For supervisor harassment, though, the employer is "strictly liable" - regardless of what it knew or should have known, and regardless of what action it takes - if the harassment includes a "tangible employment action" such as firing, demotion, loss of pay. But if there is no tangible employment action, the employer may escape liability by proving that the employer exercised reasonable care to prevent harassment and the harassment victim did not take advantage of the employer's preventive or corrective opportunities. That is known as the "Faragher-Ellerth" defense.
Under California law, there is no escape from liability. Employers are strictly liable for supervisor harassment, regardless of whether there is a tangible employment action. The employer may assert as a defense, though, that the employee's damages should be reduced because of the employee's failure to avail herself of opportunities to avoid the harassment (avoidable consequences defense.)
So, the issue of who is a supervisor matters under both schemes. California law defines supervisor in its statute (Govt. Code Section 12926(s): "'Supervisor' means any individual having the authority, in the interest of the employer, to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward, or discipline other employees, or the responsibility to direct them, or to adjust their grievances, or effectively to recommend that action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment."
Title VII does not define supervisor. Some lower courts said that supervisors had to have the power to take tangible actions like firing, reassignment, etc. The EEOC said supervisors merely have to have the power to direct the victim's work. Enter the Supreme Court.
Maetta Vance worked for Ball State University as a server in the catering department. She complained that a co-worker, Saundra Davis, was her supervisor and harassed her over a period of time on the basis of her race. Davis was a catering specialist, but she had no power to hire, fire, promote, demote, etc. Vance. The lower courts threw out Vance's harassment claim because they found that Davis was not a supervisor and that Ball State was not negligent.
After reviewing precedent and the different supervisor formulations, the Court 5-4 decided
We hold that an employer may be vicariously liable for an employee’s unlawful harassment only when the employer has empowered that employee to take tangible employment actions against the victim, i.e., to effect 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.” Ellerth, supra, at 761. We reject the nebulous definition of a “supervisor” advocated in the EEOC Guidance and substantially adopted by several courts of appeals.
It is unclear whether this decision will affect California law. As stated above, California has a statutory definition of "supervisor." In fact, that definition is taken from the National Labor Relations Act, Section 2(11). And the majority in the Vance case said the NLRA definition was too broad and did not apply to Title VII harassment cases. So, it appears that California's supervisor definition is broader than the Court's definition in Vance.
In dissent, Justice Ginsburg, writing for four, argued that the majority's definition is too narrow and that Congress should define supervisor.
This case is Vance v. Ball St. University and the opinion is here.