Last year, we reported that the most significant business law case decided was Patino v. Birken Manufacturing Company, 304 Conn. 679 (2012), in which Chief Justice Chase Rogers wrote an opinion holding that Connecticut General Statutes § 46a-81c (1) creates a cause of action for hostile work environment claims where employees are subjected to discrimination and harassment based on their sexual orientation.

This year, Chief Justice Rogers again addressed the vexing issue of workplace harassment by writing for a majority (Justice Dennis Eveleigh dissented) that held that an arbitrator’s award should be vacated because it did not recognize that there is a clear, well-defined, and dominant public policy against sexual harassment in the workplace in Connecticut.

In State of Connecticut v. AFSCME, Council 4, Local 391, 309 Conn. 519 (2013), the grievant, a Department of Corrections employee, was terminated from his employment for engaging in an pattern of sexual harassment in violation of the department’s administrative directive. That directive provides that the workplace shall be free of sexual harassment and states that any employee who engages in such conduct shall be disciplined, up to and including termination. The matter was sent to arbitration where the arbitrator reduced the employee’s dismissal to a one-year suspension without pay, concluding that the termination was not for “just cause” within the meaning of the collective bargaining agreement. The state then appealed and claimed in part that the reinstatement award violated Connecticut’s public policy against sexual harassment.

The trial court vacated the arbitration award and held that because there was a well-defined and dominant public policy against sexual harassment in the workplace, anything short of termination of the grievant’s employment would be insufficient to uphold this public policy. In reaching this decision, the court noted that the grievant knew about the department’s zero tolerance policy against sexual harassment, but he nevertheless continued to engage in lewd and offensive conduct toward his co-worker. The Appellate Court affirmed the judgment of the trial court.

The Supreme Court, in affirming the Appellate Court, similarly held that there is a clear, well-defined, and dominant public policy against sexual harassment. The Court also determined that the arbitrator’s interpretation of the collective bargaining agreement violated public policy.

In reaching its conclusion, the Court noted that it employs de novo review of an award when the challenge to an arbitrator’s authority is premised on public policy grounds and where the challenge has a colorable basis. Under the public policy exception, as the Court explained, courts are concerned not with the correctness of the arbitrator’s decision, but with the lawfulness of enforcing the award. Because of this, the chief justice wrote, courts must decide whether “under the arbitrator’s presumptively correct interpretation of contract, the contract provision violates a well-defined and dominant public policy.” (emphasis in original). Put another away, the issue is whether the arbitrator’s “interpretation of the agreement as requiring a less severe form of punishment violates public policy.”

To resolve this issue, the Court first addressed whether there was an explicit and well-defined public policy. The Court answered this question in the affirmative, concluding that the policy against sexual harassment in the workplace is explicitly discernible from Connecticut General Statute § 46a-60 (a), which provides that sexual harassment in the workplace constitutes a hostile work environment. Second, the Court determined whether the contract provision requiring the grievant’s reinstatement violated a well-defined and dominant public policy. In deciding that, the Court recognized that termination is not required for every employee who engages in misconduct that offends public policy and that an arbitrator does not have to defer to an employer’s disciplinary decision when the misconduct implicates public policy. In the instant case, however, the highly egregious and offensive nature of the grievant’s conduct as well as the grievant’s knowing violation of the policy against sexual harassment, as embodied in the department’s directive, required nothing less than termination.

Justice Eveleigh authored a dissenting opinion. Although Justice Eveleigh recognized that Connecticut has a strong public policy against workplace sexual harassment, he disagreed that termination is required in every instance in which there is a finding of sexual harassment and where the court determines that an employee’s misconduct is so egregious that public policy requires nothing less than termination. According to Justice Eveleigh, the strong public policy favoring arbitration should require the courts to follow the arbitrator’s decision.

Workers’ Compensation

In Patel v. Flexo Converters U.S.A. Inc., 309 Conn. 52 (2013), the Court addressed the scope of the international tort exception to the exclusive remedy provision of the Workers’ Compensation Act, Connecticut General Statutes § 31-275, et seq that it previously had enunciated in Jett v. Dunlap, 179 Conn. 215 (1979).

Under the exclusivity provision of the act, an employer is not liable for damages resulting from an employee’s personal injuries that arise out of and in the course of employment. In Jett, the Court recognized a narrow exception to the exclusive remedy provision of the act for intentional torts committed by an employer or a fellow employee “identified as the alter ego of the corporation.” The Jett Court, however, expressly declined to apply the exception to a supervisor’s intentional torts.

In Patel, the plaintiff brought an action against his employer after he sustained injuries at a paper bag manufacturing facility while he was attempting to dislodge a jammed bag from a machine. In his complaint, the plaintiff alleged, in pertinent part, that a managerial employee had instructed the plaintiff to reach into the machine to remove jammed bags while the machine was still in operation. The plaintiff claimed that the manager’s position as a supervisor made him the alter ego of the defendant and that, therefore, his intentional torts could be attributed to the employer. The trial court granted summary judgment in favor of the employer, concluding, among other things, that the manager was not the employer’s alter ego.

On appeal, the Supreme Court affirmed the judgment of the trial court. In reaching its conclusion, the Court recognized that it had held in Jett that extending liability to the employer for a supervisor’s intentional acts “‘is inappropriate where the actor is merely a foreman or supervisor.’” (quoting Jett) The Court, however, went on to clarify its prior holding, stating that it “should not be interpreted to suggest that the title of ‘foreman’ or ‘supervisor’ would always disqualify an employee as an alter ego of the corporation.”

Observing that the alter ego test is functional and an employee’s title is not dispositive, the Court held that whether a supervisor is the employer’s alter ego presents a question of fact, which depends on the supervisor’s role within the employer’s corporate structure. Not surprisingly, the Court also declined the plaintiff’s invitation to revisit Jett and broaden the intentional tort exception to include all intentional torts committed by a supervisor and instead reiterated the notion that the intentional tort exception should be narrowly construed.

Because the plaintiff had failed to submit any evidence concerning the manager’s role in corporate structure or his interest in the corporation, the Court concluded that there was no genuine issue of material fact whether the manager was the alter ego of the defendant employer.

In sum, although the vast majority of decisions released by the Supreme Court continue to be outside the business realm, the 2012 to 2013 Court year produced interesting decisions that will have a future effect on the business community. •