The Supreme Court clarified the standards of employer liability for sexual harassment by supervisors in two recent decisions known as Burlington Industries v. Ellerth, 118 S.Ct. 2257 (June 26, 1998) and Farager v. City of Boca Raton, 118 S.Ct. 2275 (June 26, 1998). The major change in sexual harassment law affects the standard for employer liability after harassment by a supervisor has been shown. The Supreme Court held that the employer is liable for a supervisor's hostile work environment, unless the employer proves that "(a) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise." Burlington Industries at 2261; Farager at 2279. The Supreme Court indicated that the existence of an anti-harassment policy weighs heavily in determining whether the employer has exercised reasonable care.

The Supreme Court also held that in cases of quid pro quo harassment or other harassment involving a "tangible employment action", the employer is always liable for a supervisor's harassment regardless of its policies. A tangible employment action is one that "constitutes a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits." Burlington Industries at 2261.

Finally, in Oncale v. Sundowner Off-Shore Services, Inc., et al., 118 S.Ct. 998 (1998), the Supreme Court recognized that same-sex sexual harassment could give rise to a claim under Title VII.

The up-shot of these recent Supreme Court decisions is that employers are going to be held strictly liable under Title VII when the supervisors demand sexual favors in return for obtaining improvements or avoiding significant consequences from subordinate employees, if the supervisor backs-up the threat with action only the employer can take. In other words, employers will be held strictly liable for quid pro quo harassment by their supervisors.

All other harassment by supervisors with direct hire authority over the plaintiff will be analyzed as a hostile environment case in which the employers will be liable, unless they establish the affirmative defense described above, namely that, (a) the employer exercised reasonable care to prevent and correct promptly any sexual harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise.

As a result of these Supreme Court decisions, employers should now consider taking the following steps:

1. Adopt a formal policy against sexual harassment;

2. Distribute that policy to all employees; and

3. Provide a means for an employee to bypass a harassing supervisor to complain.

Significantly, the United States Court of Appeals for the Tenth Circuit has already announced that the sexual harassment standards in Ellerth and Farager should be applied in analyzing racially hostile environment claims as well. What this means is that an employer's harassment policy (if it doesn't already) should include not only sexual harassment, but also racial, national origin, disability, age and religious harassment.

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