. She reported the incidents to appropriate management officials who investigated

the matter and meted out appropriate discipline. No further incidents of harassment occurred. The court noted that it was "difficult to conclude"

that the conduct to which the plaintiff was briefly subjected created an unlawful hostile environment. Nevertheless, the court went on to

consider liability. It stated that Ellerth and Faragher do not apply where the plaintiff quickly resorted to the employer's grievance procedure and

the employer took prompt remedial action. In such a case, according to the court, the employer's quick response exempts it from liability. The

Commission agrees with Judge Wiener that Ellerth and Faragher do control the analysis in such cases, and that an employee's prompt complaint

to management forecloses the employer from proving the affirmative defense. However, as Judge Wiener pointed out, an employer's quick

remedial action will often thwart the creation of an unlawful hostile environment, rendering any consideration of employer liability unnecessary.

47 See Greene v. Dalton, 164 F.3d 671, 674 (D.C. Cir. 1999) (in order for defendant to avoid all liability for sexual harassment leading to rape of

plaintiff "it must show not merely that [the plaintiff] inexcusably delayed reporting the alleged rape . . . but that, as a matter of law, a

reasonable person in [her] place would have come forward early enough to prevent [the] harassment from becoming 'severe or pervasive'").

48 Ellerth, 118 S. Ct. at 2267.

49 Under this same principle, it is the Commission's position that an employer is liable for punitive damages if its supervisor commits unlawful

harassment or other discriminatory conduct with malice or with reckless indifference to the employee's federally protected rights. (The Supreme

Court will determine the standard for awarding punitive damages in Kolstad v. American Dental Association,119 S. Ct. 401 (1998) (granting

certiorari).) The test for imposition of punitive damages is the mental state of the harasser, not of higher-level officials. This approach furthers

the remedial and deterrent objectives of the anti-discrimination statutes, and is consistent with the vicarious liability standard set forth in

Faragher and Ellerth.

50 Even if higher management proves that evidence it discovered after-the-fact would have justified the supervisor's action, such evidence can

only limit remedies, not eliminate liability. McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 360-62 (1995).

51 See Faragher, 118 S. Ct. at 2293, and Ellerth, 118 S. Ct. at 2270 (affirmative defense operates either to eliminate liability or limit damages).

52 See Faragher, 118 S. Ct. at 2292 ("if damages could reasonably have been mitigated no award against a liable employer should reward a

plaintiff for what her own efforts could have avoided").

53 See Section V(C)(3) for a discussion of preventive and corrective care by small employers.

54 See Hurley v. Atlantic City Police Dept., No. 96-5634, 96-5633, 96-5661, 96-5738, 1999 WL 150301 (3d Cir. March 18, 1999) ("Ellerth and

Faragher do not, as the defendants seem to assume, focus mechanically on the formal existence of a sexual harassment policy, allowing an

absolute defense to a hostile work environment claim whenever the employer can point to an anti- harassment policy of some sort"; defendant

failed to prove affirmative defense where it issued written policies without enforcing them, painted over offensive graffiti every few months only

to see it go up again in minutes, and failed to investigate sexual harassment as it investigated and punished other forms of misconduct.).

55 See Dees v. Johnson Controls World Services, Inc., 168 F.3d 417, 422 (11th Cir. 1999) (employer can be held liable despite its immediate and

appropriate corrective action in response to harassment complaint if it had knowledge of the harassment prior to the complaint and took no

corrective action).

56 Ellerth, 118 S. Ct. at 2270.

57 A union grievance and arbitration system does not fulfill this obligation. Decision making under such a system addresses the collective

interests of bargaining unit members, while decision making under an internal harassment complaint process should focus on the individual

complainant's rights under the employer's anti-harassment policy.

An arbitration, mediation, or other alternative dispute resolution process also does not fulfill the employer's duty of due care. The employer

cannot discharge its responsibility to investigate complaints of harassment and undertake corrective measures by providing employees with a

dispute resolution process. For further discussion of the impact of such procedures on the affirmative defense, see Section V(D)(1)(b), below.

Finally, a federal agency's formal, internal EEO complaint process does not, by itself, fulfill its obligation to exercise reasonable care. That

process only addresses complaints of violations of the federal EEO laws, while the Court, in Ellerth, made clear that an employer should

encourage employees "to report harassing conduct before it becomes severe or pervasive." Ellerth, 118 S. Ct. at 2270. Furthermore, the EEO

process is designed to assess whether the agency is liable for unlawful discrimination and does not necessarily fulfill the agency's obligation to

undertake immediate and appropriate corrective action.

58 Although the affirmative defense does not apply in cases of harassment by co-workers or non-employees, an employer cannot claim lack of

knowledge as a defense to such harassment if it did not make clear to employees that they can bring such misconduct to the attention of

management and that such complaints will be addressed. See Perry v. Ethan Allen, 115 F.3d 143, 149 (2d Cir. 1997) ("When harassment is

perpetrated by the plaintiff's coworkers, an employer will be liable if the plaintiff demonstrates that 'the employer either provided no reasonable

avenue for complaint or knew of the harassment but did nothing about it'"), cited in Faragher, 118 S. Ct. at 2289. Furthermore, an employer is

liable for harassment by a co-worker or non-employer if management knew or should have known of the misconduct, unless the employer can

show that it took immediate and appropriate corrective action. 29 C.F.R. § 1604.11(d). Therefore, the employer should have a mechanism for

investigating such allegations and undertaking corrective action, where appropriate.

59 Surveys have shown that a common reason for failure to report harassment to management is fear of retaliation. See, e.g., Louise F.

Fitzgerald & Suzanne Swan, "Why Didn't She Just Report Him? The Psychological and Legal Implications of Women's Responses to Sexual

Harassment," 51 Journal of Social Issues 117, 121-22 (1995) (citing studies). Surveys also have shown that a significant proportion of

harassment victims are worse off after complaining. Id. at 123-24; see also Patricia A. Frazier, "Overview of Sexual Harassment From the

Behavioral Science Perspective," paper presented at the American Bar Association National Institute on Sexual Harassment at B-17 (1998)

(reviewing studies that show frequency of retaliation after victims confront their harasser or filed formal complaints).

60 See Wilson v. Tulsa Junior College, 164 F.3d 534, 541 (10th Cir. 1998) (complaint process deficient where it permitted employees to bypass

the harassing supervisor by complaining to director of personnel services, but the director was inaccessible due to hours of duty and location in

separate facility).

61 Faragher, 118 S. Ct. at 2293 (in holding as matter of law that City did not exercise reasonable care to prevent the supervisors' harassment,

Court took note of fact that City's policy "did not include any assurance that the harassing supervisors could be bypassed in registering

complaints"); Meritor Savings Bank, FSB v. Vinson, 471 U.S. 57, 72 (1986).

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62 See Wilson, 164 F.3d at 541 (complaint procedure deficient because it only required supervisors to report "formal" as opposed to "informal"

complaints of harassment); Varner v. National Super Markets Inc., 94 F.3d 1209, 1213 (8th Cir. 1996), cert denied, 519 U.S. 1110 (1997)

(complaint procedure is not effective if it does not require supervisor with knowledge of harassment to report the information to those in

position to take appropriate action).

63 It is particularly important for federal agencies to explain the statute of limitations for filing formal EEO complaints, because the regulatory

deadline is only 45 days and employees may otherwise assume they can wait whatever length of time it takes for management to complete its

internal investigation.

64 If an employer actively misleads an employee into missing the deadline for filing a charge by dragging out its investigation and assuring the

employee that the harassment will be rectified, then the employer would be "equitably estopped" from challenging the delay. See Currier v.

Radio Free Europe/Radio Liberty, Inc., 159 F.3d 1363, 1368 (D.C. Cir. 1998) ("an employer's affirmatively misleading statements that a grievance

will be resolved in the employee's favor can establish an equitable estoppel"); Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1531

(11th Cir. 1992) (tolling is appropriate where plaintiff was led by defendant to believe that the discriminatory treatment would be rectified);

Miller v. Beneficial Management Corp., 977 F.2d 834, 845 (3d Cir. 1992) (equitable tolling applies where employer's own acts or omission has

lulled the plaintiff into foregoing prompt attempt to vindicate his rights).

65 The sharing of records about a harassment complaint with prospective employers of the complainant could constitute unlawful retaliation.

See Compliance Manual Section 8 ("Retaliation), subsection II D (2), (BNA) 614:0005 (5/20/98).

66 One court has suggested that it may be permissible to honor such a request, but that when the harassment is severe, an employer cannot

just stand by, even if requested to do so. Torres v. Pisano, 116 F.3d 625 (2d Cir.), cert. denied, 118 S. Ct. 563(1997).

67 Employers may hesitate to set up such a phone line due to concern that it may create a duty to investigate anonymous complaints, even if

based on mere rumor. To avoid any confusion as to whether an anonymous complaint through such a phone line triggers an investigation, the

employer should make clear that the person who takes the calls is not a management official and can only answer questions and provide

information. An investigation will proceed only if a complaint is made through the internal complaint process or if management otherwise learns

about alleged harassment.

68 See, e.g., Van Zant v. KLM Royal Dutch Airlines, 80 F.3d 708, 715 (2d Cir. 1996) (employer's response prompt where it began investigation on

the day that complaint was made, conducted interviews within two days, and fired the harasser within ten days); Steiner v. Showboat Operating

Co., 25 F.3d 1459, 1464 (9th Cir. 1994) (employer's response to complaints inadequate despite eventual discharge of harasser where it did not

seriously investigate or strongly reprimand supervisor until after plaintiff filed charge with state FEP agency), cert. denied, 513 U.S. 1082

(1995); Saxton v. AT&T, 10 F.3d 526, 535 (7th Cir 1993) (investigation prompt where it was begun one day after complaint and a detailed report

was completed two weeks later); Nash v. Electrospace Systems, Inc. 9 F.3d 401, 404 (5th Cir. 1993) (prompt investigation completed within one

week); Juarez v. Ameritech Mobile Communications, Inc., 957 F.2d 317, 319 (7th Cir. 1992) (adequate investigation completed within four days).

69 Management may be reluctant to release information about specific disciplinary measures that it undertakes against the harasser, due to

concerns about potential defamation claims by the harasser. However, many courts have recognized that limited disclosures of such information

are privileged. For cases addressing defenses to defamation claims arising out of alleged harassment, see Duffy v. Leading Edge Products, 44

F.3d 308, 311 (5th Cir. 1995) (qualified privilege applied to statements accusing plaintiff of harassment); Garziano v. E.I. DuPont de Nemours &

Co., 818 F.2d 380 (5th Cir. 1987) (qualified privilege protects employer's statements in bulletin to employees concerning dismissal of alleged

harasser); Stockley v. AT&T, 687 F. Supp. 764 (F. Supp. 764 (E.D.N.Y. 1988) (statements made in course of investigation into sexual harassment

charges protected by qualified privilege).

70 Mockler v Multnomah County, 140 F.3d 808, 813 (9th Cir. 1998).

71 In some cases, accused harassers who were subjected to discipline and subsequently exonerated have claimed that the disciplinary action

was discriminatory. No discrimination will be found if the employer had a good faith belief that such action was warranted and there is no

evidence that it undertook less punitive measures against similarly situated employees outside his or her protected class who were accused of

harassment. In such circumstances, the Commission will not find pretext based solely on an after-the-fact conclusion that the disciplinary action

was inappropriate. See Waggoner v. City of Garland Tex., 987 F.2d 1160, 1165 (5th Cir. 1993) (where accused harasser claims that disciplinary

action was discriminatory, "[t]he real issue is whether the employer reasonably believed the employee's allegation [of harassment] and acted on

it in good faith, or to the contrary, the employer did not actually believe the co-employee's allegation but instead used it as a pretext for an

otherwise discriminatory dismissal").

72 See Steiner v. Showboat Operating Co., 25 F.3d 1459, 1464 (9th Cir. 1994) (employer remedial action for sexual harassment by supervisor

inadequate where it twice changed plaintiff's shift to get her away from supervisor rather than change his shift or work area), cert. denied, 513

U.S. 1082 (1995).

73 See Guess v. Bethlehem Steel Corp., 913 F.2d 463, 465 (7th Cir. 1990) ("a remedial measure that makes the victim of sexual harassment worse off is ineffective per

se").

74 An oral warning or reprimand would be appropriate only if the misconduct was isolated and minor. If an employer relies on oral warnings or

reprimands to correct harassment, it will have difficulty proving that it exercised reasonable care to prevent and correct such misconduct.

75 See Varner, 94 F.3d at 1213 (complaint procedure is not effective if it does not require supervisor with knowledge of harassment to report the

information to those in position to take appropriate action), cert denied, 117 S. Ct. 946 (1997); accord Wilson v. Tulsa Junior College, 164 F.3d

at 541.

76 See Wilson, 164 F.3d at 541 (complaint procedure deficient because it only required supervisors to report "formal" as opposed to "informal"

complaints of harassment).

77 See, e.g., Splunge v. Shoney's, Inc., 97 F.3d 488, 490 (11th Cir. 1996) (where harassment of plaintiffs was so pervasive that higher

management could be deemed to have constructive knowledge of it, employer was obligated to undertake corrective action even though

plaintiffs did not register complaints); Fall v. Indiana Univ. Bd. of Trustees, 12 F. Supp.2d 870, 882 (N.D. Ind. 1998) (employer has constructive

knowledge of harassment by supervisors where it "was so broad in scope and so permeated the workplace that it must have come to the

attention of someone authorized to do something about it").

78 In Faragher, the City lost the opportunity to establish the affirmative defense in part because "its officials made no attempt to keep track of

the conduct of supervisors." Faragher, 118 S. Ct. at 2293.

79 See subsections V(C)(1)(e)(ii) and V(C)(2), above.

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80 If the owner of the business commits unlawful harassment, then the business will automatically be found liable under the alter ego standard

and no affirmative defense can be raised. See Section VI, below.

81 Faragher, 118 S. Ct. at 2293.

82 Faragher, 118 S. Ct. at 2292 ("If the victim could have avoided harm, no liability should be found against the employer who had taken

reasonable care, and if damages could reasonably have been mitigated no award against a liable employer should reward a plaintiff for what her

own efforts could have avoided.").

83 Ellerth, 118 S. Ct. at 2270; Faragher, 118 S. Ct. at 2293. See also Scrivner v. Socorro Independent School District, 169 F.3d 969, 971 (5th Cir.,

1999) (employer established second prong of defense where harassment began during summer, plaintiff misled investigators inquiring into

anonymous complaint by denying that harassment occurred, and plaintiff did not complain about the harassment until the following March).

84 The employee is not required to have chosen "the course that events later show to have been the best." Restatement (Second) of Torts §

918, comment c.

85 See Corcoran v. Shoney's Colonial, Inc., 24 F. Supp.2d 601, 606 (W.D. Va. 1998) ("Though unwanted sexual remarks have no place in the work

environment, it is far from uncommon for those subjected to such remarks to ignore them when they are first made.").

86 See Faragher, 118 S. Ct. at 2292 (defense established if plaintiff unreasonably failed to avail herself of "a proven, effective mechanism for

reporting and resolving complaints of sexual harassment, available to the employee without undue risk or expense"). See also Restatement

(Second) of Torts § 918, comment c (tort victim "is not barred from full recovery by the fact that it would have been reasonable for him to make

expenditures or subject himself to pain or risk; it is only when he is unreasonable in refusing or failing to take action to prevent further loss

that his damages are curtailed").

87 See n.59, above.

88 See Faragher, 118 S. Ct. at 2292 (employee should not recover for harm that could have been avoided by utilizing a proven, effective

complaint process that was available "without undue risk or expense").

89 See Wilson, 164 F.3d at 541 (complaint process deficient where official who could take complaint was inaccessible due to hours of duty and

location in separate facility).

90 See Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment, EEOC

Compliance Manual (BNA) N:3101 (7/10/97).

91 For a discussion of defamation claims and the application of a qualified privilege to an employer's statements about instances of

harassment, see n.69, above.

92 See Watts v. Kroger Company, 170 F.3d 505, 510 (5th Cir., 1999) (plaintiff made effort "to avoid harm otherwise" where she filed a union

grievance and did not utilize the employer's harassment complaint process; both the employer and union procedures were corrective mechanisms

designed to avoid harm).

93 Both the staffing firm and the client may be legally responsible, under the anti- discrimination statutes, for undertaking corrective action. See

Enforcement Guidance: Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms,

EEOC Compliance Manual (BNA) N:3317 (12/3/97).

94 See also Ellerth, 118 S. Ct. at 2267 (under agency principles an employer is indirectly liable "where the agent's high rank in the company

makes him or her the employer's alter ego"); Harrison v. Eddy Potash, Inc., 158 F.3d 1371, 1376 (10th Cir. 1998) ("the Supreme Court in

Burlington acknowledged an employer can be held vicariously liable under Title VII if the harassing employee's 'high rank in the company makes

him or her the employer's alter ego'").

95 Faragher, 118 S. Ct. at 2284.

96 The Court noted that the standards for employer liability were not at issue in the case of Harris v. Forklift Systems, 510 U.S. 17 (1993),

because the harasser was the president of the company. Faragher, 118 S. Ct. at 2284.

97 An individual who has an ownership interest in an organization, receives compensation based on its profits, and participates in managing the

organization would qualify as an "owner" or "partner." Serapion v. Martinez, 119 F.3d 982, 990 (1st Cir. 1997), cert. denied, 118 S. Ct. 690

(1998).

98 Id.

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