TBA Law Blog

Posted by: Edward Phillips on Mar 31, 2009

Journal Issue Date: Feb 2008

Journal Name: February 2008 - Vol. 44, No. 2

When is a Tennessee employer liable for the harassing acts of a supervisor under the Tennessee Human Rights Act (THRA)? What are reasonable steps to prevent and correct harassment? When does the individual harasser face liability? What must a plaintiff demonstrate to show retaliation? The Tennessee Supreme Court recently addressed these issues extensively, with mixed results for employers. Allen v. McPhee et al., No. M2005-00202-SC-R11-CV, 2007 Tenn. LEXIS 1073 (Dec. 4, 2007).

The president of Middle Tennessee State University's administrative assistant (Allen) claimed she was subjected to harassment at his hands (literally). The school's policy made him the final arbiter of all harassment complaints and provided no bypass mechanism. She claimed she was afraid reporting would be futile or lead to retaliation. Eventually she complained directly to the Tennessee Board of Regents, which began an investigation two days later. The president (McPhee) issued a press release and university-wide e-mail denying culpability. Allen was placed on paid leave and ultimately reassigned to another office. The investigator found that some of the allegations had merit and recommended that the president receive an unpaid 20-day suspension, a $10,000 pay cut, and 8 hours of remedial training. The board agreed. The president accepted the decision, but issued press releases subtly denying the harassment. Allen's reassignment was made permanent, with an increase in pay.

The basic outlines of THRA supervisory harassment liability have been clear since the court adopted the Faragher/Ellerth standard in Parker v. Warren County Utility District,[2] S.W.3d 170 (Tenn. 1997). Employers can escape vicarious liability for supervisory harassment only when there is no tangible employment action and the employer proves both that: 1) it took reasonable measures to prevent and correct discriminatory conduct; and 2) the employee unreasonably failed to take advantage of these measures. Faragher v. City of Boca Raton, 524 U.S. 775, 807 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 765 (1998).

Allen claimed the state was liable for the president's actions because he was its "alter ego," relying on a Seventh Circuit decision holding that the affirmative defense is not available where the supervisor is "indisputably within that class of an employer organization's officials who may be treated as the organization's proxy." Johnson v. West, 218 F.3d 725 (7th Cir. 2000) (quoting Faragher, 524 U.S. at 789). The court disagreed, saying, "[W]e decline to apply the Johnson court's reasoning to the THRA and hold that an employer may assert the Faragher/Ellerth affirmative defense regardless of whether the harassing supervisor is a proxy or alter ego of the employer."

As to whether the state established both elements of the defense, the answer was "no," at least for summary judgment purposes. The corrective investigation was timely, reasonably aimed at determining the truth (including interviews with both parties and with potential witnesses), resulted in the offender's discipline and stopped the harassment. So far so good. There were real questions of fact, however, about the preventive steps " not because some supervisory employees had not been trained on the policy or failed to report harassment as argued by Allen, but because the policy specifically named the president as the sole final arbiter of decisions related to its enforcement.

Since the policy made McPhee the final decision-maker, it was defective in that it did not provide a procedure for the employee to bypass the harassing supervisor. Allen could have reasonably believed that complaining would be futile and thus the state had failed to show it had taken reasonable steps to prevent the harassment. Similarly, because McPhee was the final decision-maker, Allen was justified in not complaining. Thus, the state could not show that she had unreasonably failed to take advantage of its complaint procedure.
Allen also unsuccessfully sued McPhee individually under the THRA's aider and abettor section, Tenn. Code Ann.  § 4-21-301(2)(2005). The problem? Though McPhee denied most of her allegations during the investigation, he did not try to scuttle the investigation or interfere with the remedial measures. Allen argued that the section should be construed to impose individual liability for the underlying supervisor-created hostile work environment, but the court found that inconsistent with prior case law and the statute itself. The court held, "[I]mposing accomplice liability for a supervisor in a hostile work environment claim requires evidence that the supervisor encouraged the employer to engage in employment-related discrimination or prevented the employer from taking corrective action." Simply denying the allegations was not enough.

Finally, the court analyzed Allen's retaliation claims under Tenn. Code Ann.  §4-21-301(1)(2005)(making it a discriminatory practice to retaliate or discriminate in any manner against an individual who engages in protected activity), noting that this was a case of first impression. Previously, intermediate appellate courts in Tennessee required a showing of adverse employment action against the plaintiff[1]. The court formally adopted the less stringent, modified standard enunciated by the U.S. Supreme Court in Burlington N. & Santa Fe Ry. Co. v. White, 126 S. Ct. 2405, 2415 (2006), which clarified that any action which might dissuade a reasonable worker from making or supporting a charge of discrimination is prohibited.

Allen clearly engaged in known protected activity. She argued that McPhee then created a hostile work environment and the state should be liable for his retaliation under Morris v. Oldham County Fiscal Court, 201 F.3d 784 (6th Cir. 2000). The court held that employer liability under the THRA for retaliatory supervisor-created hostile work environments was a "natural and reasonable extension" of Faragher/Ellerth principles, but found that McPhee's actions (i.e., his public denials) were not severe or pervasive enough to merit imposing either individual or employer liability.

Allen's transfer to a position with allegedly less responsibility, ill-defined duties, and less opportunity for advancement or promotion, however, could very well have been materially adverse.

That left only the question of establishing a "causal connection" for prima facie case purposes. Here, the court broke ranks with Sixth Circuit precedent[2] and adopted the view that close temporal proximity alone, without other indicia, establishes a prima facie causal link in retaliation claims.

The burden then shifted to the state to articulate a legitimate reason for the job transfer. It did: to prevent further harassment. Since the stated reason had a basis in fact, Allen needed to present evidence that it either did not actually motivate the decision or that it was insufficient to explain the reassignment. While the court acknowledged that the new job might well be less attractive, the alternative, namely, a continued close working relationship with her harasser, would be much worse.

The Bottom Line?

A well-drafted policy is not so specific that it does not permit for reasonable adaptations to problem situations. Instruct clients not to name a single individual as the final arbiter, since that responsibility may be delegated under some circumstances and may need to be bypassed in others. Be specific where it matters, namely in identifying (preferably by name, at least by position) two or three individuals to whom employees may report. Since temporal proximity between protected activity and any materially adverse action meets the prima facie requirements under the THRA, be extremely mindful of the reality that clients will not only need to articulate a legitimate reason for their actions, but be prepared to subject those close-in-time adverse decisions to the litigation microscope.


1. See Miller v. City of Murfreesboro, 122 S.W.3d 766, 775 (Tenn. Ct. App. 2003).

2.   See Michael v. Caterpillar Financial Services Corp., 496 F.3d 584, 596 (6th Cir. 2007)(holding that temporal proximity, when combined with other indicia such as failure to document prior performance issues and apparently disparate treatment of employees accused of similar misbehavior, may establish causal connection for prima facie case purposes).

Edward G. Phillips EDWARD G. PHILLIPS is a lawyer with Kramer Rayson LLC in Knoxville, where his primary areas of practice are labor and employment law. He graduated with honors from East Tennessee State University and received his law degree from the University of Tennessee College of Law in 1978 with honors, and as a member of The Order of the Coif. He is a former chair of the Tennessee Bar Association’s Labor and Employment Law Section.