RS21702 -- Sexual Harassment, Constructive Discharge, and Employers' Affirmative Defenses: The U.S. SupremeCourt Decision in Pennsylvania State Police v.Suders Updated June 18, 2004 Originally, courts drew a distinction for purposes of employer liability between so-called " quid pro quo " and "hostile environment" claims of sexual harassment. The former consist ofcases where a supervisor threatens to grant or withhold tangible job benefits - or to inflict detrimental jobconsequences - based on a subordinate's response to unwelcome sexualadvances by the supervisor. Employers were uniformly held liable - whether or not they knew of the harassmentor had any policy against it - for any retaliation suffered byemployees who resisted this form of sexual extortion. But the quid pro quo theory failedto address the plight of employees who refused the supervisor's advances, without adverseconsequence, or who submitted to save their jobs. In Meritor Savings Bank v. Vinson , (5) the Court recognized hostile environment sexual harassment, which dispensed with the need for any tangible harm- psychological or economic - to pursue a Title VII claim. In a hostile environment action, the plaintiff must demonstrate unwelcome sexualconduct - of verbal, physical, or visual nature - that is so "severe andpervasive" as to alter employment terms and conditions by creating a subjectively and objectively "hostile, abusive,or offensive working environment." Meritor , however, did not definea standard for holding employers liable for harassing conduct by their supervisors, which led to varying lower courtapproaches. One approach held the employer strictly liable for theacts of its supervisors. Other courts applied a negligence standard, holding employers liable only for harassmentof which they were both aware and failed to prevent. A middle courseemphasized as factors whether the employer had reason to know of the harassment or had a formal anti-harassmentpolicy in place. The Supreme Court in Farager and Ellerth sought to allay some of this judicial confusion as to the nature and scope of an employer's legal liability for the discriminatory and harassingconduct of its supervisors in Title VII cases. It held employers strictly liable for a sexually hostile workenvironment created by a supervisor, when the challenged discrimination orharassment results in a "tangible employment action." (6) But in the absence of such a "company act" the employer may raise an affirmative defense basedon its having in place areasonable remedial process and on the employee's failure to take advantage of it. Thus, the Ellerth/Farager defense has two components: "(a) that the employer exercise reasonablecare to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employeeunreasonably failed to take advantage of any preventative or correctiveopportunities provided by the employer or to avoid harm otherwise." The Supreme Court defined a "tangible employment action" categorically to mean any "significant change in employment status," that may - but not always - result in economic harm. Specifically, the term includes "hiring, firing, failing to promote, reassignment with significantly differentresponsibilities, or a decision causing a significant change in benefits" (7) However, a "constructive discharge," where the employee quits, claiming that conditions are so intolerable that heor she was effectively "fired," presented an unresolved issue. Couldan employer, faced with a claim of constructive discharge, still assert the Ellerth/Farager defense? Nancy Suders was hired by the Pennsylvania State Police as a police communications officer in March 1998. She claimed that she was forced to resign her job in August 1998, becauseof a sexually hostile work environment created by three male supervisors, and harassment due to her age andpolitical affiliation. The conduct alleged included repeated episodes ofname-calling, explicit sexual gesturing, obscene and offensive sexual conversation, and the posting of vulgar imagesin the workplace. Suders complained to the employer's equalemployment opportunity officer, but received no assistance in resolving her problem. Near the end of her tenure,Suders was accused of theft of records from the barracks and, as aresult, was handcuffed, photographed, and held for questioning. Immediately after this incident, she resigned. Suders filed a federal district court lawsuit, alleging that the State Police and the individual defendants had subjected her to a hostile work environment based on her sex, age, andpolitical affiliation and had constructively discharged her, in violation of Title VII, the Age Discrimination inEmployment Act, and the Pennsylvania Human Relations Act. At the closeof discovery, the defendants successfully moved for summary judgment. Suders' claims raised genuine hostile environment issues, but the district court found the State Police wereshielded from strict Title VII liability by the Farager/Ellerth affirmative defense. Farager/Ellerth The constructive discharge doctrine originated in federal labor law and was later transposed by judicial interpretation to employment discrimination cases. Basically, the courts have held that an employee alleging a constructive discharge must demonstrate the concurrence of two factors: 1) (s)hesuffered harassment or discrimination so intolerable that a reasonable personin the same position would have felt compelled to resign and 2) the employee's reaction to the workplace situationwas reasonable given the totality of circumstances. Because of itsdirect economic harm to employees, the Third Circuit joined the Eighth Circuit (8) in concluding that constructive discharge, if proven, is the functional equivalentof an actual dismissaland amounts to a tangible employment action. Taking the opposite position, the Second (9) and Sixth (10) Circuits had decided that a voluntary resignation, as opposed to a dismissal, wasnever the kind of official action that deprived the employer of its legal defenses. Otherwise, constructive dischargewould have been included in the recital of tangible employmentactions listed by the Supreme Court in the Faragher/Ellerth opinions. Moreover, constructive dischargecould result from actions of co-workers, for which employers have never beenheld vicariously liable, as well as supervisory harassment. Finally, the opposing circuits refused to view constructivedischarge as a tangible employment action because it is a "unilateral" act of the employee that is neither instigated nor ratified by the employer. Writing for the Third Circuit in Suders , however, Judge Fuentes was convinced that to permit the affirmative defense in constructive discharge cases would discourage activeintervention by employers to prevent harassment at its earliest stages and could even promote its continuation. (11) Conversely, he did not believe that its decisionwould encourageprecipitate or irresponsible action by victimized employees. "Because of the stringent test for proving constructivedischarge . . .it is highly unlikely that the employee will walk off ofthe job at the first sign of harassment and expect to prevail under Title VII." (12) Consequently, whenever an employee shows that working conditions havebecome so unendurable as tolead a reasonable employee to resign without formally being dismissed, the employer would be strictly liable forcompensatory and punitive damages or other Title VII relief. Or, inSuders' case, "when an employee has raised a genuine issue of material fact as to a claim of constructive discharge,an employer may not assert, or otherwise rely on, the affirmativedefense in support of its motion for summary judgment." Justice Ginsburg's opinion in Suders applied the framework of the Court's 1998 rulings to stake out a middle ground between the conflicting approaches to constructive discharge takenby the courts of appeals. The only real difference between the harassment in Ellerth/Farager and thiscase was one of degree; that is, Suders presented a "worst case" scenario, orharassment "racheted up to the breaking point." But a constructive discharge claim requires more than a pattern ofsevere or pervasive workplace abuse as would satisfy the legalstandard for ordinary harassment. Employees advancing "compound" claims must also prove that the abusiveworking environment became so intolerable that a reasonable personwould have felt compelled to resign. Such objectively intolerable conditions could result from co-worker conduct,unofficial supervisory act, or "official" company acts. The Court'searlier decisions applied agency principles to define employer vicarious liability for a supervisor's harassment ofsubordinates. Only when supervisory misconduct is "aided by theagency relation," as evidenced by a tangible or "official act of the enterprise," is the employer's responsibility soobvious as to warrant strict liability. When no tangible employmentaction is taken, the basis for imputing blame on the employer is less evident, and the focus shifts to the Title VIIpolicy of prevention. The employer may then defeat vicarious liabilityby showing that it had reasonable anti-harassment procedures in place that the employee unreasonably failed toutilize. The Supreme Court affirmed that Title VII encompasses employer liability for constructive discharge claims attributable to a supervisor. It disagreed, however, with the Third Circuit'sconclusion that the affirmative defense from Ellerth and Faragher was never available insuch cases. The Third Circuit equated constructive discharge with a tangible employmentaction, in effect conflating what the Court viewed to be two separate inquiries. Thus, while actual terminationalways involves an official company act, Justice Ginsburg reasoned, aconstructive discharge may or may not. Consequently, when an "official act" (e.g. a demotion, pay-cut, job transfer,or other "official directions or directions" likely known to theemployer) "does not underlie the constructive discharge," the role of the agency relationship in the supervisor'smisconduct is uncertain, and the employer is entitled to the benefit of theaffirmative defense. The Third Circuit erred in drawing the line differently. Justice Ginsburg elaborated: Under its formulation, the affirmative defense would be eliminated in all hostile-environment constructive discharge cases, but retained, as Ellerth and Faragher require, in 'ordinary' hostile environment cases, i.e., cases involvingno tangible employment action. That placement of the line, anomalously, would make the graver claim of hostile-environment constructive discharge easier to prove than its lesserincluded component, hostile work environment. Moreover, the Third Circuit's formulation,that court itself recognized, would make matters complex, indeed, more than a little confusing to jurors. Creationof a hostile work environment is a necessary predication to a hostileenvironment constructive discharge case. Juries would be so informed. Under the Third Circuit's decision, a jury,presumably, would be cautioned to consider the affirmative-defenseevidence only in reaching a decision on the hostile environment claim, and to ignore or at least downplay the sameevidence in deciding the closely associated constructive dischargeclaim. It makes scant sense thus to alter the decisive instructions from one claim to the next when the only variationbetween the two claims is the severity of the hostile workingconditions. (13) The Court was critical of one other aspect of the Third Circuit decision. While rejecting the availability of the affirmative defense in any constructive discharge case, the appeals courtsuggested that the existence of an effective anti-harassment policy may nonetheless be relevant to the thresholdquestion of whether the harassment was intolerable and the employee'sdecision to quit a reasonable one. In response, Justice Ginsburg sought to clarify that the employer, rather theemployee, has the ultimate burden of proving the unreasonableness of theemployee's actions in this regard. In his dissenting opinion, Justice Thomas faulted the Court for adopting an overlybroad definition of constructive discharge, which improperly failedto demand proof by the employee that supervisory harassment was intended to force a resignation. In recognizing hostile environment constructive discharge claims, Suders enhanced Title VII protection for employees who quit their jobs over intense sexual harassment by asupervisor. But the decision also makes it easier for an employer to defend against such claims by showing thatit has reasonable procedures for reporting and correcting harassment ofwhich the employee failed to avail herself. Only "if the plaintiff quits in reasonable response to anemployer-sanctioned adverse action officially changing her employment status orsituation, for example, a humiliating demotion, extreme cut in pay, or transfer to a position in which she would faceunbearable working condition," is the employer made strictly liablefor monetary damages or other Title VII relief. Moreover, even where there has been a tangible employment action,coupled with a constructive discharge or resignation, the employermay have defenses available. First, the employer may argue that the harassing conduct did not occur as alleged, orwas not sufficiently severe, pervasive, or unwelcome to meetstandards for a Title VII violation. Second, if the tangible employment action is shown to be unrelated to the allegedharassment, or is taken for legitimate non-discriminatory reasons - particularly, if by persons other than the alleged harasser - the employer might escape liability. Finally, theemployer might be able to demonstrate that, whatever form the underlyingsupervisory harassment may take, it did not meet the standard for constructive discharge: "so intolerable that areasonable person would have felt compelled to resign." But Suders alsomakes it more difficult to obtain summary judgment and avoid jury trials in sexual harassment cases involvingconstructive discharge claims. Under the decision, if there is any realdispute about whether the employee suffered a tangible employment action, the employer may not rely on theaffirmative defense to obtain summary judgment.

Summary:
On June 14, 2004 the Supreme Court resolved a conflict among the federal circuitsconcerning the defenses, if any, that may be available toan employer against an employee's claim that she was forced to resign because of "intolerable" sexual harassmentat the hands of a supervisor. An employer may generally assert anaffirmative defense to supervisory harassment under the Court's 1998 rulings in Farager v. City of BocaRaton and Burlington Industries, Inc. v. Ellerth. The defense is not available,however, if the harassment includes a "tangible employment action," such as discharge or demotion. InPennsylvania State Police v. Suders, the plaintiff claimed the tangible adverseaction was supervisory harassment so severe that it drove the employee to quit, a constructive discharge in effect. The Court, in an opinion by Justice Ginsburg, with only JusticeThomas dissenting, accepted the theory of a constructive discharge as a tangible employment action, but it also setconditions under which the employer could assert an affirmativedefense and avoid strict liability. The issue is of key importance for determining the scope of employers' vicariousliability in "supervisory" sexual harassment cases alleging a hostilework environment.