Dolan Media Newswire Story
Subject: Minnesota Supreme Court gives sex harassment standard for employers a second look
Pub: Minnesota Lawyer
Author: Michelle Lore
Category: Justice,Employment,Human Resources
Sub-Category: Courts
Issue Date: 03/03/2008 Word Count: 67
Minnesota Supreme Court gives sex harassment standard for employers a second look
by Michelle Lore
Dolan Media Newswires
© Dolan Media Newswires 2009.MINNEAPOLIS, MN -- The Minnesota Supreme Court is taking a look at whether a seven-year-old amendment to the Minnesota Human Rights Act created a new standard for an employer’s liability for sexual harassment.
Tomorrow the state high court will hear oral arguments in Frieler v. Carlson Marketing Group, Inc., a case in which it has been asked to divine the Legislature’s intent in removing the following language from the MHRA’s definition of sex harassment: “… in the case of employment, the employer knows or should know of the existence of the harassment and fails to take timely and appropriate action.”
The case has attracted a lot of attention from the employment law bar. Numerous national and state organizations including the National Employment Lawyers Association, the Minnesota Attorney General’s Office, the Employer’s Association and the Minnesota Defense Lawyers Association have submitted amicus briefs.
The plaintiff contends that the 2001 amendment to the MHRA means that employers are now strictly or, at a minimum, vicariously liable for the hostile environment harassment perpetrated by a supervisor.
The defendant employer counters that the amendment merely conformed the definition of sexual harassment to other definitions contained in the MHRA — which also don’t set out a liability standard — and that it did not expressly adopt a new standard of employer liability.
The attorneys for the parties, Frances E. Baillon, who represents the plaintiff, and Eric Magnuson, who will argue on behalf of the employer, declined to comment on the matter prior to the oral argument.
Employers are anxiously watching the case. They do not want the court to adopt a standard that would hold them liable for harassing conduct of which they had no knowledge.
“As a matter of public policy, that would make for bad law and represent a significant departure from a long history of Minnesota precedent,” said Minneapolis employment defense attorney Kerry L. Middleton, who authored the amicus brief for the Employer’s Association.
“With regard to sexual harassment, employers should be liable for what they know about, or should know about, and fail to correct. They should not be liable for conduct that is hidden from them, especially if the employee does not take advantage of a company’s complaint procedure,” Middleton said.
Nonetheless, Middleton welcomes guidance from the Supreme Court on the meaning of the 2001 amendment. “Clarification is always good — for employers and for employees,” he said.
Assaults alleged
Plaintiff Judy Frieler began working for Carlson Marketing Group on a part-time basis in 1991. She eventually sought full-time work with the company in a position that reported to Ed Janiak. The plaintiff alleged that after speaking with Janiak about the full-time job, he physically and sexually assaulted her on four separate occasions early in 2005.
When the information came to the attention of the human resources department, the plaintiff was put on paid leave and the incidents were investigated. Janiak denied the allegations and then voluntarily terminated his employment.
The plaintiff sued the company in July 2005, alleging, among other things, sexual harassment in violation of the MHRA. A Hennepin County District Court judge dismissed the claims, finding that the plaintiff failed to show a material fact dispute as to whether the employer knew or should have known about the harassment.
The Court of Appeals affirmed, noting that a prima facie case of sex harassment based on a hostile environment requires that the employer knew about the conduct and failed to take remedial action.
Strict liability
Whether the amended MHRA imposes strict liability on an employer for sexual harassment by a supervisor, as the plaintiff argues, is hotly disputed.
“Although such a reading may create a harsh result for employers, the language of the statute is clear,” Baillon wrote.
Minneapolis attorney Leslie Lienemann, author of the amicus brief for the National Employment Lawyers Association, calls the phrase “strict liability” a scare tactic that’s intended to elicit a negative response from the court. “Corporations act only through their agents. Holding a company liable for the acts of its managers is nothing new,” she wrote.
But the defendant counters that in no way did the Legislature intend to impose “automatic” or strict liability with no possible defense on employers for conduct of employees. It contends that as a matter of public policy, strict liability would defeat the remedial purpose of the statute and also diminish incentives for employees to report sexual harassment.
“[A]n automatic employer liability standard would motivate employees to refrain from reporting so that harassing events would be compiled, a finding of ‘severe or pervasive’ conduct would be made more likely, and potential damages would be compounded,” Magnuson wrote in his brief.
Vicarious liability
Also at issue is whether the Legislature, in eliminating the “knew or should have known” language, intended to adopt the federal standard of vicarious liability for sexual harassment. The plaintiff argues that it did.
“The ‘knows or should know’ is no longer a part of a plaintiff’s prima facie case at least for purposes of supervisor hostile environment sex harassment,” Baillon wrote in her brief to the court. “Not only does the legislative intent make this clear, but it is consistent with the state and federal case law.”
But the defendant employer contends that the Court of Appeals properly relied on the 2001 Minnesota Supreme Court decision in Goins v. West Group, which retained the “knew or should have known” standard of employer liability for sexual harassment. (The plaintiff counters that the incidents in Goins took place before the amendment went into effect and involved only nonsupervisor harassment, and therefore the decision is inapplicable to the case at bar.)
The federal standard of liability, which the plaintiff contends is now the standard in Minnesota, was established by the U.S. Supreme Court in Burlington Industries Inc. v. Ellerth, 524 U.S. 724 (1998) and City of Boca Raton v. Faragher, 524 U.S. 775 (1998). The cases hold that an employer is “subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee.”
The caselaw makes clear that employers should be liable for a supervisor’s sex harassment since an employer can act only through individual supervisors and employees, according to Baillon.
“When a supervisor discriminatorily hires, fires or promotes an employee based on a particular protected status, that act is considered the act of the employer,” she wrote. “There is no inquiry as to whether or not the employer had notice of the action.”
Thus, plaintiffs’ lawyers contend that there is no reason for an additional “notice” requirement in sex harassment cases.
There is no other area of the law where the courts ask, “who knew?” when the conduct was committed by a manager, said Lienemann. Managers act with the authority of the company, and if they discriminate, then their company is held liable, she said.
Lienemann added that there is no indication that the Legislature wanted to abandon Minnesota’s long-held principle of holding companies liable for the discriminatory acts of their managers.
“The language of the act is very clear and has been for years,” Lienemann told Minnesota Lawyer last week. “The court shouldn’t struggle to read into it limits that it doesn’t have.”
The defendant, however, asserts that as discussed by the Court of Appeals, “knew or should have known” remains the proper standard for employer liability. “The Legislature did not import Faragher/Ellerth into the MHRA in the 2001 amendment, although it clearly could have. Strident assertions that Faragher/Ellerth ought to be Minnesota law do not change this reality,” Magnuson wrote.
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