?Takeaway: Employers that permit high-ranking officials to serve as the face of the company can no longer claim an affirmative defense in sexual-harassment claims in the 3rd Circuit, which covers Delaware, New Jersey, Pennsylvania and the U.S. Virgin Islands.
?The 3rd U.S. Circuit Court of Appeals found that a plaintiff-employee should have been allowed a jury instruction that eliminated the Faragher-Ellerth defense when there was alleged harassment by a person who served as a proxy for the organization. Nonetheless, the court declined to overturn the jury’s verdict when the jury found that no harassment had occurred.
The plaintiff was employed as the organization’s controller. She was also responsible for the organization’s human resource functions. She filed suit in federal court, alleging she had been sexually harassed by the organization’s director, who was her direct supervisor.
At trial, the plaintiff argued that the employer should be barred from raising the Faragher-Ellerth defense because the director was a proxy for the organization. Normally, the defense applies when the employee was not subject to a tangible employment action, such as being fired, demoted or reassigned, so long as: 1) the employer exercised reasonable care to prevent and correct any harassing behavior, and 2) the plaintiff unreasonably failed to take advantage of the preventive or corrective opportunities provided. Here, though, the plaintiff claimed that the defense should not be available if the alleged harasser is in a sufficiently high position to qualify as the organization’s proxy or alter ego.
The 3rd Circuit agreed with the plaintiff and found the Faragher-Ellerth defense is not available when the supervisor accused of harassment is a proxy for the employer. The court elaborated that when the supervisor speaks on behalf of the employer and thereby merges with the employer-organization, the defense is not available. The court noted that “only individuals with exceptional authority and control within an organization” can be considered a proxy for the employer.
Although the jury determined that no harassment had occurred, the decision has important implications for employers.
Harassment by high-level management employees—those who are the face or voice of the organization—will result in strict liability to the employer without the possibility in the 3rd Circuit of the critically important affirmative defense. Although many employers provide mandatory anti-harassment training to employees and supervisors, high-level management executives are often exempt from the training. But it is more important than ever that senior executives receive comprehensive training about the significant consequences their conduct can have.
O’Brien v. Middle East Forum, 3rd Cir., 21-2646 (Jan. 5, 2023).
Molly DiBianca is an attorney with Clark Hill in Wilmington, Del., and can be reached at mdibianca@clarkhill.com.
