Opinion ID: 1057253
Heading Depth: 1
Heading Rank: 2

Heading: Individual Liability under the Vermont Fair Employment Practices Act

Text: ¶ 7. Plaintiff's amended complaint states VFEPA claims against supervisor for: sexual harassment, 21 V.S.A. §§ 495(a)(1), 495d(13), discrimination for lodging complaints against U.S. Airways with the Vermont Attorney General's Office and with the Vermont Department of Labor and Industry, id. § 495(a)(5), and discrimination for being perceived to suffer from a handicap, id. § 495(a)(1). Supervisor's motion for summary judgment on these claims argued first, that there is no provision for individual liability under the VFEPA and second, that plaintiff failed to make a prima facie showing of sexual harassment or discrimination based on disability or handicap. The superior court granted summary judgment for supervisor based on its determination that there is no individual liability under the VFEPA. [1] ¶ 8. The VFEPA prohibits any employer, employment agency, or labor organization from engaging in a range of discriminatory acts and practices. Id. § 495(a). The term employer refers to  any individual, organization, or governmental body . . . whether domestic or foreign. . . and any agent of such employer, which has one or more individuals performing services for it within this state. Id. § 495d(1) (emphasis added). Plaintiff argues that the term any agent of such employer extends liability to employees, as individuals, who engage in discriminatory actions forbidden by the VFEPA. ¶ 9. This Court has yet to construe the term any agent in the context of the VFEPA. While the question has been raised here in at least two earlier cases, we have never reached it before today. See Robertson v. Mylan Labs., Inc., 2004 VT 15, ¶ 49, 176 Vt. 356, 848 A.2d 310 (upholding summary judgment for defendants on other grounds, thus not reaching the issue of individual liability); Gallipo v. City of Rutland, 173 Vt. 223, 238-39, 789 A.2d 942, 953-54 (2001) (not reaching the issue because separate statutory provision dictated that municipal officers could not be sued in their individual capacities). [2] As with any issue of statutory construction, we seek here to give effect to legislative intent. To do so, we start with the language of the statute and read it according to its plain and ordinary meaning. Burlington Elec. Dep't v. Vt. Dep't of Taxes, 154 Vt. 332, 335, 576 A.2d 450, 452 (1990). Under this approach, the Legislature's use of the conjunctive and any agent in the definition of employer in the VFEPA signals that the Legislature intended that, in addition to those traditionally categorized as employers, agents of the employer can be held liable. The employer-employee relationship is a traditional, common-law agency relationship. Restatement (Third) of Agency § 1.01 cmt. c (2006). Thus, an ordinary reading of the language any agent supports the conclusion that the statute allows for suits against employees acting as agents for the employer. Although no ambiguity exists on the face of this statutory definition, and thus we would ordinarily simply enforce the statute according to its plain meaning, State v. O'Dell, 2007 VT 34, ¶ 7, 181 Vt. 475, 924 A.2d 87, supervisor entreats us to consider the large body of federal law reaching the opposite conclusion with respect to the federal Fair Employment Practices Act. 42 U.S.C. § 2000e(b). ¶ 10. Our construction of the VFEPA, which is patterned on Title VII of the federal Civil Rights Act protecting against employment discrimination based on race, color, religion, sex, or national origin, is often guided by the federal courts' interpretations of Title VII. Lavalley v. E.B. & A.C. Whiting Co., 166 Vt. 205, 209, 692 A.2d 367, 369 (1997). Indeed, we have said that [the V]FEPA is patterned on Title VII of the Civil Rights Act of 1964, and the standards and burdens of proof under [V]FEPA are identical to those under Title VII. Hodgdon v. Mt. Mansfield Co., 160 Vt. 150, 161, 624 A.2d 1122, 1128 (1992). Supervisor points out that it is settled law in every federal circuit that has considered the meaning of the term any agent in Title VII's definition of employer, 42 U.S.C. § 2000e(b), that the phrase does not provide a right of action against individual employees. Lissau v. S. Food Serv., Inc., 159 F.3d 177, 181 (4th Cir.1998) (citing cases from the Second, Third, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, and District of Columbia Circuits of the United States Courts of Appeals). [3] Indeed, the federal consensus is that the any agent language expresses congressional intent to hold employers vicariously liable for the acts of their employees, but not to hold employees individually liable for their own discriminatory acts in the workplace. See, e.g., Wathen v. Gen. Elec. Co., 115 F.3d 400, 405-06 (6th Cir.1997). The definition of employer, however, is not a standard[ ] or burden[ ] of proof as described in Hodgdon. Cf. Colby v. Umbrella, Inc., 2008 VT 20, ¶ 9, 184 Vt. 1, 955 A.2d 1082 (discussing standard for prima facie VFEPA case by reference to federal Title VII case law); Gallipo v. City of Rutland, 2005 VT 83, ¶ 15, 178 Vt. 244, 882 A.2d 1177 (same). Moreover, as demonstrated below, the definition of employer in the VFEPA is markedly and substantially different than that used in Title VII. Thus, even if the term any agent is identical in both definitions, the definitions as a whole are far from identical, which implies that we have no duty to interpret the VFEPA's definition of employer identically to how the federal courts have interpreted Title VII's definition. And although federal decisions can be persuasive, they are not binding and we will not adopt an interpretation of [V]FEPA solely because the federal courts, including the United States Supreme Court, have so interpreted Title VII. Lavalley, 166 Vt. at 209-10, 692 A.2d at 369-70. ¶ 11. While our past decisions demonstrate that we may depart from federal interpretations of Title VII when we construe our own fair employment practices law, it is important to explain why the federal analysis is particularly unpersuasive in this case. The definition of employer in the federal FEPA of Title VII is, in pertinent part: a person engaged in an industry affecting commerce . . ., and any agent of such a person . . ., except that . . . persons having fewer than twenty-five employees (and their agents) shall not be considered employers. 42 U.S.C. § 2000e(b). In holding that this definition connotes only vicarious liability for employers, and not individual liability for their agents, federal courts have relied on two main rationales. The first is that the federal definition expressly excludes small businesses from liability by excluding any employer who employs fewer than twenty-five people. For example, the Fourth Circuit reasoned that it would be incongruous to hold that Title VII does not apply to the owner of a five-person company but applies with full force to a person who supervises an identical number of employees in a larger company. Lissau, 159 F.3d at 180. The federal courts have also noted that the definition of employer in Title VII is essentially the same as the definition in the Age Discrimination in Employment Act (ADEA). 29 U.S.C. § 630(b); Wathen, 115 F.3d at 404 n. 6. Because the courts have held that there is no individual liability for age discrimination under the ADEA, based on similar reasoning regarding the small-employer exclusion, they have held that it is merely a logical extension of the ADEA case law to hold that Title VII does not impose individual liability for employment discrimination based on race, color, religion, sex, or national origin. Lissau, 159 F.3d at 181. ¶ 12. This logic cannot apply to the VFEPA. Vermont's law contains no small-business exclusion. In fact, the definition of employer in the VFEPA expressly includes any employer who has but a single employee within the state. Moreover, Vermont's definition of employer includes any agent of such employer, regardless of size. ¶ 13. The other rationale relied on by the federal courts for excluding individual liability under Title VII relates to the enforcement provisions in that statute. 42 U.S.C. § 2000e-5. Originally, relief included only back pay and equitable relief such as reinstatement, which are remedies available only from an actual employer, not from a mere supervisor or fellow employee. Lissau, 159 F.3d at 181; accord Tomka v. Seiler Corp., 66 F.3d 1295, 1314 (2d Cir.1995), abrogated on other grounds by Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998). In 1991, Congress amended the relief provisions to include compensatory and punitive damages. 42 U.S.C. § 1981a, as amended by Pub.L. No. 102-166, 105 Stat. 1072 (1991). However, the amendments tied the amount of damages available to a plaintiff to the size of the employer. Lissau, 159 F.3d at 181; accord Tomka, 66 F.3d at 1315. Federal courts interpret this relationship between available relief and the size of the employer as another indication that Congress did not intend for Title VII to provide a statutory cause of action against agents or supervisory employees of employers. Further, because there is no mention of individual liability as an available remedy, even in the 1991 amendments, when Congress could have added it if it saw a need, the courts conclude that Title VII provides no such avenue of relief for potential plaintiffs. Lissau, 159 F.3d at 181. ¶ 14. The VFEPA does not similarly limit its remedies to relief typically available just from employers rather than individuals working for the same company. The VFEPA originally contained a single penalty provision stating that any employer who willfully violates any of the provisions of this act, shall be fined not more than $500.00 for each violation. 1963, No. 196, § 3. In 1976, the Legislature amended the penalty section generally, and recodified it as 21 V.S.A. § 495b. 1975, No. 198 (Adj.Sess.), § 2. The new provision allowed the Attorney General or state's attorneys to enforce the act by restraining prohibited acts, seeking civil penalties, obtaining assurances of discontinuance and conducting civil investigations in accordance with the procedures established in [the Consumer Fraud Act] as though an unlawful employment practice were an unfair act in commerce. Id. It also provided that the superior courts could impose the same civil penalties and costs, and any other relief for the State or injured employee, as they could under the penalty provisions of the Consumer Fraud Act. Id. Finally, the 1976 amendment to the VFEPA provided that the superior courts could order restitution of wages or other benefits . . . and may order reinstatement and other appropriate relief on behalf of an employee. These changes provided that the penalties could go toward making the injured employees whole, instead of merely punishing the employers. Further, it is apparent from these amendments that the Legislature intended that employers could be forced to stop discriminatory practices and incur liabilities substantially greater than a $500 fine. ¶ 15. The 1976 amendments retained remedies usually imposed on traditional employers in control of payroll and hiring, rather than coemployees or supervisors who might not enjoy such powers, but later changesmany of which occurred before the 1993 addition of the term any agent to the VFEPA definition of employerevinced an even more definite expansion of the remedial scheme. The Legislature amended the penalty and enforcement provisions again in 1981twelve years prior to the any agent amendmentadding subsection (b), which allows a private right of action by injured employees against an employer who violates the VFEPA. In this subsection, any person aggrieved by a violation may seek damages or equitable relief, including restraint of prohibited acts, restitution of wages or other benefits, reinstatement, costs, reasonable attorney's fees and other appropriate relief. 1981, No. 65, § 2. In 1999, the Legislature specified that the damages available under the private right of action included compensatory and punitive. 1999, No. 19, § 5. 21 V.S.A. § 495b(b). Any one of those remedies can be extracted from an individual agent or coemployee, as well as from the traditional employer. ¶ 16. Reference to the penalty provisions for federal Title VII violations as interpretive support for the conclusion that Title VII allows for only respondeat superior liability does not transfer with equal force to the VFEPA context. Comparison of the VFEPA penalty provisions and the federal penalty provisions illustrates that the VFEPA never existed in a form where a private right of action could be remedied by solely equitable remedies, which an employer, but not a supervisor, would be in a position to provide. Further, the VFEPA does not tie the size of the possible damages award to the size of the employer, and there is no restriction on the damages availablesuch as limiting the equitable remedy to back paythat suggests the Legislature intended that employers alone would be liable for VFEPA violations. Consequently, the rationales of the federal courts provide no basis for interpreting the VFEPA to mean that employees cannot be held liable as individuals. ¶ 17. Decisions by other state courts construing their own Title VII-patterned state statutes can also inform our construction of the VFEPA. Lavalley, 166 Vt. at 210, 692 A.2d at 370. Nearly half of the states define employer in their antidiscrimination statutes similarly to the VFEPA. These state statutory definitions either include the phrase an agent of the employer, see, e.g., Mich. Comp. Laws § 37.2201(a), or an equivalent phrase, such as any person acting in the interest of an employer, directly or indirectly, see, e.g., Wash. Rev.Code § 49.60.040(3). Of these similar statutes, eleven have been construed by state appellate courts, which have split six to five in favor of holding that the agency provisions render coemployees individually liable for discriminatory acts in the workplace. [4] ¶ 18. We are not convinced by the five state-court decisions that preclude individual liability. Two of the courts, Florida and Texas, give virtually no reason for their decisions. The California, Idaho, and Tennessee courts cite the consensus of the federal courts regarding individual liability for agents under the federal FEPA as one of the main reasons for rejecting individual liability under their state workplace discrimination statutes. Reno, 76 Cal. Rptr.2d 499, 957 P.2d at 1344-45; Foster, 908 P.2d at 1232-33; Carr, 955 S.W.2d at 835. These courts have also rejected individual liability based on the fact that their states' statutes contain small-business exceptions to the definition of employer, much like the federal statute. Cal. Gov't Code § 12926(d); Idaho Code Ann. § 67-5902(6); Tenn.Code Ann. § 4-21-102(5). Again, that rationale cannot apply to any construction of the VFEPA, which does not contain a small-business exception. Because nothing in the federal opinions supports construing the VFEPA in this manner, we are no more persuaded by this rationale when borrowed by some state courts in construing their statutes. ¶ 19. The California and Tennessee courts adopted an additional approach to the individual liability issue, which is to rely on the general rule that agents are not typically held individually liable for acts undertaken on behalf of a disclosed principal that are within the legitimate scope of the delegated management authority. Carr, 955 S.W.2d at 835 (citing Restatement (Second) of Torts § 320 (1977) [5] and Janken v. GM Hughes Elecs., 46 Cal.App.4th 55, 53 Cal.Rptr.2d 741, 745 (1996)). Under an agency theory of discrimination liability, the supervising employee is not a party to the employerthird-party employee contract, unless otherwise explicitly agreed. Restatement (Third) of Agency § 6.01(2) (expressing the general rule of § 320 in the revised and renumbered restatement). Thus the agent is not subject to liability if the principal fails to perform obligations created by the contract, id. § 6.01 cmt. a, even if those obligations include protecting the employee from discrimination by that very supervisor. However, the California courts, in using this rule, were able to further rely on their statutory distinction between workplace discrimination and workplace harassment, specifying that while any person may be liable for harassment, only employers are liable for discrimination. Reno, 957 P.2d at 1335. The Reno court concluded that, since discrimination claims arise out of the performance of necessary personnel management duties such as hiring and firing, job or project assignments, office or work station assignments, promotion or demotion, performance evaluations, the provision of support, [and] the assignment or nonassignment of supervisory functions, the legislature properly made only the employer liable for discrimination claims. Id. at 1336, 1343 (quotation omitted). ¶ 20. Assuming, without deciding, that we were to apply the Restatement § 6.01(2) rule to limit the situations where employees could be individually liable under the VFEPA, § 6.01(2) does not apply to the many situations where an employee might be acting outside the scope of legitimate management authority. In these situations, existing case law establishes that employers are not insulated from liability under Title VII. The United States Supreme Court has unequivocally concluded that Title VII makes employers vicariously liable for many discriminatory and harassing acts of their employees that are outside the scope of employment. Ellerth, 524 U.S. at 758, 118 S.Ct. 2257 (holding that employers are liable when the employee unlawfully discriminates beyond the scope of his or her employment, but `was aided in accomplishing the [discrimination] by the existence of the agency relation.' (quoting Restatement (Second) of Agency § 219(2)(d))). We have not had occasion to consider the Ellerth holding in the context of a VFEPA claim, but given that the VFEPA's standards and burdens of proof. . . are identical to those under Title VII, Hodgdon, 160 Vt. at 161, 624 A.2d at 1128, the expansive employer vicarious liability standard of Ellerth is likely to apply equally under the VFEPA. In those cases where the employee is aided in his or her discriminatory acts by the existence of the agency relation to the employer, but is acting outside the scope of his or her employment, Restatement § 6.01(2) would not bar the employee from being held individually liable for his or her actions, in addition to holding the employer vicariously liable for the same. ¶ 21. Turning to state court decisions that adopt employee liability, we find two categories of reasoning in support of our conclusion regarding individual liability under the VFEPA. First, courts have noted, as we have, that the statutory language by its very terms, encompasses individual supervisors and managers whose conduct violates the provisions of [the nondiscrimination statute]. Genaro, 703 N.E.2d at 785; accord Elezovic, 697 N.W.2d at 858 (concluding that if the words [of the statutory definition of `employer'] are going to be read sensibly, [they must] mean that the Legislature intended to make the agent tantamount to the employer so that the agent unmistakably is also subject to suit along with the employer); Cooper v. Albacore Holdings, Inc., 204 S.W.3d 238, 244 (Mo.Ct.App.2006) (holding that the plain and unambiguous language with the definition of `employer' . . . imposes individual liability in the event of discriminatory conduct); Brown, 20 P.3d at 926 (stating [w]e find [the statutory definition of `employer'], by its very terms, contemplates individual supervisor liability). Second, allowing such suits is consistent with the remedial purpose of those statutes to deter and to eradicate discrimination in [the state]. Brown, 20 P.3d at 927 (quotation omitted). [6] In sum, we conclude that by including the phrase and any agent in the definition of employer, the VFEPA allows for suits against employees as individuals.