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Second Circuit Rules that Sexual Harassment Plaintiffs who have Submitted to a Supervisor's Sexual Advances Establish Automatic Vicarious Liability

July 11, 2002

The U.S. Court of Appeals for the Second Circuit recently ruled that an employee who submits to her supervisor's unwelcome sexual advances suffers a "tangible employment action," with the result that the employer is automatically liable for the supervisor's actions under Title VII of the Civil Rights Act of 1964. Jin v. Metropolitan Life Insurance, No. 01-7013, 2002 WL 1394348 (2d Cir. June 27, 2002).

The Facts of the Case

Min Jin was employed at a MetLife office in New York from 1989 through 1995. In about 1993, Gregory Morabito became her supervisor. He promptly began engaging in unwelcome conduct of a sexual nature toward Jin, including making of crude sexual remarks, touching her legs, breasts, and buttocks while she was at her desk and in the presence of clients, and requiring her to attend weekly one-on-one meetings where he would physically threaten her and require her to engage in sexual acts. Jin submitted to this conduct under threats that she would be fired if she refused, and she failed to invoke the available corrective measures under MetLife's sexual harassment policy. In an attempt to avoid her harasser Jin altered her schedule, and began to work on the evenings and weekends. Morabito continued to harass Jin whenever he saw her, leading her to apply for disability benefits, which were denied. She was subsequently terminated as a result of her erratic attendance. Jin filed suit against MetLife, claiming that she had been sexually harassed in violation of Title VII.

The District Court Decision

MetLife argued that it was not liable for Morabito's actions under the U.S. Supreme Court decisions in Burlington Industries Inc. v. Ellerth, 524 U.S. 742 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775 (1998). Those cases established an affirmative defense under which an employer can avoid liability for sexual harassment by a supervisor if it can show that: 1) it took reasonable efforts to prevent and correct sexual harassment in its workplace (such as by promulgating and enforcing a valid sexual harassment policy and complaint procedure); and 2) that the plaintiff unreasonably failed to avail herself of these preventative and corrective measures. See Supreme Court Clarifies Standards for Employer Liability for Sexual Harassment By Supervisors (July 1, 1998); Second Circuit Dismisses Harassment Claim Based on Plaintiff's Failure to Invoke Employer's Policy (June 8, 2001). However, the Ellerth/Faragher defense is available only for so-called "hostile work environment" harassment cases; it is not available where the plaintiff has suffered a "tangible employment action," such as where she has been discharged for resisting her supervisor's sexual demands.

The record showed that MetLife had taken reasonable care to prevent the harassment (the first element of the Ellerth/Faragher defense) and that Jin had failed to seek relief under MetLife's harassment policy (the second element of the defense). The critical issue, therefore, was whether she had suffered a tangible employment action; if so, the Ellerth/Faragher defense would be unavailable, and MetLife would automatically be vicariously liable for Morabito's harassment.

The trial court instructed the jury that MetLife's liability turned on whether it found that Jin had been subjected to a "tangible adverse action." In response to special verdict questions, the jury found that Morabito did not commit any acts of sexual harassment that resulted in "a tangible adverse action impacting on the terms or conditions of Jin's employment." Accordingly, MetLife was entitled to assert the Ellerth/Faragher affirmative defense. The jury found that MetLife had established both elements of the defense and, on this basis, the district court entered a finding of no liability for MetLife.

The Second Circuit Decision

Jin appealed, arguing that the district court erred in instructing the jury as to the definition of a "tangible employment action." In considering the propriety of the District Court's jury instruction, the Second Circuit examined the Supreme Court's explication of employer vicarious liability in the Ellerth and Faragher cases. The Court of Appeals reasoned that it is appropriate to impose automatic vicarious liability on employers for the harassing conduct of their supervisory employees when those supervisors are aided in their harassment by the existence of their agency relationship with the employer. In other words, an employer should automatically be liable when a supervisor wields the power that the employer has bestowed upon him as a tool to accomplish his sexual ends, such as where a supervisor who has been empowered by his employer to make hiring decisions threatens to fire an employee if she fails to comply with his sexual demands. Within this conceptual framework, the Second Circuit readily concluded that in requiring Jin to show an "adverse employment action" in order to establish automatic liability the District Court had defined "tangible employment action" too narrowly. According to the Second Circuit, requiring a plaintiff to show an "adverse" employment action was contrary to the plain language of Ellerth and Faragher, both of which cited positive employment actions such as "hiring" and "promotions" as examples of the kinds of tangible employment actions that would make the affirmative defense unavailable. The Court of Appeals went on to explain that whether an employee suffers an adverse action (such as termination) when she refuses a sexual demand, or whether she avoids an adverse action because she submits to such a demand, the supervisor has used the power bestowed upon him by the agency relationship with the employer, and the employer should automatically be liable for the supervisor's conduct.

In applying this rule, the Second Circuit found that Morabito had ordered Jin to submit to sexual acts, explicitly threatening to fire her if she refused, and then allowed her to keep her job after she submitted. MetLife had invested Morabito, as a supervisory employee, with the power to make economic decisions affecting employees, and it was that power that enabled him to force Jin to submit to his sexual abuse. The fact that Jin may not have experienced a tangible adverse employment action did not defeat her claim of automatic liability: Jin experienced a tangible job benefit, i.e., the retention of her employment, based on her submission to sexual demands. Thus, MetLife was automatically liable for Morabito's conduct.

Lessons for Employers

This decision may significantly reduce the circumstances in which the Ellerth/Faragher defense is available to employers and therefore make it easier for plaintiffs in hostile environment sexual harassment cases to hold employers liable for supervisory harassment. Under Jin, plaintiffs who have not been fired or suffered any other tangible adverse action may be able to defeat the defense by alleging that they complied with the supervisor's demands under an explicit or implicit threat of termination. The lesson: it is more important than ever for employers to prevent unlawful harassment from occurring in the first place, by maintaining a comprehensive harassment-free workplace policy and ensuring that all supervisors receive periodic sexual harassment training.