August 2024
In a win for employers, the Connecticut Supreme Court defines “supervisor” narrowly for purposes of vicarious employer liability under Connecticut Fair Employment Practices Act
Under Connecticut’s civil rights law, an employer can be vicariously liable for a supervisor’s harassment. In O’Reggio v. Commission on Human Rights and Opportunities et al., the Connecticut Supreme Court held that only an employee who can hire, fire, discipline, or otherwise “take tangible employment actions against” other workers can be considered a “supervisor” for this purpose. The Court acknowledged that a coworker’s conduct could create a hostile work environment, but rejected the employee’s argument that “supervisor” should include anyone with the power to direct an employee’s daily work because “something more is required in order to warrant vicarious liability.”
S&K Take: The court’s decision aligns Connecticut law with the federal law. In 2013, the U.S. Supreme Court narrowly held in Vance v. Ball State University that, under Title VII, a “supervisor” was only someone with the power to “take tangible employment actions” against another employee. The distinction between a “supervisor” and a non-supervisor is important because, under both federal and Connecticut state law, the employer is only liable for a hostile work environment created by a non-supervisor if the employee can prove the employer failed to take reasonable measures to stop the conduct. In contrast, when a supervisor is alleged to have created the hostile work environment, the employer is presumed liable unless it can prove it had effective anti-harassment procedures which the plaintiff failed to utilize. Employers should be aware that other states’ laws may be construed more favorably for employees than Connecticut’s.
Ninth Circuit holds employer liable for hostile work environment based on social media harassment
The Ninth Circuit in Okonowsky v. Garland reversed the trial court’s order and held an employer liable for failing to stop sexually harassing and bullying posts about an employee that were made on a coworker’s personal social media account. The trial court granted summary judgment to the employer, in relevant part, because it determined that the conduct “occurred entirely outside of the workplace” because it was made on the coworker’s personal Instagram account, was never sent directly to the affected employee and was never shown or discussed with the employee in the workplace without her consent.
The Ninth Circuit court disagreed, “reject[ing] the notion that only conduct that occurs inside the physical workplace can be actionable, especially in light of the ubiquity of social media and the ready use of it to harass and bully both inside and outside of the physical workplace.” The court stated that social media posts cannot not be described as “occurring” in a discrete location as they are “permanently and infinitely viewable” and accessible. The court also noted that the coworker’s online conduct had consequences in the physical workplace because more than 100 other employees followed and interacted with the account.
S&K Take: This decision is consistent with recent U.S. Equal Employment Opportunity Commission guidance on harassment in the workplace, which affirms that “[c]onduct that can affect the terms and conditions of employment, even if it does not occur in a work-related context, includes electronic communications using private phones, computers, or social media accounts, if it impacts the workplace.” While employers should be careful of “policing” off-duty conduct, employers should ensure anti-harassment policies and trainings address social media and other online conduct, regardless of whether such conduct occurs in the workplace or through company channels.
Sixth Circuit holds employee’s failure to engage in interactive process defeats disability accommodation suit
The Sixth Circuit in Harold Smith v. Shelby County Board of Education upheld the trial court’s order granting summary judgment to the school district employer in a failure-to-accommodate claim under the Americans with Disabilities Act of 1990 (the “ADA”), finding that the employee was responsible for the breakdown in the interactive process when he declined the employer’s counterproposals to his requested accommodation for telework, refused to return to campus, and then resigned.
Under the ADA, employers must grant a reasonable accommodation to a disabled employee. To establish a claim for failure to accommodate, a plaintiff must show they are (1) an individual with a disability, and (2) “otherwise qualified” to perform their job with or without an accommodation. Additionally, both the employer and employee must engage in an “interactive process” in “good faith,” meaning the parties must consider both the employee’s requested accommodations and any reasonable counterproposals by the employer. Where multiple accommodations are reasonable, the employer is permitted to choose from them. The court held that the employer satisfied its “good faith” obligation, even though it rejected the employee’s preferred accommodation of telework, by offering reasonable alternatives. The court further held that the employee withdrew from the interactive process when he rejected the counterproposals and refused to further engage, thereby forfeiting his “otherwise qualified” status under the ADA.
S&K Take: This case reaffirms for employers the importance of engaging in the “interactive process” when employees request disability accommodations. Engaging in a good faith dialogue with the employee is crucial to fulfill an employer’s obligations and avoid liability.
California Court of Appeals holds noncompete enforceable against owners in partial sale of business context
California Business and Professions Code § 16600, et seq., voids noncompete agreements with a few statutory exceptions. One exception is in connection with the sale of all of an individual’s interest in a business, provided that the individual had a “substantial interest” in the company such that the transaction involved the transfer of the goodwill of the business. In Samuelian v. Life Generations Healthcare, LLC, the California Court of Appeals considered whether a noncompete provision in an LLC’s operating agreement was enforceable against two members who signed it in connection with only the partial sale of their interests, after which they retained minority interests in the company.
The court held that the noncompete was enforceable against the members, rejecting their argument that enforceability required the sale of all their interests. The Court reasoned that a noncompete restriction arising from a partial sale “cannot be deemed inherently anticompetitive and invalidated per se under section 16600,” but rather should be evaluated under the reasonableness standard because “the seller remains an owner of the company and may still exercise some degree of control over its operations.” The court further noted that such owners may still owe a duty of loyalty to the company that prohibits them from competing with it, and a rule holding noncompetes void per se in such context “would unnecessarily interfere with these fiduciary duties and erode a company’s ability to ensure its owners make decisions that benefit the company.”
Given the facts of Samuelian, the court held that the two members continued, after the partial sale, to exercise some control over, have information rights from, remain involved in and owe a fiduciary duty to the business. Accordingly, the court held “it could have been reasonable to impose certain noncompetition restrictions on [them] to eliminate conflicts of interest that could compromise their decisionmaking and ensure they were committed to the Company’s success.”
S&K Take: It is not clear what practical impact this case will have on noncompetes in California. On the one hand, it seems to broaden enforceability, and is therefore notable. On the other hand, restrictions on competition during an individual’s employment or engagement have long been permissible, and the reasonableness assessment in Samuelian leans heavily on the members’ obligations to the business as current owners and members.
