Reshaping Employment Law: Supreme Court Narrows Employer Liability for Workplace Discrimination & Retaliation Claims

On June 24, 2013, the United States Supreme Court handed down three separate decisions that will narrow employer liability for workplace discrimination and retaliation under federal law. While Fisher v. University of Texas at Austin dominated the headlines, University of Texas Southwestern Medical Center v. Nassar and Vance v. Ball State University clarified and narrowed employer liability standards under important sections of Title VII of the Civil Rights Act of 1964 (“Title VII”). Taken together, these decisions are good news for employers.

University of Texas Southwestern Medical Center v. Nassar.

In the Supreme Court considered whether a 1991 amendment to Title VII changed the standard applicable in retaliation cases. Title VII of the Civil Rights Act prohibits discrimination “because of” a person’s “race, color, religion, sex, or national origin.” Similarly, Title VII’s anti-retaliation provision bans retaliation against an employee “because” the employee opposes an unlawful employment practice, or commences or participates in an investigation or proceeding regarding an alleged violation of Title VII. In 1991, however, Congress amended Title VII (the Civil Rights Act of 1991), explaining that a party proves an unlawful employment practice if it “demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice.” This “motivating factor” standard is an easier burden for employees to meet than the statute’s original “because of” standard (also called a “but-for” standard).Subsequent Supreme Court decisions under other statutes also have grappled with the appropriate standard to apply in the context of workplace discrimination claims arising under federal law. After a detailed analysis of the statute and the Court’s precedents, the Court concluded that the “but-for” standard applies to retaliation claims brought under Title VII.

Vance v. Ball State University.

Under Title VII, in certain cases (not all), an employer’s liability for workplace harassment depends on whether the harasser was the employee’s “supervisor,” as opposed to a co-worker.If a supervisor’s harassment culminates in a “tangible employment action” (e.g., hiring, firing, demotion, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits), then the employer will be strictly liable. However, if no tangible employment action follows, the employer may escape liability by establishing, as an affirmative defense, that: (1) the employer exercised reasonable care to prevent and correct any harassing behavior; and (2) the employee unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided.However, if the harasser was a co-employee, the employer is liable only if it was negligent in controlling working conditions. In Vance, the Court considered the important issue: who is a supervisor?

The Court limited a “supervisor” under Title VII to a person who was empowered by the employer to take tangible employment actions against the victim of the harassment. Dissenting, four Justices noted that the Court’s decision “strikes from the supervisory category employees who control the day-to-day schedules and assignments of others” or otherwise “direct an employee’s daily activities.”

Fisher v. University of Texas at Austin

The Supreme Court held that universities could consider race as one of many factors in an admissions program that considered the overall individual contributions of applicants, but that a program that automatically awarded points to applicants from certain racial minorities violated the Equal Protection Clause of the Constitution. In Fisher, the University of Texas at Austin (the “University”) developed an admissions program that, it contended, complied with the legal criteria established in the 2003 decisions. Amy Fisher, a white applicant, was denied admission, and sued.

The Supreme Court in Fisher declined to reach the ultimate issue of whether the University’s admissions program violated the Equal Protection Clause.Rather, the Supreme Court held that the lower court (the Fifth Circuit) had misapplied the legal requirements. The Court clarified those standards, and sent the case back to the lower court for further proceedings.The ultimate burden on the University, the Supreme Court explained, is to “make a showing that its [admissions] plan is narrowly tailored to achieve the only interest that this Court has approved in this context: the benefits of a student body diversity that ‘encompasses a … broa[d] array of qualifications and characteristics of which racial or ethnic origin is but a single though important element.'”

Implications for Employers

June 24, 2013 was a good day in the Supreme Court for employers. If you have questions regarding application of these decisions to your employment policies and practices, MH&H can assist you with this analysis.

This Alertis published solely for the interests of friends and clients of Moritt Hock & Hamroff LLP for informational purposes only and should in no way be relied upon or construed as legal advice.