When supervisors are sued

Whether an individual supervisor can be personally liable for violating employee rights depends on the law allegedly violated and the legal jurisdiction.

Although many supervisors may believe their actions in a corporate capacity cannot give rise to individual liability, plaintiffs in civil rights actions commonly name individual supervisors as defendants.

Plaintiffs do this for a number of reasons. From a strategic standpoint, suing a supervisor individually increases the pressure to give plaintiffs what they are seeking. After all, individuals can suffer sleepless nights and chronic anxiety after being served with a complaint seeking thousands of dollars. The prospect of being liable for a substantial judgment may easily influence a supervisor to advocate settling a case. In addition, a supervisor must hire and pay an attorney if the company refuses to--another incentive for the individual to reach a settlement.

WHO IS AN EMPLOYER?

Most courts have moved away from holding supervisors individually liable under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA) and the Age Discrimination in Employment Act (ADEA). However, under the prevailing analysis of the issue, individuals can be personally liable under the Family and Medical Leave Act (FMLA) and Fair Labor Standards Act (FLSA).

The anti-discrimination laws. Title VII, the ADA and the ADEA define an employer as "a person engaged in an industry affecting commerce who has 15 or more employees...and any agent of such a person." The term agent has contributed considerably to plaintiff's assertions of individual liability. Courts routinely apply arguments regarding individual liability to all three statutes interchangeably.

In advancing the argument for individual liability, many plaintiffs point to the intent of anti-discrimination laws to provide redress for victims of unlawful discrimination and harassment. Plaintiffs claim that anti-discrimination laws should be interpreted broadly to include not only corporate entities, but individual supervisors as well. Without individual liability, the argument goes, victims would have no remedy.

Appellate courts that have considered the issue are divided on whether individuals are liable under these laws. The 7th, 9th, 10th and 11th U.S. Circuit Courts of Appeals have held that supervisors are not individually liable. The 4th and 6th Circuits have determined that individual liability is permitted. The other circuits have yet to address the issue.

In one case in which an employee brought a sexual harassment claim under Title VII against her former supervisor, the 7th U.S. Circuit Court of Appeals determined that he was not individually liable. Noting that Title VII applies only to entities employing 15 or more workers, and that the 1991 amendments to the Civil Rights Act imposed limits on damages according to the size of the employing entity, the court concluded that Congress did not intend to impose individual liability against an employer's agents. Instead, the court said, the agency language in the statute simply makes clear that employers are responsible for the actions of the people they employ.

In an ADA case involving the individual liability issue, the 7th Circuit also found that an individual supervisor was not liable. In that case, the plaintiff argued that the availability of compensatory and punitive damages under the ADA showed that Congress meant to confer individual liability because those damages can usually only be obtained from individuals.

But the court noted that when Congress defined employer in the ADA it granted remedies that only employing entities, not individuals, could provide. The court said it would be a stretch to assume the 1991 amendments to Title VII were intended to broaden the remedies of the statute absent express language to that effect.

The court also rejected the argument that failure to impose individual liability reduced the deterrent effect of the anti-discrimination laws. Recognizing that Congress struck a balance between deterrence and societal cost, the court chose not to upset that balance by reading beyond the language of the statute.

The FLSA and FMLA. Although there appears to be a trend against individual liability under Title VII, the ADA and the ADEA, the same cannot be said with respect to the FMLA. Because the definition of employer in the FMLA tracks the definition used in the FLSA, courts look to cases decided under that law to interpret the term employer under the FMLA.

Both laws use a definition of employer that more clearly includes personal liability by extending employer status to "any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer."

Individuals may be liable under the FLSA if they were capable of exercising supervisory authority over the complaining employee and were responsible to some degree for the alleged violation. Even if individuals do not exercise exclusive control over the daily affairs of the employee, the FLSA applies to the extent that they exercise control over the aspect of employment alleged to have been violated. Examples of persons who may be liable under this definition include a consultant with no ownership interest in a company and no control over daily operations who exercises control over an employee's wages, or a supervisor who signs a discharge letter.

In one case, the court refused to dismiss the individual defendants because they exercised sufficient control over the plaintiffs ability to take FMLA leave. The plaintiff's supervisors made repeated requests for a medical release form and suspended her until she furnished the information, recommending termination if she failed to provide the release. After a one-week deadline expired, she was fired for failure to comply with the request.

Recognizing that these supervisors were not directors or officers of the company, the court said they nonetheless exercised enough control over the plaintiffs ability to take protected leave to qualify as employers under the FMLA. The fact that the supervisors did not have "unilateral" authority to approve or deny the plaintiffs leave and that they were following the company's policies was not a factor in the liability determination. Because the FMLA uses the FLSA's expansive definition of employer, the court found that the FMLA extends to all those who controlled, "in whole or in part," the plaintiffs ability to take leave and return to her position.

PUTTING THE PIECES TOGETHER

What do these decisions mean for supervisors concerned about individual liability? For now, the courts in the 7th, 9th, 10th and 11th U.S. Circuit Courts of Appeals have not imposed individual liability when dealing with claims under Title VII, the ADA or the ADEA. It remains to be seen whether courts in the 4th and 6th Circuits will maintain their position on individual liability, and how other courts will rule.

In any event, individual supervisors still may find themselves named as parties to lawsuits brought by aggrieved employees. The difficulty and expense of getting one's name removed as a defendant will depend on which law the claim is filed under.

Author's note: This article should not be construed as legal advice or as pertaining to specific factual situations.

Paul J. Kennedy and Ronald I. Tisch partners in the Washington, D.C., office of the law firm of Graham & James, specialize in employment discrimination matters.

COPYRIGHT 1997 Society for Human Resource Management
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