BURLINGTON INDUSTRIES, INC. v. ELLERTH

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Argument of James J. Casey

Chief Justice Rehnquist: We'll hear argument now in No. 97-569, Burlington Industries v. Kimberly Ellerth.

Mr. Casey.

Mr. Casey: Mr. Chief Justice, and may it please the Court:

Is an employer strictly or automatically liable for job-related threats made in conjunction with sexual advances when the employee has suffered no tangible job detriment for the rejection of those advances... in other words, the unfulfilled threat?

We submit that the answer to that question is no.

Strict or automatic liability should not be applied in a situation of unfulfilled threats, but rather should be analyzed--

Unknown Speaker: Mr. Casey.

Mr. Casey: --Yes.

Unknown Speaker: It sounds to me like you're asking question 2 of the questions presented on petition for certiorari, which is whether strict liability is the proper standard.

Now, I thought the Court didn't grant certiorari on question 2.

I thought we granted certiorari on question 1.

Mr. Casey: That is correct.

Unknown Speaker: Most of your brief addresses question 2.

I mean, are we going to talk about question 1, on which cert was granted?

Mr. Casey: Justice, the... the... the question... question 1 is the un... is whether or not the strict liability standard ought to apply in the unfulfilled threat situation, where... where there is no adverse job consequence.

Unknown Speaker: Well, it doesn't address strict liability actually.

It says whether a claim of quid pro quo sexual harassment may be stated under Title VII, when the plaintiff has neither submitted to the sexual advances nor suffered any tangible effects.

That's the question.

Mr. Casey: Yes, Justice.

Under--

Unknown Speaker: It... it doesn't refer to strict liability.

Mr. Casey: --Under... under the assumption, Justice, that in... that most courts, who have addressed the issue, have addressed quid pro quo as a strict liability issue.

And that's why I referred to the strict liability for the unfulfilled threat.

And... and that's why I believe it is... it is cognizable under question 1, which is the question that the Court did accept.

You are quite correct about that.

But almost all of the courts who have addressed quid pro quo sexual harassment have addressed it under the theory of strict liability for the employer, where there has been a adverse job action, such as a termination of employment, a demotion, a transfer to a less fulfilling job, a loss of benefits.

These are all tangible job detriments, where the company has acted, through... through a supervisor.

Unknown Speaker: Well, there... there's really no other reason to have the quid pro quo category, is there?

Mr. Casey: Absolutely not, Your Honor.

Unknown Speaker: Except to establish a different standard of liability.

Mr. Casey: That's correct, Your Honor.

And... and--

Unknown Speaker: The statute doesn't... doesn't establish different kinds of sexual harassment... quid pro quo and... and environmental harassment.

Mr. Casey: --No, it does not.

It--

Unknown Speaker: That's not in the statute, is it?

Mr. Casey: --It does not, Your Honor.

But the courts who have addressed the other violations of Title VII, for example, in race cases, have attached strict liability to the employer when the... the supervisor has taken an adverse job action, such as a termination of someone because of their race, a refusal to hire someone because of their race, a termination of someone because of their national... their national origins, because of their religion.

Courts have viewed that as employer strict liability.

On the other hand, when... when in a race case, for example, a... a person is living in... in a hostile racial work environment, or a hostile environment to one's religion, or a hostile environment because one happens to be Korean or Indian or... or English, that has been viewed as whether or not the company has been negligent in permitting that hostile work environment to exist.

Unknown Speaker: When you say VII, you are just asserting that there is a different standard for the employer?

Mr. Casey: Oh, absolutely, Your Honor.

Unknown Speaker: So everybody agrees that this kind of claim is stated under Title VII?

Mr. Casey: This is a... this is a claim for discrimination by reason of one's gender.

Unknown Speaker: And then how did we come to this distinction, then?

Because the statute doesn't say a word about quid pro quo and it doesn't say a word about hostile environment.

It says: same terms and conditions of employment, period.

Mr. Casey: It... it does, indeed.

This Court, in Meritor, acknowledged at least a distinction between the hostile work environment and quid pro quo.

This Court, in the Harris Forklift opinion, by noting that the Harris case was not a quid pro quo case, implicitly recognized the distinction.

I think the same distinction, Your Honor, has been made in the other... in the other type violations of Title VII, in terms of... of race and national origin, where there has been an act.

Unknown Speaker: Do we have a race or national origin case where there's a negligence, as opposed to vicarious liability?

Mr. Casey: Not from this Court.

There have been... there are many circuits who have... who have recognized that... that the hostile environment... the racially hostile environment is... is a negligence issue.

And... and the standard the company or the employer is held to is whether the... whether the employer knew or should have known of the... of the racially hostile environment.

And... and the same distinction is... is what we are urging the Court to adopt in the sexual harassment case.

Unknown Speaker: So suppose this supervisor... let's use race as an example... suppose a supervisor says, I'm not going to promote you because you're Asian, Hispanic, whatever, and a week later does promote the person.

And the person is no longer even working for that supervisor... promoted out of the department.

Is there a violation there?

Mr. Casey: In that one instance, I would say there is not.

Unknown Speaker: There is?

Mr. Casey: There is not a violation.

Unknown Speaker: There is not.

Mr. Casey: If... if there was repeated... repeated and... and repeatedly hostile comments made by the supervisor to the employee because of his national... I think there then would be a violation.

But here--

Unknown Speaker: And do you analogize what happened here to the hypothetical that I... I gave you?

Mr. Casey: --I do.

I do exactly.

Here there was an implicit threat: I could make your job easier or harder for you.

That was... that's the kind of threat we talked about.

And it was at... at a job promotion instance.

And in this case--

Unknown Speaker: Well, suppose in the case that I... that I put the promotion... the case where I put it was... that she was promoted the next week.

Mr. Casey: --Yes.

Unknown Speaker: Suppose in the race hypothetical the promotion isn't going to come up for a year, but the supervisor has said that.

Could the employee bring a cause of action injunction?

Or is there just no... it's just kind of a violation in the air, with no damage?

Mr. Casey: I think... I think there is no harm.

I think there is no harm.

Although--

Unknown Speaker: Despite... despite the insult and the personal hurt, et cetera, et cetera?

Mr. Casey: --Well, I don't think, Your Honor, that one insult is sufficiently severe to rise to... to a hostile environment, as... as bad as it may--

Unknown Speaker: Well, what if... what if you have a situation of a supervisor for a large corporate employer who routinely orders a female employee under his supervision to go to a certain isolated place, where the supervisor can be alone with this employee and repeatedly then tries to use that opportunity for sexual gratification... repeatedly?

No... no change in promotion status or discharge.

Is... is there vicarious liability there for the employer or only if the employer is, as you put it, negligent?

Mr. Casey: --Your Honor, in... in the example you just gave, I believe that there... there is very likely a quid pro quo.

She has been ordered off--

Unknown Speaker: No.

No.

I... I left that out of the assumption.

Mr. Casey: --All right.

The assumption is that... that she's ordered to an isolated--

Unknown Speaker: That the supervisor uses his supervisor... supervisory authority to place the employee in... in this situation, where he can then take advantage of her.

Mr. Casey: --Okay.

Unknown Speaker: And does so repeatedly.

Mr. Casey: Okay.

He has acted.

He has... he has used the authority vested in him by... by his employer.

He has then acted on behalf of the employer, and I believe there may well then be--

Unknown Speaker: But the employer is not negligent, the employer tells all their supervisors to be careful, don't do this.

Mr. Casey: --By... by issuing orders to isolate an employee, I believe he is using the authority vested in... in... in... vested in him by the... by the employer.

Unknown Speaker: All right.

Then why not, in... in one instance alone... let... let's take Justice O'Connor's example, but change it in this respect.

Let's assume the supervisor orders the... the employee into his office.

And instead of being subtle about it or comparatively so, he is very explicit about it.

He said: You are going nowhere with this company.

You are not going to get your promotion 12 months hence unless in the meantime you grant sexual favors to me.

Isn't that sufficient to create at least the hostile environment?

Mr. Casey: No, Your Honor.

Unknown Speaker: Why not?

Mr. Casey: Because it--

Unknown Speaker: What could be more hostile than that?

Mr. Casey: --Because he... he... he has one... well, in terms of the hostile environment, Your Honor, the... the courts have routinely... the circuit courts of appeal have routinely held that a single incident--

Unknown Speaker: Oh, quite.

But... but the... the point of the single incident cases, as I understand them, is that there's a certain amount of... of necessary rough give and take in life.

And the fact that there may be one or two employees in a company who occasionally make a remark... the one-incident case to be literal about it... does not suffice to modify the entire environment to the point where a discrimination can be inferred.

But when one is talking about a supervisor, with the undoubted authority, in effect, to... to change the entire future of a given employee in that company, and that supervisor is explicit about it, nothing is left to chance, it seems to me that the... that the... the very power of the employer, the explicitness of what he does in... in this hypothetical should... should be enough, whereas one remark from a fellow employee wouldn't be enough.

Mr. Casey: --For liability... Your Honor, for liability, for an employer to attach in an hostile work environment, there has to be some... some indication to the employer that he knew... the employer knew or should have known.

Unknown Speaker: But why... why not?

Why, if... if in a series of cases the employer is going to be liable because the supervisor has been authorized, has been given a particular power and repeatedly abuses it, so that the abuse is clear, why shouldn't the employer, by a parity of reasoning, be liable when the abuse is equally clear when it is made very explicitly clear in... in one instance?

Mr. Casey: Because, Your Honor, in... in the... in the example... or the hypothetical that Your Honor posits, the supervisor has done nothing but speak words.

He has not exer--

Unknown Speaker: Well, but he has done nothing in Justice O'Connor's hypo except speak words, except that he has done so somewhat less explicitly than he does in my case.

So it may take a while to make it very clear that he means what he says.

But in... in my case, the... the same inference can be drawn after the first instance.

Mr. Casey: --On the contrary, Your Honor, in Justice O'Connor's hypothetical, as I understood it, the... the supervisor repeatedly ordered the employee off to a isolated place where... where he could then take advantage of the employee.

And... and it's the acting--

Unknown Speaker: But she resisted.

She resisted every time.

It was awful for her, but she resisted.

What... where do you put that case?

I assume that if she succumbs in order to get the promotion, then you would say we don't have to prove negligence; is that correct?

Mr. Casey: --Your Honor, in a... in a submission case, I would... I would argue that, in a submission case, that if the employee reasonably believed that submission was a term and condition of employment, I believe then there would be strict liability... if she reasonably believed--

Unknown Speaker: Okay.

Now she reasonably... she reasonably believes that it's going to be very hard to put up resistance, but she's going to do it.

She reasonably believes that she's got to resist this.

And she does.

And in those two cases, as far as the employer is concerned, there's no more likelihood that the employer will know about one situation than the other, is there?

But you told me that if she succumbs, then there's liability.

And if she doesn't, then what?

Mr. Casey: --In... if I can modify my... not modify my answer, but if I can clarify my answer on... on the submission.

I do not believe in a case such as we have here, where there is a clear policy against sexual harassment, where there are avenues of redress which... which... in which you can avoid the complaint... complaining through the offending supervisor, as is this case here, where... that no employee then could reasonably believe what--

Unknown Speaker: Well, that's... that would all be for a trial if there were a trial.

But this... that's... this was decided only on summary judgment.

Mr. Casey: --On summary judgment.

That's correct.

Unknown Speaker: So we don't know anything about what employees... we know that there was a policy.

We don't know anything about how effective it was, how other employees reacted to it.

So all we know at this stage in the game is that there was a policy.

Mr. Casey: We... we know... we know something in addition to that, Your Honor.

We know, one, there was a policy.

We know, two, in... in... in following this Court's guidance in Meritor, that there were avenues of redress in which one could avoid the... the... the offending supervisor.

And, three, we know that... that the Respondent in this case was aware of the policy, understood the policy, and intentionally... intentionally did not follow the policy.

And in fact stated the reason she didn't tell her--

Unknown Speaker: We... we know... we know two things: That there was a policy and she didn't use it.

We don't know any... anything about why.

It may be that she thought it would... was a totally ineffective policy.

But we really can't go beyond the summary judgment record.

And we don't know any of these things, other than the fact that there was a policy and the fact that she didn't use it.

Mr. Casey: --Your... Your Honor, and... and I'm not going beyond the summary judgment record.

What she... what she testified to... and it... and it is part of the summary judgment record... what she testified to is that she intentionally did not report it to her supervisor because, and I quote, it would be his duty to report it.

And we do know that.

And we do--

Unknown Speaker: Where is that?

What are you referring to?

What testimony?

Mr. Casey: --That's in the record, Your Honor, at... I will find it, Your Honor.

But it is... it is clearly in the record, and it's quoted directly in our brief.

Unknown Speaker: What... what is the relationship between your reasonably believe standard and the standard either of employer negligence or, for that matter, employer strict liability?

Mr. Casey: I... I don't understand.

Unknown Speaker: Well, I understood you to say a moment ago, in response to Justice Ginsburg's variant on the question, that if the employee reasonably believed that he could carry out... that the employer could carry out threats, even though those threats had not at that point been carried out, that there would be a hostile environment.

And I... I was going to say, what is the relationship between that standard and the standard of employer negligence?

Mr. Casey: Your Honor, I... I... perhaps I misspoke.

What I said was if... what I meant was... if an employee reasonably believed that... that submission was a term and condition of employment and she did submit, and the relief was reasonable, then I believe there is... there would be a... an adverse tangible job consequence.

Unknown Speaker: But... but if she reasonably believed it and did not submit, even on a claim of hostile work environment, there would be no liability, period?

There could be no liability; is that your position?

Mr. Casey: In the hostile work environment, unless there... there is some evidence that the employer knew or should have known.

Unknown Speaker: May I ask a question on that point?

Supposing in the Chicago office you had conditions that clearly amounted to a hostile work environment, much... much worse facts than you have here.

Everybody is being very, very rude to the female employees.

And the only person outside of that office who knows about it is the vice president in charge of sales in New York... this particular individual.

Would that be notice to the company of the hostile work environment?

Mr. Casey: Your Honor, I think in this... in the... in the situation you describe--

Unknown Speaker: Yes.

Mr. Casey: --there would be... there would be the standard of the company should have known.

If it is as open and notorious as Your Honor describes.

Unknown Speaker: Well, but it's open only in Chicago.

And the only higher executive who knows about it is this particular individual, Mr. Slowik.

Would that be sufficient notice to the company?

Mr. Casey: And he was responsible for this office?

Unknown Speaker: Well, he had exactly the duties he has in this case.

He's the vice president in charge of the sales in a large part of the country.

Is that--

Mr. Casey: I believe... I believe, Your Honor, if he was aware of open--

Unknown Speaker: --Yes, he's aware of it.

That's my--

Mr. Casey: --and... open and notorious conduct, of... of a hostile environment for female employees, it would be notice to the company.

I think so.

Just--

Unknown Speaker: --Well, then why isn't it notice to the company when he does it himself?

Mr. Casey: --Because, Your Honor, he did not fulfill the threat.

He... he simply implied a threat, never carried it out.

She in fact got promoted.

Unknown Speaker: What if he told the president about... about the case, the president of the company.

Would she then have... have a case?

He told the president everything that she's put in the record here.

Mr. Casey: I'm missing the--

Unknown Speaker: The question... part of the question is, A, is there a violation?

And, B, if so, is the company responsible for it?

And I'm trying to assume that... that what he said would be a violation.

Maybe that's where we... we part company.

I don't know.

But if the things that happened here were not only known by Mr. Slowik, but by the board of directors of the company, would there be liability?

Mr. Casey: --I do not believe so.

I do not believe this is a hos... I do not be--

Unknown Speaker: So... so it isn't a question of whether we hold the company responsible.

The question, in your view, is whether there was a violation at all?

Mr. Casey: --Well, if there's no liability, there's no... there's no violation.

Unknown Speaker: Right.

I thought you said earlier that... that, in your view, the acts were not repeated enough to constitute a hostile work environment.

Was I wrong about that?

Mr. Casey: No, that's correct.

Unknown Speaker: Yes.

Mr. Casey: And... and... and I don't--

Unknown Speaker: So that's the reason, if there were notice to the company--

Mr. Casey: --and I don't think it rises to a hostile work environment.

Unknown Speaker: --Can... can I ask you something about Justice O'Connor's hypothetical?

Mr. Casey: Yes, certainly.

Unknown Speaker: You said that where... where the company officer takes the woman aside to an isolated place where he can make his sexual advances, that that would... that would be automatic liability on the part of the employer?

Mr. Casey: Your Honor--

Unknown Speaker: That would be a quid pro quo case?

Is that why... why... because he's using his power as an officer to take her aside to the--

Mr. Casey: --To order her to isolated parts of the... of the factory.

Unknown Speaker: --What would you call that?

Would you call that quid pro quo?

Mr. Casey: I would... in... in that circumstance, Your Honor, I would say that is quid pro quo, because... because he is exercising the... precisely the authority--

Unknown Speaker: Well, what if he tells her to come over to the water cooler?

I mean, boy, you've expanded quid pro quo an enormous amount if you accept that.

What if he tells her, you know, Come on over to the water cooler, I want to tell you something, and she goes over to the water cooler?

Mr. Casey: --I don't... I'm making the distinction, Your Honor.

I interpreted Justice O'Connor's question--

Unknown Speaker: I had thought the quid pro quo was just those... those company actions which, in themselves, amount to an alteration of the terms and conditions of employment, like firing, promotion and so forth.

Mr. Casey: --I think--

Unknown Speaker: But you're willing to say quid pro quo is... is what, any... any action that... that an officer of the company has authority to tell somebody to do?

Mr. Casey: --No.

I think, Your... I think, Your Honor, that isolation and constant isolation on orders of a supervisor is... is an adverse tangible job consequence.

Unknown Speaker: Well, it isn't constant isolation, as I understood her hypothetical.

He just took her aside to an isolated place to make his proposition.

I mean if he assigned her to a... you know, to Timbuktu or something, yes, then--

Mr. Casey: Justice--

Unknown Speaker: --then I could see a quid pro quo.

Mr. Casey: --Justice--

Unknown Speaker: But he just pulled her aside to make his proposition.

Mr. Casey: --Justice O'Connor's question was repeatedly... repeatedly ordered her to an isolated part of the factory so he could do that.

Unknown Speaker: Oh, I see.

So she's working... you... you understood her question to mean that she's working in an isolated part of the factory?

Mr. Casey: That's correct.

Unknown Speaker: All by herself there?

Mr. Casey: That's correct.

That's how... exactly how I interpreted it.

Unknown Speaker: Mr. Casey--

--Well, that wasn't the question.

[Laughter]

But you're altering it to suit your needs now.

Mr. Casey, would you explain this to me?

In the... I take it it's common ground here with you and everybody else that in a hostile environment claim there does not have to be any change in conditions beyond those conditions which are constituted by the hostility of the environment?

Mr. Casey: That is correct.

Unknown Speaker: Okay.

Now--

Mr. Casey: Environmental hostility, correct.

Unknown Speaker: --Right.

If the environmental hostility is created by threats of personnel action, threats of a quid pro quo nature in other words, which are not carried out, why isn't the hostility of the environment just as clear, even though there are no other changes in condition, as... as may be the case in a non-unfulfilled quid pro quo hostile environment case?

Mr. Casey: It... Justice Souter, it may well be a hostile environment.

And if it is a hostile environment, then... then we look at it as a... as a standard of negligence.

Did the employer know or should the employer have known?

Unknown Speaker: Well, but I'm leaving aside the... and maybe... maybe I'm isolating the question too much for... for... for your tastes... but I'm... I'm suggesting for a minute let's leave aside the standard for imputing liability to the employer.

Let's just look at whether there's been a violation.

And... and forget whether it's negligence or whether it's strict liability for the moment.

And I take it your answer is yes, there can be a hostile environment by unfulfilled quid pro quo kinds of threats?

Mr. Casey: That's correct.

Unknown Speaker: And your... your only point of difference then, I guess, with your opponents on that isolated point is that you say there's got to be more than one threat, just as there has got to be more than one hostile remark, if you will, in order to create the environment?

Mr. Casey: Correct.

Unknown Speaker: One... one instance--

Mr. Casey: One instance does not create a hostile environment.

Unknown Speaker: --And you're saying that the fact that the hostile environment and the unfulfilled quid pro quo situation is created by a supervisor, with more authority than let's say just a fellow employee, that doesn't make any difference in the calculus of how many instances there have got to be before we can conclude that the environment has in fact become hostile; you're saying that really is not relevant?

Mr. Casey: I... I don't... I do not believe that to be relevant.

Unknown Speaker: Okay.

Mr. Casey, you... you formulated this question, a claim of quid pro quo sexual harassment.

Now, what... what is your understanding of the term "quid pro quo sexual harassment"?

Mr. Casey: My understanding, Your Honor, is... is this for that.

You give me something, and I will do something either negatively or positively to you.

There's a quid and a quo.

And... and I believe--

Unknown Speaker: Simply where it's proposed or where it happens?

Mr. Casey: --Where it happens.

Unknown Speaker: Where it happens?

Mr. Casey: Correct.

Unknown Speaker: You mean--

--Where it happens?

Mr. Casey: --where... where... where something is proposed by... by the... by the supervisor, but not necessarily acquiesced in by the employee, I take it?

Sleep with me or I won't promote you, I mean, is the classic example that we all use.

Unknown Speaker: Yes.

But... and--

Mr. Casey: And I don't promote you.

Unknown Speaker: --Yes.

But it's curious, because you say that where... where the woman says, Okay, I will sleep with you, and he does promote her, so that there is a quid and there is quo for the quid, that is not quid pro quo.

But where she refuses, she does not give the quid, and therefore does not get the quo, that is quid pro quo?

[Laughter]

Mr. Casey: Your Honor, if... if he gets--

Unknown Speaker: It's an interesting theory.

Mr. Casey: --No... no, it's... but that's... but that's not precisely the theory.

The theory is if... if she gets the promotion for having slept with him, she... she got something she's not otherwise entitled to.

And I think that is... that is discrimination.

And I think that is a violation if she actually didn't get the promotion.

Unknown Speaker: And in the case where it is... in the case where it is the violation, he makes the proposition, it's refused, and she is not promoted, and the person who did it is the vice president of the company, why doesn't the company know about it?

He knows about it.

He's the vice president.

He is the company.

So why isn't the company the actor?

Why does he--

Mr. Casey: Because he... he... excuse me, I didn't mean to interrupt you... because he didn't act with the authority given him by the employer.

Unknown Speaker: --All right.

So then you're just using the same arguments that were in this other case.

There's nothing new here?

I guess it puzzles me that--

--Is that right?

--if she does acquiesce, the law gives her a remedy.

If she doesn't, it doesn't give her a remedy.

So the law favors submission, as I understand it.

Mr. Casey: No, I don't... I don't think that's actually the case, Your Honor.

I don't think it's safer for submission in... in any event.

I don't think there's a--

Unknown Speaker: But if we're talking--

--I'm assuming he's bluffing in both cases.

In both cases he's bluffing.

Mr. Casey: --If he's bluffing in both cases and she had no reasonable belief, I think there's no violation.

Unknown Speaker: But in your view, there... in your view... this is what I was trying to get at... there is nothing in this case in respect to authority, apparent authority, agency... all the things that we discussed in previous cases that were recently argue... in that area, there is nothing different here; the only thing that is different in this case is whether or not the quid pro quo is in fact substantively irrespective, is that right?

Mr. Casey: In the face... in the face of a clear policy in the company, she could not reasonably believe that he had the authority to do... there is no apparent authority--

Unknown Speaker: I mean, but I know that you... I'm trying to figure out, is there anything in the question that we are being asked to decide that is different from the question in the two cases that were recently argued here?

Mr. Casey: --Absolutely.

Unknown Speaker: And there is one thing that seemed different.

We're asked... which is what I thought the question meant... whether there is a substantive violation of the statute, nothing to do with vicarious liability.

Mr. Casey: The--

Unknown Speaker: And now, other than that, is there anything different?

Mr. Casey: --Yes, Your Honor, the difference--

Unknown Speaker: And what is that?

Mr. Casey: --The difference in this case is the standard of liability to be applied.

Is it strict liability or is it a negligence issue?

Unknown Speaker: So if I believe it's strict liability, there's nothing different?

If I--

Mr. Casey: Other than standard liability, that's correct.

Unknown Speaker: --But that... that's what we didn't grant certiorari on.

That's the second question.

Mr. Casey: Your Honor, I'm... I'm tying the strict liability to the quid pro quo.

If it is a quid pro quo case, this for that, I believe the... the cases are... are quite uniform that there is strict liability.

And in--

Unknown Speaker: Mr. Casey, how did all this come up?

It really is mystifying, with a statute that doesn't use any of these terms.

It just says no... thou shall not discriminate in hiring, firing or terms and conditions of employment.

Mr. Casey: --Justice, it came up in the context, really, of the other violations of Title VII, in the race cases.

For example, the company is automatically liable if... if the person is fired or demoted or not promoted because of his race.

And--

Unknown Speaker: Why... why should that be?

Why... why should that be?

Why should there be a distinction between quid pro quo and hostile work environment?

What is the law trying to achieve by adopting that category... by adopting that dichotomy?

Mr. Casey: --Well, this Court has... has instructed us, in Meritor, that we should look to agency principles.

And... and when one is acting on behalf of the employer and using his authority, that is in effect the employer acting.

When... when there is simply a hostile environment, there... the standard for agency should be "known" or "should have known".

Unknown Speaker: Thank you, Mr. Casey.

Mr. Rossiello, we'll hear from you.

Argument of Ernest T. Rossiello

Mr. Rossiello: Mr. Chief Justice, and may it please the Court:

The express language of Title VII of the Civil Rights Act of 1964 specifies that three elements, and three elements only, must be demonstrated to establish a violation of that statute.

There must first be employer action; secondly, posited upon a discriminatory basis; and, third, the discriminatory conduct must alter the terms and conditions of employment.

The only issue for this Court to decide is whether or not Mr. Slowik's conduct in this case was employer action within the meaning of 42 U.S.C. 2000e-2 (a)(1).

Unknown Speaker: Mr. Rossiello--

--Well, why does quid... I'm sorry, go ahead.

I'd like to ask you, in... in a situation like this, where we take it that the supervisor doesn't follow through on any threat, actual or implied, of failure to promote or something, some employment action, where the employer does not follow through on that, the harm to the employee seems to be very much the same as that under hostile environment claims.

Mr. Rossiello: That's correct.

Unknown Speaker: I mean, I... I don't see a lot of difference here than there would be to simply a hostile environment situation, where... where the threat is... is not carried out.

Mr. Rossiello: Well, the harm could or might be the same.

For purposes of damage... for purposes of damages or the harm inflicted, it could be the same for hostile work environment.

Unknown Speaker: Well, I... I just don't see much difference now.

And in that regard, what role does the existence of an employer policy and method for handling complaints of this type play?

Does it go to the reasonableness of the employee's belief or does it go to the amount of damages if there's liability?

What role does that play?

Mr. Rossiello: It goes to the amount of damages.

The existence of a policy has little or no effect on the liability issue.

In this particular case, the policy we're talking about is a single, flimsy sentence, buried amid two very brief paragraphs--

Unknown Speaker: Well, let's suppose it's a fabulous policy and very effective.

Mr. Rossiello: --If we can find--

Unknown Speaker: Now, what role does it play?

Mr. Rossiello: --Excuse me?

Unknown Speaker: What role should it play, if it's a perfect policy?

Mr. Rossiello: Little to none on the liability issue.

Because the express language of Title VII does not require that the plaintiff follow a policy or complain to the employer before it goes to the EEOC--

Unknown Speaker: Well, but might it go to the reasonableness of the employee's understanding when some comment is made?

I mean if she knows perfectly well, look, this company has a... a good policy, and if I say something higher up the ladder, it's going to be taken care of.

Then is it reasonable to... for her to believe that there is some serious threat out there?

Mr. Rossiello: --The short answer to that is yes.

The existence of a policy does affect the reasonableness of the plaintiff's conduct.

Most often that would be in a hostile work environment-type case.

In a quid pro quo-type case--

Unknown Speaker: Well, but we've already explored the possibility that this is very much like hostile environment if the threat isn't carried out.

You're... you're back to hostile environment.

Well, it's sort of a hybrid.

If--

--Well, Mr. Rossiello, a hybrid of what?

Mr. Rossiello: --Well, some case... if you look at Judge Wood's opinion, the first one, that was vacated in the Seventh Circuit, she seems to believe that quid pro quo sexual harassment also is a hostile work environment.

Unknown Speaker: Well, what's wrong with that belief?

Mr. Rossiello: Nothing.

I think it's... not... nothing at all.

Unknown Speaker: Could I follow up on that?

Mr. Rossiello: Sure.

Unknown Speaker: You... you agree that where... where either she complies and... and the job action... threatened job action isn't taken or she doesn't comply and the job action still isn't taken, it's like hostile work environment.

Isn't it also true that where she doesn't comply and the job action is taken... she's not given the promotion or she's fired... is anything added to the Title VII analysis by saying it was quid pro quo?

That is to say, suppose the... the officer of the company, without making a quid pro quo proposition, you know, didn't say, you know, Unless you sleep with me, you won't get the promotion, but simply asked the woman to sleep with him, she didn't, and he fired her for that reason.

Without having made any quid pro quo proposal, would... would the case come out any differently if that could be established than it would if he had made the proposal?

In other words, isn't the... isn't the proposal simply evidence of the fact that the reason she was fired or the reason she didn't get the promotion was sexual discrimination?

Mr. Rossiello: Yes.

Unknown Speaker: Okay.

Mr. Rossiello: Because... right.

The... if the threat is discriminatory in nature and if it affects--

Unknown Speaker: You don't even need a threat.

I mean if... if--

Mr. Rossiello: --You don't need much necessarily.

Unknown Speaker: --if he just makes a sexual advancement, she doesn't comply, she is fired thereafter, and if you can show that the reason for the firing was that she was not compliant, you... you've established a case, haven't you?

Mr. Rossiello: Yes, you have.

Unknown Speaker: Whether there's been the threat or not.

The threat only serves as evidence of the reason for the job action.

Mr. Rossiello: Yes.

Unknown Speaker: Okay.

But in a... in a situation in... in which the threat is not carried out, then I take it quid pro quo... the quid pro quo distinction makes a difference in this sense... and tell me whether you think I'm right.

As I understand the way we've been using the term, a quid pro quo threat is, by definition, a threat that only a supervisor can make, because only the supervisor has got the power to do whatever is threatened.

Mr. Rossiello: Right.

Unknown Speaker: I suppose that a supervisor's threat, simply because it is that of a supervisor, may have more force, may be more powerful in creating a hostile work environment, even if it's only made once, than would one off-color remark or one proposition by a fellow employee without such power.

Do you agree that in the unfulfilled quid pro quo situation there might be that difference?

Mr. Rossiello: Well--

Unknown Speaker: Which is essentially an evidentiary difference.

Mr. Rossiello: --There is.

It's a question of proof.

Right.

Unknown Speaker: Okay.

Mr. Rossiello: We're only on summary judgment here.

The District Court has--

Unknown Speaker: With respect to that, if you've got a supervisor who just loves to... never makes kind of a thing,

"If you don't, then I will. "

but just likes to make the atmosphere fun for the guys and dreadful for the... for the women, doesn't ask for any favors, there's just all of these remarks, light touching, just makes it... do you remember way back in the beginning of the world, there was a case called Bundy, and there were secretaries who said, We don't want a promotion, and nobody is threatening to fire us, but this is awful to live under these conditions.

So, Court, don't give us money, just tell them to stop.

Now, where does that kind of case fit in this picture?

Mr. Rossiello: --Well, that is discriminatory conduct within the meaning of Title VII.

As both... both cases, Harris and Meritor, stated when the work environment is permeated with intimidation--

Unknown Speaker: But nobody ever suggested in those days that there was something different between quid pro quo and a hostile environment and... and vicarious liability on the one hand versus knew or should have known on the other.

It seemed to be all one... it was under Title VII and there was one standard.

Mr. Rossiello: --Well, we believe there should be one standard.

I mean, with all due respect, I think Meritor is a wonderful opinion, but I don't think the Court or the author of the opinion intended to wreak the havoc that it did when it used those words, "quid pro quo", and "hostile work environment", in that opinion.

The circuit courts of appeals and the district courts have had a field day with those two expressions.

Unknown Speaker: Well, let me ask you this.

Suppose it were a given... suppose we would hold that in a hostile work environment case there is liability only if the employer is negligent.

Suppose that were our holding.

Would the quid pro quo distinction then be important to you?

[Laughter]

Mr. Rossiello: Yes, it would be.

[Laughter]

Unknown Speaker: And in fact, I noticed that in answering Justice O'Connor's question you said, but in a quid pro quo case.

And now, see, you attack this distinction and yet you use it.

Mr. Rossiello: Well, it's so hard to--

Unknown Speaker: Or at least you want to hold it in reserve.

Mr. Rossiello: --You see, it's so hard to avoid it.

There is just such a large body of case law throwing these two terms around.

Unknown Speaker: And we didn't start it, Mr. Rossiello, lest... lest silence indicate consent.

[Laughter]

When we used the... the expression in... in Meritor, we were referring to by... what was by then a well-established body of... of court of appeals law.

I mean don't... don't put it on us.

We were just--

[Laughter]

Mr. Rossiello: All right.

I promise not to.

Unknown Speaker: I don't see why it's a problem.

Why is it a problem, but for the circumstance that you have here, where there is a proposition that is refused and no punishment?

In any other situation, isn't it perfectly useful, or is it?

Mr. Rossiello: Well, it is... it is instructive.

Unknown Speaker: Instructive.

But I mean more, doesn't it happen, propositions, every day of the week?

Mr. Rossiello: Yes.

Unknown Speaker: And they're sometimes are followed by punishment.

And they're also sometimes accepted and followed by the lack thereof.

Mr. Rossiello: In many cases, yes.

Unknown Speaker: So there is actually... but if there is... if... to go back to our case, where... where there's a proposition turned down and no punishment, if it were true in that subset, in that subset of quid pro quo, that it is not a violation unless it is a hostile work environment, which depends upon circumstance and a lot more than just the bare facts I stated, how can you win?

Because what I'm interested in your answering is, in the opinions below, I have some kind of impression that you either waive that or they said that that isn't in the case or... what... can you explain to me what I'm... what... it may be a hostile work environment, but it requires further factual exploration, and there is a Seventh Circuit opinion that suggests this whole matter was waived or something.

Mr. Rossiello: Right.

Unknown Speaker: Could you respond to my... what I'm worried about?

Mr. Rossiello: Yes... yes, I can.

And that inquiry of Your Honor is treated at great length in our cross-petition for certiorari.

By the time the Seventh Circuit got through its 203-page decision below, I think that hostile work environment claim got lost in the shuffle.

We think there's enough in the record that we... it hasn't been waived.

And if the Court--

Unknown Speaker: What are we supposed to do if... if... or what am I supposed to do if I thought that might still be there, in light of what the Seventh Circuit did hold, not what they should have hold... held?

And... and in light of the fact that your cross-petition, I take it, is not before us?

Mr. Rossiello: --No.

Unknown Speaker: All right.

So what are... what would I do in this case if I... on the assumption... I'm not saying I really think that... but on the assumptions that I gave you?

Mr. Rossiello: Well, I would remand this case for reconsideration of the whole claim.

[Laughter]

Unknown Speaker: He should regret that we did not accept your cross-petition, I suppose.

Mr. Rossiello: Well--

Unknown Speaker: We didn't accept it.

I mean that's the fact.

Mr. Rossiello: --Well, it's still pending.

We have our foot in the door.

Unknown Speaker: Mr. Rossiello, as I understood what... what happened, was that you didn't surrender a hostile environment case, but you did surrender a simple negligence.

So, in other words, what you said is hostile environment, quid pro... whatever you want to call it, there's vicarious liability here.

So I think what the majority of the Seventh Circuit judges said you gave up was hostile environment, simple negligence, not that you gave up hostile environment and the standard is vicarious liability.

Is that correct?

Mr. Rossiello: Yes, I believe that's an accurate characterization.

Unknown Speaker: So that in the next round of this... let's assume you win this round... in the next round, if it is determined that in fact when a supervisor is involved and the action involves a threat of using the authority that the supervisor has been given by the company, negligence is not required.

A stricter standard of vicarious liability applies.

Then you're home free?

Mr. Rossiello: Yes.

Just as Justice Breyer said a few minutes ago, you know, when this... this type of conduct is engaged in by a vice president, he is the company and the company is him.

Unknown Speaker: Right.

But the... the point that I was making is the only thing that you have conceded out is company liability on a negligence theory?

Mr. Rossiello: For sure.

Unknown Speaker: Yes, okay.

Mr. Rossiello: If there are no more questions--

Unknown Speaker: Well, I don't... I just don't understand your response about his using authority that the company has given him.

The company hasn't given him authority to... to make a sexual proposition to any of the employees, has it?

Mr. Rossiello: --That's true, the company has not.

Unknown Speaker: And I assume the company also hasn't given him authority to fire a woman for her failure to comply with his sexual proposition.

Mr. Rossiello: No, absolutely not.

That's why the cases in our brief, which are other types of Title VII cases, where--

Unknown Speaker: I mean--

Mr. Rossiello: --where a firing or discharge or a demotion or a pay... a pay differential is--

Unknown Speaker: --where it occurs, you can say the employer has acted.

I don't care whether this officer was involved or not, the employer has acted, where the firing has occurred.

But where the firing hasn't occurred, where there's been no employer action, I... I find it... I find it much more difficult to leap to employer responsibility on a theory that the supervisor was using authority employment... the employer gave him.

The employer didn't give him any authority to fire somebody for failure to comply with his sexual advances.

Mr. Rossiello: --Well, there's where you... we get into the hair splitting.

That's very true.

The employer did not give the authority to sexual harass.

No employer does that as far as I know.

In fact, in the face of an explicit policy against sexual harassment, this type of conduct still occurs.

But where a supervisor, like in this case, Mr. Slowik... should I just finish?

Unknown Speaker: You can finish your answer briefly to Justice Scalia's question.

Mr. Rossiello: All right.

But where a supervisor uses the authority delegated in him in general to accomplish the sexual harassment, Title VII has been violated.

Thank you very much.

Unknown Speaker: Thank you, Mr. Rossiello.

Ms. Underwood, we'll hear from you.

Argument of Barbara D. Underwood

Ms Underwood: Mr. Chief Justice, and may it please the Court:

When a supervisor tells an employee she has to provide sexual favors in order to get a promotion, he is, at that moment, imposing a term or condition on her employment because of her sex, in violation of Title VII.

That's true whether she complies or refuses.

And if she refuses, whether she's punished immediately or has to suffer anxiety about the result.

No matter how she responds, this supervisor has used the power of the employer--

Unknown Speaker: Even when the employer's policy, which the woman knew about, specifically prohibits this, how... how could you possibly say that the employer was... was changing her terms and conditions of employment?

The... the supervisor was violating an employer policy that she knew about.

Ms Underwood: --Just as when a supervisor fires someone or demotes someone--

Unknown Speaker: Yes, but in... but in... but in that instance, the... the company is acting... the company has acted.

So it is within the scope of employment.

But if it's just a threat, there's no action within the scope of employment for agency principles.

Ms Underwood: --Justice Kennedy, there is.

The power to--

Unknown Speaker: And we'll... we'll leave aside hostile environment and repeated acts and pervasive discrimination and so forth.

Ms Underwood: --The power to fire or to hire, to promote or demote, includes the power to state what the conditions are for doing that, to hold out threats and promises.

In fact, that's the way that power is most commonly and effectively and predictably used in the management of a company.

Unknown Speaker: Well, you could say that, but it's not true.

In fact, that power does not reside in that officer.

It has explicitly been taken away from him by the company.

What more can the company do than to... you know, than to make that the company policy?

Ms Underwood: No, the company has given him the power to hire and fire, but not to do it for wrongful reasons.

And just so, the company has given him the power to hold out the prospect of hiring and firing, promoting and demoting--

Unknown Speaker: Well, but that's... that's--

Ms Underwood: --but not to do it--

Unknown Speaker: --But that's the difference.

Suppose you have a model employer, with... with policies, with grievance procedures and so forth.

Then you have a threat that is not carried out.

Under agency principles, there's... the scope of employment doesn't come into play, because nothing has happened other than an environment, which we can take care of under a different analysis.

Ms Underwood: --Well, a great deal has happened.

The employee has now been told that her work assignment and the conditions of her work are different and the terms on which she can get a promotion are different.

Just--

Unknown Speaker: But... but that's never... that's never... never carried out.

And she knows that's not true.

Yes.

Ms Underwood: --Well, she doesn't know it's not true.

She knows that the company has stated that it's against company policy.

That's not quite--

Unknown Speaker: Well, then she also learns that it's not carried out because she doesn't acquiesce and nothing happens.

Ms Underwood: --If there are no damages, then that would be a matter for damages.

In this case--

Unknown Speaker: Well, but there... there... my sense of the thing, if... if that is true, is that there simply isn't any liability.

Ms Underwood: --Well, suppose the company fires somebody and she complains and she immediately is reinstated.

There will still be a violation.

Unknown Speaker: Sure.

Ms Underwood: There will be minor damages.

Unknown Speaker: And suppose they don't discharge the person.

He says, I'll discharge you; are you discharged?

Ms Underwood: No.

Unknown Speaker: He's wanting you to go collect unemployment insurance.

I don't think they'll give it to you.

Ms Underwood: No, you're not discharged.

Unknown Speaker: All right.

And this doesn't penalize an attempt to discharge.

Ms Underwood: No, it doesn't.

Unknown Speaker: All right.

So it... it... if it's say you can't discharge, you can't hire, you can't discriminate on terms of employment.

So why, if in fact you don't discharge the person but say you're going to but you don't, if that doesn't violate the statute, why would it violate it to say, I'm not going to give you a promotion, and then you do?

Ms Underwood: Well, this... this isn't just, I'm not going to give you a promotion.

If it were just, I'm not going to give you a promotion--

Unknown Speaker: But suppose it is, I'm going to make you work in Timbuktu, or, I'm going to make you do some other thing terrible, but you don't.

Ms Underwood: --No, what... what distinguishes this is the... the coercive effect it has right now.

I'm not going to give you a promotion because you're a woman, I would say, is... is not a... is not now changing the condition--

Unknown Speaker: But if it has... if it has... if it has the bad effect, if they do something bad, she's hurt.

Ms Underwood: --Right.

Unknown Speaker: But you're saying the simple statement of saying it... so if you say something that never happens, because the person is a woman and it doesn't create a hostile environment, it still is actionable?

Ms Underwood: No, not if they say because she's a woman, because that isn't attempting to coerce her to do anything.

There's nothing really she can do to stop being a woman.

It's when the statement is, I won't promote you unless you do something.

Unknown Speaker: Ms. Underwood, supposing this supervisor had two employees, one a man and one a woman.

And he says to the man, I can make your life a lot easier here if you let me... you let me use your beach place every weekend, and he says to the woman what was said here.

Now, is a case of discrimination on the basis of sex made out there?

Ms Underwood: Well, if it's on the basis of using your beach place, then it's not on the basis of sex.

Unknown Speaker: Well, but he's... he's asking favors from both males and females.

Ms Underwood: Oh, I see.

Well, I think that if he's asking female... favors from females on the basis of sex, then he is discriminating on the basis of sex against them.

And he may also be engaging in other improper conduct with respect to other people.

But I think the... the point--

Unknown Speaker: I see.

So... so your answer might be different if he hadn't asked the male employee to lend him his beach place, but rather made a sexual overture to the male employee.

Then he would have been making sexual overtures indiscriminately, and there would have been no sexual discrimination towards either party; is that your--

Ms Underwood: --Well, that... that's the hardest case for the sex discrimination proposition.

But--

Unknown Speaker: --Yes, it is.

It's an impossible case, isn't it?

Ms Underwood: --Yes.

[Laughter]

Unknown Speaker: Ms. Underwood--

Ms Underwood: But... but... yes.

Unknown Speaker: --No, finish... I thought you were finished.

Go ahead.

Ms Underwood: No, I want... I wanted, in response to some of those questions, to suggest that, for instance, if an employer said to the women employees or to the black employees that you have to work twice as hard as the men do in order to keep your job or to get a promotion or you have to do twice as much work or you have to work twice as fast or you have to do the... the... you have to, in addition to doing all the other aspects of your job--

Unknown Speaker: And... and then the next... and the next day, a new supervisor comes in and says, We're sorry about that; that's wrong.

Was there a violation?

They worked for 1 hour under the... under the employee who behaved wrongfully.

Ms Underwood: --There's a violation with de minimus consequences.

You can always produce a trivial version of a violation.

There was a violation.

There have been cases in the lower courts where there was a remand to the district court for a factual inquiry to determine whether what happened was so trivial, so de minimus as not to--

Unknown Speaker: Is there any case in any area of the law... I'll focus on the word "discharge", because it clarifies it conceptually.

I want to take out of your thought the problem of the bad environment.

So we're not talking about a bad environment at all.

Is there any case in labor law, law of contract?

You know, there... there is lots and lots of law where it's unlawful civilly to discharge someone.

And is there any instance where a person could recover where he wasn't discharged?

It's somebody who said, I will discharge you, but he didn't.

I... I can't--

Ms Underwood: --Not... not if the only--

Unknown Speaker: --All right.

Then--

Ms Underwood: --there is not the case that to... that a discharge is equivalent to a promise to discharge.

But Title VII prohibits more than discharges.

Unknown Speaker: --Is there any case, then, under Title VII... well, but it's... you see, it's in... it's lined up certain things: hiring, discharge and discriminating in terms of conditions of employment.

So the question would be the same for each.

That is, where there was no discharge, where there was no hiring, where there was no discrimination in terms or conditions of employment, but simply a threat to make... to do those things that was not carried out.

Now, is there any precedent that would make the threat in any of those areas equivalent to the reality?

Ms Underwood: Well, I would describe the threat... if... if you describe the threat as altering her job responsibilities, altering what she has been told she must do to get a promotion, then the answer is yes.

But--

Unknown Speaker: And can we tell from just the first threat... and this is the problem, Ms. Underwood, that I had understanding the government's position... there could be a threat and the company could have a very strong policy.

So you really, looking at it as an observer, you can't tell whether it would be reasonable for the worker to believe that the threat is anything more than a... a slight of the kind that is... we... we all have to accept.

So I can understand a series of threats as making for a hostile environment.

But I don't understand just a single threat.

And you seem to say that a single threat, whether carried out or not, it... it qualifies for liability.

Ms Underwood: --A genuine, credible threat, which could be communicated, depending on the circumstances of the particular case, by one, serious, credible statement by somebody who is known, for instance, to have carried out such threats in the past, notwithstanding the wonderful policy--

Unknown Speaker: But suppose all you have is this... you have this vice president, who is a pest.

And you have a strong policy.

And you have only those two things.

How do you... how do you know, when he makes his first threat?

Ms Underwood: --Well, I think you have an issue of fact about whether a genuine, credible threat, sufficient to support liability, has been made.

I think that on this record, more was alleged than one statement.

And sum... enough was alleged to resist summary judgment.

What we have in this case, after all, is the initial statement, I can make life difficult for you; then, I'm reluctant to promote you; then, after she's promoted, I won't give you permission to do the... the job that you need to do for your customer unless you comply with my sexual demands.

In each case, a coercive statement is made.

Unknown Speaker: Why does the threat... why does the threat make a difference?

In the example you gave earlier, about racial... racial discrimination in employment, why... why is it any worse... why does it affect the working conditions any more if the... if the officer of the company says, Because you're black, I'm going to make your work... unless you work twice as hard, unless you black employees work twice as hard, you're going to be fired... why is that any worse than... than the officer who says, Because you're black employees, I'm going to give you twice as much work?

Now, there... there's--

Ms Underwood: I... I... I--

Unknown Speaker: --there is no quid pro quo in the latter case.

Ms Underwood: --No, I think they're the same.

Unknown Speaker: They're not saying, Unless you do this, I'll do that.

They're saying--

Ms Underwood: They are, in each case, imposing a new term or condition on employment by reason of race, in... in the hypotheticals that you've posed.

Unknown Speaker: --Right.

But the problem--

--So the threat makes no difference?

Ms Underwood: No, the threat... the threat can be the mechanism by which the new condition is imposed.

And in this case, and in other sexual harassment cases, it sometimes is.

But no, it's not the only way a new term or condition can be imposed on someone's employment.

Unknown Speaker: What you're saying is--

--But you're saying it's a term or condition even if the person is bluffing all the way through?

You're saying it's still a term or condition?

Ms Underwood: I'm saying it's a term or condition if it is--

Unknown Speaker: Even... even... even if the... if the supervisor says, You're going to have to work twice as hard because you're a woman, and she doesn't work twice as hard and nothing happens, he was bluffing all along, that's still a violation as soon as he said it?

Ms Underwood: --Well, if he says it in a... in a sufficiently credible manner, so that she now... and everyone... and other people in the work place to whom it's said... anybody to whom it's said understands that to be a new term of employment under which--

Unknown Speaker: But how do you judge that just on the basis of the threat alone?

I mean, we... and let me ask you how you factor in the existence of a policy that this kind of thing shouldn't happen and this is how you complain when it does?

Ms Underwood: --Well, in general, it seems to me a good complaint procedure will serve many functions.

One is that it will prevent some violations.

Another is that prompt reporting will tend to corroborate the plaintiff, and failure to use it will tend to raise questions about her credibility.

Unknown Speaker: But... but strict liability, which is what you're arguing for, will not encourage that.

Strict liability for a hostile work environment, say, or for a quid pro quo, say, if we were going to make a distinction, does... does not encourage use of grievance procedures.

It encourages laying back and filing a lawsuit.

Ms Underwood: Well, I don't... it's not so clear that that's so.

Because one consequence of laying back and filing a lawsuit is to minimize, to reduce the credibility of the plaintiff who says that something happened but never complained to anybody about it.

Unknown Speaker: It certainly will go to damages, won't it?

Ms Underwood: It would go absolutely to--

Unknown Speaker: All right.

Let me... let me... let me ask you this question, which... which I think is behind some of the things that are bothering us.

Take an easy case in which there's a company policy, but there have been 25 threats from the... from the particular supervisor.

And he had done everything that... that he could reasonably do to make it clear that he's going to follow through on the threat, but the moment for doing so has not yet occurred.

The... the next job evaluation has not come up yet.

The reason, if I understand your argument, that those threats... repeatedly, et cetera... changed the terms and conditions of employment is the same reason that we say other actions, perhaps even of co-employees, create hostile environments.

It does create a hostile environment, and the hostility is in fact a change of condition.

Is that your argument?

Ms Underwood: --Well, it is similar to the hostile environment created by coworkers in the way that you suggest.

The difference is that when hostile environment is created by coworkers, there is an issue about whether the company is properly responsible, because--

Unknown Speaker: Okay.

But leave... leave aside the question of what the standard of imputed liability is going to be.

Just go the question of violation.

And I take it on the question of violation, the two... the two instances are identical in your analysis?

There are evidentiary differences, but conceptually they're identical; is that correct?

Ms Underwood: --The harm... yes, the harm that's caused is caused in the same way.

I see the light.

Chief Justice Rehnquist: Thank you, Mr. Underwood.

The case... the case is submitted.