Paulette L. Barnes v. Douglas M. Costle, Administrator of the Environmental Protection Agency

MacKINNON, Circuit Judge,

concurring:

I concur in the remand of this case, but would narrowly limit the area in which petitioner-can assert her claim against the Environmental Protection Agency. In support of that position, I offer the following analysis of vicarious liability of an employer for acts of its agents.

The liability of an employer for sexual harassment imposed on an employee by a supervisor requires reference to the law of agency and tort, as well as statutory interpretation. The starting point must be that supervisors act, generally, as agents of the employer. In certain circumstances, the relationship can be closer, so that the supervisor could be termed a servant of the employer.

An act of sexual harassment which caused the victim, because of her rejection of such advances, to be damaged in her job, would constitute a tort. Four other district courts have considered the question presented here; each has started from (and two have proceeded no further than) a tort perspective. Tomkins v. Public Service Electric & Gas Co., 13 F.E.P.C. 1574 (D.N.J. 1976); Williams v. Saxbe, 12 F.E.P.C. 1093 (D.D.C.1976); Miller v. Bank of America, 418 F.Supp. 233 (N.D.Cal.1976); Corne v. Bausch & Lomb, 390 F.Supp. 161 (D.Ariz. 1975). Where sexual favors are solicited in return for job benefits or under retaliatory threats to expose one’s deficiencies on the job, the gravity of the incident might also constitute a violation of the criminal laws. 1 On the civil side, a question arises whether a principal can be held liable for the tort of the agent.

Under general rules of agency, “A Master is not subject to liability for the torts of his servants acting outside the scope of their employment.” Restatement (Second) of Agency § 219(2) (1958). The present case offers no suggestion that the sexual harassment was even arguably within the scope of employment and certainly it would not be so understood by any federal employee. The sexual harassment furthered no objective of the government agency, nor was it part of the supervisor’s actual or ostensible authority, nor was it even within the outermost boundaries of what could be perceived to be his apparent authority.

To the general rule, however, the Second Restatement of Agency attaches four exceptions. The first three involve situations where culpability would naturally apply to the principal: “(a) the master intended the conduct or the consequences, or (b) the master was negligent or reckless, or (c) the conduct violated a non-delegable duty of the master . .” None of these are here relevant, though if the government had prior knowledge of the offending supervisor’s propensity for sexual harassment of subordinate employees, liability might be based on negligence or reckless conduct. The fourth exception considers situations where “the servant purported to act or to speak on behalf of the principal and there *996 was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation.” Restatement (Second) of Agency, supra.

The exception is stated in the disjunctive. The first part has no application here — it could not be reasonably believed by an employee that the supervisor’s demands derived from the employer or that in complying with such demands the employee actually relied upon the authority of the employer. Concerning the second part of the exception, at first reading it seems to argue too much. In every case where vicarious liability is at issue, the agent will have been aided in some way in committing the tort by the position that he holds. In this case, the male supervisor would not have been .in a position to ask petitioner for an “after-hours affair” were it not for his position as her immediate “boss.”

The examples provided in the Restatement commentary, however, indicate that a narrower concept is involved. The tort must be one accomplished by an instrumentality, or through conduct associated with the agency status.

In other situations, the servant may be able to cause harm because of his position as agent, as where a telegraph operator sends false messages purporting to come from third persons. . . . Again, the manager of a store operated by him for an undisclosed principal is enabled to cheat the customers because of his position.

Restatement (Second) of Agency § 219 Comment at 485.

The telegraph operator commits the tort via a telegraph message; the store manager commits the tort through the way he charges for what he sells. If the supervisor falsified the report of the quality of the female employee’s work, that might (arguably) be a tort of defamation within the stated exception; but the tort involved in the sexual advance is committed entirely outside of the employment milieu.

Turning to the master-servant vicarious liability in tort law, the same conclusion is reached. Again, the first hurdle is to determine whether the activity is within the scope of employment. It was not so in this case. There might still be a possibility of holding the master liable for acts outside of the scope of that employment. The exception is stated with an example of another kind of tort in W. L. Prosser, Handbook of the Law of Torts (4th ed. 1971) 465-66:

The most difficult questions arise where the servant, for strictly personal reasons and not in furtherance of his employment, loses his temper and attacks the plaintiff in a quarrel which arises out of the employment . . . Here, unless some nondelegable duty can be found, the older rule denied recovery, and this is still the holding of the majority of the decisions. There has been a tendency in the later cases, however, to allow recovery on the ground that the employment has provided a peculiar opportunity and even incentive for such loss of temper; and there have been California decisions which have found something of an analogy to the workmen’s compensation acts, and have considered that the intentional misconduct arises out of and in the course of the employment.

Even if this court were to join what is admittedly a minority of jurisdictions on this point, the exception would not here apply. While the supervisor has been provided with an opportunity by the agency, it is no more than would be afforded by any employment setting, and can hardly be said to comprise an “incentive” for such tortious conduct.

There being no basis for liability by the employer in a situation like the one presented in this case, under the general law of agency and tort, there is even less basis for vicarious liability if the supervisor’s action were characterizable under the criminal law. See Restatement (Second) of Agency § 231.

Analysis of liability of an employer for violation of Title VII takes us beyond the common law of agency and tort, but the rules operative in those spheres provide a necessary starting point. From this basis, we are led to the conclusion that, if liability *997 is to be placed upon an employer, it must be because of the wording and policy of the legislation. Without the interposition of statutory law, the common law would impute no liability.

Title VII includes in its definition of employer “any agent” of one who fits the general definition. 42 U.S.C. § 2000e(b). 2 The District Court in Tomkins v. Public Service Electric & Gas Co., supra, emphasized the reference to agent in the general definition, though eventually that court found that the sexual advances involved there were outside the purview of the supervisor’s authority:

Insofar as the quoted language suggests that acts done for the private benefit of an individual supervisor cannot be imputed to the Employer for the purpose of finding a violation of Title VII, this Court respectfully disagrees. If a supervisor is acting within the purview of his authority, the doctrine of respondeat superior may be employed whether he is driving a company car or victimizing a female. See Title 42 United States Code, § 2000e(b) which expressly includes any agent of an employer within the meaning of “employer.”

The other significant legislative scheme governing employer-employee relations, the National Labor Relations Act, defines employer in a similar way: “The term ‘employer’ includes any person acting as an agent of an employer, directly or indirectly.” 29 U.S.C. § 152 (2) (1970). To the extent that the term “agency” is used, however, the usual principles of agency are invoked; and, as has been seen, those rules would deny government liability as an employer in a case such as this. The supervisor is not acting as an agent when he commits the tort complained of; hence, no unlawful employment practice has been committed by the “employer.”

However, the action complained of does not terminate with the mere sexual advance. In the present case, and in others'of this type, it is alleged that the employee’s refusal to comply led the supervisor to take unfavorable employment-related actions against her. If those employment-related actions were unjustified, then the issue arises of holding the employer liable for those actions. Even where the tort complained of arose in the employment setting, if it was riot committed within the scope of the supervisor’s authority, the employer will not be liable.

A different interpretation has been followed, however, where the tortious conduct is also violative of the National Labor Relations Act. While granting fullest rein to an employer’s discretion to hire, promote, or fire for a “good reason, a bad reason, or no reason at all,” that statute, as interpreted by the courts, delineates certain impermissible reasons (such as discrimination for or against union members); and when those impermissible reasons are involved, the normal rules of vicarious liability are not applied. For example, if a supervisor singles out union members for abusive treatment, neither actual nor constructive knowledge by the personnel director is required to find a section 8(a)(3) violation. The supervisor might even be acting outside the scope of his employment and contrary to the announced policy of the employer, still, to hold that no violation occurred “would provide a simple means for evading the Act by a division of corporate personnel functions.” Allegheny Pepsi-Cola Bottling Co. v. NLRB, 312 F.2d 529, 531 (3d Cir. 1962). This approach has even been extended so far as to find a violation in the combination of two acts, by two different members of management, where each was itself permissible. 3

As it is a departure from the common law rule, the approach to liability adopted by courts applying the National Labor Rela *998 tions Act must be carefully scrutinized tó determine whether it should be followed in a related, but significantly distinct context.

First, whatever reliance can be drawn from the legislative history of the National Labor Relations Act, and its statement of policy to encourage collective bargaining, is inapplicable to Title VII. Combing the legislative history of the Civil Rights Act turns up no direct statement that employers are to be vicariously liable.

However, the Supreme Court has found that “The objective of Congress in the enactment of Title VII is plain from the language of the statute,” Griggs v. Duke Power Co., 401 U.S. 424, 429 , 91 S.Ct. 849, 853 , 28 L.Ed.2d 158 (1971), and relying on that language alone, has developed strong rules of employer liability. See, e. g., Franks v. Bowman Transportation Co., 424 U.S. 747 , 96 S.Ct. 1251 , 47 L.Ed.2d 444 (1976) (retroactive seniority relief required, despite section 703(h) of Title VII); Albemarle Paper Co. v. Moody, 422 U.S. 405 , 95 S.Ct. 2362 , 45 L.Ed.2d 280 (1975) (backpay even in the absence of bad faith); McDonnell Douglas Corp. v. Green, 411 U.S. 792 , 93 S.Ct. 1817 , 36 L.Ed.2d 668 (1973) (prima facie case met, even in particular case, with no showing of intent to discriminate); Griggs v. Duke Power Co., 401 U.S. 424, 432 , 91 S.Ct. 849, 854 , 28 L.Ed.2d 158 (1971) (“Congress has placed on the employer the burden of showing that any given requirement must have a manifest relationship to the employment in question”).

Accordingly, what legislative history cannot itself supply has been suggested by a reading of the statute’s intent from its overall scheme. Common elements may be found between the liability for employer conduct under Title VII and employer liability, as traced above, under the National Labor Relations Act. Generally, liability has been premised on one of three (non-exhaustive) rationales: 1) if ambiguous conduct might be violative of the statute, the employer is in the best position to know the real cause, and to come forward with an explanation; 2) the employer, not the employee, can establish prophylactic rules which, without upsetting efficiency, could obviate the circumstances of potential discrimination; 3) the type of conduct at issue is questionable at best, and it is not undesirable to induce careful employers to err on the side of avoiding possibly violative conduct.

The first rationale is the premise behind many Title VII cases involving subjective decision-making. See, e. g., United States v. N. L. Industries, Inc., 479 F.2d 354, 368 (8th Cir. 1973); Rowe v. General Motors Corp., 457 F.2d 348, 358 (5th Cir. 1972). For a fine analysis of contemporary Title VII law, see Lopatka, A 1977 Primer on the Federal Regulation of Employment Discrimination, 1977 U.Ill.L.For. 69 (1977), especially at 89 (subjective decisions). See also Stacy, Subjective Criteria in Employment Decisions Under Title VII, 10 Georgia L.Rev. 732 (1976). This rationale also seems to underlie the Supreme Court’s strict formulation of liability in the related field of jury discrimination: when the percentages show a large disparity, it is for the state or county to offer explanations. See, e. g., Castaneda v. Partida, 45 U.S.L.W. 4302 (U.S. March 23, 1977); Alexander v. Louisiana, 405 U.S. 625 (1972); Turner v. Fouche, 396 U.S. 346, 359-360 , 92 S.Ct. 1221 , 31 L.Ed.2d 536 (1970).

The second rationale finds clearest expression in the Supreme Court’s decisions involving employment testing. Although explicitly permitted by Title VII, 42 U.S.C. § 2000e-2(h) (1970), the Court’s approach in Griggs v. Duke Power Co., supra, and Albe-marle Paper Co. v. Moody, 422 U.S. 405 , 95 S.Ct. 2362 , 45 L.Ed.2d 280 (1975) has displayed a great suspicion. 4 Employers who use general knowledge or aptitude tests are *999 not inherently discriminating, but such tests can be made more or less relevant and fair, and it is the employer who controls their imposition. Hence, if discrimination results, he must answer.

In labor relations law under the National Labor Relations Act, the second rationale has also been influential. Even though an employer has a statutory (and constitutional) right to address his employees on the likely effects of a union takeover, predictions about economic consequences of unionization are fraught with potential for implied or actual threat. If such threats develop, the employer is liable. This is so even if it is his supervisors who make the threats, since making predictions is inherently dangerous and the employer could have instructed his supervisors simply to avoid making predictions in talking with employees. See generally NLRB v. Gissell Packing Co., 395 U.S. 575, 618 , 89 S.Ct. 1918 , 23 L.Ed.2d 547 (1969).

The National Labor Relations Act also provides several examples of the third rationale. That rationale underlies the rule adopted by the National Labor Relations Board, and sanctioned by the courts, Peerless Plywood Co., 107 NLRB 427 (1953), whereby employer speeches within 24 hours before the scheduled time of an election are prohibited. Not every employer speech during that time period is coercive, but it is not a severe burden to require that employers order their campaigns without relying on that particular tactic. On the union side, the use of “dual-purpose” authorization cards provide a comparable example of an intrinsically troublesome device, and the Board, and the courts, have seen no harm in inducing an avoidance of the practice.

These general principles by no means exhaust the guiding rules of employer liability in labor relations law, but they do provide a structure useful for focusing on whether respondeat superior should be imposed in a particular case. Different conclusions result in varying Title VII contexts. 5 Where sexual advances are involved, it must be candidly recognized at the outset that, even when directed from a supervisor who would be difficult to refuse, the advances themselves might be welcome. It cannot be presumed as a matter of law that the employee is subjected to disfavorable treatment because of the advances. Once it is established, however, that the employee has no interest in the proposal, then the employee may suffer from the continuation of advances. And the eventual damage to her job for failing to accede, if that is a result, is undeniably harmful.

1. The rationale of an employer's better position to know. Unlike the case of a standardized employment test, the employer or higher supervisor is not in the best position of anyone to know whether an employee has been unjustly damaged on her job. The sexual advance of a supervisor toward an employee is seldom a public matter; and the distinction between invited, uninvited-but-welcome, offensive-but-tolerated and flatly rejected advances ordinarily does not fall within the special ability of the employer or higher supervisor to discern.

However, once a complaint of offensive advances has been made, the employer’s role becomes far more serious. One of the four district court opinions (besides the one currently before us) that have considered sexual advances, based employer liability *1000 precisely on this phase of the incident, “When a female employee registers a complaint of sexual abuse and the company chooses to fire her rather than investigate, the corporate response may constitute discrimination based on sex.” Tomkins v. Public Service Electric & Gas Co., supra.

In the present case, the complaint fairly includes allegations that the plaintiff’s supervisor, whose sexual advances had been spurned, induced other agents of the Environmental Protection Agency to punish her (complaint at J.A. 29); that the Agency was guilty of wrongful action in prosecuting her complaint, informing her that she should not bring a sex but only a race discrimination claim (J.A. 30); 6 that the Civil Service Commission collaborated in frustrating her claim by refusing as a matter of law to reopen the hearings for evidence of sex discrimination (J.A. 31); that “agents and employees of the defendant” retaliated against her for having filed an EEO complaint (J.A. 37, 44 — Count II of Amended Complaint); and that harassment both for refusing sexual advances and for filing the EEO complaint was not only imposed by the supervisor who had been made the advances, but also by “other supervisors” within her agency (J.A. 85).

These allegations are sufficient to raise a suspicion under the first rationale that the employer ' itself knew, or should have known, of the harassment, and hence the common law result of no respondeat superi- or should be considered reversed by the statute. However, under this rationale, the plaintiff still has a substantial burden to prove: as alleged, EPA officials other than Barnes’ own supervisor must be shown to have incorrectly or falsely advised plaintiff in processing her complaint, and to have treated her adversely in job assignment, for the purpose of frustrating her Title VII charge and punishing her for bringing it, or with that effect. If plaintiff can prove this, she should prevail.

From a more general perspective, respon-deat superior should apply, and the common law rule should be ousted, whenever a plaintiff can show that, in addition to the particular sexual advance, and the retaliatory actions by the maker of that advance, other agents of the employer with knowledge of her charges assisted the retaliation or impeded the complaint. That type of showing suffices to shift to the defendant the burden of disproving that the agency had, at the least, a callous disregard of Title VII rights.

2. Employer’s ability to take preventive steps in advance. An employer could promulgate a rule that no sexual advances were to be made by any supervisors to any employees. The unique problem with this kind of harassment, however, is that its potential is not confined to working hours. Even if a no-advances rule were adopted, it could only with great difficulty be made to apply to employees’ “own time.”

Hence, there is no basis under this rationale to oust the common law rule against respondeat superior for acts outside the scope of employment. Nor do the facts of this complaint demonstrate a narrowly definable opportunity for the employer to formulate a specific preventive rule short of prohibiting all off-hours social contacts between employees and supervisors which is of course out of the question.

As the analysis under this rationale unfolds, it is apparent that an employer could somewhat insulate itself from vicarious liability by taking certain preventive measures. At the least, an employer should be free from vicarious liability if it 1) posts the firm’s (or government’s) policy against sexual harassment by supervisors, and 2) provides a workable mechanism for the prompt reporting of sexual harassment, which mechanism 3) includes the rapid issuance of a warning to the supervisor complained of, or the mere notation of a rejected sexual advance for possible future reference in *1001 case an issue is made of voluntariness, and 4) affords the opportunity of the complainant remaining anonymous.

Here, the established policy of the federal government against sex discrimination, 7 applies to the Environmental Protection Agency, and the 1972 Equal Employment Opportunity Act 8 together with Executive Order No. 11375 (1967) 9 provide a mechanism for reporting and adjusting complaints. 10 Those broad steps are important, and in the present context (where no precise preventive rule was feasible) they suffice to defeat vicarious liability. Nevertheless, detailed procedures along the lines suggested would demonstrate more sensitivity to the particular problem of sexual advances and subsequent discrimination, and, if conscientiously applied, would come close to assuring an employer of protection against vicarious liability in many cases.

3. Inducing extra caution. Sexual advances may not be intrinsically offensive, and no policy can be derived from the equal employment opportunity laws to discourage them. We are not here concerned with racial epithets or confusing union authorization cards, which serve no one’s interest, but with social patterns that to some extent are normal and expectable. It is the abuse of the practice, rather than the practice itself, that arouses alarm.

Accordingly, there is no justification under this rationale to impose vicarious liability upon an employer.

In summary, I concur in the remand of this case, but on a narrower ground than the majority. Barnes has brought her suit against the Environmental Protection Agency and its administrator, not against a single supervisor. Vicarious liability of an employer would not attach at common law under the facts here alleged, so the suit can be maintained only by reason of a statutory exception. Drawing from labor relations law and equal employment opportunity law, we can isolate three general rationales for overturning the common law and imposing respondeat superior or principal-agent liability. Only one of those provides a basis for such a ruling on these facts. That theory is brought into operation by the charge that other management personnel harassed petitioner, that they misled her in filing her complaint, that her supervisors retaliated against her for doing so and that her employer, with knowledge of the facts alleged by her, ratified the discrimination that her supervisor had improperly imposed upon her. Those allegations if true would make a case that the Environmental Protection Agency knew or should have known of the harassment involved. 11 The case should be remanded to allow petitioner a chance to prove this claim.

. D.C. Code § 22-2305 (1973) provides:

Whoever verbally or in writing accuses or threatens to expose or publish any [person’s] infirmities or failings, with intent to compel the person accused or threatened to do . . . any act, and whoever with such intent publishes any such accusation . . . shall be imprisoned . . . [etc.]

. This provision does not, technically, apply to the federal government, but other parts of the amended Title VII do.

. In a case of selective discharge, the personnel director who orders the firing might not actually know that the employee was a union supporter, but it is sufficient if a foreman does, because his knowledge will be imputed to the employer as an entity. Texas Aluminum Co. v. NLRB, 435 F.2d 917 , 919 (5th Cir. 1970).

. In Albemarle, the Court stated that a plaintiff, even after the employer had shown an employment test to be “job related,” should be allowed “to show that other tests or selection devices, without a similarly undesirable racial effect would also serve the employer’s legitimate interest in ‘efficient and trustworthy workmanship’. . . Such a showing would be evidence that the employer was using the tests merely as a ‘pretext’ for discrimination.” 422 U.S. at 425 , 95 S.Ct. at 2375 .

. At one end of the spectrum, for example, a supervisor’s persistent use of racial epithets would undoubtedly lead to an employer’s Title Vll liability. Tracing through the three rationales: (1) If uttered often enough, the employer either actually knows of it, or should know of it. (2) A simple order announced by the employer (even before any suggestion of abuse has arisen) would obviate the problem. (3) Name-calling of any kind is close to abuse, and there is no harm from inducing its complete avoidance.

At the other end would be a foreman’s unprovoked and unforeseeable attack upon the black workers on a particular job: the employer could not be expected to anticipate it; no general prophylactic rule could have been promulgated to prevent it; to order supervisors to circumvent all occasions where such incidents might arise would severely impede the efficient ordering of work.

. The power of the agency to control her complaint against it and its obligation to see that it is properly brought is difficult to discern. The agency is the adversary.

. It is the policy of the Government of the United States and of the government of the District of Columbia to provide equal opportunity in employment for all persons, to prohibit discrimination in employment because of race, color, religion, sex, or national origin, and to promote the full realization of equal employment opportunity through a continuing affirmative program in each agency.

5 C.F.R. § 713.202 (1977).

. 42 U.S.C. § 2000e(a), (Supp. V, 1975).

. 32 Fed.Reg. 14303 (Oct. 13, 1967) (adding sex to the list of impermissible factors in personnel decisions).

. See 5 C.F.R. §§ 713.211-713.222 (agency adjudication of discrimination complaints); 5 C.F.R. §§ 713.231-713.236 (appeal to U.S. Civil Service Commission) (1977).

. It was on a similar, limited basis that the Fourth Circuit recently remanded Garber v. Saxon Business Products, Inc., 552 F.2d 1032 (4th Cir. 1977).