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Cat’s paw liability extends sexual harassment to employer with temporary workers from staffing agency



By Patricia Kryder

The employer was a supply-chain logistics company with a warehouse in Memphis. Temporary employees supplied by staffing agencies accounted for approximately 80% of its workforce. Although the employer’s employee handbook contained a sexual harassment policy, temporary employees were not given a copy of the handbook.  The employer maintained that the relevant issues applicable to temporary employees were covered during their orientation.

The Equal Employment Opportunity Commission brought a sexual retaliation action against the company, alleging that a supervisor in the Receiving Department sexually harassed three female employees and retaliated against the women after they objected to his sexual advances. In addition, one male employee who supported the women’s complaints was terminated.

At a jury trial in federal court, the employer was found liable for sexual harassment and retaliation, and the victims were awarded compensatory and punitive damages of over $1.5 million dollars. The employer filed motions for a new trial. The motions were denied, and the employer then appealed to the U.S. Court of Appeals for the Sixth Circuit.

The employer maintained that the women were not engaged in a protected activity prior to their termination, and there was no evidence of termination due to protected activity, or evidence that the employer acted with malice or reckless indifference to any claimants’ federally protected rights. Title VII prohibits an employer from retaliating against an employee who has either opposed any practice made an unlawful employment practice, or made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing involving Title VII claims.

The evidence indicated that the employer usually trained its new employees for two weeks and then gave them a month or two to adjust to the department. The supervisor in Receiving admitted that he transferred two of the women to the Returns Department, warning their new supervisor that the workers talked more than they worked. He admitted that he was responsible for talking to their supervisor and getting them fired.

An employer is vicariously liable for a supervisor’s harassment of an employee under the supervisor’s authority when the harassment results in a tangible employment action. A tangible employment action is any action effecting a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits. When a party proves that a tangible employment action resulted from a refusal to submit to a supervisor’s sexual demands, he or she established that the employment decision itself constitutes a change in the terms and conditions of employment that is actionable under Title VII. In the absence of a tangible employment action, an employer may still be held liable for harassment unless the employer affirmatively shows that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior and the party unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer to avoid harm or otherwise.

The appeals court affirmed the decision. The employer’s liability for the terminations was premised on a theory of “cat’s paw liability” in which the relevant decision makers were conduits of the supervisor in the Receiving Department and his retaliatory animus after his sexual harassment was brought into the open. To prevail on this theory, the EEOC only had to show that the retaliatory animus of the biased supervisor influenced the decision maker.




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