IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
FILED
September 7, 1999
Cecil Crowson, Jr.
Appellate Court Clerk
FOR PUBLICATION
Filed: September 7, 1999
DEMETRA LYREE PARKER, )
)
PLAINTIFF/APPELLEE, ) WARREN COUNTY CHANCERY
)
v. ) Hon. John W. Rollins, Judge
)
WARREN COUNTY UTILITY DISTRICT, ) No. 01S01-9806-CH-00107
)
DEFENDANT/APPELLANT. )
FOR APPELLANT: FOR APPELLEE:
LISA M. CARSON ROBERT S. PETERS
Franklin Winchester
OPINION
COURT OF APPEALS AFFIRMED AS MODIFIED HOLDER, J.
OPINION
We granted review to address the standard for an employer's liability in
supervisor sexual harassment cases under the Tennessee Human Rights Act
following the recent United States Supreme Court's decisions in Burlington
Indus. Inc. v. Ellerth, 118 S.Ct. 2257 (1998), and Faragher v. City of Boca Raton,
118 S.Ct. 2275 (1998). Upon review, we adopt a standard consistent with Ellerth
and Faragher and hold that an employer is vicariously liable for sexual
harassment by a supervisor. An employer, however, may raise an affirmative
defense to liability or damages when no tangible employment action has been
taken. The decision of the Court of Appeals is affirmed as modified.
FACTS
David Grissom worked as the general manager for the defendant, Warren
County Utility District ("Utility District"). In 1988, Grissom hired the plaintiff,
Demetra Lyree Parker, to work as a bookkeeper for the Utility District. In 1991 or
1992, the plaintiff notified her immediate supervisor, Pam Link, that Grissom was
sexually harassing her. She alleged that Grissom’s actions included touching
her breast, attempting to kiss her, rubbing his body against hers, rubbing her
legs and shoulders, commenting on the way her clothes fit her body, and
whispering sexual remarks into her ear. Grissom further allegedly informed the
plaintiff that "the solution to her problem was him" and that he "was a man" and
“could take care of [her]."
Link apparently believed the plaintiff's allegations based on her own
experiences with Grissom. Moreover, Grissom's alleged sexual harassment of
the plaintiff was commonly discussed among the female employees in Link's
office. Link asked the plaintiff what she wanted to do concerning the sexual
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harassment. The plaintiff informed Link that she feared she would lose her job if
she did anything. She, therefore, requested that Link do nothing. Link
suggested to the plaintiff that she try to avoid Grissom and not dress in a manner
that might cause him to sexually harass her.
Link did not initiate a formal complaint against Grissom on the plaintiff's
behalf. Link's testimony indicates that she thought the Utility District had a
grievance procedure. She, however, stated that to her knowledge the procedure
was never explained either to her or to any of the Utility District's employees.
Grissom testified that the Utility District did not have a sexual harassment policy
when the alleged incidents of sexual harassment occurred. Grissom testified
that the Utility District did not adopt a sexual harassment policy until October of
1994.
The plaintiff continued to convey to Link complaints of sexual harassment
by Grissom that the plaintiff alleged occurred on almost a daily basis. Link
discussed the plaintiff's allegations with Phillip Vinson, a member of the Utility
District's Board of Commissioners. Link informed Vinson that the plaintiff did not
"want anything done about [the harassment] because she's afraid she'll lose her
job." According to Link, Vinson agreed that the plaintiff would probably lose her
job if she pursued the allegations of sexual harassment.
Link spoke with Grissom about his treatment of the plaintiff. Grissom
allegedly responded that the plaintiff had "done everything but lay [sic] down on
the floor and take her clothes off in front of [him]." Link felt that additional
conversation with Grissom concerning this matter would have been unproductive
so she did not pursue the matter further.
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In 1992 or 1993, the plaintiff discussed the alleged sexual harassment
with Vinson. The plaintiff apparently conveyed to Vinson that she was
concerned she would lose her job if she pursued the matter. Vinson did not
assure the plaintiff that she would not lose her job. Vinson also replied that he
represented only one vote on the Board and that he did not know how the other
four commissioners would vote. The plaintiff asked Vinson not "to go to the
Board with it because she felt that she would [lose] her job." Vinson did advise
the plaintiff that she could pursue the matter legally if she felt "like [she had] a
harassment case." Vinson neither discussed the matter with Grissom nor
reported the plaintiff's allegation to other members of the Utility District's Board.
Grissom allegedly continued to sexually harass the plaintiff until Grissom
voluntarily resigned in April of 1994. In the fall of 1994, the Board was
considering rehiring Grissom as the Utility District's general manager. The
plaintiff then notified the entire Board that Grissom had subjected her to sexual
harassment and unwelcome sexual advances. The Board still voted to rehire
Grissom, but the Board retained outside counsel to conduct an independent
investigation into the plaintiff's allegations of sexual harassment. Plaintiff does
not allege that Grissom sexually harassed her after he was rehired. The Board,
however, suspended Grissom without pay as a result of the independent
investigation into the allegations of sexual harassment.
In October of 1994, the plaintiff filed this action against Grissom, the Utility
District, and two of its commissioners, Bobby Mayfield and Harrison Gant. The
plaintiff asserted claims under both Title VII of the Civil Rights Act of 1964, 42
4
U.S.C § 2002e et seq.,1 and the Tennessee Human Rights Act ("THRA"), 2 and
asserted common law claims for negligent and intentional infliction of emotional
distress. The plaintiff voluntarily dismissed without prejudice the claims against
Bobby Mayfield and Harrison Gant and her claim under Title VII. The trial court
subsequently entered an agreed order dismissing with prejudice the plaintiff's
action against Grissom individually.
The plaintiff's claim before this Court is a claim under the THRA against
the Utility District. The Utility District filed a motion for summary judgment
alleging that it took prompt corrective action in response to plaintiff's complaints
and that the corrective action was "a complete defense" to a claim for sexual
harassment. The trial court granted the defendant’s motion for summary
judgment. The Court held that the Utility Board took "immediate steps" to
"terminate the harassment" once "it received notice" of the harassment. The
Court of Appeals reversed and held that "a genuine issue of material fact existed
as to whether the Utility District responded promptly, adequately, and effectively
to the plaintiff's informal complaints of sexual harassment." We granted the
defendant's appeal.
ANALYSIS
This Court established a framework for analyzing sexual harassment
cases under the THRA in Carr v. United Parcel Serv., 955 S.W.2d 832 (Tenn.
1997). In Carr, we recognized that our legislature had intended the THRA "to be
1
Under Title VII of the Civil Rights Act of 1964, “it shall be an unlawful employment
practice for an em ployer . . . to fail or refu se to hire o r to discha rge any ind ividual, or othe rwise to
discriminate against any individual with respect to his compensation, terms, conditions, or
privileges of employment, because of such individual’s race, color, religion, sex, or national
origin.” 42 U.S.C. § 2000e-2(a)(1).
2
It is a discriminatory practice under the THRA for an employer to "[f]ail or refuse to hire or
dischar ge any pe rson or o therwise to discrim inate aga inst an individu al with resp ect to
compensation, terms, conditions or privileges of employment because of such individual's race,
creed, color, religion, sex, age or national origin." Tenn. Code Ann . § 4-21-401(a).
5
coextensive with federal law." Id. at 834-35 citing Bennett v. Steiner-Liff Iron &
Metal Co., 826 S.W.2d 119, 121 (Tenn. 1992); Tenn. Code Ann.
§ 4-21-101(a)(1) (1991 Repl.) (stating purpose and intent of general assembly
was to "provide for execution of the policies embodied in the federal Civil Rights
Acts of 1964, 1968 and 1972, . . ."). We, however, are neither bound by nor
limited by the federal law when interpreting our state's anti-discrimination statute.
Id. at 835. The policy of interpreting the THRA coextensively with Title VII is
predicated upon a desire to maintain continuity between state and federal law.
Since our decision in Carr, the United States Supreme Court has modified
the federal analysis for imposition of employer liability in cases involving
supervisor sexual harassment. We shall begin by discussing our decision in
Carr. Next we shall briefly examine the recent Supreme Court decisions
articulating a standard for imposition of employer liability in cases involving
supervisor sexual harassment. Finally, we shall examine the differences
between Carr and the current federal law and address the facts of this case.
SUPERVISOR HARASSMENT
In Carr, this Court adopted the federal courts' general analysis and
delineated two general classes of supervisor harassment, quid pro quo and
supervisor-created hostile work environment. In establishing the framework for
analyzing a quid pro quo case, this Court utilized the Sixth Circuit Court of
Appeal's test set forth in Kauffman v. Allied Signal, Inc., 970 F.2d 178, 186 (6th
Cir. 1992). We held that under a quid pro quo theory of sexual harassment, a
plaintiff must establish:
(1) that the employee was a member of a protected class; (2) that
the employee was subjected to unwelcome sexual harassment in
the form of sexual advances or requests for sexual favors; (3) that
the harassment complained of was based on sex; (4) that the
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employee's submission to the unwelcome advances was an
express or implied condition for receiving job benefits or that the
employee's refusal to submit to the supervisor's demands resulted
in a tangible job detriment; and (5) the existence of respondeat
superior liability.
Id. at 837 citing Kauffman v. Allied Signal, Inc., 970 F.2d at 186. Under the Carr
analysis, an employer was strictly liable for quid pro quo sexual harassment.
The theory of strict liability was imposed under the doctrine of respondeat
superior and predicated upon the theory that: (1) a supervisor is the alter ego of
the employer; and (2) a supervisor has the actual or apparent authority to alter
an employee's terms or conditions of employment. Id. at 837; see generally
Restatement of Agency § 219(1) ("A master is subject to liability for the torts of
his servants committed while acting in the scope of their employment.").
Unlike quid pro quo harassment, supervisors in supervisor-created hostile
work environment cases do not make job benefits contingent upon the receipt of
sexual favors. Carr, 955 S.W.2d at 838. The supervisor instead creates a
hostile work environment. The Carr analysis for imposing employer liability for
supervisor hostile work environment cases asked: "(1) whether the supervisor's
harassing actions were foreseeable or fell within the scope of employment; and
(2) even if they were, whether the employer responded adequately and
effectively to negate liability." Id. at 838 quoting Pierce v. Commonwealth Life
Ins. Co., 40 F.3d 796, 803 (6th Cir. 1994). Accordingly, the employer's liability in
a hostile work environment case was predicated upon its reaction to the
supervisor's discriminatory conduct and not upon a theory of respondeat superior
liability. Id.
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BURLINGTON INDUSTRIES, INC. V. ELLERTH
AND
FARAGHER V. CITY OF BOCA RATON
Since our decision in Carr, the United States Supreme Court has revisited
the area of employer liability for supervisor sexual harassment. In Burlington
Indus. Inc. v. Ellerth, 118 S.Ct. 2257 (1998), and Faragher v. City of Boca Raton,
118 S.Ct. 2275 (1998), the Supreme Court enunciated a standard for imposing
employer liability. Prior to these decisions, the Supreme Court had not clearly
delineated a standard for imposing employer liability for supervisor sexual
harassment under Title VII. The Court had previously acknowledged in Meritor
Savings Bank, FSB v. Vinson, 477 U.S. 57 (1986), that hostile work environment
and quid pro quo harassment constituted violations of Title VII. In Meritor,
however, the Court did not articulate a precise standard for imposing employer
liability but did suggest that lower courts should look to agency principles when
defining liability for supervisor sexual harassment.
Faragher v. City of Boca Raton
In Faragher, the plaintiff worked part-time as a lifeguard for the defendant
from approximately 1985 to 1990. She alleged that her supervisors subjected
her to a "sexually hostile atmosphere." Her allegations included sexually
offensive comments and unwanted touchings from two of her supervisors,
Silverman and Terry.
Faragher spoke informally with one of her supervisors, Gordon, but she
did not initiate a formal complaint to upper management. Faragher, 118 S.Ct. at
2281. She left her job as a lifeguard in 1990. The City remained unaware of the
alleged sexual harassment until April of 1990 when one of Faragher's co-workers
complained of sexual harassment in a letter to the City's Director of Personnel.
8
The City investigated the complaint and reprimanded the harassing supervisors.
Faragher initiated suit in 1992 alleging violations of Title VII.
The City of Boca Raton had adopted an anti-sexual harassment policy in
1986. Id. at 2280. Although the 1986 policy was addressed to all City
employees, the policy was issued only to a portion of the City employees. The
City revised and reissued the policy in 1990. Id. The revised policy detailed the
City's policy against sexual harassment. Id. at 2281, 2294. The policy was not
properly disseminated, and Faragher's supervisors were unaware of the anti-
harassment policy prior to litigation.
The district court ruled that the City was liable for sexual harassment
because: (1) the City had "knowledge or constructive knowledge" of the
harassment; (2) the harassing supervisors were acting as agents of the City; and
(3) Gordon's knowledge of the sexual harassment could be imputed to the City.
The Eleventh Circuit Court of Appeals reversed the district court's holding that
the City was liable. The Eleventh Circuit reasoned that the supervisors' acts of
sexual harassment were outside the scope of employment and that their conduct
was not aided by the agency relationship. Id. at 2281. The Supreme Court
granted certiorari.
Burlington Industries, Inc. v. Ellerth
Ellerth was employed by Burlington as a salesperson for approximately
one year. Ellerth's immediate supervisor reported to Slowik. Ellerth alleged that
Slowik subjected her to sexual harassment. Her allegations included "repeated
boorish and offensive remarks and gestures." Ellerth, 118 S.Ct. at 2262. First,
she claimed that Slowik made comments concerning her breasts and told her
that he could "make [her] life very hard or very easy at Burlington." Id. Second,
9
she maintained that Slowik informed her she was not "loose enough" and rubbed
her knee during an interview for a promotion. Id. Finally, she alleged that Slowik
told her during a telephone conversation that her job would be easier if she wore
shorter skirts. Id.
Burlington's policy against sexual harassment was contained in the
employee's handbook. Ellerth had received the employee's handbook and was
aware of the policy. She, however, never complained to anyone in authority
concerning her allegations against Slowik. She later quit her job. Id. at 2262-63.
Ellerth filed suit in the district court under Title VII alleging sexual
harassment and constructive discharge. The district court granted summary
judgment to Burlington holding that Burlington "neither knew or should have
known" about Slowik's behavior because Ellerth failed to use Burlington's
grievance procedures. Id. at 2263. The Seventh Circuit Court of Appeals
reversed the district court's grant of summary judgment. The Seventh Circuit
sitting en banc issued eight separate opinions with no consensus for a controlling
rationale of the standard for employer liability. The majority of the Seventh
Circuit, however, did categorize Ellerth's claim as quid pro quo harassment but
failed to agree on whether to apply a standard of negligence or vicarious liability.
Supreme Court's Holdings in Faragher and Ellerth
The Supreme Court granted certiorari in Faragher and Ellerth to define the
standard for imposing employer liability in supervisor sexual harassment cases.
In Ellerth, the Court was asked to decide "whether an employee who refuses
unwelcome and threatening sexual advances by a supervisor but suffers no
adverse job consequences can recover against the employer without showing
that the employer was negligent or otherwise at fault." Id. at 2262. In Faragher,
10
the Court sought to identify "the circumstances under which an employer may be
held liable under Title VII" for supervisor-created hostile work environment found
to be sexual harassment. Faragher, 118 S.Ct. at 2280.
The Supreme Court held that employers are vicariously liable for all forms
of supervisor sexual harassment actionable under Title VII regardless of whether
the conduct constitutes quid pro quo sexual harassment or hostile work
environment sexual harassment. The Court rejected the argument that the
scope of employment was the only basis for defining employer liability. The
Court looked generally to the Restatement of Agency § 219(2)(d)3 and held that:
An employer is subject to vicarious liability to a victimized employee
for an actionable hostile work environment created by a supervisor
with immediate (or successively higher) authority over the
employee. When no tangible employment action is taken, a
defending employer may raise an affirmative defense to liability or
damages, subject to proof by a preponderance of the evidence, . . .
The defense comprises two necessary elements: (a) that 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 preventive
or corrective opportunities provided by the employer or to avoid
harm otherwise . . . . No affirmative defense is available, however,
when the supervisor's sexual harassment culminates in a tangible
employment action . . . .
Faragher, 118 S.Ct. at 2292-93; Ellerth, 118 S.Ct. at 2270. Accordingly, an
employer may now avoid liability for supervisor sexual harassment under Title VII
only when: (1) a tangible employment action has not occurred; and (2) the
3
The Restatement of Agency § 219(2) provides:
A master is not subject to liability for the torts of his servants acting outside the
scope of their employment, unless:
(a) the master intended the conduct of the consequences, or
(b) the master was negligent or reckless, or
(c) the conduct violated a non-delegable duty of the master, or
(d) the servant purported to act or to speak on behalf of the
principal and there was reliance upon the apparent authority, or
he was aided in accomplishing the tort by the existence of the
agency relationship.
11
employer establishes by a preponderance of the evidence that it meets the
required elements of the affirmative defense.
Under the newly enunciated standard, the Court reversed the Eleventh
Circuit in Faragher and held that the City of Boca Raton was vicariously liable for
the supervisor-created hostile work environment found by the district court. The
Court found that Faragher did not experience a tangible employment action.
The Court, therefore, analyzed whether the City could establish the affirmative
defense. The Court held that, based upon the findings of the trial court, the City
failed to exercise reasonable care to prevent the sexual harassment and was
unable to avail itself of the affirmative defense. Faragher, 118 S.Ct. at 2293.
Similarly, the Court held in Ellerth that Burlington was vicariously liable for
Slowik's conduct in creating a hostile work environment. Ellerth did not sustain a
tangible job loss, so the affirmative defense was available to Burlington. The
Court remanded Ellerth to afford Burlington the opportunity to establish the
affirmative defense.
IMPACT OF FARAGHER AND ELLERTH ON CARR
Carr is now inconsistent with federal law on supervisor sexual harassment
following the recent Supreme Court decisions. Carr employed the pre-Faragher
and pre-Ellerth separate categories of quid pro quo and supervisor-created
hostile work environment. In Carr, an employer's liability was premised upon a
standard of negligence for supervisor-created hostile work environment and
upon vicarious liability for quid pro quo harassment. While the terms quid pro
quo and hostile work environment are no longer relevant under the federal
analysis when determining the employer's standard of liability under Title VII, the
terms are relevant for illustrating "the distinction between cases involving a threat
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which is carried out and offensive conduct in general." Ellerth, 118 S.Ct. at
2265. The terms retain further relevance "when there is a threshold question
whether a plaintiff can prove discrimination in violation of Title VII." Id.
The legislature's stated purpose in codifying the THRA was to prohibit
discrimination in a manner consistent with “the federal Civil Rights Acts of 1964,
1968, and 1972, . . . ." Tenn. Code Ann. § 4-21-101(a)(1), -101(a)(2).
Accordingly, we hold that the stated purpose behind the enactment of our THRA
will be best served by maintaining continuity between our state law and the
federal law on the issue of imposing employer liability for supervisor sexual
harassment. We, therefore, adopt the Supreme Court's recently articulated
standard of vicarious liability in all supervisor sexual harassment cases.
We hold that, under the THRA, an employer is subject to vicarious liability
to a victimized employee for actionable hostile work environment sexual
harassment by a supervisor with immediate (or successively higher) authority
over the employee. The defending employer may raise an affirmative defense to
liability or damages when no tangible employment action has been taken. The
affirmative defense is comprised of two necessary elements: (1) that the
employer exercised reasonable care to prevent and correct promptly any
sexually harassing behavior; and (2) that the plaintiff employee unreasonably
failed to take advantage of any preventive or corrective opportunities provided by
the employer or that the employee unreasonably failed to otherwise avoid the
harm. The affirmative defense shall not be available to the employer when the
supervisor's sexual harassment has culminated in a tangible employment action.
Our decision in Carr is thus modified to reflect the above standard recently
articulated by the United States Supreme Court, and Carr is overruled only to the
extent that the decision is inconsistent with the above standard.
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APPLICATION TO FACTS
The Utility District argues that it is not liable and is entitled to summary
judgment because the harassing supervisor did not act within the scope of his
employment. Section 219(1) of the Restatement of Agency states that
employers are liable for the torts committed by employees "while acting in the
scope of their employment." The Supreme Court in Faragher lamented that the
phrase "scope of employment" provided little guidance and held that § 219(1)
does not serve as the sole basis for imposing employer liability. We have
adopted the Supreme Court's vicarious liability standard, and the defendant's
assertion is inconsistent with the adoption of that standard. See generally
Restatement of Agency § 219(2)(d). Accordingly, we hold that the defendant
would be vicariously liable for Grissom's alleged sexual harassment.
We shall next examine whether the plaintiff was subject to a tangible
employment action. The plaintiff alleges in her complaint that she "received less
money than she would have received except that she has not complied with
David Grissom's demands and requests . . ." The plaintiff also contends that she
was the "lowest paid office employee." The record reflects that the plaintiff
continued to work for the defendant at the time the lawsuit was initiated. She
occupied the same position she had attained two months after she began her
employment with the defendant. She apparently received the maximum pay rate
for her position, received annual cost of living increases, and received some
merit raises. The record in this case is insufficient to show that the plaintiff has
suffered a tangible employment action. The defendant, therefore, is entitled to
raise the affirmative defense under the current facts.
The affirmative defense requires the defendant to establish both: (1) that
it exercised reasonable care to prevent and correct the harassing behavior; and
14
(2) that the plaintiff unreasonably failed to take advantage of any preventive or
corrective opportunities provided by the employer or that the employee
unreasonably failed to otherwise avoid the harm. The facts in this case are
similar to those in Faragher. The plaintiff discussed Grissom's sexual
harassment with her supervisor, Link. She, like Faragher, never initiated a
formal complaint. The harassment in both cases continued for several years
even though both plaintiffs complained of the harassment informally to
supervisors. Both employers alleged they were unaware of the harassment
because the plaintiffs never initiated formal complaints. The Utility District
appears to allege that it had a sexual harassment policy in place when the
alleged harassment occurred. A specific anti-sexual harassment policy,
however, has not been brought to this Court's attention. Moreover, if an anti-
sexual harassment policy had been in existence at the time of the alleged
harassment, the Utility District apparently failed to properly disseminate the
policy. Link testified that she thought the Utility District had a grievance
procedure but that to her knowledge the procedure was never explained to her or
to any other Utility District employees. Grissom, however, testified that a policy
against sexual harassment was not in force when the alleged harassment
occurred.
The record currently before us is devoid of evidence to support a finding
that the Utility District exercised reasonable care to prevent the alleged sexual
harassment. Moreover, the Utility District has failed to either establish the
presence of a written anti-discrimination policy that was properly disseminated to
its employees or establish the presence of a policy suitable to deal with the
employment circumstances of this case.
The trial court's decision to grant the defendant's motion for summary
judgment is reversed. The case is remanded to the trial court for further action
15
consistent with this opinion. We have modified our decision in Carr to reflect the
recently articulated standard for supervisor harassment adopted by the United
States Supreme Court. As stated above, the defendant cannot establish the
affirmative defense on this record. On remand, however, the Utility District shall
be afforded the opportunity to assert facts that may establish the elements of the
affirmative defense that we have adopted today. Cost of this appeal shall be
taxed against the Utility District for which execution may issue if necessary.
JANICE M. HOLDER, JUSTICE
Concurring:
Anderson, C.J.
Drowota, Birch, and Barker, J.J.
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