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Ever since the U.S. Supreme Court decisions in Faragher and Ellerth, the question of whether the employee has suffered a “tangible employment action” has been the principal battleground in determining whether the employer is entitled to assert an affirmative defense to the claim of sexual harassment. The phrase “tangible employment action” was first articulated by the Ellerth Court in stating that an employer will not be able to assert an affirmative defense to a claim that she was sexually harassed by a supervisor when she has suffered a “tangible employment action” that is “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” The Court obviously could not set forth an exclusive list of workplace events that could negatively affect an employee’s status and those two little words: “such as” indicate that courts deciding whether the affirmative defense can be used should make that decision on a case-by-case basis. SEX IN THE WORKPLACE The recent decision of the 9th U.S. Circuit Court of Appeals in Holly D. v. California Institute of Technology, ____ F. 3d ______ (9th Cir. 2003), recognizes the new tangible action of “successful coercion of sex” as an action that, if proven, could prevent the employer from asserting the Faragher/Ellerth affirmative defense. Holly D. worked as an assistant for Professor Stephen Wiggins at Caltech. Wiggins was known to be a critical supervisor. He threatened to extend Holly D.’s probationary period and, although he did not do so, gave her a “negative” evaluation shortly after she began her assignment. According to Holly D., during this same time, Wiggins occasionally made sexual comments and demonstrated his prowess with navigating pornographic websites on the Internet. Less than a year after their working relationship began, in July 1997, Wiggins allegedly visited Holly D.’s office and, after some brief by-play, asked her for sex, to which she simply replied, “Yes.” For the next year, the Holly D. and Wiggins frequently engaged in sex during work hours. Holly D. characterized her second performance evaluation as “excellent.” Notably, Holly D. did not contend that Wiggins used physical force to coerce sex or that he explicitly threatened her with job-related consequences if she did not have sex. Nor did she claim that he ever stated directly or indirectly that there was any connection between his requests for sex and her past performance evaluations or her future employment prospects. Her only explicit allegation of a connection between sex and her job was that, from time to time during their relationship, Holly D. claimed that she held out and that Wiggins became “supercritical.” She alleged that she could “neutralize” this criticism by giving in to Wiggins’ sexual requests. Eventually, Holly D. sought to transfer to other, higher paying, positions and, when she was rejected, she filed a claim with the EEOC that Caltech had violated the Americans with Disabilities Act based upon her suspicion that her clinical depression had played a role in these promotion decisions. When the EEOC rejected this claim, Holly D., for the first time, mentioned that she had been sexually harassed to the Caltech ombudsman. CALTECH INVESTIGATES Caltech investigated the allegations of harassment and found there to be no conclusive evidence that it had occurred. Wiggins consistently denied any relationship, of any kind. Holly D. was eventually transferred to an equivalent position. Holly D. brought suit against Caltech and Wiggins (alleging various state law claims) and the District Court granted Caltech’s motion for summary judgment on her Title VII claim of sexual harassment. Specifically, the District Court found that Holly D. had not suffered a “tangible employment action” because “she remained in her position, received salary increases and was not denied any tangible employment benefit.” As such, Caltech’s affirmative defense, that it had taken reasonable care to prevent the harassment and that Holly D. had not availed herself of an established complaint procedure, was successful. UNRESOLVED ISSUE UNDER ‘FARAGHER/ELLERTH’ On appeal, the 9th Circuit panel recognized that neither Faragher nor Ellerth addressed the question of a supervisor’s successful coercion of an employee who submits to her supervisor’s sexual demands because of the threat of discharge or other material job-related consequences. In finding this to be the type of “employment action” that could preclude the employer’s affirmative defense, the court found that “the supervisor accomplishes the objective of the threat — the coercion of the sexual act — by bringing to bear the authority to make critical employment determinations on behalf of the employer.” But this only addresses that the employer has abused his supervisory authority. It does not follow that it has negatively impacted the employment relationship to create a “tangible employment action.” Here, the 9th Circuit found that “the participation in unwanted sexual acts becomes a condition of the employee’s employment — a critical condition that effects a substantial change in the terms of that employment.” The court found that the injury in the case was the “physical and emotional damage resulting from the performance of unwanted sexual acts.” Although the court found that Holly D. could have presented a “tangible employment action,” she did not. Critically, the court held that a claim of “successful coercion” could only lie “when continued employment has been expressly conditioned on participation in sexual acts or [a reasonable woman] would find that such participation is a condition of employment.” It is the “reasonable woman” standard upon which Holly D.’s claim failed, as there was no evidence “connecting any discussion of her job duties with Wiggins request that she engage in sexual acts with him. [T]he mere fact that Wiggins was interested in sex generally and desired to have sex with Holly D. is simply not enough.” AFFIRMATIVE DEFENSE PERMITTED As such, Caltech was able to present evidence that it had fulfilled its “reasonable care” duties and that Holly D. had not taken advantage of the opportunities to complain. The 9th Circuit noted that the 2nd and 3rd Circuits have also recognized “successful coercion” as a tangible employment action. The critical element in these cases will be how carefully a court looks at the evidence connecting the “coercion” to the employment relationship. If courts look to an objective standard and require there to be evidence, and not just a perception, that the request for sex and the employment relationship are linked, then this reading of the law will have minimal effect. If the employee’s perception of the relationship creeps in, then the “successful coercion” claim could change the dynamics of sexual harassment law. Sidney R. Steinberg is a shareholder in the business law and litigation department of Post & Schell, (www.postschell.com). He concentrates his national litigation and consulting practice in the field of employment and employee relations law and may be reached at [email protected].

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