May 26, 2014 | Danny Wash Is there any hope left for victims of sexual harassment after Vance v Ball State University’s limitation of the vicarious liability standard for employers to those actions taken against victims by supervisors who have been empowered by the employer to take ultimate actions against the employee? And the answer is: “maybe.” The path to vicarious liability of an employer has been narrowed but it may be found if you look for it carefully. Recall that in the Faragher and Ellerth U. S. Supreme Court cases, it was held that if a supervisor exercises his/her power to bring about an ultimate employment action against an employee, which they are sexually harassing, then the employer is vicariously liable for the action. However, if the harasser is not a supervisor, but a co-employee, the employer is only liable if it knew, or should have known, of the harassment and failed to take prompt preventative action. In other words, a negligence standard of liability, as opposed to being strictly liable. In Vance v Ball State University, the Court significantly reduced the number of employees that could now be called supervisors. Many of the employees that were formerly thought to be a supervisor, because they directed the work of an employee, were defined out of the category of being a supervisor for vicarious liability purposes. In the Vance case, the Supreme Court was asked to define what employees are supervisors for the purpose of vicarious liability. The Supreme Court’s specific holding was that “an employee is a “supervisor” for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim.” The Court elaborated by further stating that a tangible employment action would be an action to effect 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.” However, the Court in it’s attempt to respond to the legitimate concerns of the dissent in the case left a few “weapons” for the plaintiff to use when faced with the argument that “no one can fire or discipline anyone here except the president and vice-presidents.” In fact, the court specifically considered the situation when, in response to the Vance case, an employer begins to concentrate the power to terminate or discipline employees into only a very few high ranking employees. The majority stated the following: “…if an employer concentrates all decision making authority in a few individuals, it likely will not isolate itself from heightened liability under Faragher and Ellerth. If an employer does attempt to confine decision making power to a small number of individuals, those individuals will have a limited ability to exercise independent discretion when making decisions and will likely rely on other workers who actually interact with the affected employee. Cf. Rhodes v. Illinois Dept. of Transp., 359 F.3d 498, 509 (CA7 2004)… (“Although they did not have the power to take formal employment actions vis-á-vis [the victim], [the harassers] necessarily must have had substantial input into those decisions, as they would have been the people most familiar with her work—certainly more familiar with it than the off-site Department Administrative Services Manager”). Under those circumstances, the employer may be held to have effectively delegated the power to take tangible employment actions to the employees on whose recommendations it relies. See Ellerth, 524 U.S., at 762, 118 S. Ct. 2257, 141 L. Ed. 2d 663.” I call the employee who actually supervises the plaintiff on a practical or daily basis, but has no ability to take the ultimate employment decisions contemplated by the Vance case, a “de facto supervisor” and I call the supervisor contemplated by the Vance case, the “Vance supervisor.” This theory will require the plaintiff to develop the facts in detail in deposition in order to demonstrate the influential ability of the de facto supervisor to cause the Vance supervisor to take tangible employment actions. If enough evidence of the influential ability of the de facto supervisor can be proven, then the court, on summary judgment, would be authorized to hold that there is a triable fact issue as to whether the company has “effectively delegated the power to take tangible employment actions to the employees on whose recommendation it relies.” If this fact issue can be raised, then the de facto supervisor could become the Vance supervisor for the purposes of holding the company vicariously liable for the sexual harassment of the de facto supervisor. Even if an employee cannot prove that the de facto supervisor is the Vance supervisor and prevail on a vicarious liability theory, the employee might still prevail on a negligence theory if the employee can prove that the employer knew or should have known of the harassment of the co-employee (or de facto supervisor). The Vance court also discussed this issue: “Contrary to the dissent’s suggestions…, this approach will not leave employees unprotected against harassment by co-workers who possess the authority to inflict psychological injury by assigning unpleasant tasks or by altering the work environment in objectionable ways. In such cases, the victims will be able to prevail simply by showing that the employer was negligent in permitting this harassment to occur, and the jury should be instructed that the nature and degree of authority wielded by the harasser is an important factor to be considered in determining whether the employer was negligent. The nature and degree of authority possessed by harassing employees varies greatly…and as we explained above, the test proposed by petitioner and the United States is ill equipped to deal with the variety of situations that will inevitably arise. This variety presents no problem for the negligence standard, which is thought to provide adequate protection for tort plaintiffs in many other situations. There is no reason why this standard, if accompanied by proper instructions, cannot provide the same service in the context at issue here.”