Faragher-Ellerth Supervisory Harassment Defense Not Available When Employee Is Constructively Discharged
 
September 25, 2003
 

As we have discussed in the past, an employer generally can raise an affirmative defense to supervisory harassment under the Ellerth and Faragher Supreme Court decisions. This defense is not available, however, if the harassment includes a tangible employment action such as a discharge or demotion. In a recent decision, the U.S. Court of Appeals for the Third Circuit expanded the category of tangible employment actions that will bar the Ellerth/Faragher defense. In Suders v. Easton, No. 01-3512 (3rd Cir. April 16, 2003), the Court ruled that an employee who is constructively discharged – i.e., forced to resign because of the harassment – suffers a tangible employment action, and the defense is not available.

Legal Background - What Is A “Tangible Employment Action”

An employer faced with a supervisory sexual harassment claim can generally avoid liability if it can prove a two-part affirmative defense. First, the employer must show that it exercised reasonable care to prevent and promptly correct any sexually harassing behavior. Second, it must further show that the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or otherwise avoid harm.

This defense is not available, however, if the harassment involves a tangible employment action. The Supreme Court defined a “tangible employment action” to be “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” When a tangible employment action occurs, the employer loses the defense because the supervisor is performing the kind of acts the employer generally authorizes – hiring, firing, reassigning – even though the employer may not agree with the actions or motives themselves.

What Is “Constructive Discharge”

An employee suffers a “constructive discharge” when the employer knowingly permits an employee to be subject to conditions of employment discrimination that are so intolerable that a reasonable person would feel compelled to resign. The courts have listed factors they consider to be indicative of constructive discharge, including (1) a threat of discharge, (2) suggestions or encouragement to resign, (3) a demotion or reduction of pay or benefits, (4) an involuntary transfer to a less desirable job, (5) alteration of job responsibilities, and (6) unsatisfactory job evaluations. Courts also consider whether the employee complained or sought alternative remedies for the alleged discrimination before resigning.

The courts have disagreed on whether constructive discharge constitutes a tangible employment action. Some courts hold that because constructive discharge is essentially a decision made and implemented by the employee, it is not a tangible employment action. Other courts have ruled that because constructive discharge has always been treated as the legal equivalent of an actual discharge, it should logically be treated as a “tangible employment action” for purposes of the Ellerth/Faragher defense.

Third Circuit’s Decision

Nancy Suders was a newly employed state police officer who alleged that three supervisors sexually harassed her on a daily basis for four months and then set her up on false theft charges, prompting her resignation. She made a formal internal complaint of sexual harassment, and then resigned only two days later.

When she sued for sexual harassment, the employer claimed that she had not taken advantage of its complaint procedures and that it was entitled to rely on the Ellerth/Faragher affirmative defense. On appeal, the Third Circuit disagreed.

The Third Circuit rejected the decisions of two other courts of appeals that had ruled that constructive discharge is not a tangible employment action. The court was concerned that if it did not consider constructive discharge as equal to an actual discharge, and thus a tangible employment action, employers might feel they could ignore sexual harassment complaints or even encourage increased harassment to cause harassed employees to quit. According to the court, the employer could then argue that it had taken no tangible employment action and raise the affirmative defense. As a result, the court ruled that proof of constructive discharge means the employer may not rely on the Ellerth/Faragher affirmative defense and is automatically liable for the harassment.

What This Means for Employers

The Suders decision significantly increases the risk employers face from supervisory sexual harassment claims. It means that a pattern of severe harassment could deprive the employer of the Ellerth-Faragher defense - even if the acts were those of a rogue supervisor, the employee never complained, and the employer never knew about the alleged harassment. It also makes it more difficult to obtain summary judgment and avoid jury trials in sexual harassment cases involving constructive discharge claims. Under the Suders decision, if there is any real dispute about whether the employee was constructively discharged, the employer may not rely on the affirmative defense to obtain summary judgment.

The court did, however, give employers some comfort that employees will not be able willy-nilly to walk off the job and file a constructive discharge claim, and thereby prevent the employer from raising the affirmative defense. It stated that employees face a very high burden to prove constructive discharge. An employee must show: (1) she suffered harassment or discrimination so intolerable that a reasonable person in the same position would have felt compelled to resign; and (2) the employee’s decision to resign was reasonable under all the circumstances, including any steps the employee had taken to stop the harassment. This requires evidence beyond what is necessary to show a hostile environment.

Courts around the country are split as to whether constructive discharge is a tangible employment action. At least two circuits, the Second and Sixth, have ruled that constructive discharge is not a tangible employment action. See Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 294 (2d Cir. 1999), cert. denied, 529 U.S. 1107 (2000). Turner v. Dowbrands, Inc., No. 99-3984, 2000 WL 924599, at *1 (6th Cir. June 26, 2000) (“claim of constructive discharge is not a tangible employment action for purposes of Faragher and Burlington.”) On the other hand, the Eighth Circuit has ruled that constructive discharge does preclude the Ellerth/Faragher defense. See Jaros v. LodgeNet Entertainment Corp., 294 F.3d 960, 966 (8th Cir. 2002).

What You Should Do About It

In light of Suders, employers must continue to do everything possible to prevent, detect and remedy sexual and other illegal harassment. Educational programs, frequent republication of your company’s harassment policy, and prompt and appropriate responses to harassment complaints remain vitally important. In addition, employers should interview employees who voluntarily quit to identify potential constructive discharge claims. Such interviews should include questions about whether the employee ever suffered harassment and whether it had anything to do with the resignation. The interview should be documented and the employee should be asked to sign a statement summarizing the employee’s reasons for leaving.

For more information, e-mail Tamra Domeyer at tamra.domeyer@hklaw.com, or call toll free, 1-888-688-8500.

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