June 26, 2015 Practice Points

Faragher-Ellerth Defense Available in Vicarious-Liability Cases

The New Jersey Supreme Court confirms availability of the Faragher-Ellerth affirmative defense in employee lawsuits attempting to hold employers vicariously liable for alleged supervisor misconduct.

Charn Reid – June 26, 2015

In Aguas v. State of New Jersey (A-35-13) (072467) (N.J. Feb. 11, 2015), the plaintiff, an employee with the New Jersey Department of Corrections (NJ DOC), alleged that she was subjected to sexual harassment by two of her male supervisors on several occasions. Prior to filing suit, Aguas verbally complained to the NJ DOC about the alleged harassing conduct. On March 8, 2010, the NJ DOC’s Equal Employment Division (EED) notified Aguas that it had initiated an investigation of her complaint. The EED conducted 20 interviews over the course of several weeks and ultimately determined that the plaintiff’s allegations were unsubstantiated.

Notably, plaintiff Aguas, on March 10, 2010—only two days after being notified by the EED that it had begun investigating her harassment claims—filed a lawsuit, including the state as a named defendant, alleging that the two supervisors subjected her to a hostile work environment based on her gender and retaliated against her when she objected to their conduct, in violation of the New Jersey Law Against Discrimination. Aguas, however, did not allege that the NJ DOC took any tangible employment action against her. In its answer to the complaint, the state asserted affirmative defenses based on its anti-harassment policy and the prompt and thorough investigation of the employee’s complaint. After discovery, the trial court granted summary judgment in favor of the state, holding that, although plaintiff Aguas made a prima facie showing that she was subjected to severe and pervasive sexual harassment, the State had established an affirmative defense, because the NJ DOC’s anti-harassment policy required complaints to be in writing, and Aguas failed to comply with that policy by complaining verbally.

Aguas appealed and the Appellate Division affirmed the lower court’s grant of summary judgment and further held that Aguas failed to establish that her most senior supervisor used his authority to control Aguas’s day-to-day working environment as a means to aid in his sexual harassment of her. Aguas once again appealed, and the New Jersey Supreme Court found in favor of the employer and, in doing so, adopted the standard set forth by the U.S. Supreme Court in Burlington Industries v. Ellerth, 524 U.S. 742, 765 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775, 807–08 (1998), which standard, in federal jurisprudence, is referred to as the “Faragher-Ellerth defense.” As the New Jersey Supreme Court decreed, the Faragher-Ellerth defense is available to an employer in a lawsuit alleging hostile-work-environment sexual harassment, if the employer can show that it “exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise,” and “provided that the employer has not taken an adverse tangible employment action against the plaintiff employee.”

Essential to the New Jersey Supreme Court’s ultimate conclusion that the Faragher-Ellerth affirmative defense was available to the state was the NJ DOC anti-discrimination policy and the enforcement of that policy with respect to the plaintiff’s complaint of harassment. The Aguas court carefully noted that the NJ DOC had implemented a robust, written anti-discrimination policy that clearly described the prohibited behavior, the obligation to ensure a harassment-free workplace, the sanctions for failing to do so, the procedures for reporting harassing behavior, the procedure for investigating complaints, and the remedial steps to be taken when a complaint of harassment or discrimination is substantiated. The court also weighed in its decision the fact that the employer required all employees to receive training on the anti-discrimination policy, the extensiveness of the NJ DOC investigation of the complaint, that Aguas filed the lawsuit before the investigation was complete, and the absence of an adverse employment action against her.

The Aguas case represents a major milestone in New Jersey employment law, as previous rulings in New Jersey had hinted at, but never expressly provided that a Faragher-Ellerth-type affirmative defense was available for employers in suits alleging vicarious liability for supervisory harassment. However, one element of the Aguas ruling that has been largely overlooked is the New Jersey Supreme Court’s expansion of the definition of “supervisor” for purposes of determining whether an employer can be held vicariously liable for the harassing acts of an employee’s supervisor. More specifically, the Aguas court adopted the definition of “supervisor” used by the U.S. Equal Employment Opportunity Commission (EEOC), which is broader in scope than the definition used to determine questions of vicarious liability in federal Title VII cases. This distinction is no small one, because the broader New Jersey definition, in practice, could significantly increase the potential pool of individuals whose conduct can expose the employer to liability.

The Aguas case presents a number of very clear takeaways for employers in New Jersey and nationwide regarding methods they can employ to reduce their exposure to claims of vicarious liability for the allegedly harassing conduct of supervisors:

  • Implement a written anti-discrimination policy that clearly describes: (a) the types of conduct prohibited, (b) the obligation to ensure a workplace free of harassment and discrimination, (c) the protocols for reporting misconduct, (d) the employer’s procedure and timeline for investigating claims, and (e) the remedial steps to be taken when a claim is substantiated.
  • Enforce the policy as written and investigate each complaint.
  • Thoroughly document the investigation, as that documentation may be the evidence relied upon in the event of a lawsuit.
  • Care should be taken to ensure that the investigator does not have a stake in the outcome of the investigation (e.g., don’t assign investigation to a friend or ally of the accused supervisory employee).
  • Provide initial and periodic follow-up training on the anti-discrimination policy and give each employee a personal copy of the policy to keep for reference.
  • Do not take any adverse employment action (demotion, termination, etc.) against the complaining employee relating to that employee’s reporting of allegedly harassing behavior.
  • The employer should also consult an employment attorney to ensure its anti-discrimination policy is compliant with federal law and any applicable state law in each state in which the employer operates.

Keywords: litigation, employment law, labor relations, Faragher-Ellerth, affirmative defense, employer, vicarious liability, agency law, Title VII, EEOC, discrimination, harassment, sexual harassment, hostile work environment, gender, supervisor, adverse employment action, tangible employment action, Aguas, New Jersey, Department of Corrections, anti-discrimination policy, anti-harassment policy

— Charn Reid, Brooks Pierce, LLP, Greensboro, NC


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