Opinion ID: 1344791
Heading Depth: 1
Heading Rank: 2

Heading: Did the superior court properly instruct the jury as to whether VECO could be held liable for hostile environment sexual harassment committed by a supervisor acting outside the scope of his employment? [11]

Text: VECO claims that the superior court's instructions on liability were erroneous because they allowed the jury to impose strict liability on it if a low-level supervisor subjected Rosebrock to hostile environment sexual harassment, or if a low-level supervisor knew about the harassment, but failed to take remedial action. It argues that it should only be liable for a supervisor's hostile environment sexual harassment if a management-level employee knew or should have known about the harassment and failed to take proper and effective remedial action. [12] Rosebrock, however, argues that an employer should always be liable for hostile environment sexual harassment if it is committed by its supervisors or if its supervisors had knowledge and failed to take remedial action. The superior court instructed the jury on liability as follows in Instruction No. 16: If you find that VECO employees subjected Rosebrock to a sexually hostile working environment as previously defined, you must decide whether VECO itself is liable for its employees' conduct. You must first consider the role of VECO supervisory employees. You shall find VECO liable for the conduct of its supervisory employees if you find that it is more likely than not that: 1. One or more of VECO's supervisory employees encouraged, caused, permitted, ratified, or participated in the conduct; or 2. One or more of VECO's supervisory employees, knowing of the conduct, excused it or failed to take remedial action reasonably calculated to end the harassment. Such remedial action must be immediate and must remedy the conduct without adversely affecting the terms or conditions of the complaining party's employment. You shall find VECO liable for the conduct of its non-supervisory employees if you find that it is more likely than not that such employees were acting within the scope of their employment, and if VECO knew or should have known of the harassment and failed to take remedial action as discussed above. The first paragraph of the instruction directs the jury to proceed if VECO employees, supervisors or otherwise, subjected Rosebrock to a hostile work environment. The second paragraph defines when VECO will be liable for the acts or omissions of its supervisory employees. The subparagraph numbered one allowed the jury to impose liability on VECO if its supervisory employees encouraged, caused, permitted, ratified, or participated in the harassment. It did not require the jury to find that those supervisors had acted within the scope of their employment or used their delegated authority to carry out the harassment. In addition, it did not require the jury to find that a management-level employee knew or should have known about the harassment. Thus this subparagraph allowed the jury to impose liability on VECO for the sexual harassment by a low-level supervisor, acting outside the scope of his employment, even if VECO management-level employees did not know or have constructive knowledge of the harassment. Subparagraph number two allowed the jury to impose liability on VECO if a supervisor knew about the harassment, but did not take proper remedial action. It did not limit VECO's liability to an omission by a management-level employee, but allowed the jury to impose liability on VECO for a low-level supervisor's failure to take proper remedial action. [13] Instruction 17 defined supervisor as follows: A supervisor is one who serves in a supervisory position and has corporate authority to affect the terms and conditions of the employees he supervises. In other words a person is a supervisor if he has the authority to hire, fire, promote, discipline, or in any other manner affect the terms or conditions of an employee's employment. Taken together these instructions allowed the jury to impose liability on VECO for the acts or omissions of Rosebrock's immediate supervisors, regardless of whether they were acting within the scope of their employment, and regardless of whether management-level employees knew or should have known about the harassment. The scope of an employer's liability for its employees' hostile environment sexual harassment is an issue of first impression in Alaska. In interpreting Alaska's anti-discrimination laws, we have looked to federal Title VII cases for guidance. [14] See French, 911 P.2d at 28 n. 8. We have observed, however, that AS 18.80.220 is intended to be more broadly interpreted than federal law to further the goal of eradication of discrimination. Wondzell v. Alaska Wood Prods., Inc., 601 P.2d 584, 585 (Alaska 1979). The United States Supreme Court addressed the issue of employer liability in Meritor Savings Bank v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986). [15] Because the factual record had not been fully developed in the trial court, the majority opinion refused to issue a definitive rule on employer liability, but stated that we do agree with the EEOC that Congress wanted courts to look to agency principles for guidance in this area. While such common-law principles may not be transferable in all their particulars to Title VII, Congress' decision to define employer to include any agent of an employer, 42 U.S.C. § 2000e(b), surely evinces an intent to place some limits on the acts of employees for which employers under Title VII are to be held responsible. For this reason, we hold that the Court of Appeals erred in concluding that employers are always automatically liable for sexual harassment by their supervisors. See generally Restatement (Second) of Agency §§ 219-237 (1958). For the same reason, absence of notice to an employer does not necessarily insulate that employer from liability. Id. at 72, 106 S.Ct. 2399. The Court stated that the court of appeals was wrong to entirely disregard agency principles and impose absolute liability on employers for the acts of their supervisors, regardless of the circumstances of a particular case. [16] Id. at 73, 106 S.Ct. 2399. Justice Marshall, concurring with three other justices in Meritor, reached the issue of employer liability, and stated that employers should be held liable for a supervisor's hostile environment sexual harassment of an employee under his supervision, regardless of notice. See 477 U.S. at 74, 76-77, 106 S.Ct. 2399 (Marshall, J., concurring). He stated: [I]t is the authority vested in the supervisor by the employer that enables him to commit the wrong: it is precisely because the supervisor is understood to be clothed with the employer's authority that he is able to impose unwelcome sexual conduct on subordinates. There is therefore no justification for a special rule, to be applied only in hostile environment cases, that sexual harassment does not create employer liability until the employee suffering the discrimination notifies other supervisors. No such requirement appears in the statute, and no such requirement can coherently be drawn from the law of agency. Id. at 76-77, 106 S.Ct. 2399 (first and third emphasis added). He emphasized that a supervisor's authority is not limited to changing employees' status by hiring, firing, or disciplining them; instead, a supervisor also has the responsibility to supervise the daily work environment and to ensure a safe, productive work environment. See id. at 76, 106 S.Ct. 2399. [17] We agree with Justice Marshall's view. Harassment by supervisors is facilitated, made more serious, and is less apt to be reported because supervisors are understood to be clothed with the employer's authority. Id. at 77, 106 S.Ct. 2399. The Restatement (Second) of Agency § 219(2)(d) supports imposing vicarious liability in such circumstances. It provides: (2) A master is not subject to liability for the torts of his servants acting outside the scope of their employment, unless: .... (d) the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation. (Emphasis added.) The Massachusetts Supreme Court has employed this theory to hold employers vicariously liable for hostile environment sexual harassment by their supervisors: [H]arassment by a supervisor carries an implied threat that the supervisor will punish resistance through exercising supervisory powers, which may range from discharge to assignment of work, particularly exacting scrutiny, or refusal to protect the employee from coworker harassment. Quid pro quo harassment may be easier to identify as an abuse of the authority vested in a supervisor because of the effect on tangible job conditions, but it does not define the limit of a supervisor's authority. Although coworkers or even outsiders may also be capable of creating a sexually harassing work environment, it is the authority conferred upon a supervisor by the employer that makes the supervisor particularly able to force subordinates to submit to sexual harassment. College-Town v. Massachusetts Comm'n Against Discrimination, 400 Mass. 156, 508 N.E.2d 587, 593 (Mass.1987) (emphasis added) (citation omitted). Even where the employer has issued a policy prohibiting sexual harassment, and where the employer has established procedures for the receipt of employee complaints, the employer will still have aided the supervisor in committing the harassment. See Meritor, 477 U.S. at 76-77, 106 S.Ct. 2399 (Marshall, J., concurring). Therefore, we hold that an employer is vicariously liable for the hostile work environment created by its supervisors regardless of whether management-level employees knew or should have known about the harassment, and regardless of whether the supervisors were acting within the scope of their employment. [18] Agency principles also provide an important limitation on employer liability, however. An employer will only be vicariously liable for the acts of the complainant's supervisor, because only then will the supervisor be using his position with the employer to alter the conditions of the complainant's employment. See French, 911 P.2d at 28 (defining hostile work environment as discriminatory behavior sufficiently severe or pervasive to alter the conditions of the victim's employment). As Justice Marshall stated, a supervisor who does not oversee the complainant should be treated as a co-worker. See Meritor, 477 U.S. at 77, 106 S.Ct. 2399 (Marshall, J., concurring). In that situation, the supervisor does not have authority over the complainant and may not be aided by his position in the workplace. Furthermore, when a co-worker or supervisor with no control over the complainant creates a hostile environment, the complainant should be less hesitant to report the situation, since the harasser could not retaliate by changing the conditions of the complainant's employment. Thus, employers are only vicariously liable for hostile environment sexual harassment committed by the complainant's supervisor. [19] These same principles apply to determine the scope of an employer's liability when its supervisors know about sexual harassment by a co-worker or by a supervisor who does not have authority over the complainant, but fail to take appropriate remedial action. There is no basis for distinguishing between supervisors' acts of harassment and their failure to remedy known harassment. Supervisors who allow other employees to sexually harass employees they supervise have used their delegated authority to allow the harassment to continue. For the above reasons we conclude that the trial court correctly instructed the jury on VECO's liability for hostile environment sexual harassment by a supervisor acting outside the scope of his employment.