NJ Supreme Court Issues Landmark Sexual Harassment Ruling

From unwelcome sexual propositions to sexually suggestive gestures, sexual harassment claims account for a significant percentage of workplace discrimination claims brought under New Jersey’s Law Against Discrimination (NJLAD).

Following a recent ruling by the Supreme Court of New Jersey, these lawsuits will be a bit easier for employers to defend, specifically if they have anti-harassment policies and procedures in place.

In Aguas v. State of New Jersey, the state’s highest court addressed two significant issues that impact sexual harassment/hostile workplace claims: (1) the impact of an employer’s anti-harassment policy on an employee’s claims of negligence or recklessness and vicarious liability; and (2) the definition of a supervisor for purposes of a hostile work environment sexual harassment claim. In what is regarded as being a win for employers, in the case of issue #1, the court followed federal legal precedent by holding that having a strong anti-harassment policy in place can shield businesses from liability so long as the worker did not suffer an adverse employment action. However, with regard to the second issue, the court declined to adopt the U.S. Supreme Court’s narrow definition of supervisor, as set forth in Vance v. Ball State University, and adopted the much fuzzier definition applied by the Equal Employment Opportunity Commission (EEOC) for purposes of imposing vicarious liability.

The Facts of the Case

Plaintiff Ilda Aguas, an employee with the Department of Corrections (DOC), filed a complaint against the State of New Jersey, alleging violations of the LAD due to the sexual harassment/hostile work environment created by her supervisors. The allegations included that she was subjected to repeated sexual advances at the hands of her male “supervisors.” Aguas did not allege that the DOC took any tangible employment action against her.

In 1999, the DOC implemented a written policy prohibiting discrimination in the workplace, and mandated that all employees be trained with respect to it. The policy included procedures with regard to reporting, investigating, and remediating claims of misconduct, and specifically “encouraged” employees to promptly report incidents of harassment. When Aguas was hired in 2004, she received a copy of the policy. Despite her knowledge of the policy, the plaintiff did not file a written complaint with the DOC. However, the DOC learned of Aguas’ allegations and commenced an investigation by interviewing 20 witnesses. At the end of the investigation, it found that the claim harassment was “unsubstantiated.”

The trial court ultimately dismissed the sexual harassment suit on summary judgment. Although it found that the plaintiff established a prima facie showing of sexual harassment, it concluded that employer liability was inappropriate because the defendant adopted and published a proper anti-discrimination policy and engaged in a thorough investigation of the claims and there was no evidence of a tangible adverse employment action. The Appellate Division affirmed.

The Court’s Decision

The New Jersey Supreme Court formally adopted the tests first set forth in 1998 by the United States Supreme Court in Burlington Industries v. Ellerth and Faragher v. City of Boca Raton. Accordingly, in a hostile work environment case, the employer may assert the affirmative defense that: 1) it “exercised reasonable care to prevent and correct promptly any sexually harassing behavior;” 2) “the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise:” and 3) no adverse tangible employment action was taken against the plaintiff employee.

The court also addressed the definition of a supervisor for purposes of claims based on sexual harassment giving rise to a hostile work environment. As noted above, the court declined to adopt the more restrictive definition of “supervisor” recently prescribed by the Supreme Court in Vance v. Ball State University. As previously discussed on this blog, the majority held that an employee is a “supervisor” for purposes of vicarious liability under Title VII of the Civil Rights Act only if he or she is empowered by the employer to take tangible employment actions against the victim.

Instead, the New Jersey Supreme Court adopted the less precise definition used by the EEOC that includes not only employees granted the authority to make tangible employment decisions, but also those placed in charge of the complainant’s daily work activities. Accordingly, the alleged harasser will be deemed to be the complainant’s supervisor if that employee has the authority to take or recommend tangible employment actions or directs the complainant’s day-to-day activities in the workplace. This conclusion should be concerning to employers as it significantly increases the employer’s potential exposure to strict liability where a tangible employment action has been taken.

The Implications for New Jersey Employers

The NJ Supreme Court’s decision reinforces what should already be understood by employers: it imperative that all employers have strong anti-harassment/discrimination policies in place. In addition to enacting such policies and procedures, it is also essential to provide anti-harassment training to all employees and supervisors and to be prepared to quickly respond to and thoroughly investigate all sexual harassment complaints in accordance with published policies and procedures. Secondly, we strongly recommend that employers evaluate who is a supervisor by establishing bright lines in the chain of command and determining which persons may exercise supervisory authority through the adoption of proper job descriptions.