Friday, 1 August 2003

5th Circuit Holds Faragher/Ellerth Affirmative Defense Not Available When Harasser is Proxy for Company

Declining an invitation to read the Faragher/Ellerth decisions narrowly, the 5th Circuit held that the affirmative defense is not available when the harasser is at a high enough level so that his or her conduct is a proxy for the conduct of the company. Under such circumstances, the company is vicariously liable. Ackel v. National Communication, Inc. (5th Cir. 8/1/03) [pdf]. In making this determination, the court noted it was following the lead of the 7th Circuit in Johnson v. West (7th Cir. 2000). The three judge panel, including a 9th Circuit judge sitting by designation, reversed a summary judgment and remanded to the trial court for a determination as to whether or not the alleged harasser was in fact a proxy for the company.

In this case, the harasser was the general manager, 2% stockholder and member of the board of directors of the employer, Fox 29 in Lake Charles, LA. Although the defendant had maintained that with only 2% stock ownership he could not be a proxy, the court held that ownership was irrelevant, it was his position of control and authority that would determine his status.

The court did reaffirm the 5th Circuit's position that paramour discrimination is not a viable cause of action because it is not based on gender, but on favoritism which impacts both sexes equally. Additionally, the court upheld the summary judgment for the retaliation claims.

Although not applicable to a large number of cases, for sole owners and very high level executives in companies, this case makes definitive what had appeared clear from the original Faragher/Ellerth decisions, your conduct puts the company at risk, beyond the saving grace of a well implemented sexual harassment program.

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