the first four incidents of alleged sexual harassment. Domm's resignation did not take effect immediately, and several days later Shlossman proposed an arrangement by which Domm could continue to work for Jersey Printing. The arrangement allowed Domm to work at home on the condition that she waived her right to sue for sexual harassment and agreed to a non-competition clause. Domm declined the proposed offer. She terminated her employment with Jersey Printing in November, 1992 and brought this sexual harassment lawsuit.
Standard of Review
Pursuant to Fed. R. Civ. P. 56(c), summary judgment shall be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Id. In making this determination, a court must draw all inferences in favor of the non-movant. Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 fn.2 (3d Cir. 1983), cert. denied, 465 U.S. 1091, 79 L. Ed. 2d 910, 104 S. Ct. 2144 (1984). Whether a fact is "material" is determined by the substantive law defining the claims. United States v. 225 Cartons, 871 F.2d 409, 419 (3d Cir. 1989).
When deciding a motion for summary judgment, the judge's function is not to weigh the evidence to determine the truth of the matter, but to determine whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986). An issue is "genuine" if a reasonable jury could hold in the non-movant's favor with regard to that issue. Id. at 248. A fact is "material" if it influences the outcome of the action under the governing substantive law. Id. Summary judgment must be granted if no reasonable trier of fact could find for the non-moving party. Id. at 249; Radich v. Goode, 886 F.2d 1391, 1395 (3d Cir. 1989)
When the non-moving party will bear the burden of proof at trial, the moving party's burden can be "discharged by 'showing' -- that is, pointing out to the District Court -- that there is an absence of evidence to support the non-moving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). If the moving party has carried its burden of establishing the absence of any genuine issue of material fact, the burden shifts to the non-moving party to "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986). When the non-moving party's evidence in opposition to a properly supported motion for summary judgment is merely "colorable" or "not significantly probative," the court may grant summary judgment. Anderson, 477 U.S. at 249-50, 106 S. Ct. at 2511. The non-moving party must come forward with more than a mere scintilla of evidence in its favor. Carlson v. Arnot-Ogden Memorial Hosp., 918 F.2d 411, 413 (3d Cir. 1990).
When a non-moving party who bears the burden of proof at trial has failed, in opposition to a motion for summary judgment, to raise a disputed factual issue as to any essential element of his or her claim, summary judgment should be granted because "a complete failure of proof concerning an essential element of the [non-moving] party's case renders all other facts immaterial." Celotex, 477 U.S. at 322-233, 106 S. Ct. at 2552.
Sexual Harassment under Title VII
Pursuant to Title VII of the Civil Rights Act of 1964, it is "an unlawful employment practice for an employer... to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin." 42 U.S.C. § 2000e-2(a)(1). A claim of sexual harassment is a form of sex discrimination actionable under Title VII. Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 106 S. Ct. 2399, 2404-5, 91 L. Ed. 2d 49 (1986).
The legislative history regarding sex discrimination is scarce since the inclusion of sex-based discrimination in the statute was a last minute decision of Congress. Representatives initially thought that sex discrimination was sufficiently distinct to warrant separate legislative treatment. 110 Cong.Rec. 2577-2584 (1964). As a result, Title VII as it applies to sexual harassment has been defined primarily through regulations and case law.
Sexual harassment is defined as "unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature." 29 CFR § 1604.11(a)(1985). The United States Supreme Court recognized two forms of sexual harassment that are actionable under Title VII in Meritor at 2404-05. First, quid pro quo sexual harassment exists when employment benefits are conditioned on sexual favors. Second, Title VII recognizes sex discrimination that creates a hostile or abusive work environment. Id.
"Employer" Status Under Title VII
Title VII defines an employer as:
A person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, and any agent of such a person,...." 42 U.S.C. § 2000e(b) (emphasis added).
At issue in the case sub judice, is whether defendants Shlossman and Golden can be held individually liable for the sexual harassment which Domm alleges created a hostile environment. Defendant Shlossman is the alleged harasser as well as CEO of the company, and Golden is Domm's supervisor and in charge of personnel matters.
Meritor and Lehmann v. Toys ' R' Us, Inc., 132 N.J. 587, 626 A.2d 445 are the seminal federal and New Jersey state cases on sexual harassment, respectively. While the issue of individual liability was not raised in either case, it should be noted that both plaintiffs did name their supervisors as defendants and were not challenged on that ground. The United States Supreme Court held, inter alia, that hostile environment sexual harassment is a form of sex discrimination actionable under Title VII and that employers may be held liable for the sexual harassment of their employees even when they do not have notice of their employees actions. Meritor at 2405-8. The court relied on agency law to reach that determination. Meritor at 2408.
In Lehmann, the Supreme Court of New Jersey held that a three-pronged test should be employed to determine when an employer may be held liable for compensatory and punitive damages for hostile work environment discrimination of a supervisor. "First, strict liability should apply for relief that is equitable in nature. Second, agency principles, which include negligence, should be applied to decide if an employer is liable for compensatory damages that exceed that equitable relief. Third, a higher level of culpability than mere negligence should be required for punitive damages." Lehmann at 626.
Defendants cite a recent decision in this District which declined to impose personal liability upon an employer's agent. In Crawford v. West Jersey Health Systems, 847 F. Supp. 1232 (D.N.J. 1994), the court relied upon Fifth and Ninth Circuit decisions to hold that under Title VII individuals cannot be held personally liable. Miller v. Maxwell's Intern. Inc., yn 991 F.2d at 587-88 (9th Cir. 1993) ("No employer will allow supervisory or other personnel to violate Title VII when the employer is liable for the Title VII violation.... There is no reason to stretch the liability of individual employees beyond the respondeat superior principle intended by Congress."). The Fifth Circuit, in Harvey v. Blake, 913 F.2d 226 (5th Cir. 1990) held that supervisors may be held liable in their official capacity as agents; while, a mere co-worker may never be held liable under Title VII as an agent. Id. at 227-28. See also, Grant v. Lone Star Co., 21 F.3d 649, 652-53 (5th Cir. 1994).
In support of their position, defendants make the following arguments to justify a finding that agents cannot be held individually liable under Title VII. First, they argue that the agency provision in the statute was solely intended to incorporate respondeat superior liability. Second, it is illogical to believe that Congress intended to hold individual employees liable when it explicitly exempted from coverage under the Act all employers with fewer than 15 employees. Finally, personal liability would not increase the likelihood of deterrence. Crawford at 1237.
This Court finds that these arguments are undercut by the Civil Rights Act of 1991 which amended Title VII to make available compensatory and punitive damages to plaintiffs in addition to the equitable remedies of reinstatement and backpay. prior to the amendment, the relief available under Title VII could not be provided by the "agent" who may have been personally responsible for the discrimination or harassment. Bridges v. Eastman Kodak Co., 800 F. Supp. 1172, 1180 (S.D.N.Y. 1992).
Furthermore, there is precedent in this District and others which supports the proposition that employees in a supervisory capacity are "agents" of their employer, and therefore, subject to liability under Title VII. A recent decision by Judge Irenas held that supervisors who are agents of their employer can be held personally liable under Title VII. The court stated that distinguishing between the agent's "individual" and "official" capacity for purposes of liability is "without a basis in the law." Bishop v. Okidata, 1994 WL 557082, 5 (D.N.J. Oct. 3, 1994), citing Doe v. William Shapiro, Esq., P.C., 852 F. Supp. 1246, 1252 (E.D.Pa. 1994) (Individual with supervisory authority may be sued under the Americans with Disabilities Act. The court based its decision on case law interpreting Title VII.). See also, Gierlinger v. New York State Police, 15 F.3d 32, 34 (2nd Cir. 1994) (Section 1983 liability can be imposed upon individual employers, or responsible supervisors, for failing to properly investigate and address allegations of sexual harassment when through this failure, the conduct becomes an accepted custom or practice of the employer.); Guyette v. Stauffer Chemical Co., 518 F. Supp. 521, 525-26 (D.N.J. 1981) (In a Title VII action for sexual harassment, supervisory employees can be held liable as "employers", but co-workers cannot.); Bridges at 1179-80. (Both individual and official liability may be imposed upon employees who are agents of the employer, since they are supervisors or participated in the discrimination.); Magnuson v. Peak Technical Services, Inc. 808 F. Supp. 500, 512 (E.D.Va. 1992) (The term "employer" under Title VII should be construed to encompass persons who control some aspect of an individual's compensation, terms, conditions, or privileges of employment.); Showalter v. Allison Reed Group, Inc., 767 F. Supp. 1205, 1210-11 (D.R.I. 1991) (An employee is the employer's agent and subject to liability under Title VII, when they perform the functions of a general manager and have the authority to hire and fire workers. A secretary of an employer's agent is not an "employer" subject to Title VII liability, even if employees hold the erroneous belief that the secretary has the authority to make personnel decisions.); Wanamaker v. Columbian Rope Co., 740 F. Supp. 127, 135 (N.D.N.Y. 1990) (Officers and directors of a corporation may be liable for violations of the ADEA if they exercise control over an employee.); Burrell v. Truman Medical Center, Inc., 721 F. Supp. 230, 232 (W.D.Mo. 1989) (To be an agent for the purposes of Title VII liability, an individual must be a supervisor or managerial employee who has the responsibility for making some employment decisions.) Baliko v. Stecker, 275 N.J. Super. 182, 190, 645 A.2d 1218 (1994) (Liability may be found against an employer, fellow employees, a labor organization or its aiders and abettors for sexual harassment that causes a hostile working environment.).
A recent Third Circuit decision, Bouten v. BMW of North America, D.C. Civil No. 90-2884 (3d Cir. June 10, 1994), held that agency principles determine employer liability in hostile environment sexual harassment claims. In Bouten, the court relied on agency principles to determine that the company could be held liable for the supervisor's harassment, unless there is an effective grievance procedure in place and the victim is aware of it. While the court did not address the issue that faces this Court, in dictum, the court implied that the harasser could be sued directly under Title VII.
In addition, the Supreme Court of New Jersey, in Lehmann, similarly implied that the harasser could be held individually liable under Title VII. In discussing the different standards for equitable, compensatory and punitive damages, the court stated, "unlike the situation with equitable damages, the employer is not necessarily the only one capable of providing compensatory relief and is not necessarily the party whose conduct is sufficiently outrageous to warrant punitive damages." With this statement, the court clearly implied that a plaintiff may be compensated for injuries by a party other than the employer.
This Court finds as a matter of law that the definition of "employer" and of "agent," like the rest of Title VII, is to be liberally construed in light of its remedial purpose. Guyette at 526. Agency principles control employer liability in hostile environment sexual harassment cases. Meritor at 2408; Lehmann at 618; Bouten at 6. Chapter 11 of the Restatement (Second) of Agency (1957) focuses on the liability of agents to third persons. Section 343 states the general rule as to an agent or servant's liability to third persons for torts committed:
An agent who does an act otherwise a tort is not relieved from liability by the fact that he acted at the command of the principal or on account of the principal, except were he is exercising a privilege of the principal, or a privilege held by him for the protection of the principal's interests, or where the principal owes no duty or less than the normal duty of care to the person harmed.