Supreme Court oral argument next week on sexual-harassment constructive discharge — important issue or much ado about nothing?

The term “constructive discharge” refers to a resignation that courts treat as the legal equivalent of an involuntary termination. It has been applied where working conditions would lead a reasonable person to feel they have no choice but to quit. It also obviously applies to resignations which are thinly veiled terminations (”you’re fired, but to ease the pain a bit, we’ll allow you to resign”).

This coming Wednesday, the Supreme Court will hear oral arguments on whether in a harassment case involving constructive discharge an employer may assert the affirmative defense that it took reasonable steps to prevent and correct harassment whereas the employee unreasonably failed to take advantage of preventive or corrective opportunities provided by the employer or to avoid harm otherwise. If this defense is not available, and if the harassment was by a supervisor of the employee and meets the legal standard for actionable harassment, the employer is strictly liable.

Marcia Coyle writes in the National Law Journal [free regis. req'd.]: “High Court Set to Mend a Split on Job Suits; Circuits diverge on ‘constructive’ firing”

“This is a very, very important case,” said Debra Katz of Washington’s Bernabei & Katz, who represent employees in discrimination cases. “There are a lot of constructive discharge cases litigated. If an employer creates a work environment so intolerable that an employee is forced to leave, it should be treated no differently than an out-and-out discharge.”

But quitting and being fired are different, said Pennsylvania Chief Deputy Attorney General John G. Knorr III. Allowing strict liability in constructive discharge situations “will increase the scope of an employer’s liability in an area where supervisors may be misbehaving in a way that employers have no real control over,” Knorr said.

The 3rd U.S. Circuit Court of Appeals agreed with the plaintiff’s side and with the 8th Circuit’s view that a constructive discharge constitutes a tangible employment action, such as a firing, demotion or cut in pay. The 2nd and 6th circuits have disagreed. . . .

At the heart of the Supreme Court appeal are two sexual harassment rulings by the justices in 1998: Burlington Indus. Inc. v. Ellerth, 524 U.S. 742, and Faragher v. City of Boca Raton, 524 U.S. 775.

In a sexual harassment suit under Title VII of the Civil Rights Act of 1964, the court held, an employer will be vicariously liable for a hostile work environment created by a supervisor with immediate or higher authority over a worker.

If the harassment results in a tangible employment action, such as firing, failure to promote, reassignment or a decision causing a significant change in benefits, the employer is strictly liable for its supervisors’ actions.

If the harassment did not result in a tangible employment action, the employer may raise an affirmative defense to avoid liability or damages. The defense is that the employer “exercised reasonable care to prevent and correct promptly” the harassing behavior, and that the employee “unreasonably failed” to take advantage of opportunities provided by the employer to correct or prevent the harm. . . .

The state and its supporters argue that a constructive discharge lacks the signs of official action that typically mark tangible employment actions. The latter, they say, involves “an official act of the enterprise,” which generally causes direct economic harm. . . .

Allowing strict liability for harassment resulting in constructive discharges would make having a complaint procedure and a remedial policy pointless, wrote Ann Elizabeth Reesman of Washington’s McGuiness Williams & Norris, counsel to the business organization.

The Bush administration argues that a constructive discharge standing alone should not produce a categorical rule of strict liability. The Faragher/Ellerth affirmative defenses should be available, the government says, “unless the constructive discharge was triggered in significant part by an ‘official act’ of the employer.

“An employer has far less ability to control a supervisor’s workplace harassment when it is unaccompanied by an official act, and agency principles therefore do not support a rule of strict liability in such cases,” the U.S. solicitor general and Equal Employment Opportunity Commission (EEOC) argue. . . .

But Suders’ supporters and counsel, Donald Bailey of Bailey, Stretton & Ostrowski in Harrisburg, Pa., contend that their opponents ignore a history of court treatment of constructive discharges. Courts for decades have recognized that a constructive discharge, when proven, “is the legal equivalent of an actual discharge,” Susan Grover of the College of William & Mary School of Law wrote in an amicus brief for the Lawyers Committee for Civil Rights Under Law, the National Employment Lawyers Association and other civil rights groups. . . .

[T]here is a high standard of proof for employees claiming constructive discharge. Read more

The topic is treated more thoroughly from a legal (and predictably feminist and well-spoken) perspective by Findlaw commentator Joanna Grossman: “How Should Harassment Victims’ Claims of “Constructive Discharge” Be Treated? A Question the Supreme Court Soon Will Confront”

The Court, I will argue, should treat hold that strict liability is appropriate. . . .

What are the arguments in favor of counting “constructive discharge” as a “tangible employment action” — in essence, a firing — in the sexual harassment context?

First, outside the harassment context, the Supreme Court has repeatedly recognized that constructive discharge — that is, a situation where quitting is the only solution — is legally indistinguishable from actual discharge. And the EEOC has taken this position. It makes sense to apply this general legal rule — a rule favored by the agency charged with enforcing the relevant law — in this particular context, just as we do in other contexts.

Second, constructive discharge fits the Supreme Court’s own definition of a “tangible employment action.” The touchstone is whether the action constitutes a “significant change in employment status.” Also, most such actions will “inflict economic harm.”

Being forced to resign due to intolerable conditions plainly significantly changes employment status: The employee is now out of a job. It also plainly inflicts economic harm: Because the employee is out of a job, she loses salary and benefits.

Third, this interpretation fits well with other sexual harassment doctrines. To show constructive discharge, an employee must show she was compelled to resign–that any reasonable person in her situation would have walked off the job. And if this is truly the case, then strict liability makes sense.

Exceptions to strict liability are crafted to penalize the unreasonable non-complainer. And typically, that is not the person who is constructively discharged. It’s hard to imagine a situation where it was both unreasonable not to complain, and yet reasonable to walk off the job. Often, victims walk off precisely because they were either too afraid to complain, for fear of retaliation or further harassment, or already did complain, to no avail.

Fourth, there is no “floodgates” problem here — not all harassment will result in strict liability, even if harassment that results in “constructive discharge” does. After all, not all hostile environments are intolerable; and most victims do not quit their jobs no matter how bad the situation is. . . .

After giving equal time to the opposing arguments, Ms. Grossman concludes:

So what should the Court do in this case? It should hold that constructive discharge is — in this context, as in others — tantamount to a firing. But it should also reconsider its whole approach to such cases, and put less stress on the idea that a “tangible employment action” must also be an “official act.”

Noted feminist scholar Martha Chamallas has proposed that, instead, courts should focus strictly on causation. If the supervisor’s harassment caused the plaintiff to resign, then the plaintiff should be able to recover from the employer . . . .

This approach, Chamallas argues, is more realistic about supervisory power, which often comprises both formal and informal aspects. It also would permit courts to take into account how typical victims behave.

Real-life victims simply don’t file formal complaints at the drop of a hat. And sometimes, after encountering severe harassment, they simply find it impossible to go to work one day — and never come back. And that is understandable: Severe harassment can be demeaning, terrorizing, frightening, and traumatic.

The Court should hold that an employer is strictly liable for employing supervisors who treat their subordinates so abominably as to compel their resignation. A drumming out is as bad as — if not worse than — a firing. Read more

Read the briefs (scroll down to March 31)

Where to begin?

Finally, my prediction? The Court will either reject the employee position altogether or adopt a compromise position: that whether constructive discharge defeats the affirmative defense depends upon whether the alleged cause for resignation was simply hostile environment harassment incidents by the supervisor or whether it was more of the “quit-or-be-fired” variety. If it does rule in favor of the employee position, it will note with strong language, either in dictum or in a concurring opinion, that constructive discharge is very difficult to prove and ordinarily will not occur in the absence of a failure of the employer to respond reasonably to reasonable efforts by the employee to have the harassment remedied.

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