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In 1998 the Supreme Court decided two cases on the same day that changed employment discrimination law and spurred a cottage industry: the redrafting of every employer’s handbook then existing. In Faragher v. City of Boca Raton, and Burlington Industries v. Ellerth, both decided on the same day, the Supreme Court made two important holdings relating to employer liability in sexual harassment claims.1 The Supreme Court held that "[a]n employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee." If the conduct results in a tangible employment action, such as discharge or demotion, the employer has no affirmative defense to liability.

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