In a decision issued on June 9, the Sixth Circuit Court of Appeals (which covers Ohio, Michigan, Kentucky and Tennessee) affirmed the dismissal of sexual harassment claims brought by the Equal Employment Opportunity Commission (EEOC) on behalf of three female AutoZone employees. In its decision, the Court reaffirmed some important principles.

The case involved a store manager who was transferred into an AutoZone store in Cordova, Tennessee. Shortly after arriving, he began to make lewd and obscene sexual comments and propositions to one female employee in particular and also made sexual comments to two other female employees as well. Under AutoZone’s system, the store manager did not have the authority to fire, promote, reassign and take tangible employment actions with respect to store employees (even though he could make some hires). Those responsibilities were reserved for the district manager (who visited the store at least once a week).

In affirming dismissal of the plaintiffs’ sexual harassment claims, the Court first held that the company could not be liable for the store manager’s actions based on imputed knowledge because he was not the employees’ manager/supervisor under the law. In reaching this conclusion, the court noted that “AutoZone did not empower [the store manager] to take any tangible employment action against his victims.”

In addition, the Court also affirmed dismissal on the basis that, even if he were the victims’ supervisor/manager, the company met the requirements for an affirmative defense to liability under the Supreme Court’s decisions in Farragher and Ellerth. That is, the Court found that the company had not only posted an effective anti-harassment policy but had also included that policy in an employee handbook, which it required every employee to read and acknowledge. Although the female employees claimed that they had never read the anti-harassment policy, the Court stated that “a human resources representative need not look over each employee’s shoulder as she reads each page of AutoZone’s handbook,” that their not reading it was “not AutoZone’s fault” and that it exercised “reasonable care by requiring employees to acknowledge their responsibility to read the policy by signing a form to that effect.” In addition, the Court found that the company had taken very prompt and effective action after learning of the complaints, including moving the store manager out of that store and then terminating him.

Further, as to the other prong of the Farracher/Ellerth affirmative defense, namely undue delay in reporting the complaints, the Court found that the employees did not report the alleged harassment by the store manager until two and a half months later. Although one of the employees had talked to a colleague in another store, that was not sufficient to bring the matter to the company’s attention. Accordingly, the Court held that even if the store manager had been their supervisor/manager under the law, the company’s defense to liability was established in this regard as well.

The bottom line
This decision reaffirms two important principles.

First, when analyzing whether a harassment situation involves a “supervisor,” careful attention should be given to understanding the authority (or lack of authority) of that person over the complaining employee.

Second, this decision reaffirms the importance of having an effective policy (preferably signed off by employees as part of a handbook or otherwise) and taking prompt and effective action to address harassment situations when they arise. Thus, even if the alleged harasser is determined to be a supervisor/manager under the law, the company can be rewarded with a dismissal before trial even against the nation’s primary enforcer of the equal employment opportunity laws, as here.