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Paul Castronovo And Megan Frese Porio
‘Aguas v. State of New Jersey’
In Aguas, the Supreme Court of New Jersey created a sexual harassment trilogy. Aguas v. State of New Jersey, 2015 N.J. LEXIS 131 (N.J. Feb. 11, 2015). Aguas joined Lehmann v. Toys ‘R’ Us (1993) and Gaines v. Bellino (2002) in the pantheon. The Aguas court clarified principles first enunciated in those two seminal cases and issued two holdings. Citing Lehmann, Aguas explicitly adopted a broad definition of who constitutes a supervisor for sexual harassment claims. Noting Gaines, the court explicitly adopted the federal Ellerth-Faragher “due care” defense from 1998 that an employer can avoid liability if it implements an effective anti-harassment policy.
Despite media headlines and the spirited dissent, the Aguas court’s adoption of Ellerth- Faragher will affect precious few cases. First, it impacts only those cases where a supervisor is the harasser. The defense has always applied to peer harassment. Second, the defense does not apply where a tangible employment action occurred, which is common in sexual harassment cases. Finally, the employer’s policy must be effective.
The Trilogy Explained
Lehmann first recognized sexual harassment, either hostile work environment or quid pro quo, as a cause of action under the Law Against Discrimination (LAD). In doing so, Lehmann joined the United States Supreme Court’s 1986 decision in Meritor Savings Bank v. Vinson in holding that sexual harassment is illegal because it is a form of gender discrimination. Lehmann touched on who is a supervisor but made no holding on that issue. The Lehmann court also stated the agency principles on which an employer is liable for sexual harassment.
Gaines built on the agency principles discussed in Lehmann by recognizing an affirmative defense to hostile work environment claims that an employer will not be liable when it implements an effective antiharassment policy and reporting procedure for victims. Without explicitly saying so, Gaines adopted this affirmative defense from two United States Supreme Court companion decisions in 1998, Ellerth and Faragher. The Gaines court never cited Ellerth-Faragher, yet it adopted the “due care” aspect of the defense. But Gaines left open two questions: Does the defense shield an employer when a supervisor abuses his authority to sexually harass a subordinate, or is it limited to peer harassment? Does the defense apply when the employee suffers a tangible employment action? That’s where Aguas stepped into the breach.
Aguas expressly adopted all components of the federal affirmative defense. The majority held:
Under the Ellerth- Faragher analysis, the employer in a hostile work environment sexual harassment case may assert as an affirmative defense to vicarious liability that [1] it “exercised reasonable care to prevent and correct promptly any sexually harassing behavior,” and [2] “the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise,” provided that [3] the employer has not taken an adverse tangible employment action against the plaintiff employee.
That language both expands and limits Gaines. Aguas expanded Gaines by applying the defense to supervisors as well as peers, and then removed the defense in cases of a tangible employment action. Aguas noted that the LAD has a strong statutory policy of preventing sexual harassment and that this defense provides employers with the incentive to do so. That holding benefits employers.
But Aguas issued a more important holding: it adopted an expansive definition of who is a supervisor—a significant boon to employees. The Aguas court noted that “supervisor” was a “term undefined by the LAD and our prior case law.” The court held that “an allegedly harassing employee is the complainant’s supervisor if that employee had the authority to take or recommend tangible employment actions affecting the complaining employee, or to direct the complainant’s day-today activities in the workplace [emphasis added].” In so holding, Aguas explicitly rejected the federal model’s narrow definition, in Vance v. Ball State Univ., that only an employee with “authority to make tangible employment decisions,” such as hiring, firing, promotion, undesirable reassignment or discipline, is a supervisor.
What It All Means in Practice
Almost all sexual harassment cases that we have litigated as both plaintiff and defense attorneys involve some form of tangible employment action, usually actual or constructive termination. It is rare for an employee to sue her current employer; it happens most often in the government-employer setting (like Aguas and Gaines). In citing EEOC Guidance on what are “tangible employment decisions,” Aguas notes they must “include, but not be limited to, hiring and firing, promotion and failure to promote, demotion, undesirable reassignment, a decision causing a significant change in benefits, compensation decisions and work assignment, and suspension, or other progressive discipline.”
This definition means that the Ellerth-Farager defense is unavailable when a worker can control the work assignments of another employee and changes them for the worse or recommends any other tangible action that occurs, such as discipline. The court reasoned that this expansive definition of “supervisor” furthers the LAD’s paramount goal of eradicating sexual harassment, and also accounts for “the broad range of employer structures and factual settings in which sexual harassment occurs.”
Importantly, a constructive termination (where an employee resigns rather than face continued sexual harassment) is a tangible employment action. Citing Ellerth-Faragher, the United States Supreme Court held that the defense is not available when an employee is constructively terminated. See Pennsylvania State Police v. Suders, 542 U.S. 129, 140- 41 (2004). The Appellate Division, again citing Ellerth-Faragher, issued the same holding for the LAD in Entrot v. BASF Corp., 359 N. J. Super. 162, 192 (App.Div. 2003) . The Aguas court approvingly cited Entrot in its adoption of Ellerth-Faragher and its discussion of “tangible employment action.” Notably, the Aguas court’s definition of supervisor conforms to the definition and holding of Entrot in 2003. Entrot held that a temporary project leader constituted a supervisor whose sexual harassment led to the employee’s constructive discharge which barred the defense.
As to a policy’s effectiveness, the Aguas majority took great care to rebut the dissent’s critique that an employer could now “hide behind a paper antidiscrimination policy.” But Gaines already held that an “in name only” policy bars the defense. Regardless, the Aguas majority forcefully noted on this “pivotal issue,” that “an employer that implements an ineffective antiharassment policy, or fails to enforce its policy, may not assert the affirmative defense.”
Aguas, Gaines and Lehmann instruct us on what comprises an effective policy:
- Formal policies prohibiting workplace harassment;
- Useful formal and informal complaint structures for victims;
- Mandatory antiharassment training for supervisors, which is available to all employees;
- Effective sensing or monitoring mechanisms to check the trustworthiness of the policies and complaint structures;
- An unequivocal commitment from the highest levels of management that harassment will not be tolerated, and demonstration of that policy commitment by consistent practice; and
- Prompt and thorough investigation of employee complaints of harass-ment—with remedies that are reasonably calculated to stop any harassment that is found.
While the trilogy explicitly lists the first five, the sixth factor is clearly required by Aguas and Gaines’ instruction that “the efficacy of an employer’s remedial program is highly pertinent to an employer’s defense.”
Moreover, the lower threshold of a “supervisor” will assist sexually harassed employees in defeating the defense when the sexual harassment was by a supervisor, since being harassed by a supervisor tasked with implementing a policy is a good indication that the employer’s policy is ineffective. Given the interplay of the supervisor definition and the reality of the workplace, many employer policies will be found to be ineffective at summary judgment and trial. For example, an employee may complain to her project manager (a supervisor) about sexual harassment by the co-project manager. In many real-world scenarios, the project manager may not recognize it as a reportable offense, so the harassment will continue. That is an ineffective policy.
Another common litigation example arises from a human resources investigation that is prompt and thorough on its face, yet finds the allegation “unsubstantiated.” Most corporate HR investigations conclude that the harassment is he-said-she-said because they require corroboration in the form of an email or text, cellphone recordings or a supporting eyewitness. Lacking that corroboration, HR will find the complaint unsubstantiated. If the harassment continues, then the policy is ineffective.
The problem with this typical employer requirement is that it exceeds the burden of proof required even in criminal cases. The Supreme Court of New Jersey noted that “the most serious forms of sexual harassment are also the least likely to occur in public and, therefore, the least likely to be witnessed by third parties.” In Re Seaman, 133 N.J. 67, 83 (1993) (holding uncorroborated testimony by law clerk of sexual harassment by judge sufficient to suspend judge without pay). Seaman notes that the EEOC “itself can find a cause of action based solely on a reasoned decision to credit the charging party’s testimony.” Seaman emphasized that, in a sexual harassment case, “uncorroborated testimony of a victim is sufficient to meet the law’s highest standard of evidence—guilt beyond a reasonable doubt.”
If employers hope to avail themselves of this defense, then they must instruct HR investigators not to require a smoking gun and, instead, make common-sense credibility determinations as any jury would. That will ensure that usually-secret sexual harassment is firmly punished and stopped before it gets out of hand—the exact policy goal stated by Aguas.