Authored By: Dennis J. Merley Attorney View Biography

In the recent case of Judy Frieler v. Carlson Marketing Group, Inc., the Minnesota Supreme Court adopted a new liability standard in cases of sexual harassment by a supervisor. In that case, Frieler claimed that her supervisor sexually harassed her by luring her to a back room and then molesting her. She did not invoke the company’s sexual harassment policy at first because she feared losing a sought-after promotion and perhaps even her job. When she finally did report the harassment, the supervisor denied the allegations (although he did quit a few days later for “health issues”) and witnesses could not verify any sexually oriented behavior.

After the investigation, Frieler claimed that co-workers gossiped about her and shunned her. At her psychologist’s recommendation, she quit and then sued for sexual harassment under the Minnesota Human Rights Act. She also claimed that the company caused her post-traumatic stress disorder and major depression. The trial court dismissed the claims and the Court of Appeals agreed, finding no evidence that the company knew or should have known about the harassment, which was the Minnesota test for proving sexual harassment.

The Minnesota Supreme Court reviewed the case to decide the proper standard of liability for harassment by a supervisor under the Human Rights Act. The answer depended on the Minnesota legislature’s intent in 2001 when they removed the “knew or should have known” language from the Act’s definition of harassment. Frieler argued that this created strict liability for the harassment so that subsequent investigation and corrective action would not absolve the employer. The company countered that this was just a technical change to match language in other parts of the statute, and that the “knew or should have known” standard remained in place.

The Minnesota Supreme Court rejected both arguments, adopting instead the federal standard from a 1998 United States Supreme Court case ruling that where a supervisor creates a hostile environment without tangible employment action (e.g. termination, denial of promotion), the employer wins if they prove that (a) they exercised reasonable care to prevent and correct sexually harassing behavior, and (b) the employee unreasonably failed to utilize preventive or corrective opportunities provided by the employer.

They ruled this way because:

• The Minnesota Department of Human Rights specifically sought this particular amendment to implement the federal standard for cases brought under the state law.
  
  
• The Department has interpreted the law consistently with the federal standard, and administrative agencies are entitled to great deference in such interpretations.
  
  
• The federal standard appropriately balances the respective rights of the parties and best effectuates the purposes of the Human Rights Act.

The Minnesota court agreed with the U.S. Supreme Court in concluding that where a supervisor’s harassment does have a tangible effect on the victim’s employment, the defenses described above are not available.

This decision is a ringing endorsement for maintaining and enforcing effective policies against sexual harassment. It also highlights the need to insure that everybody in the workforce understands and abides by those policies.

Make sure that employees understand their right to seek assistance if they feel victimized by harassment, and address all complaints of sexual harassment in a timely and appropriate manner. In so doing, you will give yourself the best chance to prevail under this new liability standard and defeat claims of harassment directed at the behaviors of supervisors.

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