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Moody v. Atlantic City Bd. of Educ., No. 16-4373 (3d Cir. Sept. 6, 2017)

The Third Circuit holds, in a 2-1 decision, that an individual may be a "supervisor" for purposes of imputing liability to the employer vicariously for sex harassment if they are "tasked with creating a work schedule" for their subordinates.  

Moody v. Atlantic City Bd. of Educ., No. 16-4373 (3d Cir. Sept. 6, 2017):  In 2013, the Supreme Court in Vance v. Ball State Univ., 133 S. Ct. 2434 (2013), held that for a harasser to be deemed a "supervisor" for purposes of vicarious liability, they had to be "empowered by the employer to take tangible employment actions" against the victim, generally taken to mean hiring-and-firing-type authority.

In this case the alleged harasser, named Marshall, was a custodial foreman at one of the schools (New York Avenue School) where plaintiff Moody worked as a substitute custodian in starting in October 2012. The Board conceded that Marshall was Moody's foreman during the critical period of time in the case.  The record revealed no other person who had supervisory authority over Moody at that time.

According to the summary judgment record, for the next several months, "Marshall began making sexual comments to her and told her that he would assign her more hours if she performed sexual favors for him." This escalated into Marshall allegedly grabbing Moody, trying to remove her shirt, exposing himself, propositioning her, sending sexually explicit texts, and finally luring her into an unwanted sexual encounter with promises of full-time work. "In the days following this encounter, Moody told Marshall that it would never happen again."

By January 2013, Moody discovered that her hours had been cut, and she had been replaced by another female substitute custodian. Moody then reported the harassment to the Board's Assistant Superintendent, who initiated an investigation. Moody and Marshall were ordered not to have contact with each other. The first investigation was inconclusive; a second, outside investigation concluded that there was no harassment or discrimination.

Moody filed an action against the Board alleging sexual harassment and retaliation under Title VII and the New Jersey Law Against Discrimination (NJLAD). The district court granted summary judgment, holding that the Board was not vicariously liable for any harassment that may have occurred because Marshall was not Moody's supervisor, and alternatively that the Board took sufficient, prompt corrective action to meet its Faragher/Ellerth affirmative defense.

The panel majority reverses. After concluding that there is a genuine dispute about whether the alleged harassment was severe and "because of sex," the panel holds that the discrimination could have detrimentally affected the plaintiff:

"[Moody] testified that she believed Marshall expected to trade sexual favors for work and would seek retribution if she did not accede to his demands, and that he made her uncomfortable when he grabbed her and when he invited her to his office while he was unclothed."

The principal issue on appeal was how liability might, if at all, be imputed to the Board. Harassment is automatically imputed if the harasser is a supervisor (subject to the Faragher/Ellerth defense). The panel here applied agency principles. If the supervisor made use of his authority over the subordinate to carry out harassment, then under Restatement (Second) of Agency § 219(2)(d), liability might accrue to the employer if the harasser was "aided in accomplishing the tort by the existence of the agency relation."

While any of the several foremen working for the Board might have at one time exercised supervisory authority over Moody, during the critical period it was Marshall who allegedly "had the authority to decide whether to summon Moody to work at New York Avenue School because the Board granted him that authority as the custodial foreman."

The "authority to assign work," moreover, can constitute a "tangible employment action" because it directly impairs the subordinate's earnings. Marshall "had the authority to determine whether Moody worked at all if he needed a substitute custodian," and supposedly used that power on a number of occasions after Moody rebuffed him. "[S]ince Moody's primary benefit from her employment was hourly compensation, and since Marshall controlled 70% of her hours, his decision to assign or withhold hours significantly affected her pay."

The panel majority distinguishes this situation with the more ordinary one where a line manager assigns work shifts:

"Marshall was not a mere scheduler, assigning hours among those who were in a pool of employees. Marshall controlled whether Moody worked at New York Avenue School at all. Furthermore, the record does not reflect that anyone else was Moody's supervisor."

The panel majority also holds that any decision on the Faragher/Ellerth defense is premature. While holding that the Board did not waive the defense (despite not explicitly raising it in its answer), it goes on to hold that Moody may have suffered a "tangible employment action by receiving reduced hours from Marshall," which renders the defense nugatory.

The time records, the panel majority holds, are inconclusive. "A reasonable juror could conclude that Marshall gave Moody hours to entice her to accede to his sexual demands and then reduced her hours after she rejected him .... [on the other hand, such a] juror could therefore also conclude that Marshall did not reduce Moody's hours at all following her rejection of his advances." Because of the potential ambiguity, the panel majority holds that there is genuine dispute about whether Moody suffered a tangible employment action.

The panel also holds (and the dissenting judge agreed) that the drop in hours so close in time to Marshall's complaints to the Board about harassment might also constitute unlawful retaliation. "The close temporal connection between Moody's complaint and the reduction in her hours is 'unduly suggestive' and sufficient to provide prima facie evidence of a causal connection."

Judge Rendell, dissenting against remanding the harassment claim, would have held that the ability to assign work did not make Marshall a supervisor of Moody. Because Moody was only a substitute custodian, she was not guaranteed any work at all. "Moody's arrangement with the Board is dispositive of the supervisor question, as the benefits to which she was entitled constitute our starting point for assessing whether there was a 'significant change.' But as Moody testified, there were no benefits to which she was entitled." Under the panel majority's holding, the dissent argues, "every person in charge of the weekly roster for hourly workers such as waiters, nurses, truckers, and the like will be supervisors if they sufficiently favor, or disfavor, certain of those workers."

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