The California Spin on Harassment by Supervisors: Avoidable Consequences and the Focus on Damages

By Morgan, James F.; Owens, James M. et al. | Labor Law Journal, Fall 2004 | Go to article overview

The California Spin on Harassment by Supervisors: Avoidable Consequences and the Focus on Damages


Morgan, James F., Owens, James M., Gomes, Glenn M., Labor Law Journal


The law of sexual harassment has never enjoyed constancy. Without the benefit of Congress providing a strong legislative foundation, courts are the lone architects of federal sexual harassment law. Decisions by the United States Supreme Court (and frequently edicts from lower federal courts) adjudicating claims oi sexual harassment have provided the workplace community with a plethora of court opinions that has resulted in a series of moving targets for striking an appropriate balance among the competing interests of employer, harasser, and victim. The product of these judicial pronouncements over the past 30 years is a trail marked occasionally with switchbacks, often with curves, and always with unpredictability. Nowhere are the tensions as strong, the stakes as high, and the doctrine as unstable as in the development of sexual harassment law relating to an employer defense to supervisor harassment.

After the U.S. Supreme Court's landmark 1986 ruling in Meritor Savings Bank FSB, v. Vinson1 ("Meritor") extended the definition of sexual harassment to include hostile work environments, the Court waited more than a decade to tackle the issue of employer liability for the harassing behavior of supervisory employees. In the Burlington Industries, Inc. v. Ellerth2 ("Ellerth") and Faragherv. City ofBoca Raton3 ("Faragher"} decisions, the Supreme Court in 1998 opted courageously to create an affirmative defense for employers wishing to avoid vicarious liability for supervisory harassment. These decisions addressed the important public policy issue arising from the question of whether employers are entitled to protection from liability or reduced damages when instances of sexual harassment have occurred.

In late 2003, however, the California Supreme Court ruled, in State Department of Health Services v. Superior Court4 ("McGinnis"), that, under California law, employers are not entitled to an affirmative defense when a supervisor engages in sexually harassing behavior. Motivated by the need to interpret extant anti-harassment provisions of state statutory law, California's highest court decided that employers are strictly liable for such conduct. Surprisingly, both employees and employers applauded the decision. In offering support to aggrieved employees, the court observed that under California law, and in contrast to interpretations of federal law, employers are strictly liable for all types of supervisor harassment and, therefore, are not entitled to an affirmative defense as constructed by the U.S. Supreme Court in the Ellerth and Faragher rulings. But the California court also decided that employers are not necessarily responsible for all damages suffered by the harassed employee. Provocatively, the court found that when the harassed employee failed to take reasonable mitigating action, the employer-while remaining strictly liable-is nevertheless not responsible for those damages that could have been avoided if the employee had provided the employer with an opportunity to correct the offending behavior. Thus, employers may avoid the full financial impact of damages arising from their strict liability by invoking the "doctrine of avoidable consequences," which allows any compensation awarded for violating California sexual harassment law to be reduced to the extent that the victim contributed to the loss.

If the past is any indicator of the future, the U. S. Supreme Court will likely find cause to revisit the question of employer liability for supervisor harassment. At that time, rather than allowing employers the opportunity to escape liability altogether through the use of the affirmative defense, the Court may consider adopting the California approach whereby employers remain strictly liable, yet may minimize damages through the application of the avoidable consequences doctrine. For now, the McGinnis decision will most assuredly prompt a reexamination of employer liability law throughout the country. In our opinion, the logic of the California court's ruling is solid (especially given extant statutory constraints). …

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