Opinion ID: 2166544
Heading Depth: 4
Heading Rank: 1

Heading: Faragher/Ellerth and the Availability of the Affirmative Defense

Text: The United States Supreme Court developed the modern framework for determining an employer's liability for hostile work environment sexual harassment in the companion cases of Faragher v. City of Boca Raton, 524 U.S. 775, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998). Those cases held that [a]n employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. Faragher, 524 U.S. at 807, 118 S.Ct. 2275; Ellerth, 524 U.S. at 765, 118 S.Ct. 2257. There is, however, an important exception to the rule of vicarious liability: When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence. . . . The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. Faragher, 524 U.S. at 807, 118 S.Ct. 2275; Ellerth, 524 U.S. at 765, 118 S.Ct. 2257. In accordance with the policy of maintaining the continuity of the THRA and Title VII, we have since adopted the vicarious liability rule and the Faragher / Ellerth defense. Parker, 2 S.W.3d at 176. When the harassing supervisor has not taken or instigated a tangible employment action against the employee, such as a termination, failure to promote, demotion, or undesirable reassignment, the employer may raise an affirmative defense to liability. Id.; Faragher, 524 U.S. at 808, 118 S.Ct. 2275; Ellerth, 524 U.S. at 765-66, 118 S.Ct. 2257. The affirmative defense requires the employer to establish: 1) that it took reasonable measures to prevent and correct discriminatory conduct; and 2) that the employee unreasonably failed to take advantage of these preventive and corrective measures. Id.; see also Faragher, 524 U.S. at 807, 118 S.Ct. 2275; Ellerth, 524 U.S. at 765, 118 S.Ct. 2257. Allen argues that the Faragher / Ellerth defense is unavailable to the State because McPhee, the president of a state university, was the alter ego or proxy of the State. To support her position, Allen relies upon Johnson v. West, 218 F.3d 725 (7th Cir.2000). In Johnson, the Court of Appeals for the Seventh Circuit held that the affirmative defense is unavailable to an employer when the harassing supervisor is . . . `indisputably within that class of an employer organization's officials who may be treated as the organization's proxy.' 218 F.3d at 730 (quoting Faragher, 524 U.S. at 789, 118 S.Ct. 2275). Other federal circuits have applied similar reasoning. See Ackel v. Nat'l Commc'ns, Inc., 339 F.3d 376, 384-85 (5th Cir.2003) (applying Johnson ); Mallinson-Montague v. Pocrnick, 224 F.3d 1224, 1232-33 (10th Cir. 2000) (upholding a jury instruction stating that an employer may be held vicariously liable for the behavior of an individual acting as an alter ego of the employer); Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 516 (9th Cir.2000) (applying analogous reasoning to an employer's defense against punitive damages). Although we recognize that these federal circuits have interpreted Faragher and Ellerth in this fashion, we believe a careful reading of Faragher and Ellerth demonstrates that the United States Supreme Court did not intend to create an alter ego or proxy exception to the affirmative defense. In Johnson, the Court of Appeals based the alter ego/proxy exception entirely on a single quotation from Faragher , thus creating the impression that the Court of Appeals believed it was simply restating the clear holding of that case. The quote that forms the basis the Johnson holding appears in the following context in the Faragher opinion: Nor was it exceptional that standards for binding the employer were not in issue in Harris, [510 U.S.17, 114 S.Ct. 367, 126 L.Ed.2d 295] supra. In that case of discrimination by hostile environment, the individual charged with creating the abusive atmosphere was the president of the corporate employer, who was indisputably within that class of an employer organization's officials who may be treated as the organization's proxy. Faragher, 524 U.S. at 789, 118 S.Ct. 2275 (citation omitted) (second emphasis added). Viewing the italicized language in light of the sentence preceding it, it is apparent that the United States Supreme Court mentions the president's status as the organization's proxy only as an explanation for Harris's failure to set forth standards for determining employer liability. Moreover, the above-quoted language appears in the Court's summary of prior case law, over twenty paragraphs before the establishment of the affirmative defense that constitutes Faragher 's central holding. See Faragher, 524 U.S. at 789-90, 807, 118 S.Ct. 2275. It is clear from this context that the quoted material is not intended to enunciate an exception to the Faragher / Ellerth affirmative defense. Furthermore, nothing in the Supreme Court's explanation of the affirmative defense suggests that the availability of the defense depends on whether or not the supervisor is an alter ego or proxy for the employer. Id. at 807, 118 S.Ct. 2275; Ackel, 339 F.3d at 386-88 (Garza, J., concurring). Rather, the Supreme Court clearly states that the affirmative defense is available whenever no tangible employment action is taken against the employee. Faragher, 524 U.S. at 807, 118 S.Ct. 2275. Furthermore, the Supreme Court has continued to hold that Faragher and Ellerth created  two categories of hostile work environment claims: (1) harassment that `culminates in a tangible employment action,' for which employers are strictly liable, and (2) harassment that takes place in the absence of a tangible employment action, to which employers may assert an affirmative defense. Pa. State Police v. Suders, 542 U.S. 129, 143, 124 S.Ct. 2342, 159 L.Ed.2d 204 (2004) (emphasis added) (citations omitted). We therefore remain unconvinced by the interpretation of Supreme Court precedent offered by Johnson and similar cases. Until the United States Supreme Court clearly articulates an alter ego or proxy exception, we decline to apply the Johnson court's reasoning to the THRA and hold that an employer may assert the Faragher / Ellerth affirmative defense regardless of whether the harassing supervisor is a proxy or alter ego of the employer. Having determined that the State is not barred from asserting the affirmative defense by Allen's proxy/alter ego argument, we must now determine whether McPhee took or instigated a tangible employment action against Allen. If no such action was taken, the affirmative defense is available to the State. The record does not demonstrate that McPhee took or instigated any tangible employment action against Allen, nor does Allen contend that any such act was taken. We therefore hold that the State is entitled to assert the affirmative defense set forth in Faragher / Ellerth . We now turn to the issue of whether the undisputed facts establish the Faragher / Ellerth defense as a matter of law.