Wisconsin Labor and Industry Review Commission Rejects Faragher/Ellerth Defense

June 9, 2005

In a recent decision, the Wisconsin Labor and Industry Review Commission (LIRC) expressly rejected the Faragher/Ellerth defense that the Supreme Court articulated for employers in its infamous 1998 decisions.
In Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), the United States Supreme Court recognized under federal Title VII law a defense to employer liability for supervisor harassment involving a hostile work environment. The federal law defense requires an employer to prove that (1) it exercised reasonable care to prevent and correct promptly any harassing behavior, and (2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. If these requirements are proven, an employer can avoid all liability under this defense.
In Sanderson v. Handi Gadgets Corp. (LIRC, 2005), LIRC emphasized that the Wisconsin Fair Employment Act (WFEA) provisions differ from Title VII. The LIRC specifically referred to the language in the WFEA that prohibits an employer from “engaging in sexual harassment.” The federal law does not have a similar provision. Therefore, the LIRC concluded, “the theory that there is an affirmative defense available to employers when sexual harassment is perpetrated by a supervisor is inapplicable in a proceeding under the WFEA.”
WFEA Definition of Sexual Harassment: The WFEA defines “sexual harassment” as follows:

unwelcome sexual advances,
unwelcome requests for sexual favors,
unwelcome physical contact of a sexual nature, or
unwelcome verbal or physical conduct of a sexual nature. [1]

Definition of Supervisor: In determining whether an employee’s co-workers are supervisors for purposes of imputing liability for alleged sexual harassment, the LIRC and the courts will assess the following factors:

The authority to effectively recommend the hiring, promotion, transfer, discipline or discharge of employees;
The authority to direct and assign the work force;
The number of employees supervised and the number of other persons exercising greater, similar or lesser authority over the same employees;
The level of pay, including an evaluation of whether the supervisor is paid for his skill or for his supervision of employees;
Whether the supervisor is primarily supervising an activity or is primarily supervising employees;
Whether the supervisor is a working supervisor or whether he spends a substantial majority of his time supervising employees; and
The amount of independent judgment and discretion exercised in the supervision of employees.

What does this mean for Wisconsin employers? A single instance of “verbal or physical conduct of a sexual nature” by a supervisor can subject the employer to liability. It does not matter whether or not the employer knew or should have known about the conduct. Wisconsin employers must make certain that all supervisors are trained to recognize sexual harassment when it occurs and to know their responsibilities under company policy, including how to handle complaints. Also, supervisors should be trained to be alert to situations that may constitute harassment and to be preemptive in dealing with such situations.
If you have questions regarding the above, please contact Sara Ackermann, the author of this article, or any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.
[1] Wis. Stat. 111.32(13). The WFEA further defines “unwelcome verbal or physical conduct” to include:

the deliberate, repeated making of unsolicited gestures or comments of a sexual nature;
the deliberate, repeated display of offensive sexually graphic materials which is not necessary for business purposes; or
deliberate verbal or physical conduct of a sexual nature, whether or not repeated, that is sufficiently severe to interfere substantially with an employee’s work performance or to create an intimidating, hostile or offensive work environment.

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