Meritor Savings Bank v. Vinson

This case examined the application of Title VII of the Civil Rights Act of 1964, which makes it unlawful for an employer "to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such [an] individual's race, color, religion, sex, or national origin." The court of appeals found that in this case the sexual harassment created "an offensive or hostile working environment" that was a violation of Title VII and that sexual harassment of a subordinate by a supervisor was considered sexual discrimination. The petitioner argued that the alleged sexual harassment did not result in an economic loss.

The Supreme Court disagreed with that argument, saying that the intent of Congress was to address a large range of mistreatment, not limited to economic loss only. Also, the Equal Employment Opportunity Commission (EEOC) had issued guidelines in 1980 that defined sexual harassment as a type of sexual discrimination unacceptable in the workplace, in other words, a "hostile environment" (Rogers v. EEOC, [1972]). The Court felt that the respondent's claims were "plainly sufficient to state a claim for `hostile environment' sexual harassment." The Supreme Court went on to say that, apparently, the district court's finding that the respondent did not suffer sexual harassment was "likely based on one or both of two erroneous views of the law." First, the district court did not consider this case to fall under the "`hostile environment' theory" as the court of appeals correctly did. Second, the district court believed that the sexual activity was voluntary, which the Supreme Court rejected as a sufficient defense against a Title VII complaint, noting that the sexual relationship was "unwelcome."

Another point in contention was that the court of appeals did not admit as evidence testimony about the respondent's dress or "sexually provocative speech," saying it was not relevant. However, the Supreme Court found that, following the EEOC guidelines, "such evidence is obviously relevant."

The Supreme Court then turned to the matter of whether the bank was liable for the actions of Taylor. Because the bank was never notified of Taylor's alleged misconduct towards Vinson, the district court found that it "could not be held liable for Taylor's alleged actions." The court of appeals did not agree, "holding that an employer is strictly liable for a hostile environment created by a supervisor's sexual advances, even though the employer neither knew nor reasonably could have known of the alleged misconduct." The petitioner argued that because Vinson failed to report the misconduct using "its established procedure," the bank could not be held accountable for "Taylor's wrongdoing." The Supreme Court opted not to define the responsibilities of employer liability and held that "the Court of Appeals erred in concluding that employers are always automatically liable for sexual harassment by their supervisors" and "absence of notice to an employer does not necessarily insulate that employer from liability." Thus, the Supreme Court affirmed the decision of the court of appeals that reversed the district court decision, and remanded the case "for further proceedings consistent with this opinion."