Discrimination by managers and supervisors: recognizing agent liability under Title VII.

• Author: Goldberg, Scott B.

[T]he party whose voluntary conduct has caused the damage should suffer, rather than one who has had no share in producing it.

--Oliver Wendell Holmes(1)

INTRODUCTION

The principle of personal accountability is deeply rooted in the American legal tradition.(2) Although liability of indirectly responsible parties is appropriate under certain circumstances, liability of the actual wrongdoer is generally a prerequisite, especially in the employment context.(3) In the context of employment discrimination, however, several federal courts have held otherwise.(4)

Title VII of the Civil Rights Act of 1964(5) (Title VII), enacted to combat employment discrimination and compensate its victims,(6) prohibits racial and sexual harassment and discriminatory practices affecting hiring, firing, compensation, and benefits.(7) Although Title VII explicitly permits victims of discrimination to seek both injunctive relief and damages,(8) the statute fails to specify precisely whom victims may sue for such relief.(9) Consequently, the federal judiciary has been required to make this determination.

In practice, federal courts readily hold liable employers(10) who are proven to have violated Title VII.(11) Unlawfully discriminatory acts, however, often emanate from agents of employers acting within the scope of their employment, such as when a chief executive officer of a major corporation makes a racially based hiring decision.(12) In such cases, federal courts agree that employers may be held liable for the acts of their agents.(13) Whether agents who actually discriminate may also be held liable, however, remains unresolved.(14) This issue has sharply divided the federal courts of appeals(15) and district courts,(16) thus leaving the doctrines defining Title VII liability in a state of disarray.(17)

This Comment analyzes the issue of agent liability under Title VII and concludes that managers and supervisors who unlawfully discriminate should be held personally accountable to their victims.(18) Part I demonstrates that the plain language of Title VII provides a basis for agent liability. Part II examines the legislative intent underlying Title VII and determines that agent liability comports with Title VII's statutory objectives. Part III evaluates the public policy implications of holding agents liable under Title VII and concludes that recognizing agent liability under Title VII is desirable.

1. STATUTORY LANGUAGE PROVIDES A BASIS FOR AGENT LIABILITY UNDER TITLE

   VII

   According to the United States Supreme Court's longstanding pronouncement on statutory construction, "the meaning of a statute must, in the first instance, be sought in the language in which the act is framed."(19) As the following sections demonstrate, federal courts have disagreed on the meaning of Title VII's language. A literal reading of Title VII supports agent liability, although some courts have used more indirect readings of the statute to reach the opposite conclusion. The reasoning of these courts is flawed, however, and therefore the literal reading of the statute should prevail.

   1. A Literal Reading of Title VII Supports Agent Liability

      Title VII does not state explicitly who may be held liable for violating its prohibitions.(20) Federal courts implicitly recognize that the statutory provisions defining unlawful employment practices most directly indicate which discriminators fall within the ambit of statutory liability.(21) Such provisions delineate the conduct that constitutes "an unlawful employment practice for an employer."(22) Accordingly, exposure to liability turns upon who is "an employer" within the meaning of the statute, which is defined as "a person engaged in an industry affecting commerce who has fifteen or more employees ... and any agent of such person."(23) Thus, simply substituting the statutory definition of employer into the provisions defining unlawful employment practices plainly establishes a basis for agent liability.(24)

   2. Alternate Readings of Title VII's Language Are Flawed

      The United States Court of Appeals for the Ninth Circuit recently espoused the various rationales of those federal courts rejecting a literal reading of Title VII.(25) As the following sections demonstrate, each of these rationales is logically flawed and therefore fails to provide a persuasive reason for denying agent liability.

      1. Title VII's Definition of "Employer" Does Not Provide a Persuasive

         Reason for Rejecting Agent Liability

         1. Interpreting Title VII's Inclusion of "Agents"

            The explicit inclusion of agents within Title VII's definition of "employer" suggests, by simple substitution, that agents may be held liable for their unlawfully discriminatory conduct.(26) Some federal courts, most notably the Ninth Circuit, have nonetheless used the identical provision to reach the opposite conclusin. Employing a representative approach, the Ninth Circuit concluded that the "'obvious purpose of [including "agent" in the definition of employer! was to incorporate respondeat superior liability into the statute,'" not to provide a basis for agent liability.(27)

            This approach to resolving the issue of agent liability under Title VII is unpersuasive for two reasons. First, the Ninth Circuit cited no authority to support its assertion other than the unpublished opinion of the district court below.(28) Second, even assuming that Congress included the word "agent" for respondeat superior purposes, it does not necessarily follow that Congress intended suits against employers to constitute the exclusive means of Title VII liability.(29) Such a conclusion is especially dubious given that a literal reading of the statute dictates a contrary outcome and thus does not weigh in favor of denying agent liability under Title VII.(30)

         2. Interpreting Title VII's Exclusion of Employers with Fewer Than

            Fifteen Employees

            The Ninth Circuit's second rationale for rejecting agent liability focuses on Title VII's coverage of only those employers with fifteen or more employees.(31) After assuming that Congress would intend to treat individuals and small entities similarly, the court concluded that, given the statute's protection of small businesses, it would be "inconceivable that Congress intended to allow civil liability to run against [agents]."(32)

            The logical error of this analysis lies in its improper assessment of the reasons Congress limited Title VII's coverage to larger employers. As some federal courts have recognized, legislative history reveals that Congress excluded small employers from Title VII's coverage to preserve the autonomy of family-run businesses that prefer to hire friends and family members.(33) This rationale, however, does not apply to individual agents. Congress's intent to preserve a sphere of autonomy for small businesses does not suggest that Congress would similarly protect individual discriminators, especially when these individuals are agents of em-ployers covered by Title VII. Rather, agents of covered employers are acutely involved in the business decisions Congress intended Title VII to reach.(34) Contrary to the Ninth Circuit's reasoning, then, Congress would not have intended violators within covered enterprises to escape the consequences of their actions.

      2. Title VII's Damage Limitation Provisions Do Not Provide a Legitimate

         Reason for Rejecting Agent Liability

         The Ninth Circuit also based its denial of agent liability on the language of the Civil Rights Act of 1991, which both authorized compensatory and punitive damages and limited the size of such awards according to the number of people employed by the liable defendant.(35) After correctly noting that no provision explicitly limits damage awards against individuals,(36) the court concluded that Congress never envisioned agent liability under Title VII.(37) This interpretation's appeal lies in its ability to prevent the potentially unjust result of imposing even greater liability on an agent than on the employer, who often would have greater financial resources than the individual agents it employs.(38)

         Title VII's silence regarding the range of damages available against this class of potential defendants does not, however, indicate that Congress intended to foreclose agent liability. The damage limitation provisions are also silent with respect to other Title VII defendants whose exposure to liability remains uncontroversial. In particular, the damage limitation provisions do not expressly cover employment agencies and labor organizations having under fifteen employees, despite Title VII's undisputed coverage of such entities regardless of their size.(39) It would seem disingenuous to argue that Congress intended its silence on damage limitations regarding these potential defendants to nullify the content of statutory provisions specifically directed at them. Similarly, legislative silence does not indicate that Congress intended to leave agents outside Title VII's reach.(40) Because all alternative readings of Title VII's language prove unpersuasive,(41) the literal reading, which supports agent liability under Title VII, remains the most compelling.(42)

2. AGENT LIABILITY FURTHERS THE CONGRESSIONAL OBJECTIVES OF TITLE VII

   Because Title VII's language does not unambiguously resolve the issue of agent liability, one must look to the statute's legislative history for further guidance.(43) Although Congress never specifically addressed the issue of agent liability,(44) Title VII's broad objectives are clear: to eradicate employment discrimination and to provide redress for the victims of such discrimination.(45) The following sections consider whether agent liability serves these dual purposes, concluding in the affirmative.

   1. Agent Liability Helps Victims Secure Compensation

      Absent agent liability, victims of discrimination must resort to suing the wrongdoer's employer alone. The following subsections explain why employer liability is often insufficient to ensure...