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Dennis J. Merley, Editor
Felhaber, Larson, Fenlon and Vogt, P.A.
Vol. 18, No. 5
July 2008
SEXUAL HARASSMENT
Minnesota adopts new liability standard for supervisor harassment
In the last 10 years, a change in federal law and an amendment to the state discrimination statute have caused great uncertainty about when you can be held liable for sexual harassment by a supervisor. In the following decision, the Minnesota Supreme
Court resolved the issue and ruled that Minnesota employers must follow the standard used under the federal law. Read on to see exactly what the court had to say.
Supervisor makes his pitch
Judy Frieler, a part-time employee at Carlson Marketing Group (CMG), told her supervisor in the bindery department, David Weber, that she was interested in a full-time position. In February 2005, she learned about a full-time opening in the shipping
department and told Ed Janiak, the shipping department supervisor, that she was interested. Janiak first informed her that the position had been filled but later told her that it was still open and that he would consider her along with another CMG
employee.
Frieler alleges that immediately afterward, Janiak sexually harassed her on four separate occasions over the next two weeks. On three occasions, he allegedly offered to tell her something about the job and brought her into a limited-access room
requiring a key to enter. He then closed the door (which locked automatically), grabbed her in a bear hug, pressed himself against her, reached under her clothes, and engaged in graphic, sexually oriented talk with her. He told her that if he was
going to be her boss, she had to "handle it." After releasing her, he cautioned her not to tell anyone about the incidents.
On March 9, Frieler accepted the full-time position in the shipping department. There are varying accounts as to whether Weber, Janiak, or others in the company had the most influence on the decision.
Frieler was aware of CMG's sexual harassment policy, which advised employees to report sexual harassment to their supervisor, HR, or the ethics hot line. While she did tell her sister-in-law (who also worked at CMG) and other family members about the
harassment, she didn't invoke the policy for fear that she might lose the full- time job and possibly her part-time position since Weber and Janiak were friends.
Employee cries 'foul'
On March 10, Frieler reported the harassment to Weber. She then met with Weber, Weber's manager, and an HR representative about the allegations. As a follow-up, she divulged that Janiak had been verbally harassing her for years and that her coworkers
joked that he was her boyfriend.
An investigation commenced the next day. Frieler was given the option to continue working but chose instead to be placed on paid leave. During the investigation, Janiak admitted that he met with Frieler to show her job-related tasks but denied any
sexual harassment. Four employee witnesses reported never experiencing any behavior by Janiak that made them uncomfortable. In fact, they expressed disbelief that he could act as Frieler had alleged. A few days later, Janiak resigned because of
"health issues" and a desire to spend more time with his family.
Frieler claimed that when she returned to work, she heard rumors that she was in drug rehab and had family problems. Other coworkers wouldn't look at her, and one asked her, "Why did you do this [to Janiak]?" Frieler alleged that the treatment she
received caused her to suffer from posttraumatic stress disorder and major depression. She later saw a psychologist, who recommended that she not return to CMG.
Frieler eventually sued CMG for sexual harassment in violation of the Minnesota Human Rights Act (MHRA). She also filed claims for assault and battery and negligent supervision and retention. CMG asked the court to dismiss her claims, which it did,
finding that she failed to raise a significant issue of fact about whether:
- CMG knew or should have known about Janiak's harassment;
- Janiak was her supervisor for vicarious liability purposes; and
- sexual harassment was foreseeable either at CMG or in its industry.
Frieler appealed to the Minnesota
Court of Appeals, which upheld the trial court's ruling. With regard to the sexual harassment claim, the appeals court decided that the standard for liability for harassment by a supervisor was the same as that for harassment by a nonsupervisor. In
other words, to succeed on her claim, Frieler had to show that CMG either knew or should have known about the harassment. The court found that she failed to make that showing.
Play is under review
The Minnesota Supreme Court then decided to hear the case, focusing on two critical issues in the sexual harassment claim. First, it considered whether the federal standard for imposing vicarious liability for harassment by a supervisor should be
adopted in Minnesota. Next, it looked at whether Frieler was able to establish that Janiak was a supervisor with authority over her.
The court began by asking whether the "knows or should know" standard should apply to supervisor harassment the same way it does for harassment by nonsupervisors. The court observed that when the Minnesota Legislature defined sexual harassment in the
1982 amendments to the MHRA, the standard was explicitly included without a distinction between supervisors and nonsupervisors. Then, in 1998, the U.S. Supreme Court decided Faragher v. City of Boca Raton.
In the Faragher case, the Court determined that when an employee alleges a hostile environment created by a supervisor but no tangible employment action is taken, the employer may defend itself by showing that (1) it exercised reasonable care to
prevent and correct promptly any sexually harassing behavior and (2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided to avoid harm. Three years later, in the 2001 amendments to the MHRA, the
legislature removed the "knows or should know" language from the statutory definition of harassment.
Frieler argued that the removal of the explicit "knows or should know" language meant that the legislature had decided to impose strict liability for all acts of harassment by a supervisor. In other words, once the harassment took place, an employer
couldn't escape liability by investigating and rectifying the matter. CMG countered that the amendments were intended only to conform the definition to other definitions in the statute that didn't set forth a liability standard. As a result, it
argued the change was more of a "housekeeping" measure than a substantive change in the law.
Court calls supervisor out
The Minnesota Supreme Court came down somewhere in between, ruling that neither strict liability nor "knows or should know" is the correct standard. Ultimately, the court adopted the federal standard explained above ― that when a supervisor's
harassment results in no tangible adverse employment action (i.e., termination, denial of promotion, or the like), the employer may still use the defense that it took reasonable care to prevent such behavior and that the employee unreasonably failed
to take advantage of corrective opportunities. The court ruled in this fashion for the following reasons:
- The Minnesota Department of Human Rights (MDHR) specifically requested the amendment and believed that it would establish the federal standard for cases filed under the state law.
- Since the amendments, the MDHR has interpreted the law
in a way that is consistent with the federal standard, and administrative agencies are entitled to great deference in such interpretations.
- The federal law is an appropriate balance of law regarding liability of agents and other legal issues
that best effectuate the purposes of the MHRA.
The court also ruled, as did the U.S. Supreme Court in the Faragher decision, that when a supervisor's harassment has a tangible effect on the victim's employment, the defenses described above are
not available.
The Minnesota Supreme Court then turned its attention to the critical question of what constitutes a "supervisor" for the purpose of applying this standard. It rejected the standard used by the Eighth U.S. Circuit Court of Appeals (which covers
Minnesota) to the effect that a supervisor must have power to take "tangible employment action against the victim, such as the authority to hire, fire, promote, or reassign to significantly different duties." Instead, it adopted the definition from
the Equal Employment Opportunity Commission (EEOC), which provides that even without the "final say" on employment matters, a true supervisor is one whose "recommendation is given substantial weight by the final decision maker(s)."
The EEOC uses this definition because even without the ability to fire or demote, "an individual's ability to commit harassment is enhanced by his or her authority to increase the employee's workload or assign undesirable tasks." To rule otherwise,
the court explained, would ignore the realities of the workplace and would conflict with the remedial purposes of the law.
As a result, the Minnesota Supreme Court returned the case to the lower court to determine if Janiak fit the new definition of a supervisor and, if so, whether liability could be assessed under the proper standard. Judy Frieler v. Carlson Marketing
Group, Inc. (Minnesota Supreme Court, No. A06-1693, May 30, 2008).
Postgame analysis
This decision is a ringing endorsement for maintaining and enforcing effective policies against sexual harassment and for making sure that everybody in the workforce understands and abides by those policies. You should be vigilant in distributing
your policies to employees and making sure they fully understand their rights to seek assistance if they feel victimized by harassment. Supervisors and managers must also understand their obligation to refrain from harassing behavior and effectuate
the policy.
Finally, you must address all complaints of sexual harassment in a timely and appropriate manner. By doing so, you afford yourself the opportunity to benefit from the adoption of the Faragher standard and possibly defeat claims of harassment
resulting from the behavior of supervisors.
Find out more about preventing sexual harassment in the subscribers' area of www.HRhero.com, the website for Minnesota Employment Law Letter. You have access to an HR Executive Special Report on the
subject: "The HR Manager's Guide to Preventing Sexual Harassment." Just log in and scroll down to the link for all the Special Report titles. Need help? Call customer service at (800) 274-6774.
Copyright 2008 M. Lee Smith Publishers LLC
MINNESOTA EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual legal problems, but rather, to provide information about recent developments in Minnesota employment law. Individuals having questions about specific legal issues
should consult with the attorney of their choice.
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