Opinion ID: 1172244
Heading Depth: 3
Heading Rank: 4

Heading: Federal cases on course and scope in sexual harassment cases

Text: In Smith, the court of appeals discounted the federal cases, reasoning that liability under cases dealing with Title VII [6] is much broader than common law tort liability. Smith, 179 Ariz. at 135, 876 P.2d at 1170. We again disagree with Smith, believing the United States Supreme Court's decision in Meritor Savings Bank v. Vinson instructed federal courts to take agency law as a guide in determining employer liability for a supervisor's acts of sexual harassment when deciding a Title VII case. 477 U.S. 57, 71-72, 106 S.Ct. 2399, 2408, 91 L.Ed.2d 49 (1986). Chief Justice Rehnquist, writing for the Court, proclaimed no unique rule for determining vicarious liability in cases dealing with a supervisor's sexual harassment. Instead, the Court rejected the administrative agency's view that an employer is absolutely or strictly liable for a supervisor's actions and directed the district courts as follows: Congress wanted courts to look to agency principles for guidance in this area. While such common law principles may not be transferrable in all their particulars to Title VII, Congress' decision to define employer to include any agent of an employer,... 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. at 2408. Following Meritor, most if not all circuit court decisions dealing with Title VII sexual harassment actions have applied the common law of agency to determine the employer's vicarious liability. See Katherine Philippakis, Comment, When Employers Should be Liable for Supervisory Personnel: Applying Agency Principles to Hostile-Environment Sexual Harassment Cases, 28 ARIZ. ST. L.J. 1275, 1279 (1997). For that reason, we believe post- Meritor Title VII cases apply common-law agency principles and should be considered. The federal cases cover both quid pro quo and hostile work environment situations. A quid pro quo claim is one in which the offender conditions job benefits or advancements on the employee's performance of sexual favors, while a hostile-environment claim is one in which the offender creates a sexually hostile or offensive working environment. Id. at 1276; Meritor, 477 U.S. at 65, 106 S.Ct. at 2404. Given these definitions, both types of claims are raised by the facts here. In quid pro quo cases, applying traditional agency principles, many courts have held an employer liable because a quid pro quo harasser is able to grant such job benefits or detriments only because he has actual or apparent authority to do so delegated to him by his employer.... Under traditional agency principles the exercise of such actual or apparent authority gives rise to liability on the part of the employer under a theory of respondeat superior. See RESTATEMENT (SECOND) OF AGENCY § 219(2)(d) (1958). Nichols v. Frank, 42 F.3d 503, 514 (9th Cir. 1994) (collecting cases). Some hostile environment cases have found a jury question with regard to vicarious liability. In a case similar to ours, the plaintiff had both hostile environment and quid pro quo claims. The harasser was not only her immediate supervisor but the corporate vice president in charge of managing the hotel property where the plaintiff worked. He had full authority to determine employee benefits and to hire, fire, promote, and discipline the employees. Martin v. Cavalier Hotel Corp., 48 F.3d 1343, 1348 (4th Cir. 1995). The circuit court affirmed judgment against the employer, stating that it was following Meritor and applying the common law of agency in determining the question of vicarious liability. Id. at 1350. In applying those principles in the context of this case, the court stated: [W]hether an employee's acts are within the scope of his employment requires an examination of when the act took place, where it took place, and whether it was foreseeable. See generally RESTATEMENT (SECOND) OF AGENCY §§ 210 to 245 (1958). (Emphasis in original.) An employer may be liable for an employee's acts even if the employee's motive is not to benefit the employer, to advance his self interest rather than the interest of his employer.... A forbidden or even consciously criminal or tortious act may still be within the scope of employment.... Indeed an employer may be liable for its employee's unauthorized use of force if such use was foreseeable in view of the employee's duties.... The test of the liability of the employer for the tortious act of the employee is not whether the tortious act itself is a transaction within the ordinary course of the business of the employer or within the scope of the employee's authority, but whether the service itself in which the tortious act was done was within the ordinary course of such business or within the scope of such authority .... Here Bachelor's assaults took place in the work place, during working hours, on an employee whom he had authority to hire, fire, promote, and discipline. There is no question that such sexual assaults were foreseeable;.... Thus, under common law agency principles Bachelor was acting within the scope of his employment with Cavalier and so Cavalier is liable for Bachelor's assaults on Martin. To be sure, ... Bachelor's assaults on Martin were outrageous and violative of his employer's rules. Nonetheless, those assaults arose out of Bachelor's management of the hotel,.... At the very least, because Bachelor's willful and malicious acts were committed while he was performing his employment duties there is here ... sufficient evidence to present a jury issue as to whether Bachelor was acting within the scope of his employment with Cavalier. Id. at 1351-52 (citations omitted, emphasis added) (quoting Commercial Business Systems, Inc. v. Bellsouth Services, Inc., 249 Va. 39, 453 S.E.2d 261, 266 (Va.1995)); see also Fields v. Sanders, 29 Cal.2d 834, 180 P.2d 684 (1947); Philappakis, supra, 28 ARIZ. STATE L.J. at 1288 (any other interpretation of motive to serve the employer would be unduly constrained and antithetical to the RESTATEMENT position). Many other federal cases have reached the same conclusion on more or less the same analysis, applying the RESTATEMENT and common law agency cases in both quid pro quo and hostile environment cases. See, e.g., Kauffman v. Allied Signal, Inc., 970 F.2d 178, 183-84 (6th Cir.1992) (court should look at when the act took place, where it took place, and whether it was foreseeable to determine whether supervisor's harassment occurred within course and scope of employment). Kauffman holds the employer is relieved of liability if the company learns of the hostile work environment created by its supervisor and takes prompt remedial action. Id. at 184. This part of the decision has been cogently criticized on the ground that prompt remedial action could insulate against direct liability for negligence and against punitive damage claims, but not against vicarious liability. Oppenheimer, supra, 81 CORNELL L.REV. at 132. We need not concern ourselves with this issue because the present record contains no evidence of remedial action prior to Schallock's filing her damage action. Some federal cases have rejected employer course and scope liability absent evidence that the employer also knew or should have known of the hostile work environment created by the supervisor. See, e.g., Nichols, 42 F.3d at 508; Henson v. City of Dundee, 682 F.2d 897, 905 (11th Cir.1982). These cases have also been cogently criticized as confusing elements necessary for a finding of direct liability with those required for vicarious, course and scope responsibility. See Phillipakis, supra, 28 ARIZ. STATE L.J. at 1285; Oppenheimer, supra, 81 CORNELL L.REV. at 133-35 (citing cases). Again, though the criticism seems logical, we need not solve this problem because the partial record of the tort case indicates quite clearly that APAAC had either actual knowledge of the hostile work environment or at worst constructive knowledge because the conditions were so widespread and prevalent. See Faragher, 111 F.3d at 1538; E.E.O.C. v. Mitsubishi Motor Mfg. of Am. Inc., 102 F.3d 869, 870 (7th Cir.1996) (where hostile work environment is pervasive, employer's knowledge may be imputed or inferred). Notwithstanding the confusion and debate among the federal circuits, we conclude APAAC is not entitled to summary judgment on the course and scope issue in Schallock's and Saunders' hostile environment claims. The court of appeals thus erred in instructing the trial court to enter judgment for the state.