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The Supreme Court's Ruling on Employer Liability For Sexual Harassment That Results in "Constructive Discharge":
Why It's a Disappointment

Tuesday, Jun. 22, 2004

This Supreme Court term featured very few cases relating to employment or gender discrimination, the Supreme Court. But it decided one important case in that category last week: Pennsylvania State Police v. Suders.

The Suders case involved employer liability for a sexual harassment victim's alleged "constructive discharge" - that is, her claim that while not formally fired, the harassment she suffered was so severe that she was effectively forced to resign.

The specific question presented in Suders was this: Can an employer be held strictly liable - that is, liable with no available defenses -- for a supervisor's sexual harassment resulting in the constructive discharge of his victim?

In a strangely convoluted opinion, the 8-1 majority's answer was: Maybe, but not in most cases.

(A subsidiary question for the Court was whether Title VII even prohibits "constructive discharge" in the first place. Most lower courts had said yes. The Supreme Court, here, finally said yes too.)

Some Brief Background on the Case: The Basic Facts and Allegations

As I have described in greater detail in a prior column, the case arose out of Nancy Suders's employment as a communications operator for the Pennsylvania State Police (PSP). Her suit alleged that several of her supervisors engaged in sexually harassing behavior, including sexually explicit remarks, gestures, and behavior.

Suders told the PSP equal employment officer that she was being harassed. The officer told her to file a complaint, but did not give her specific information about how to go about it. In the end, Suders never filed anything formal.

Suders eventually resigned. She says that she took a computer skills exam several times, and was told each time by her supervisors that she'd failed it. But she alleges that she came upon the exams in a drawer in the women's locker room--not the place you might expect to find official papers--and thus began to suspect that her supervisors, attempting to undermine her prospects for success, had never even forwarded the tests for grading, and had lied about her purported failing scores.

Knowing she had taken the exams, her supervisors dusted the drawer in which they were kept with theft-detection powder. When she returned the exams, her hands turned "telltale blue."

She was then handcuffed, photographed, interrogated, and given Miranda warnings. Ultimately, she was released, but only after she stated her intent to resign.

The Key Issue -- "Tangible Employment Action" - and Why It Matters

A jury could easily find, on the facts alleged, that Suders' supervisors created a sexually hostile environment. But if it did, could the employer--the PSP--be held vicariously liable for the supervisors' conduct?

(The question is crucial because Title VII, the federal anti-discrimination statute under which this case was filed, does not permit individual harassers - even if they are supervisors -- to be held liable. So the employer is the only possible defendant from which the plaintiff could recover damages under Title VII.)

The answer to that question turns on another question: Has the harassment has resulted in a "tangible employment action"?

If the answer to this second question is yes, then the employer is strictly liable, with no defenses, as long as the plaintiff can prove the underlying harassment was sufficiently severe or pervasive to be actionable.

If the answer is no, however, the employer has the opportunity to prove an affirmative defense. Specifically, it must prove two things. First, it must prove it took reasonable measures to prevent and correct harassment. Second, it must prove that the victim failed to take advantage of the corrective opportunities made available to her.

If the employer succeeds in proving both things, it can either avoid damages or, depending on the facts and the jurisdiction, actually avoid any liability at all. In Suders's case, the employer's success with this defense would turn on whether her failure to file a formal complaint was unreasonable.

Is a "Constructive Discharge" a "Tangible Employment" Action?

So is a "constructive discharge" a "tangible employment action"?

Plainly, being fired is a tangible employment action - it's one of the most tangible, adverse things that can happen to an employee. But what about feeling that one cannot face going to work due to a hostile environment of harassment, and thus has been forced out of one's job?

Generally, the law treats constructive discharge as tantamount to firing. To prove constructive discharge, you must prove that you had no reasonable alternative other than to quit. And at that point, courts have seen little difference between being official firing, and being left with no reasonable alternative but to leave. Both getting fired and being forced out result in significant economic consequences. And both are essentially involuntary.

For essentially these reasons, the U.S. Court of Appeals for the Third Circuit agreed with Suders, and held constructive discharge can indeed be a tangible employment action. But then the case went up to the U.S. Supreme Court.

The Legal Standard Adopted by the Supreme Court

Here's what the Supreme Court ruled, in a nutshell: In the Title VII context, a constructive discharge can count as a "tangible employment action." But it can only count if some official, employer-sanctioned, adverse action precipitated the resignation.

What kind of adverse actions would qualify? The Court gave some examples: "officially changing [the employee's] employment status," "a humiliating demotion, extreme cut in pay, or transfer to a position in which [the employee] would face unbearable working conditions."

How did the majority reach this result? It went back to two landmark sexual harassment decisions.

The Basis for the Court's Legal Standard

In 1998, two Supreme Court cases -- Faragher v. City of Boca Raton and Burlington Industries v. Ellerth - established two categories of employer liability for supervisory harassment. Strict liability without defenses is only available for the first category: harassment resulting in a "tangible employment action."

Title VII holds employers and their "agents" responsible for discriminatory employment conditions, including harassment. That left the Court with a question: When is a harassing supervisor an "agent" of the employer? Perhaps the most relevant criteria, it noted, was whether the harassment was "aided by the agency relation."

That's where the "tangible employment action" comes in. If a supervisor gets a subordinate demoted or fired as part of his campaign of harassment (or based on her unwillingness to suffer it), plainly his "agency relation" has helped him in his harassment. After all, if he weren't the boss - that is, an agent of the company - he wouldn't have the power to fire or demote his victim.

Should the power - or the ability -- to constructively discharge an employee by forcing her out be analyzed the same way? The Supreme Court thought not. It opined that employers can be forced out by the harassment of supervisors, co-workers, or even third parties - without the company's knowledge, involvement or blessing, or the aid of the "agency relation." In contrast, it pointed out that an employee's formal firing always results from an official act of the company.

The Court thus decided to treat constructive discharge as a tangible employment action only if an official act underlies it - opining that only then has the forcing out been definitively aided by the fact of the agency relationship (that is, the fact that the boss is the boss.)

The Court's decision was that there must, at a minimum, be an official act that is the "last straw" for the plaintiff who resigns -such as a demotion or an intolerable transfer.

What's Wrong With This Ruling

The Court's ruling was in error. In fact, a constructive discharge is almost always aided by the agency relationship - that is, by the fact that the boss is the boss. For this reason, it should always - or virtually always - be considered a tangible employment action under the logic of Faragher and Ellerth.

If the supervisor harasses a subordinate to the point that her only reasonable alternative is to quit, he's doubtless using his status - the implied threat of his hire/fire/promote/demote power - to do so. If co-workers or customers force the employee out, they often do so with the supervisor's knowledge or consent, and again, the implied threat of his hire/fire/promote/demote power is involved.

And employers, after all, have both the responsibility and power to control the environment their employees work in. When an employee is harassed so severely at work as to compel her to quit, the employer has failed in its duty.

Nevertheless, as noted above, the Court added an artificial "official act" requirement for constructive discharge to count as a "tangible employment action."

Why the Ruling Will Leave The Same Plaintiffs Out in the Cold, With No Remedy

The holding in Suders could have been worse, of course: The Court could have said that constructive discharge is never a tangible employment action, because it isn't a formal act of the company. As a result, many commentators are treating this opinion as a victory for plaintiffs.

In truth, though, the victory here is almost useless, for the Court has made it almost impossible for "constructive discharge" plaintiffs ever to win. And in cases where they will win, they should have won anyway, because the "official act" they can point to would itself have been a tangible employment action or an independent act of retaliation.

Not only that, but the same "official act" would, in any case, have decimated the employer's ability to prove that it took reasonable corrective measures - and thus establish the affirmative defense that would allow it to avoid damages or even liability. Such an official act will tend, instead, to show the employer only made things worse.

Consider the example given by the Court of a properly analyzed case: A case where the plaintiff alleges that her employer, a judge, sexually harassed her. She went to the presiding judge, who transferred her, but, at the same time, told her the first six months would "be hell" because the new judge resisted having her on the staff, and it was probably in her "best interest to resign." So she did.

The transfer would mean the plaintiff would win under the Court's new rule; it's an official act preceding the constructive discharge - here, the forced resignation. But so what? This plaintiff should have won anyway.

With the presiding judge knowingly transferring her into a different kind of hostile environment, and suggesting she should quit, there's no way the employer could have established "reasonable corrective measures"! This is more a case of adding insult to injury.

Moreover, the presiding judge's actions in transferring the plaintiff into "hell" and suggesting she quit, might have been independently illegal. Title VII doesn't only prohibit harassment; it also bans retaliation against someone who files a harassment claim.

Just as the same winner plaintiffs will win, the same loser plaintiffs will lose - and it turns out that the Court has only impeded plaintiffs, rather than helping them. Consider this: To show constructive discharge, one must show quitting was a "fitting response" to the harassment. But reasonable grievance procedures tend to rebut any such proof. After all, they raise the question: Why didn't you complaint instead of resigning? And again, they also establish the affirmative defense.

Will Suders Herself Now Win Her Case?

So will the plaintiff in the case before the Court -- Nancy Suders - win her case now? The answer is probably yes. But, if the facts she alleges are true, she should have won in any case.

Her arrest might satisfy the "official act" requirement the Court has now imposed. If Suders can prove that the arrest - combined with the long course of sexually harassing behavior by her supervisors -- was sufficiently intimidating and threatening, that it left her no choice but to quit, she should win under the Court's standards.

Why should Suders have won anyway? Because her employer, after she complained, allegedly offered only an "insensitive and unhelpful" response, it wouldn't have been able to show "reasonable corrective measures," and establish the affirmative defense, anyway.

In the end, Suders is not really a victory for Title VII's mandate of eradicating sex discrimination - including sexual harassment. It gives the illusion of greater protection to sexual harassment victims, while leaving most plaintiffs no better off than before. And it continues the law's misguided focus on employer policies and procedures, at the expense of finding legal standards that might hold employers accountable for their continuing failure to reduce the incidence of harassment.

Joanna Grossman, a FindLaw columnist, is an associate professor of law at Hofstra University. Her other columns on discrimination, including sex discrimination and sexual harassment, may be found in the archive of her columns on this site.

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