Supreme Court to Decide Who's the Boss in Sexual Harassment Cases

Increasingly, individual employees are being named in employment lawsuits because of their perceived involvement in adverse employment decisions made by their employer.  The reason is:  if the employee is involved in an alleged incident of sexual harassment, for example, and he or she is a "supervisor," the employer may be held liable for the acts of that employee.

However, federal employment law, at least in the context of sexual harassment claims, makes a distinction between supervisors and non-supervisors or co-workers.  Under federal law, when the alleged harasser is a co-worker, the employer will only be liable for the harasser's actions if the employee proves that the employer was negligent.  But when the employee is a supervisor who creates a hostile work environment, the employer is liable unless it can prove a defense, for instance, that it had anti-harassment policy and that the employee who was the victim of the harassment failed to take advantage of such a policy.

This term, the U.S. Supreme Court is expected to decide, in the case of Vance v. Ball State, 2008 U.S. Dist. LEXIS 69288 (S.D. Ind. 2008) aff'd 646 F.3d 461 (7th Cir. 2011), the issue of the scope of supervisor liability, and resolve the question of who qualifies as a supervisor.  Here in the Second Circuit, the court of appeals has defined the term supervisor broadly to include any individual with the power to direct and oversee the work of the alleged victim. This is also the definition adopted by the EEOC.  More specifically, the Second Circuit has held that for the purpose of supervisor liability, a supervisor is one who possesses "authority to direct the employee's daily work activities" even if he lacks the authority to take tangible employment actions against the victim.  Mack v. Otis Elevator, 326 F.3d 116, 127 (2d Cir. 2003).  Other federal courts have applied more narrow definitions of the term.

The Supreme Court will likely adopt either a broad or a narrow definition, but until then employers in New York are well advised to follow the broader definition of "supervisor" and understand that they will be liable to an alleged victim of harassment for the acts of an employee who is responsible for directing and supervising work, not just one who has the authority to make employment decisions.

Stay posted for the Supreme Court's decision.

Defending Against Age Discrimination Claims Has Just Become a Little More Difficult

Recently, the EEOC issued a final rule making it more difficult for employers to establish the "reasonable factor other than age" defense for disparate impact age discrimination claims by employees.

Under the Age Discrimination in Employment Act an employee may bring an action against his or her employer for either disparate treatment or disparate impact.  A disparate impact claim alleges that the employer has a policy or procedure that may appear neutral, but in fact adversely affects employees who are older than 40 years of age.

One defense that employers have typically raised in the face of a disparate impact claim is that the policy or procedure was "reasonable and based upon factors other than age."  But now that defense has been heightened.

The new EEOC rule, which took effect on April 30, 2012, requires an employer to establish not only that the policy or procedure was based on reasonable factors other than age, but that it was reasonably designed to further or achieve a legitimate business purpose and administered in a way that reasonably achieves that purpose in light of the particular facts and circumstances that were known or should have been known to the employer at the time.

What this means to employers is that a much more thorough analysis of the business' circumstances and its needs must be conducted before changing or implementing any new policy or procedure that could impact the older employees even if there is a reasonable basis for the change.

New York Appellate Court Sets Standard for the Preservation of Electronically-Stored Information in Anticipation of Litigation

The preservation of electronically-stored data and documents, including email communications, when parties anticipate litigation, has been the subject of much debate and many court decisions in the past few years.

The obvious concerns are that parties that anticipate litigation may (a) intentionally destroy such data if it is believed to contain harmful evidence against the business, or (b) accidentally destroy the data, or (c) simply destroy the data as a routine part of their practice to purge certain documents and communications.

Until recently, the New York state courts had not articulated a set standard for when a party must implement an appropriate “hold” in order to avoid the destruction of electronic data and documents, including emails. The Federal courts had done so in 2003 with the notable decision in Zubulake v. UBS Warburg, LLC.

Now, at least one appellate court in New York, the Appellate Division, First Department, has adopted the same standard formulated by the Zubulake court.  The court in Voom HD Holdings, LLC v. EchoStar Satellite, LLC, 2012 WL 265833 (1st Dept. 2012) so held this past January 2012. 

According the Appellate Division, First Department, now, whenever a party reasonably anticipates litigation, the party must take steps to implement a hold policy on the destruction of the data even if litigation has not commenced, no notice of any claim has been served, or the parties are attempting to negotiate a resolution of the dispute.