Halunen & Associates

by Barbara L. Jones writing for Minnesota Lawyer
The state Supreme Court recently revived a sexual harassment lawsuit under the Minnesota Human Rights Act that had been dismissed by the lower courts.
In so doing, the high court adopted federal caselaw that said a plaintiff alleging sexual harassment by a supervisor is not required to prove that the employer knew or should have known about the harassment and failed to take timely and appropriate action.
However, the court declined to set a strict liability standard for employers, instead establishing an affirmative defense.
In Frieler v. Carlson Marketing Group, a man allegedly assaulted a female co-worker who was also a prospective subordinate after calling her into a private room to discuss work-related matters. Similar incidents allegedly occurred on three other occasions, after which the woman for the first time made a harassment complaint. An investigation ensued, and the man opted to quit. The woman subsequently left the company, and filed an action alleging a hostile work environment.
A Hennepin County District Court judge dismissed the case, holding that there were no fact issues as to whether the defendant knew about the harassment, whether the alleged harasser was a supervisor for purposes of vicarious liability and whether sexual harassment was foreseeable at the company or in the industry.
The Court of Appeals affirmed, saying that Minnesota had not adopted the federal standard for supervisor liability set forth in 1998 by the U.S. Supreme Court in Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth. That standard relieves the employee of proving actual or imputed knowledge where the harassment was by a supervisor.
The Minnesota Supreme Court reversed and remanded the case for trial, saying the Court of Appeals had erred in determining that the Faragher/Ellerth standard did not apply.  It said that under the MHRA, an employer is subject to vicarious liability for sexual harassment by a supervisor.
It also said that the employer is afforded an affirmative defense when no tangible employment action is taken as a result of the harassment.  The elements of the defense are that the employer exercised reasonable care to prevent and correct harassment and that the employee unreasonably failed to take advantage of corrective/preventive opportunities provided by the employer.
The court said that the defense allows “an inquiry into the reasons that would support a conclusion that harassing behavior ought to be held within the scope of a supervisor’s employment.”  The defense is unavailable in cases of a “tangible employment action” such as discharge, demotion or undesirable reassignment.
The court then determined that a person is a supervisor if the individual has the authority to undertake or recommend tangible employment decisions affecting the employee or the authority to direct the employee’s daily work activities, which is the definition adopted by the Equal Employment Opportunity Commission.
The plaintiff had raised a genuine issue of material fact that the alleged harasser was her supervisor, the court concluded.  Thus it remanded the case for trial.
However, the court upheld summary judgment on the plaintiff’s claim for assault and battery, saying that the plaintiff did not show that the alleged assault was foreseeable such that the company should be held vicariously liable for it.  The foreseeability of an employee’s conduct is a question of fact to be analyzed based on the evidence presented in a particular case and the existence of a harassment policy is not sufficient to create a fact issue on forseeability, the court said.
Strictly speaking
The business community quickly claimed victory in the case because the court had refused to subject employers to a strict liability standard.
Minneapolis attorney Joe Schmitt, who represented the Minnesota Chamber of Commerce, amicus curiae, issued a press release that said, “the Supreme Court decision allows employers to avoid liability provided that they have adopted and distributed appropriate harassment and complaint resolution procedures. This decision provides further encouragement to employers to adopt and implement effective harassment and complaint policies and procedures.”
The case points out the need for a policy and a complaint procedure that people can understand and at the same time preserves the plaintiff’s rights to argue egregious fact circumstances, said Minneapolis attorney Linda Holstein.
Attorneys for Carlson Marketing Group said their clients would not comment on pending litigation.
Another view
Lawyers who typically represent employees were not so sure the case is a victory for businesses.
“Whether Frieler is a victory for employers at the expense of employees, as some have suggested, remains to be seen and depends largely on how broadly or narrowly state courts apply the affirmative defense at the summary judgment stage,” said Minneapolis attorney Justin Cummins, chair of the Minnesota State Bar Association Labor and Employment Section.
Cummins pointed out that the employer must prove each element of the affirmative defense, which ordinarily would turn on facts that should not be decided on summary judgment.
The employer must show that it took adequate preventive action, which means that an anti-harassment policy must be conveyed in a way that is readily understandable to the particular workforce, he said.
Second, the employer must show that it took timely and sufficient corrective action, which means an examination of its specific actions.  Third, the burden is on the employer to show that the employee acted unreasonably in avoiding and/or reporting the harassment.  That element means that the adequacy of the employer’s procedures becomes relevant because if the procedures are inadequate then a failure to report may become reasonable, Cummins said.
Attorneys for the plaintiff, Frances E. Baillon and Joni Thome of Minneapolis, said that the Faragher/Ellerth defense should not apply in this case because the harassment resulted in tangible employment action. The woman allegedly was told, “I’m going to be your boss, you got to handle it.”
But even if the defense does apply, the defendant can’t meet it, said Thome.  “I think it will be difficult for defendants to get past Faragher/Ellerth,” she said.
Ballion noted that the majority made it clear that Minnesota is going to apply the Faragher/Ellerth standard according to the broad and remedial purposes of the MHRA.
She explained that the court recognized that a person in a supervisory role has power over the employee and therefore the reasonableness of the plaintiff’s response to the harassment should be evaluated in that light. Additionally, the court adopted what it called the EEOC’s expansive definition of “supervisor” and rejected the 8th U.S. Circuit Court of Appeal’s narrow view, Baillon said.
Furthermore, it is now certain that there is such a thing as apparent authority, said Thome.
“I think it is important to note that we are to apply the EEOC definition of supervisor, which includes a supervisor whom the employee reasonably believes has supervisory authority or apparent authority,” she said.
Thome also said that the decision leaves the door open for future assault and battery claims where there is evidence — not necessarily expert evidence — of foreseeability.
“We still bring those claims and the evidentiary threshold is low, certainly not what I imagine the defense bar was hoping for,” she said.  The future evidence may include the experience of other employees and statistical information on assaults in the workplace, she added.