In Vance v. Ball State Univ., 2013 WL 3155228 (June 24, 2013), the United States Supreme Court created a bright-line test for determining who will be considered a "supervisor" (and whose conduct may be imputed to the employer) in Title VII harassment cases. The Court determined that a Title VII "supervisor" must have power to make a "significant change" in another worker’s employment status or at least make recommendations regarding such topics on which the employer relies. Significant changes would be such things as hiring, firing, failing to promote, reassigning with "significantly different responsibilities" or causing a "significant change in benefits."

Under Title VII, an employer's liability for workplace harassment depends on the status of the harasser. If the harasser is a co-worker, the employer is liable only if it was negligent in controlling working conditions. If the harasser is a "supervisor," however, the employer will be strictly liable if the supervisor’s harassment results in a tangible employment action (a significant change in employment status, benefits or responsibilities). Where the harassment involves co-workers, or the harasser is a supervisor but there is no tangible employment action, the employer can escape liability by establishing an affirmative defense that: (1) the employer exercised reasonable care to prevent and correct any harassing behavior by adopting an effective anti-harassment policy, and (2) the plaintiff unreasonably failed to take advantage of the preventative or corrective opportunity the employer provided. Faragher v. Boca Raton, 524 U.S. 775, 807; Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 761.

In Ball State, the Court rejected the broad definition of "supervisor" that the Equal Employment Opportunity Commission and some appeals courts had adopted, which encompassed employees who had the discretion to assign and direct work but lacked the ability to take tangible employment actions. The Court called the EEOC's definition "a study in ambiguity" that makes litigation "far more complex and difficult" in comparison to the Court's interpretation, which can be "readily applied" such that the alleged harasser's supervisory status can be resolved more easily and as a matter of law at the summary judgment stage.

In the wake of the Ball State decision, employers should evaluate managers’ duties to determine if they are engaging in conduct that would meet the new supervisory test and then, if appropriate, ensure that its supervisors receive workplace harassment training, as their conduct can create strict liability for employers.