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Sixth Circuit Determines Employer Cannot Be Held Liable Under Title VII for Sexual Harassment By Manager Who Lacked Actual Authority to Take Tangible Employment Action

In a sexual harassment lawsuit brought by the EEOC, the Sixth Circuit last week affirmed the lower court’s summary judgment for the employer, concluding that “[b]ecause [the manager] did not take any tangible employment action against his co-workers and indeed had no authority to do so, the manager was not a supervisor under Title VII and thus [the employer] cannot be liable for the conduct alleged.” EEOC v. AutoZone, Inc., No. 16-6387 (6th Cir. June 9, 2017).

The EEOC filed suit against AutoZone based on allegations that a store manager had sexually harassed several store employees. Importantly, neither the district court nor the court of appeals relied on the accused harasser’s job title – store manager – to impose vicarious liability on the company. Instead, the courts were persuaded by the store manager’s actual job duties and responsibilities, which did not include the authority to fire, demote, promote, transfer or otherwise impose adverse employment action against employees.

Whether the store manager was a supervisor is critical to an employer’s vicarious liability under Title VII. As the Sixth Circuit explained, employers are vicariously liable for a supervisor’s sexual harassment without any showing of employer negligence if the agency relationship (e.g., status as supervisor) aided the harassment. If the alleged harasser is not a supervisor, however, the employer may be held liable if it was negligent in controlling working conditions (i.e., knew or should have known of the harassment but failed to take prompt and appropriate corrective action). And the Court noted that an employee is a “supervisor” for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim.

In this case, the Sixth Circuit reviewed the evidence of the store manager’s authority and found that he was not a supervisor for purposes of Title VII liability. He did not have authority to take tangible employment action against the victims. AutoZone did not, for example, empower the store manager to fire, demote, promote, or transfer any employees. Although the store manager could initiate the disciplinary process and recommend demotion or promotion, his recommendations were not binding, and his ability to influence the district manager did not suffice to turn him into his victims’ supervisor. Nor did his ability to direct the victims’ work at the store or his title as “store manager” make him the victims’ supervisor for purposes of Title VII.

An important takeaway from this opinion for employers is the prospect of focusing courts on the actual authority of management-level personnel, or, more precisely, the lack of such authority, as a legal defense to vicarious liability under Title VII. Whether, regardless of job title, the accused harasser has actual authority to take tangible employment action against his victims may be critical to the employer’s legal defense.