Huston v. Procter & Gamble Paper Products Corp, Manager responsibility in sexual harassment complaints Options

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3rd Circuit Narrows Definition of 'Management' in Harassment Case

from law.com

Making it significantly more difficult for some workers to bring sexual harassment claims, a federal appeals court has ruled that plaintiffs cannot rely on evidence that a supervisor was aware of their alleged mistreatment, but instead must show that a "management level" employee was on notice.

In Huston v. Procter & Gamble Paper Products Corp., a unanimous three-judge panel of the 3rd U.S. Circuit Court of Appeals applied classic principles of agency in holding that an employee's knowledge may be imputed to a corporation "only if that knowledge is important to the function the employee is employed to perform."

In the context of a sexual harassment claim, the panel concluded, a plaintiff who says her complaints were ignored must show that she complained to a management-level employee with the authority to do something about it.

"In requiring that a 'management level' employee have knowledge of allegations of co-worker sexual harassment as a pre-requisite to imputing that knowledge to the employer, we require that this knowledge have reached an employee in the governing body of the entity, as opposed to merely a supervisory employee in the labor force," 3rd Circuit Judge D. Brooks Smith wrote.

Applying that test, Smith concluded that plaintiff Priscilla Huston failed to show that she complained to management about the allegedly hostile environment she worked in until June 2004, and that P&G responded quickly by beginning an investigation that quickly led to discipline.

That finding proved fatal for Huston's claim, which hinged on evidence that her complaints to two supervisors had fallen on deaf ears and that she was forced to endure more harassment.

The ruling is a victory for attorneys John J. Myers and Ryan J. Siciliano of Eckert Seamans Cherin & Mellott in Pittsburgh.

It upholds a decision by U.S. District Judge James F. McClure of the Middle District of Pennsylvania that dismissed all of Huston's claims and granted summary judgment in P&G's favor.

In his May 2007 opinion, McClure observed that the 3rd Circuit had offered "little guidance as to what 'management level' exactly means in the context of imputing constructive notice of co-worker sexual harassment to the employer."

Now the 3rd Circuit has heard McClure's plea. Smith, who was joined by Judges Marjorie O. Rendell and D. Michael Fisher, concluded that Huston's appeal "provides us with the opportunity to offer some guidance to the district courts as to who qualifies as a 'management level' employee."

To establish a hostile work environment claim against an employer, Smith said, a plaintiff must prove five elements -- that she suffered intentional discrimination because of her sex; that the discrimination was pervasive and regular; that it detrimentally affected her; that it would also detrimentally affect any reasonable woman in the same position; and the existence of respondeat superior liability.

The first four elements, Smith said, establish that a hostile work environment existed. But the appeal in Huston's case hinged on the fifth element, which establishes the basis for holding an employer liable.

In the suit, the panel said, Huston complained that male workers had exposed their testicles and looked at pornography on the company computers.

Huston's lawyer, Lori K. Serratelli of Serratelli Schiffman Brown & Calhoon in Harrisburg, Pa., conceded that all of the employees who performed or witnessed the alleged harassing incidents were not supervisors.

In a brief to the Middle District in the case, Serratelli had argued that in mid-May 2004, supervising technicians Pete Romanchick and Jack Traver became aware of the harassment and did nothing to stop it.

Serratelli also argued in the trial court brief that Romanchick and Traver qualified as management-level employees because they held the supervisory positions and had the authority to "turn in" employees who were in breach of plant policies.

McClure rejected that argument in his May 2007 decision, saying Serratelli was asking for "an expanded definition of supervisor that would include employees who merely have control over the daily work activities of other employees."

Such a broad definition, McClure said, "would create too low of a threshold, and does not properly reflect the level of hierarchy necessary to impute liability."

Instead, McClure said, "to be considered sufficiently high in an employer's hierarchy to impute liability to the employer -- and thus be considered 'management-level' -- an employee should have some significant authority over the employment status of other employees."

The 3rd Circuit upheld McClure's findings and took the opportunity to explain how district judges should go about deciding whether an employee qualifies as management.

Smith found that Congress has expressly instructed the courts to interpret Title VII based on agency principles.

"The relevant agency principles here are those governing when to impute an agent's knowledge of particular facts to the agent's principal," Smith wrote.

Smith found that the Restatement (Third) of Agency explains that the knowledge that may be imputed should be limited to those facts that are "material" to the worker's duties.

"Under this approach," Smith said, "a corporation is not charged with the legal consequences of an employee's knowledge of a fact that lies outside the scope of the employee's duties to the corporation."

The knowledge also "must be important or significant to the employee's duties to the employer," Smith wrote.

Applying those principles to the context of sexual harassment, Smith found that awareness of harassment may be imputed to the employer only when the employee "is employed to report or respond to sexual harassment."

"An employee's knowledge of allegations of coworker sexual harassment may typically be imputed to the employer in two circumstances," Smith wrote.

"First, where the employee is sufficiently senior in the employer's governing hierarchy, or otherwise in a position of administrative responsibility over employees under him, such as a departmental or plant manager, so that such knowledge is important to the employee's general managerial duties," Smith wrote.

"Second, an employee's knowledge of sexual harassment will be imputed to the employer where the employee is specifically employed to deal with sexual harassment," Smith wrote.

An employee in the first category, Smith said, "usually has the authority to act on behalf of the employer to stop the harassment, for example, by disciplining employees or by changing their employment status or work assignments."

Those in the second category, Smith said, are typically part of the human resources, personnel, or employee relations group or department.

Smith found that Romanchick and Traver didn't fall into either category because, as team supervisors, they "simply oversaw the production line work of their fellow technicians."

The responsibilities of the two focused on mechanical operations, Smith said, and they had no authority to affect the employment status of other workers.

"In short, P&G did not employ them to discover or to act upon knowledge or rumors of sexual harassment; Romanchick and Traver were employed to keep the machines working," Smith wrote.

Serratelli did not return calls seeking comment on the ruling.


http://www.law.com/jsp/article.jsp?id=1202...Harassment_Case