The First U.S. Circuit Court of Appeals ruled recently in Chaloult v. Interstate Brands Corporation that an employer could not be held vicariously liable for sexual harassment, despite the fact that the plaintiff?s co-worker who witnessed the incidents failed to report them as required under the employer?s policy.

Under Title VII, an employer is vicariously liable for sexual harassment perpetrated by a supervisor against a subordinate employee where the harassment results in a tangible, detrimental employment action. An employer may also be liable even where the harassment does not result in a tangible employment action; the employer may defend against this liability, however, with the so-called Faragher-Ellerth defense. As articulated by the United States Supreme Court, this defense may be used to shield the company from vicarious liability where (i) its own actions to prevent harassment were reasonable, and (ii) the employee?s actions in seeking to avoid harm were not.

Please see full advisory for more information.