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Second Circuit Expands Employer Liability for Sexual Harassment

April 1, 1994

A recent decision by the U.S. Court of Appeals for the Second Circuit in New York has expanded the range of circumstances in which an employer may be held liable for sexual harassment by supervisors. Karibian v. Columbia University, 14 F.3d 773 (2d Cir. 1994). Reversing a lower court decision dismissing the plaintiff's lawsuit, the court held: (1) that a plaintiff may assert a claim of quid pro quo harassment, even in the absence of any demonstrable economic detriment to her job; and (2) that an employer is strictly liable for hostile workplace harassment by a supervisor if the supervisor makes use of his supervisory authority to create or maintain a discriminatorily abusive work environment.

In Karibian, the plaintiff, a student at Columbia University who worked in the University's fundraising office, alleged that her supervisor repeatedly made sexual advances toward her, and coerced her into a violent sexual relationship by telling her that she "owed him" for his actions on her behalf as her supervisor. She claimed that the conditions of her employment, such as her hours, raises, autonomy and flexibility, varied depending upon her responsiveness to her supervisor's sexual advances. During the course of the harassment, Karibian contacted a member of Columbia's Panel on Sexual Harassment, as well as Columbia's Equal Opportunity Coordinator. At Karibian's request, both of these meetings remained confidential, and did not result in any further investigation or action against her supervisor. A year and a half later, Karibian again met with Columbia's Equal Opportunity Coordinator regarding her conflicts with her supervisor. At this time, Karibian dropped her request for confidentiality. As a result, Columbia investigated the relationship. Shortly thereafter, Karibian's supervisor resigned. At about the same time, Columbia closed the office in which Karibian worked, and she was laid off. Based on these events, Karibian sued Columbia and her supervisor, among others, claiming that she had been subjected to sexual harassment in violation of Title VII of the Civil Rights Act of 1964.

Quid Pro Quo Harassment

Karibian alleged both a quid pro quo theory and a hostile workplace theory of sexual harassment. Under the Guidelines promulgated by the Equal Employment Opportunity Commission, quid pro quo harassment occurs when submission to or the rejection of unwelcome sexual advances, requests for sexual favors, and other sexual conduct is made either explicitly or implicitly a term or condition of an individual's employment, or is used as the basis for employment decisions affecting such individual. Prior to the Karibian case, a number of courts had held that an employee could state an actionable claim for quid pro quo harassment only if she had actually suffered a harmful effect upon her job (i.e., dismissal, demotion, increased hours, or reduced pay). In practical effect, if an employee acceded to the supervisor's demands, and thereby avoided such harm, she would have no quid pro quo harassment claim under those cases.

The Karibian court held that "actual economic loss" is not necessary to state a claim for quid pro quo sexual harassment. After Karibian, a supervisor's use of the employee's acceptance or rejection of sexual advances as the basis for decisions affecting the terms, conditions or privileges of an employee's job constitutes quid pro quo harassment, even where the employee does not suffer any actual economic harm.

Hostile Workplace Harassment

The second claim in the Karibian case was that by his actions toward her, Karibian's supervisor had created a hostile or abusive working environment. The leading case on hostile workplace harassment is Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986), in which the Supreme Court ruled that unwelcome sexual advances, requests for sexual favors, and other sexual conduct constitute sexual harassment when such conduct "has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment." In Meritor, the Court also held that, unlike quid pro quo harassment in which the employer is strictly liable for sexual harassment by a supervisor, employer liability for hostile environment harassment was to be decided in accordance with "traditional agency principles."

In applying Meritor, many courts ruled that, in a hostile environment case, an employer is liable for acts of sexual harassment by a supervisor only if the employer was, or should have been, aware of the supervisor's conduct and failed to take prompt corrective action. As a result, many hostile environment claims were dismissed based on the plaintiff's failure to complain about the supervisor's conduct, such as by pursuing the matter under the employer's sexual harassment policy.

The Court of Appeals in Karibian, however, greatly expanded the circumstances under which an employer will be held liable for hostile workplace sexual harassment by a supervisor. Under this decision, an employer is no longer necessarily insulated from liability by the plaintiff's failure to complain about the supervisor's conduct. Rather, regardless of whether an employer is aware of the supervisor's conduct, it is liable for the sexually abusive work environment created by a supervisor if the supervisor "uses his actual or apparent authority to further the harassment, or if he was otherwise aided in accomplishing the harassment by the existence of [his relationship with the employer]." Thus, whether or not the employer will be found liable depends on the extent of the supervisor's authority.

Applying this analysis, the Karibian court noted that "the actions of a supervisor at a sufficiently high level in the hierarchy would necessarily be imputed to the company." On the other hand, in the case of a low-level supervisor, who does not rely on supervisory authority to carry out harassment, the employer will be liable for the supervisor's actions only if "the employer either provided no reasonable avenue of complaint or knew of the harassment but did nothing about it."

The Karibian court did not specify what would be considered a sufficiently high level in the supervisory hierarchy to sustain strict liability of the employer. With respect to the supervisor at issue in the case, however, the court found that, if Karibian's allegations were true, the supervisor capitalized on his authority to create and maintain a hostile work environment, and the employer would therefore be held liable for the supervisor's actions.

The Karibian decision should send a cautionary note to all employers. Employers, as always, will be held strictly liable for quid pro quo harassment. After Karibian, they will also be held liable for hostile workplace harassment by supervisors who make use of their position of authority to effect such harassment. Now more than ever, it is essential for employers to take measures to prevent such conduct from occurring at all. Comprehensive policies against sexual harassment, with a particular focus on educating supervisors about what actions may be inappropriate and illegal when dealing with their subordinates, remain a critical tool in that effort.