Opinion ID: 2166544
Heading Depth: 2
Heading Rank: 1

Heading: Discrimination Claims

Text: We begin our review with Allen's discrimination claim against the State. The THRA provides that it is a discriminatory practice for an employer to [f]ail or refuse to hire or discharge any person or otherwise to discriminate against an individual with respect to compensation, terms, conditions or privileges of employment because of such individual's race, creed, color, religion, sex, age or national origin. Tenn.Code Ann. § 4-21-401(a)(1) (2005). [3] Our legislature intended for the THRA to be coextensive with federal law. Parker v. Warren County Util. Dist., 2 S.W.3d 170, 172 (Tenn.1999) (quoting Carr v. United Parcel Serv., 955 S.W.2d 832, 834 (Tenn.1997)); see also Bredesen v. Tenn. Judicial Selection Comm'n, 214 S.W.3d 419, 430 (Tenn.2007). Although we are not bound or limited by federal law, [t]he policy of interpreting the THRA coextensively with Title VII is predicated upon a desire to maintain continuity between state and federal law. Parker, 2 S.W.3d at 173; see also Campbell v. Fla. Steel Corp., 919 S.W.2d 26, 31 (Tenn.1996). It is well settled that both the THRA and Title VII prohibit hostile work environment sexual harassment. Campbell, 919 S.W.2d at 31.
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.
To avoid liability for sexual harassment committed by a supervisor an employer must prove: 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. Faragher, 524 U.S. at 807, 118 S.Ct. 2275; Ellerth, 524 U.S. at 765, 118 S.Ct. 2257; Parker, 2 S.W.3d at 176. Under our summary judgment standards, the State is entitled to summary judgment only if the undisputed evidence, when viewed in the light most favorable to Allen, establishes that the State exercised reasonable care to prevent and correct the alleged sexual harassment and that Allen unreasonably failed to take advantage of the preventive and corrective measures. Tenn. R. Civ. P. 56.04; Staples v. CBL & Assocs., Inc., 15 S.W.3d 83, 88-89 (Tenn.2000).
The first part of the Faragher / Ellerth affirmative defense requires us to examine both whether the employer exercised reasonable care to prevent sexual harassment and whether it exercised reasonable care to correct sexual harassment that had already occurred. We begin our analysis with the requirement that an employer take reasonable measures to correct sexual harassment that has already occurred. Federal case law indicates that the duty to correct sexual harassment requires an employer to take reasonable steps to end and investigate alleged harassment. See, e.g., Weger v. City of Ladue, 500 F.3d 710, 723-24 (8th Cir.2007); Hill v. Am. Gen. Fin., Inc., 218 F.3d 639, 643 (7th Cir.2000); Brown v. Perry, 184 F.3d 388, 396-97 (4th Cir.1999). An employer is not required to conduct a proceeding in the nature of a trial to investigate allegations of sexual harassment. Baldwin v. Blue Cross/Blue Shield of Ala., 480 F.3d 1287, 1304 (11th Cir.2007). Circumstances, however, may require an employer to conduct an inquiry informally in a manner that will not unnecessarily disrupt the company's business, and in an effort to arrive at a reasonably fair estimate of truth. Id. Federal courts have found corrective measures inadequate primarily when the alleged harasser is not disciplined and harassment is allowed to continue. See EEOC v. Harbert-Yeargin, Inc., 266 F.3d 498, 511 (6th Cir.2001); Mota v. Univ. of Tex. Houston Health Sci. Ctr., 261 F.3d 512, 525 (5th Cir.2001). Allen argues that the State failed to show that it reasonably corrected the sexually harassing behavior because the investigation was not thorough or impartial, McPhee's punishment was inadequate, and her position in the development office substantially differed from her position in the president's office. The record demonstrates that the investigation into Allen's sexual harassment complaint against McPhee was started on October 8, 2003, only two days after she filed the complaint. As part of the investigation, Johnson sought to determine the veracity of Allen's allegations by conducting interviews with the parties and numerous witnesses. Although Johnson may not have taken all of the steps Allen requested, nor reached the conclusions Allen would have liked, there is no evidence that Johnson's efforts fell below the minimum requirements for a reasonable investigation. McPhee was informed of the charges on October 9, 2003, and he was instructed not to return to his office. Allen was placed on paid administrative leave through October 17, 2003. To prevent further contact with McPhee, Allen was reassigned to work in the Development Office with the same job title, job classification, and salary. When Allen refused the temporary reassignment, she was allowed to remain on administrative leave with pay. After the investigation concluded, Johnson filed a detailed summary of her findings and recommendations. Chancellor Manning accepted and implemented the recommendations in full on December 5, 2003. McPhee was suspended for twenty days without pay, assessed a $10,000 reduction in annual salary for one year, and required to participate in eight hours of sexual harassment training. Allen was transferred to the Development Office in the position of coordinator. No further acts of sexual harassment occurred after she filed her complaint. Because it is clear from these facts that the State undertook an investigation to determine the truth of the accusations, disciplined McPhee, [4] and, most importantly, effectively ended the harassment, we conclude that the State's corrective actions were reasonable as a matter of law. In addition to making reasonable efforts to correct harassment, employers must exercise reasonable care to prevent sexual harassment before it occurs. Faragher, 524 U.S. at 807, 118 S.Ct. 2275; Ellerth, 524 U.S. at 765, 118 S.Ct. 2257; Parker, 2 S.W.3d at 176. In Parker , we reversed the trial court's grant of summary judgment dismissing an employee's sexual harassment claim because the employer failed to prove that it exercised reasonable care to prevent sexual harassment. 2 S.W.3d at 177. Specifically, we held that summary judgment was inappropriate because the record was devoid of evidence to support a finding that the [employer] exercised reasonable care to prevent the alleged sexual harassment and because the employer failed to either establish the presence of a written anti-discrimination policy that was properly disseminated to its employees or establish the presence of a policy suitable to deal with the employment circumstances of this case. Id. Our holding in Parker makes clear that the employer has the burden of establishing that it exercised reasonable care. Parker also demonstrates that the presence of a properly disseminated, written anti-harassment policy is relevant to the determination of whether an employer exercised reasonable care. Id. Federal cases provide further guidance regarding an employer's duty to take reasonable steps to prevent harassment. It is widely accepted that the existence of an anti-harassment policy weighs heavily in favor of a conclusion that an employer has exercised reasonable care to prevent harassment. See, e.g., Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 295 (2d Cir.1999), overruled on other grounds by In re Initial Pub. Offering Sec. Litig., 471 F.3d 24, 42 (2d Cir.2006); Brown, 184 F.3d at 395; Shaw v. Auto-Zone, Inc., 180 F.3d 806, 811-12 (7th Cir. 1999); Kohler v. Inter-Tel Techs., 244 F.3d 1167, 1180 (9th Cir.2001). The mere existence of an anti-harassment policy, however, does not conclusively establish that an employer has taken reasonable steps to prevent sexual harassment. Hurley v. Atlantic City Police Dep't, 174 F.3d 95, 118 (3rd Cir.1999). On the contrary, an employer has the burden of establishing that anti-harassment policies are reasonably designed and reasonably effectual. Brown, 184 F.3d at 396. An employer may meet this burden by demonstrating that its anti-harassment policy is reasonably published, contains reasonable complaint procedures, and is not otherwise defective. Frederick v. Sprint/United Mgmt. Co., 246 F.3d 1305, 1314 (11th Cir. 2001). Allen argues that the State failed to show that the anti-harassment policy was reasonably published. In support of her argument, Allen introduced evidence that several employees, including Allen's immediate supervisor, had received no training about MTSU's policy. She further argues that the inadequacy of dissemination of the policy is demonstrated by the fact that when she reported the harassment to Dr. Hannah, who had supervisory authority at MTSU, Dr. Hannah failed to report the harassment to the director as required by the anti-harassment policy. It is important to note, however, that the State is not required to demonstrate that its distribution efforts were perfect, but rather that the policy was reasonably published. See Hill, 218 F.3d at 644 (holding that employer was entitled to summary judgment where policy was kept in a public access type place where employees could access it). The record clearly shows that the State made the policy available to all employees online and provided a hard copy of the policy to new hires. In addition, the State made efforts to inform employees of the contents of the policy through online training and speakers. Although there were longer-tenured employees who had never received a hard copy of the policy, no reasonable jury could conclude that MTSU's dissemination efforts were unreasonable. Accordingly, we hold that under these circumstances the State's dissemination efforts were reasonable as a matter of law. Allen also argues that the complaint procedures were unreasonable as applied to her because she was required to report the harassment to the director, who in turn was required to report to McPhee. In addition, the policy designated McPhee as the final decision-maker with regard to the resolution of the harassment. Generally, anti-harassment policies should set forth clear complaint procedures that permit an employer to bypass a harassing supervisor. See Faragher, 524 U.S. at 808, 118 S.Ct. 2275; Shaw, 180 F.3d at 812. The reasoning behind this principle is clear. Employees would be understandably reluctant to come forward with sexual harassment complaints if they were forced to seek assistance from their harassers. Complaining to a harassing supervisor could reasonably be expected to be futile and could potentially expose the complainant to an increased level of harassment. Employers have a duty to provide reasonable avenues for reporting sexual harassment and are therefore expected to design anti-harassment policies in such a way that employees are not put in this vulnerable position. See Faragher, 524 U.S. at 808, 118 S.Ct. 2275; Shaw, 180 F.3d at 812. Although Allen was not required to report the harassment directly to McPhee, McPhee was the final arbiter regarding sexual harassment complaints. MTSU's policy failed to provide a method of removing McPhee from the decision-making process in situations in which he was the alleged harasser. Furthermore, Allen had no reason to suspect that MTSU would abandon the procedures set forth in its harassment policy and request the TBR to conduct the investigation and implement McPhee's punishment. Under these circumstances, Allen could have reasonably believed that complaining would have been futile or counterproductive. A reasonable jury therefore could conclude that the complaint procedures set forth in the policy were unreasonable as applied to Allen. Because there are genuine issues of material fact with regard to whether the State's anti-harassment policy contained reasonable complaint procedures, we hold that the State has failed to establish the first prong of the Faragher / Ellerth defense.
We now turn to the second prong of the Faragher / Ellerth affirmative defense, which required Allen to exercise reasonable care in avoiding harm by taking advantage of the State's preventive and corrective measures. In Faragher , the Supreme Court said that while proof that an employee failed to fulfill the corresponding obligation of reasonable care to avoid harm is not limited to showing an unreasonable failure to use any complaint procedure provided by the employer, a demonstration of such failure will normally suffice to satisfy the employer's burden under the second element of the defense.  Faragher, 524 U.S. at 807-08, 118 S.Ct. 2275 (emphasis added). Furthermore, federal courts have consistently held an employee's duty to use an employer's complaint procedure promptly is not alleviated by the employee's speculative fear of retaliation or subjective belief in the futility of complaining. Baldwin, 480 F.3d at 1307; Reed v. MBNA Mktg. Sys., Inc., 333 F.3d 27, 35-36 (1st Cir.2003); Barrett v. Applied Radiant Energy Corp., 240 F.3d 262, 267-68 (4th Cir.2001); Shaw, 180 F.3d at 813. Rather, to be reasonable, an employee's failure to use an employer's complaint procedure must be based on a credible fear that any complaint would not be taken seriously or would result in retaliation. Reed, 333 F.3d at 36; Caridad, 191 F.3d at 295-96. The record demonstrates that Allen waited nearly thirteen months after McPhee's first act of harassment to report the harassment. In the absence of proof that Allen's delay in reporting was based on a credible fear that her complaint would not be taken seriously or would result in retaliation, this evidence is sufficient to satisfy the State's burden of proof on the second prong of the Faragher / Ellerth defense. Faragher, 524 U.S. at 807-08, 118 S.Ct. 2275. Allen argues that her delay in reporting McPhee's conduct was reasonable because it stemmed from her concern that McPhee would learn of the allegations and be part of the decision-making process. As previously discussed, the sexual harassment policy required McPhee to be involved in the decision-making process for all sexual harassment complaints, with no exception made for complaints in which McPhee was the alleged harasser. Given the role McPhee would be designated to play in the handling of Allen's sexual harassment complaint, a reasonable jury could conclude that Allen could have credibly believed that complaining would have been futile or counterproductive or would have resulted in retaliation. Accordingly, we hold that there are material issues of fact regarding whether Allen unreasonably failed to take advantage of corrective measures made available to her by the State. In summary, the State has failed to demonstrate that there are no genuine disputes of material fact with regard to the reasonableness of the anti-harassment policy's complaint procedures and the reasonableness of Allen's failure to take advantage of preventive and corrective measures made available by the State. Accordingly, the trial court erred in determining that the State established the Faragher / Ellerth defense.
The THRA states that [i]t is a discriminatory practice for a person or for two (2) or more persons to . . . (2)[a]id, abet, incite, compel or command a person to engage in any of the acts or practices declared discriminatory by this chapter. Tenn.Code Ann. § 4-21-301(2)(2005). In applying this section, we have held that individual liability may exist under the common law civil liability theory of aiding and abetting. See Carr v. United Parcel Serv., 955 S.W.2d 832, 836 (Tenn. 1997), overruled on other grounds by Parker, 2 S.W.3d at 176. The common law civil liability theory requires that the defendant knew that his companions' conduct constituted a breach of duty, and that he gave substantial assistance or encouragement to them in their acts. Id. (quoting Cecil v. Hardin, 575 S.W.2d 268, 272 (Tenn.1978)). Accordingly, imposing accomplice liability for a supervisor in a hostile work environment claim requires evidence that the supervisor encouraged the employer to engage in employment-related discrimination or prevented the employer from taking corrective action. Id. at 836. In the present case, McPhee denied most of Allen's allegations, but he did not try to inhibit or impair the investigation that was conducted by the TBR from October 8, 2003, through October 29, 2003. In addition, McPhee did not discourage or prevent the State from taking remedial measures, as he accepted the sanctions that were imposed upon him. Notwithstanding the evidence, Allen argues that we should adopt a new rule imposing individual liability based on a supervisor's personal participation in the actions that created the hostile work environment. Such a rule is inconsistent with Carr and the common law theory of aiding and abetting embraced in Tennessee Code Annotated section 4-21-301(2). As we said, [a] supervisor . . . may be individually liable for encouraging or preventing the employer from taking corrective action. Absent such allegations, [supervisor-defendants] [cannot] be held individually liable under a hostile work environment theory. Carr, 955 S.W.2d at 838. In sum, we decline to extend individual liability to supervisors who participate in the behavior creating the hostile work environment absent a showing that the supervisor's conduct encouraged the employer to engage in employment-related discrimination or prevented the employer from taking corrective action. Because the evidence did not satisfy this standard, we hold that the trial court properly granted summary judgment to McPhee on this issue.