The New Jersey Supreme Court recently decided two key issues affecting claims of supervisory hostile work environment sexual harassment under the New Jersey Law Against Discrimination (“NJLAD”). In Aguas v. State of New Jersey, the court adopted the federal Faragher/Ellerth affirmative defense and also clarified the definition of “supervisor.” Although the adoption of the Faragher/Ellerth affirmative defense is a welcome pronouncement for employers, the court’s expansive definition of a “supervisor” will likely make it more difficult for New Jersey employers to prevail on summary judgment and ultimately to defend at trial claims of hostile work environment sexual harassment.

In cases of coworker sexual harassment, an employer has a complete defense to liability if the employer took prompt remedial action to address and correct sexually harassing conduct of which it knew or should have known.  However, prior to Aguas, there was no clear standard in New Jersey for employer liability when the alleged harasser is the plaintiff’s supervisor.

The U.S. Supreme Court previously established an affirmative defense to claims of supervisory hostile work environment sexual harassment in Burlington Industries v. Ellerth and Faragher v. City of Boca Raton. Under Faragher/Ellerth, an employer is not liable for the harassing conduct of its supervisors if the employer: (1) exercised reasonable care to prevent and correct promptly any sexually harassing behavior; and (2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities or to avoid harm otherwise. This defense is only available if no tangible employment action was taken against the employee, such as demotion or termination. Although the New Jersey Supreme Court applied the principles of the Faragher/Ellerth defense in a prior decision, Gaines v. Bellino, the court never formally adopted the Faragher/Ellerth structure until the Aguas decision.

The New Jersey Supreme Court conversely departed from recent U.S. Supreme Court precedent with respect to the definition of “supervisor,” adopting a more expansive definition than announced by the U.S. Supreme Court in Vance v. Ball State University. The New Jersey Supreme Court held that a “supervisor” is any employee who either had the authority to: (1) take or recommend tangible employment actions affecting the plaintiff; or (2) direct the plaintiff’s day-to-day activities in the workplace. This definition captures more employees as supervisors, potentially including first-level managers, forepersons, and team leads, requiring employers to meet the more difficult Faragher/Ellerth affirmative defense rather than the less stringent coworker liability standard.

In light of the Aguas decision, New Jersey employers should immediately review existing policies to ensure they adequately define prohibited conduct, provide for effective complaint procedures, mandate prompt and thorough investigations, and call for remediating any substantiated policy violations. Moreover, employers should take steps to ensure that policies are "effective" by conducting periodic anti-harassment training for "supervisors" (especially in light of the court's expanded definition) and rank-and-file employees, and by periodically redistributing policies to all employees.

Ballard Spahr’s Labor and Employment Group regularly assists employers with developing anti-harassment policies, anti-harassment training, investigations of sexual harassment, and defense of sexual harassment claims under state and federal law. For more information, please contact Louis L. Chodoff at 856.761.3436 or chodoffl@ballardspahr.com, Amy L. Bashore at 856.761.3402 or bashorea@ballardspahr.com, or the member of the Group with whom you work.


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