The perils of (reporting and) not reporting sexual harassment.

• Author: Turner, N. James

Three years ago, an article appeared in the December 1994 issue of The Florida Bar Journal entitled "Employer Liability for Acts of Sexual Harassment in the Workplace: Respondeat Superior and Beyond." One of the conclusions this author expressed in that issue was that in many situations, an employer can be held liable for the acts of its low-level and mid-level supervisors if those acts represent the exercise of authority that third parties reasonably believe him or her to possess as evidenced by the employer's conduct. Since its publication, and, in particular, during the calendar year of 1997, the 11th Circuit Court of Appeals published several opinions that have a substantial impact on the subject of employer liability for hostile environment sexual harassment, essentially making the opinions and conclusions of the December 1994 column obsolete. What follows is a review of the most important of those opinions which will also serve as an update to the earlier treatment of the subject of employer liability for acts of sexual harassment.

Faragher v. City of Boca Raton

By far, the most significant of the 11th Circuit opinions on the subject of employer liability for sexual harassment is Faragher v. City of Boca Raton, 111 F.3d 1530 (11th Cir. 1997). The central facts in Faragher are simple and essentially involve unwelcome sexual advances in the workplace toward two females by two heterosexual males, constituting what one court recently referred to as a "paradigm [sexual] harassment case."[1] Beth Ann Faragher worked as a lifeguard for the City of Boca Raton from September of 1985 until June of 1990. During her employment, Bill Terry and David Silverman acted as supervisors over all ocean lifeguards, Terry acting as chief of the marine safety section and Silverman as a marine safety lieutenant and later as captain. Terry had the authority to supervise all aspects of the lifeguards' assignments, as well as to give oral reprimands, place reports of disciplinary actions in personnel files, and to interview and select new lifeguards subject to approval by higher management. Silverman supervised the lifeguards' daily duties, including designating work assignments and supervising physical fitness routines. The marine safety section headquarters was located at a remote area of the beach, far from city hall. Terry, as chief of the marine safety section, reported to the recreation superintendent, who reported to the director of parks and recreation, who in turn reported to the city manager. Of crucial importance was the fact that lifeguards had little contact with city officials.

Marine Safety Chief Terry subjected Faragher and another female lifeguard, Nancy Ewanchew, to uninvited and offensive touching. Lieutenant Silverman made offensive comments and gestures to both Faragher and Ewanchew. Specifically, Faragher testified that over the course of her five years of employment, Terry touched her shoulders, touched her waist on a number of occasions, patted her thigh once in April of 1990, and slapped her on the rear-end. Ewanchew testified about two specific instances where Terry touched her in a sexually offensive manner. However, neither Faragher nor Ewanchew ever complained to the parks and recreation department management about Terry's or Silverman's conduct while they were employed by the city. Both women spoke about their conduct with another supervisor, Captain Robert Gordon, who was the marine safety lieutenant and training captain. Moreover, most of the female lifeguards complained to Gordon about Silverman's language and conduct. However, they did not speak with Gordon as their supervisor; instead, they spoke to him as a friend. Notwithstanding the importance of these confidences, Gordon never reported the complaints to his supervisor, to Terry, or to any other city official.

Ewanchew and Faragher resigned their lifeguard positions in April of 1989 and June of 1990, respectively. Neither woman said anything about sexual harassment upon their resignations. However, one year after her departure, Ewanchew wrote a letter to the city's director of personnel complaining that she and other female lifeguards had been sexually harassed by Terry and Silverman while employed by the city. Until receiving Ewanchew's letter in April 1990, the city did not know about Terry's and Silverman's conduct. After that letter, the city investigated Ewanchew's allegations and determined that Terry and Silverman had engaged in inappropriate conduct and reprimanded and disciplined both of them.

In 1992, Faragher sued the city for sexual harassment under Title VII of the Civil Rights Act of 1964 and Terry and Silverman for sexual harassment under 42 U.S.C. [sections] 1983. In addition, Faragher and Ewanchew[2] asserted several pendent state law claims, suing Terry for battery and the city for negligent retention and supervision of Terry. The district court conducted a nonjury trial on all claims and entered judgment for Faragher on her Title VII claim against the city, awarding her $1 in nominal damages. The trial judge held that Terry's and Silverman's offensive conduct was sufficiently severe and pervasive so as to alter the conditions of Faragher's employment by creating a hostile work environment. Additionally, the city was found to be directly liable for Terry's and Silverman's conduct under agency principles based upon their supervisory authority and overall workplace structure, and indirectly liable for Terry's and Silverman's offensive conduct because it was severe and pervasive and supported "an inference of knowledge, or constructive knowledge, on the part of the city regarding Terry's and Silverman's sexual harassment."[3]

Faragher and Ewanchew appealed and the city cross-appealed. A three-judge panel of the 11th Circuit reversed the district court's judgment for Faragher on her Title VII claim against the city but affirmed the judgment in all other respects.[4] Thereafter, the panel opinion was vacated and an en bane rehearing was granted.[5] In its en bane opinion, the Court of Appeals held that: 1) the city was not vicariously liable for the sexual harassment by Terry and Silverman; and 2) the city was not directly liable for their harassment.

In arriving at its holding, the Court of Appeals initially addressed two issues: first, whether the city may be liable under Title VII for Terry's and Silverman's hostile environment sexual harassment of Faragher, regardless of whether the city had actual or constructive knowledge of that harassment; and, second, whether the city knew or should have known of Terry's and Silverman's hostile environment sexual harassment of Faragher. Faragher contended that Terry's and Silverman's positions as top lifeguard commanders made them "prototypical agents of the City." Moreover, she argued that the harassment by them was so pervasive that the city should have been charged with constructive knowledge of their conduct.

In response to Faragher's contentions, the city argued that it could not be held liable under agency principles for either man's conduct because there was no evidence to support a finding that they were acting within the scope of their authority in harassing Faragher, or that they were aided in accomplishing the harassment by the existence of their agency relationships with their employer. The city further argued that the evidence was insufficient to support the trial court's finding that the city had constructive notice of Terry's and Silverman's conduct.

In beginning its analysis of the first issue, the majority paid proper deference to Meritor Savings Bank v. Vinson, which mandated that federal courts use traditional agency principles when deciding hostile environment sexual harassment cases, but simultaneously "place some limits on the acts of employees for whom employers under Title VII are to be held responsible."[6] In order to simplify its analysis of the two critical issues upon which the court focused, a distinction was drawn between direct liability and indirect liability under agency principles. The opinion stated further that an employer is directly liable for hostile environment sexual harassment if it knew or upon reasonably diligent inquiry should have known, of the harassment and failed to take immediate and appropriate corrective action citing Steele v. Offshore Shipbuilding, Inc.[7] The 11th Circuit observed that under the theory of direct liability, the city can be held liable for its own negligence or recklessness, but not for the conduct of its supervisors or employees. Again, a contrast was made between direct liability with indirect or vicarious liability for the wrongful conduct of its agents, and whether the employer knew or should have known of the agent's wrongful acts. The court pointed out that generally, an employer may be indirectly liable for hostile environment sexual harassment by a superior: 1) if the harassment occurs within the scope of the superior's employment; 2) if the employer assigns performance of a nondelegable duty to a supervisor and an employee is injured because of the supervisor's failure to carry out that duty; or 3) if there is an agency relationship that aids the supervisor's ability or opportunity to harass his or her subordinate.[8]

The decision observed, among other things, that prior precedent in the 11th Circuit has concluded that in a pure hostile environment case, a supervisor's harassing comment is typically outside the scope of his employment.[9] Further, the 11th Circuit had previously articulated two agency principles under which an employer may be held indirectly, or vicariously, liable for hostile environment sexual harassment: 1) when a harasser is acting within the scope of his or her employment and perpetrating the harassment;[10] and 2) when a harasser is acting outside the scope of his or her employment, but is aided in accomplishing the harassment by the existence of the agency...