On January 28, 2016, the New Jersey Supreme Court issued a ruling that clarifies the standard by which employers can establish an affirmative defense to harassment claims. While denying an oil delivery driver’s attempt to revive his lawsuit against his former employer, the Supreme Court used the opportunity to correct one aspect of the lower court’s analysis of vicarious liability for supervisor harassment. In a nutshell, the Supreme Court clarified that employers can establish an affirmative defense to vicarious liability for supervisor harassment upon a showing that the employer exercised reasonable care to prevent and to promptly correct harassing behavior, but only if those prevention measures were in place prior to the alleged harassment occurring. The ruling ends a case that had been ping-ponging back and forth between the State’s various courts for years.
The plaintiff, Brian Dunkley, worked for S. Coraluzzo Petroleum Company (CPC) as a delivery driver in May 2010. At the outset of his employment, CPC provided Dunkley with a handbook detailing its anti-harassment and anti-discrimination policies. The handbook also contained CPC’s reporting mechanism for employees to file a complaint if they perceive any harassment.
CPC assigned another delivery driver, Richard Harrington, to provide Dunkley with two weeks of on-the-road training. Dunkley claimed that Harrington harassed him during this period by making several racially derogatory comments, including use of the N-word, and references to the Ku Klux Klan, and African Americans being “thugs” and using food stamps. Dunkley never filed a complaint about Harrington’s conduct per the reporting procedures set forth in the employee handbook. Instead, he just failed to show up for work one day.
When CPC called to inquire about his absence, Dunkley set up a meeting with three employees wherein he listed the problems he had with Harrington. CPC responded by assigning Dunkley a new trainer. Dunkley had no problems with the new trainer and never saw Harrington again. But he claimed he felt ostracized by other co-workers after reporting Harrington’s conduct, and that treatment forced his constructive discharge.
After resigning, Dunkley sued CPC for racial harassment. Dunkley contended CPC was liable for negligence under the New Jersey Law Against Discrimination (LAD) and vicariously liable by allowing conduct that created a hostile work environment, which contributed to his constructive discharge.
The trial court entered summary judgment in CPC’s favor and the appellate court first affirmed in June 2014. The appellate court held that CPC was not liable because, once Dunkley informed it of the harassment, it immediately took action in accordance with its anti-harassment policy, the harm was remedied, and Dunkley’s complaints of co-workers ostracizing him were insufficient to establish constructive discharge. In March 2015, the Supreme Court remanded the case. It instructed the appellate court to reconsider its decision in light of the Supreme Court’s recent holding in Aguas v. State of New Jersey. In Aguas, the Supreme Court adopted a test, known as the Ellerth/Faragher test, for defending claims alleging vicarious liability for supervisor harassment. Employers who could satisfy the test could establish an affirmative defense to supervisor harassment by showing they “acted in a reasonable and prompt manner to prevent or correct the harassing behavior.” This required a showing that: (1) the employer adopted and enforced an effective policy against harassment; (2) the employee unreasonably failed to take advantage of preventive or corrective opportunities; and (3) the employee suffered no tangible employment action.
On remand, the appellate court again affirmed summary judgment. It held that CPC had an effective anti-harassment policy that Dunkley was aware of and never utilized, and that his claims of negative treatment from co-workers did not amount to an adverse action. More specifically, it held that CPC “exercised reasonable care to prevent and correct harassing conduct by the prompt enforcement of its” anti-harassment policy after Dunkley advised his supervisors why he did not report to work.
Finally, in its January 2016 ruling, the Supreme Court declined to revive the case. In doing so, however, the Supreme Court clarified one possible inaccuracy in the appellate court’s analysis. It held, “to the extent that the panel’s language could be construed to suggest that an employer … need only take action to deter harassing conduct going forward,” that analysis is wrong. Rather:
[O]nly an employer who instituted meaningful and effective anti-harassment policies and procedures to prevent discrimination, prior to the alleged discriminatory [or harassing] conduct, may assert the affirmative defense. An employer’s imposition of such policies and procedures, only after the discriminatory conduct alleged in the case, does not entitle the employer to the affirmative defense recognized in Aguas.”
Takeaway for Employers
The takeaway from this lengthy case is short and simple: New Jersey employers should develop, implement, and enforce effective anti-harassment and anti-discrimination policies now. Such policies, if properly followed, may provide an effective defense against vicarious liability claims based on supervisor discrimination or harassment. But the policies will be useless if they were not already in place and being followed before the alleged discriminatory or harassing behavior occurred.