|
|
MTSU Sexual Harassment Case Results in Clarification and Adoption of Tennessee Discrimination and Retaliation Standards
On December 4, 2007, the Tennessee Supreme Court issued a landmark decision addressing a number of issues of first impression regarding the standards for discrimination and retaliation under the Tennessee Human Rights Act ("THRA"). With regard to discrimination claims, the Court rejected the reasoning of the Fifth, Seventh, and Tenth Circuit Courts of Appeal and held that the availability of the Faragher/Ellerth affirmative defense is not subject to the harassing supervisor's status as a "proxy" or "alter ego" of the employer. The Court also held that to be individually liable for discrimination a supervisor must encourage the employer to engage in discrimination or prevent the employer from taking corrective action. With respect to retaliation claims, the Court adopted the United States Supreme Court's burden-switching analysis recently articulated in Burlington N. & Santa Fe Ry. Co. v. White, 126 S. Ct. 2405, 2414 (2006). And the Court adopted the holding and rationale of a recent Sixth Circuit case that permitted employers to be found vicariously liable for severe and pervasive harassment by a supervisor, although the Court declined to assess such liability in this case.
Tammie Allen ("Allen") alleged discrimination due to a sexually hostile work environment and retaliation under the THRA against Middle Tennessee State University ("MTSU"); MTSU President, Dr. Sidney McPhee ("McPhee"); the Tennessee Board of Regents ("TBR"); the Chancellor for the TBR; and the State of Tennessee. Allen worked as McPhee's administrative assistant. Between November 2001 and September 2003, McPhee allegedly made a number of verbal and physical sexual advances toward Allen on the golf course, in his automobile, and in the president's office.
MTSU's anti-harassment policy provided that MTSU employees were required to report harassment to a designated director, who then appointed an investigator to look into the allegations of harassment and draft a report of findings and recommendations. The report was then presented to the president of MTSU (in this case, McPhee), who made a final determination of the appropriate resolution of the complaint.
On October 6, 2003, Allen filed a sexual harassment complaint against McPhee. Allen filed her complaint with the TBR rather than with the director because MTSU's policy did not account for situations in which the president was the alleged harasser. TBR began an investigation of the complaint, instructed McPhee not to return to his office, and placed Allen on administrative leave with pay. On October 17, 2003, the TBR told Allen that she had been reassigned to the MTSU Development Office with the same title, classification, and pay. Allen refused the assignment and remained on leave with pay.
On October 20, 2003, Allen refiled her complaint, this time also alleging retaliation and constructive discharge against McPhee, the TBR, and her immediate supervisor at MTSU. For his part, McPhee denied that he sexually harassed Allen and suggested to the investigator that Allen had been sexually suggestive to him and other MTSU employees. On November 25, 2003, the investigator issued her report, which found that no conduct by McPhee resulted in a tangible job detriment to Allen, nor were there any changes to Allen's title, job classification, salary, or benefits. However, the report found that McPhee created a hostile work environment due to his behavior on the golf course, as a result of explicit sexual conversations and innuendo, and by dancing with Allen in his office on the weekend.
The investigator's report and recommendations were accepted in full by the TBR Chancellor, who placed McPhee on leave without pay for twenty days, decreased his salary by $10,000 for one year, and required him to participate in eight hours of sexual harassment training. Allen was transferred to the position of Coordinator in MTSU's Development Office, where she reported directly to the Vice President for Development.
In February 2004, Allen filed an action for discrimination and retaliation in Rutherford County Circuit Court. The court granted motions for summary judgment filed by MTSU and McPhee, which the Court of Appeals affirmed.
I. Discrimination Claims
A. Liability of the State for Hostile Work Environment Harassment
The THRA makes it unlawful for an employer to "[f]ail or refuse to hire or discharge any person or otherwise to discriminate against an individual with respect to compensation, terms, conditions or privileges of employment because of such individual's race, creed, color, religion, sex, age or national origin." T.C.A. § 4-21-401(a)(1)(2005). The Court first addressed whether the State was subject to vicarious liability to Allen for the hostile environment created by McPhee, who had immediate (or successively higher) authority over her. The United States Supreme Court has held that an employer is generally liable in such a circumstance1, however, the Court also recognized an important exception to this rule of vicarious liability. This "Faragher/Ellerth defense" is available to an employer that establishes that: 1) it took reasonable measures to prevent and correct the discriminatory conduct; and 2) the employee unreasonably failed to take advantage of these preventive and corrective measures.
Citing case law from the Fifth, Seventh, and Tenth Circuit Courts of Appeal, Allen argued that this affirmative defense was unavailable to the State because McPhee, as president of a state university, was an "alter ego or proxy" of the State. Following a careful reading of applicable precedent, the Tennessee Supreme Court rejected these federal circuits' interpretations, holding that United States Supreme Court did not intend to create an alter ego or proxy exception to the affirmative defense. The Court determined that the State was not barred from asserting the affirmative defense.
The Court then turned to whether the undisputed facts established the affirmative defense as a matter of law. The Court rejected Allen's argument that the State failed to take reasonable measures to correct the sexually harassing behavior because the State undertook an investigation to determine the truth of the accusations, disciplined McPhee, and, most importantly, ended the harassment. The Court also affirmed that MTSU's adoption of an anti-harassment policy and its reasonable dissemination to MTSU employees weighed heavily in favor of a conclusion that it had exercised reasonable care to prevent harassment.
The Court, however, accepted Allen's argument that MTSU's harassment procedures were unreasonable as applied to her because the policy designated McPhee, the alleged harasser, as the final decision-maker with regard to the resolution of the harassment. Because MTSU's policy failed to provide a method of removing McPhee from the decision-making process in situations in which he was the alleged harasser, the Court held that a genuine issue of material fact existed with regard to whether MTSU's anti-harassment policy contained reasonable procedures. Relatedly, in examining the second prong of the Faragher/Ellerth defense, the Court held that there were material issues of fact regarding whether Allen unreasonably failed to take advantage of corrective measures available to her. Because McPhee was designated to play a role in the handling of Allen's sexual harassment complaint, Allen credibly could have believed that complaining would have been futile, counterproductive, or resulted in retaliation. In light of these issues of material fact, the Court reversed the grant of summary judgment on this issue.
This result is a cogent reminder to employers to make sure that their anti-harassment policies contain procedures for handling complaints against all persons, including those at the very top.
B. Liability of McPhee for Discrimination
The THRA makes it unlawful for one or more persons to "[a]id, abet, incite, compel or command a person to engage in any of the acts or practices declared discriminatory by this chapter." T.C.A. § 4-21-301(2) (2005). Under Tennessee law, therefore, for a supervisor to be individually liable for participating in a hostile work environment, the employee must show that the supervisor encouraged the employer to engage in employment-related discrimination or prevented the employer from taking corrective action. Unable to establish the foregoing, Allen argued that the Court should adopt a new rule imposing individual liability based on a supervisor's personal participation in the actions that created the hostile work environment. However, the Court declined to extend individual liability to supervisors who merely participated in the behavior absent a showing that the supervisor's conduct encouraged the employer to engage in employment-related discrimination or prevented the employer from taking corrective action.
II. Retaliation Claims
A. The State's Liability for Retaliation
Addressing an issue of first impression, the Court then clarified the standards by which an employer may be found liable for retaliation under Tennessee law. In doing so, the Court adopted the standard set out by the United States Supreme Court in Burlington, which held that an employee need not demonstrate that an employer took an employment action adverse to her, but rather any adverse action, whether or not employment related. The Court found this rule to be consistent with T.C.A. § 4-21-301(1), which provides that it is unlawful for an employer to "[r]etaliate or discriminate in any manner against a person because such person has opposed a practice declared discriminatory by this chapter" (emphasis added).
Under Burlington, the process for determining employer liability for retaliation is that, first, an employee must state a prima facie case for retaliation by demonstrating that: 1) she engaged in activity protected by the THRA; 2) the exercise of her protected rights was known to the defendant; 3) the defendant thereafter took a materially adverse action against her; and 4) there was a causal connection between the protected activity and the materially adverse action. In the event a prima facie case of retaliation is shown, the burden of proof shifts to the defendant to articulate a legitimate, non-discriminatory reason for the materially adverse action. If the defendant articulates such a reason, the employee must present evidence demonstrating that the articulated reason is mere pretext and that the employer's action was actually motivated by a desire to retaliate against the employee. The employee bears the burden of persuasion throughout the process.
In applying these standards, the Court found that the first and second prongs of the prima facie case were clearly satisfied and not at issue, that is, that Allen engaged in protected activity by filing her sexual harassment complaint and that both the State and McPhee were aware of this activity. With regard to the third prong, the Court found that genuine issues of material fact existed with regard to whether the State's reassignment of Allen was materially adverse. Allen claimed that her new position had less prestige and responsibility and no opportunities for growth or promotion. Viewing the evidence in the light most favorable to Allen, the Court concluded that a reasonable employee might have been dissuaded from filing a complaint if she knew that she would be reassigned from the President's office to Allen's current position. With regard to the fourth prong of the retaliation analysis, the Court adopted the majority rule and held that the close proximity in time of Allen's complaint and her transfer were sufficient to establish a prima facie case of causation. Thus, the Court concluded that a reasonable jury could find that Allen had established a prima facie case of retaliation
The burden then switched to the State to produce a legitimate, non-discriminatory reason for Allen's transfer. The State contended that it reassigned Allen to MTSU's Development Office to protect her from further harassment by McPhee, a legitimate and nondiscriminatory goal. Allen, however, subsequently failed to produce evidence that this proffered motive had no basis in fact, did not actually motivate the reassignment, or was insufficient to explain the reassignment. Therefore, the Court held that Allen had failed to demonstrate the existence of a genuine issue of material fact regarding the State's motivation for the reassignment and concluded that the State was entitled to summary judgment on this issue.
B. McPhee's Liability for Retaliation
Allen further argued that McPhee took an adverse employment action against her by issuing an email and two press releases that portrayed him as the victim of false accusations and by making false accusations against her to the TBR investigator. The Court rejected these claims, finding that the press releases, which were essentially limited to statements implying McPhee's innocence, did not constitute a materially adverse action. Moreover, potentially false statements to an investigator in the context of a confidential investigation (as opposed to statements made to other MTSU employees or the public at large) were not necessarily materially adverse. The Court reasoned that an employee would reasonably expect a person accused of harassment to oppose the allegation and perhaps make false statements about the accuser, and the employee would not be dissuaded from reporting discrimination on those bases.
In another issue of first impression, the Court rejected Allen's argument that the State should be held vicariously liable for McPhee's allegedly retaliatory press releases and false allegations to the investigator. The Court adopted the Sixth Circuit standard, that an employer may be held vicariously liable when the retaliation takes the form of severe and pervasive harassment by a supervisor. Because both the anti-discrimination and anti-retaliation provisions of Title VII prohibit discrimination by an employer, the Court reasoned that if severe and pervasive harassment by a supervisor constituted discrimination under the anti-discrimination statute, then it should also be sufficient to constitute discrimination under the anti-retaliation statute. In this case, however, the harassment of Allen ended immediately after Allen filed her complaint. Moreover, McPhee's conduct was not the type of severe and pervasive harassment that warranted a finding of retaliatory harassment. Therefore, the Court held that there was no evidence of retaliatory conduct by McPhee for which the State could be held vicariously liable.
Ultimately, the Court concluded that the State was entitled to summary judgment on Allen's retaliation claim because Allen failed to present any evidence that the State's proffered reason for transferring her was pretextual. The Court also concluded that McPhee was entitled to summary judgment on Allen's retaliation claim because Allen failed to show that McPhee took an action materially adverse to her. The Court concluded that McPhee was entitled to summary judgment on Allen's discrimination claim because Allen failed to present any evidence that McPhee encouraged the harassment or attempted to prevent corrective action. However, the Court ruled that the State was not entitled to summary judgment on Allen's discrimination claim as it had not conclusively established that (1) the State's anti-harassment procedures were reasonable as applied to Allen and (2) Allen unreasonably failed to take advantage of these procedures, under the Faragher/Ellerth defense.
1 Faragher v. City of Boca Raton, 524 U.S. 775 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). |
|
|
