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You Take the Good, You Take the Bad: NJ High Court Offers Employers Avenue to Limit Vicarious Liability in Harassment Suits; But Broadens Definition of “Supervisor”

In Aguas v. State of New Jersey, the New Jersey Supreme Court recently adopted an affirmative defense—available under federal law since 1998—allowing employers to use their anti-harassment policies to limit vicarious liability under the New Jersey’s Law Against Discrimination (LAD) to the employer for a supervisor’s harassment.  At the same time, however, the Court adopted the more expansive definition of “supervisor” used by the EEOC as opposed to the narrower definition adopted by the U.S. Supreme Court in 2013.

Facts

For employment lawyers, the facts in Aguas are fairly unremarkable for a hostile work environment case.  The New Jersey Department of Corrections (DOC) instituted a written anti-discrimination/anti-harassment policy mandating that all employees be trained with respect to it.  The policy incorporates procedures with regard to reporting, investigating and remediating claims of misconduct, and “encourages” employees to promptly report incidents of harassment.  The plaintiff, a corrections officer, received a copy of the policy at the time of her hiring.  In fact, there was no dispute about the plaintiff’s awareness of the policy because she had twice before instituted written complaints under the policy.

The plaintiff was supervised by a male Area Lieutenant, the highest-ranking supervisor on her shift.  The plaintiff alleged that, for a period of approximately six months, her supervisor sexually harassed her on several occasions, including making inappropriate comments and engaging in unwanted physical touching and by directing a female officer to pat-frisk her.

The plaintiff verbally reported the Area Lieutenant’s conduct to another supervisor but did not file a written complaint with the DOC under its policy because she allegedly feared retaliation.  Nonetheless, the DOC’s Equal Employment Division (EED) initiated an investigation of the plaintiff’s verbal complaint of sexual harassment.  After several weeks and 20 interviews, the EED ultimately concluded that the plaintiff’s allegations were unsubstantiated.

Analysis

Writing for a 5-2 majority, Justice Anne Patterson explained that “the employer in a hostile work environment sexual harassment case may assert as an affirmative defense to vicarious liability 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.’”  This affirmative defense, however, is not available to employers in the event of an adverse employment action (e.g., discharge, demotion) against the employee.  As noted above, this affirmative defense—commonly referred to as the Faragher/Ellerth defense—has been available under federal anti-discrimination law since it was adopted by the US Supreme Court in 1998.  As to the New Jersey Law Against Discrimination, however, the availability of the Faragher/Ellerth defense was left unanswered by New Jersey’s highest court until now.

In response to the dissent’s sharp rebuke of the majority opinion, Justice Patterson clarified that “the affirmative defense provides no benefit to employers who empower sexually harassing employees who take tangible employment actions against their victims, employers who fail to implement effective anti-harassment policies, and employers whose policies exist in name only.”  The opinion further stated: “So that the dissent’s description of our opinion does not confuse employers, employees, counsel or trial courts with respect to this pivotal issue, we restate: An employer that implements an ineffectual antiharassment policy, or fails to enforce its policy, may not assert the affirmative defense.”

While employers will be pleased about the adoption of this affirmative defense, the Aguas decision was not all good news.  Agreeing with the EEOC’s guidance at the expense of the US Supreme Court’s 2013 decision in Vance v. Ball State University, the New Jersey high court adopted the more expansive standard for determining whether an alleged harasser is a “supervisor” (which means that it’s easier to hold an employer vicarious liable).  Under the more restrictive “supervisor” definition adopted in Vance, supervisors are limited to those with authority to make tangible employment decisions.  Under the broader EEOC standard, adopted by the New Jersey Supreme Court, “an allegedly harassing employee is the complainant’s supervisor if that employee had the authority to take or recommend tangible employment actions affecting the complaining employee, or to direct the complainant’s day-to-day activities in the workplace” (emphasis added).

Given the good news (i.e., the affirmative defense) for employers of this “mixed bag” decision, it is clearer than ever that employers must ensure that they have robust anti-discrimination/anti-harassment policies on the books (and if not, now is the time to institute them or beef them up).  Policies in name only won’t do the trick.  Since having a legitimate, enforced policy with multiple reporting avenues—supported by training on that policy—now provides a New Jersey Supreme Court-endorsed affirmative defense to vicarious liability under the LAD, employers would be remiss not to have this tool at their disposal, particularly in light of the now more expansive “supervisor” standard.

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Author

David Katz