Employer liability in a Title VII harassment cases is affected by whether the alleged harasser is a coworker or supervisor.

The United States Supreme Court held on June 24 that an employee is a "supervisor" for vicarious liability purposes only if the employee has been empowered to take tangible employment actions against a harassment victim, as opposed to individuals who are merely able to direct a coworker's labor to some degree. This case arose after an African-American catering assistant sued her employer alleging that a white catering specialist created a racially hostile work environment in violation of Title VII. The district court granted summary judgment to the employer because the alleged harasser, who had no authority to hire, fire, demote, promote, transfer or discipline the plaintiff, was not a supervisor under Title VII. The United States Court of Appeals for the Seventh Circuit affirmed the decision, and the case was appealed to the Supreme Court.

In affirming the Seventh Circuit decision, the Supreme Court noted that requiring supervisors to be empowered to have authority to effect a significant change in employment status, responsibilities, or benefits is both (a) a clear requirement that courts can readily apply to resolve many disputes regarding supervisory status as a matter of law; and (b) supported by precedent establishing that supervisors are a distinct class of the employer's agents who are empowered to make economic decisions and cause direct economic harm to employees through tangible employment actions. The court further reasoned that while the ability to direct another employee's daily tasks can lead to the creation of intolerable work conditions even absent any power to take tangible employment actions, so too can the actions of coworkers with no authority to direct a victim's work. As such, the court concluded, a negligence standard is a better framework for evaluating employer liability when a harassing employee is a coworker or lacks the power to take tangible employment actions against the alleged victim. In such case, the employer liability analysis will focus on whether the employer failed to monitor the workplace, failed to respond to complaints, or effectively discouraged complaints from being reported. Read more.