Opinion ID: 1172244
Heading Depth: 3
Heading Rank: 2

Heading: Law of agencyfactors peculiar to supervisory sexual harassment cases

Text: In Schallock the court of appeals stated, [f]ollowing Smith and the RESTATEMENT (SECOND) OF AGENCY, we hold that Heinze did not act in the course and scope of employment.... Though Heinze used his broad supervisory authority as a license for sexually predatory acts, these acts were not intended to serve APAAC but himself. Schallock, 185 Ariz. at 218, 914 P.2d at 1310. The court then rejected Schallock's contrary argument because it confuses elements of independent and vicarious liability [4] and obscures the traditional lines of course and scope. Id. We disagree with the court of appeals on several grounds. First, given the facts of this case, we do not believe it can be said as a matter of law that Heinze was outside the course and scope of authority with regard to many or most of the incidents alleged by Saunders and Schallock. Second, the court has overlooked entirely the question of authorization: the statute grants indemnity for acts done within course and scope or authorization. A.R.S. § 41-621(A)(3) (emphasis added). Finally, the court has conflated principles required to establish a master's direct liability in tort with those necessary to find vicarious liability. Before addressing these issues, it is important to note four special factual and legal considerations in cases of the present type. First, this case involves claims of a managing officer's sexual harassment of subordinate employees over whom he had power to hire and fire, promote and demote, instruct and control. This distinguishes the case from the great majority of cases involving torts committed by a servant against either a non-employee or co-employee. Language used in such cases is sometimes inapplicable to cases involving a managing officer's harassment of a subordinate. See David Benjamin Oppenheimer, Exacerbating the Exasperating: Title VII Liability of Employers for Sexual Harassment Committed by Their Supervisors, 81 CORNELL L.REV. 66, 71 (1995). Second, the law of agency governs both commercial relations and master-servant relations. We must be careful to apply only those rules that pertain to the latter situation. Id. Third, phrases such as course and scope of employment and scope of authority carry the gloss of historical meaning and policy considerations much more complex than the words themselves indicate. See Doe v. Samaritan Counseling Center, 791 P.2d 344, 349 (Alaska 1990) (quoting Fruit v. Schreiner, 502 P.2d 133, 140-41 (Alaska 1972)). Finally, in determining course and scope in a sexual harassment case, we must realize that employers never adopt resolutions authorizing sexual harassment. Nor do they grant such authority in job descriptions or employment manuals. Oppenheimer, supra, 81 CORNELL L.REV. at 84; Faragher v. City of Boca Raton, 111 F.3d 1530, 1541 (11th Cir.1997) (Barkett, J., concurring in part, dissenting in part). In the absence of written controls, a firm's policies set the limits both on what is tolerated or permitted and on the authority given its supervisors. With these considerations in mind, we address the specifics of the present case.