NJ Supreme Court Backs Employer Defense in Supervisor Harassment Suits

By Harris Neal Feldman

The New Jersey Supreme Court recently ruled that an employer may assert an effective and enforced anti-harassment policy as an affirmative defense in cases brought against the employer alleging that a supervisor engaged in sexual harassment under the New Jersey Law Against Discrimination.

Citing the long-standing U.S. Supreme Court cases of Burlington Industries v. Ellerth and Faragher v. Boca Raton, the N.J. Supreme Court in Aguas v. New Jersey held that when an employer has “exercised reasonable care to prevent and correct promptly any sexually harassing behavior” and “the plaintiff employee unreasonably failed to take advantage of any [such] preventive or corrective opportunities,” then the employer may assert this affirmative defense.  Notably, this defense remains unavailable if the employer took any adverse job action against the employee.

In analyzing the availability of the defense, the Court applied the five factors set forth in Gaines v. Bellino and in the seminal New Jersey case of Lehman v. Toys ‘R’ Us, Inc.:

[T]he existence of: (1) formal policies prohibiting harassment in the workplace; (2) complaint structures for employees’ use, both formal and informal in nature; (3) anti-harassment training, which must be mandatory for supervisors and managers, and must be available to all employees of the organization; (4) the existence of effective sensing or monitoring mechanisms to check the trustworthiness of the policies and complaint structures; and (5) an unequivocal commitment from the highest levels of the employer that harassment would not be tolerated, and demonstration of that policy commitment by consistent practice.

The Court’s opinion also adopted a broader definition of “supervisor” used by the EEOC.  Essentially, if the person has “the authority to take or recommend tangible employment actions affecting the complaining employee, or to direct the complainant’s day-to-day activities in the workplace” then that person is a supervisor for purposes of attributing vicarious liability to the employer under the LAD.

While practitioners have been following the Ellerth, Faragher, and Lehman guidance for years, this case clarifies the availability of this pro-employer defense and serves as a reminder to employers to review their anti-harassment policies to ensure they are clearly-written, uniformly enforced and effective. The other factors cited above, such as anti-harassment training, are also key to the employer’s ability to raise this affirmative defense.