Congress charged the Equal Employment Opportunity Commission (“EEOC”) with administering and enforcing federal laws prohibiting workplace discrimination, including Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. In this case, the district court held that even where an employer’s proxy perpetrates sexual harassment prohibited by Title VII, the employer is not automatically liable but instead may avail itself of the defense for supervisor harassment established in Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). The EEOC files this brief to inform the Court of the EEOC’s view that Supreme Court precedent, well-established principles of agency law, decisions of this Court and other circuits, and the EEOC’s Enforcement Guidance all support the conclusion that employer liability is automatic when the harasser qualifies as the employer’s proxy. See Fed. R. App. P. 29(a)(2).

1. Is the employer automatically liable for actionable harassment where the individual perpetrating this unlawful harassment is not merely a supervisor but instead qualifies as the employer’s proxy?

2. Whether the district court’s decision not to instruct the jury regarding proxy liability was prejudicial, where the evidence at trial suggested that the harasser qualified as the employer’s proxy, given that the harasser was second-in-command as Director, Chief Operating Officer, and Secretary of the Board; answered only to the employer’s president; and dictated policies for the day-to-day governance of the employer’s main office?

STATEMENT OF THE CASE

A. Factual Background

Marnie O’Brien worked at The Middle East Forum (“MEF”), a think-tank, from 2016 to 2020, serving as a controller responsible for tasks such as bookkeeping, payroll, and various HR functions like onboarding. II.App.1934, 2165 (O’Brien testimony).[2] O’Brien testified that throughout her employment, she experienced a sustained course of sexual harassment at the hands of Gregg Roman, her direct supervisor. II.App.1933-2006, 2031-42. Roman was second-in-command at MEF as the organization’s Director, Chief Operating Officer, and Secretary of the Board, answering only to MEF’s president Daniel Pipes and exercising significant independent decision-making authority. II.App.2867-68 (Roman testimony), 2881-82, 2886, 2936-37 (Pipes testimony). Roman was involved in MEF’s mission and strategic vision and was in charge of MEF’s administration and day-to-day governance of MEF’s main office in Philadelphia where he and O’Brien worked. II.App.2881-82, 2886-87, 2936-37, 2941 (Pipes testimony). O’Brien and her co-workers described Roman as the “face” of MEF and stated that he was “everyone’s direct supervisor.” II.App.1993 (O’Brien testimony), 2486 (Barbounis testimony), 2602-03 (McNulty testimony).

O’Brien testified that Roman repeatedly made sexual advances towards her and her female co-workers, spread rumors about her sex life to co-workers, and used his position of authority to control and retaliate against women who rejected his unwanted sexual advances. II.App.1933-2006, 2031-42. According to O’Brien, Roman stared at her legs when she wore skirts, asked uncomfortable questions about her personal life, and made comments about liking older women (O’Brien was older than Roman). II.App.1939-40, 2194. Roman also invited O’Brien to dinner to discuss work matters, where he stated that “non-Jewish women are made for sex” (O’Brien is not Jewish), discussed his marital problems and made comments about “need[ing] a release,” and asked her to return to the office with him allegedly to sign paperwork. II.App.1888, 1942-45 (O’Brien testimony). On another occasion, at an after-party at an Airbnb with several co-workers following an out-of-town networking event, Roman took O’Brien into his bedroom and closed the door; she felt uncomfortable and promptly left. II.App.1949 (O’Brien testimony). At this same event, O’Brien saw Roman get close to two female co-workers and pull one onto his lap who looked “mortified and very uncomfortable.” II.App.1950 (O’Brien testimony). These co-workers testified about this incident during the trial, one stating that Roman pulled her downwards so that her face was almost on his lap and the other testifying that Roman reached under her dress and grabbed her buttocks, pulled her onto his lap, and whispered “that no other men should be in the room and [she] should know why that is.” II.App.2497 (Barbounis testimony), 2608 (McNulty testimony).

Roman also asked O’Brien to accompany him on a business trip to Israel and told her he had rented a two-room Airbnb. II.App.1958 (O’Brien testimony). When O’Brien said she did not want to stay in an Airbnb with Roman, he disinvited her from the trip. II.App.1958 (O’Brien testimony). Following this trip, the female co-worker who traveled to Israel in O’Brien’s place reported to O’Brien that, during the trip, Roman “stuck his foot under her butt” and “then he started screaming at her . . . that he needed a release. Someone needs to give him a blowjob.” II.App.1968 (O’Brien testimony). The co-worker confirmed this account, testifying that Roman said: “I’m a director, I’ve got a lot of responsibility . . . . I really need a good blow job, can you give me a release.” II.App.2513 (Barbounis testimony). After this trip, Roman asked O’Brien to begin documenting this co-worker’s performance deficiencies because “she’s going to have to go.” II.App.1963 (O’Brien testimony).

O’Brien and another co-worker testified that Roman cultivated fear and paranoia in the office by telling female staff that he could hack into phones and computers and that he had cameras set up in the office that he could access even from home. II.App.1977 (O’Brien testimony), 2487-89 (Barbounis testimony). O’Brien stated that she was aware of other women who had complained of Roman’s behavior and that MEF terminated their employment.[3] II.App.1952-57, 1969. O’Brien explained that because of this, and because Roman had instructed her not to correspond directly with Pipes, she was afraid to report the harassment. II.App.1953-57, 1969-70.

After O’Brien’s co-worker told her about being accosted during the Israel trip, O’Brien decided to report Roman’s conduct to Pipes. II.App.1976 (O’Brien testimony). She did so in November 2018 using a hand-written letter to avoid detection by Roman. II.App.1977-78 (O’Brien testimony). Pipes convened a meeting to discuss the allegations, but O’Brien and other co-workers testified that they felt uncomfortable speaking freely during this meeting because Roman’s sister, who also worked at MEF, was present and started “yelling at us saying, well, it’s because we wear short shirts so Gregg acts like that.” II.App.2545 (Barbounis testimony); see also II.App.1988-92 (O’Brien testimony), 2433-34 (Brady testimony).

While Pipes initially curtailed some of Roman’s duties, Roman began to regain responsibilities four months later, despite O’Brien’s specific objection. II.App.1996 (O’Brien testimony), 2977 (Pipes testimony). Shortly thereafter, O’Brien heard that Roman started a rumor that she slept with a co-worker’s father to get a prior job. II.App.1997-98 (O’Brien testimony). O’Brien complained to Pipes about this rumor, but he determined this rumor started prior to November 2018 and thus did not feel the need to impose further discipline on Roman. II.App. 2979, 2907-09 (Pipes testimony). Pipes testified that he thought “here we go again, rumors, and suspicions, and rivalries, and okay. You know, I really want to work on Egypt . . . and here I am working on a rumor.” II.App.2908. Pipes also required O’Brien to work with Roman on an audit over her objection. II.App.1999-2001 (O’Brien testimony), 2980 (Pipes testimony). O’Brien explained that this made her uncomfortable because she “didn’t want [Roman] to have any access to anything that [she] did because . . . he always said that anybody that ever crossed him he would destroy.” II.App.1999. When she protested to Pipes by email, he forwarded her email to Roman. II.App.2980 (Pipes testimony). Pipes testified that: “I was trying to get the audit done and Marnie was trying to obstruct. And it was the bane of my life that I had to deal with issues like this.” II.App.2981.

O’Brien left MEF in February 2020. II.App.2165 (O’Brien testimony). She testified that, after Roman regained his duties, MEF unfairly reprimanded her for purported performance deficiencies and pushed her out of the organization. II.App. 2013-14, 2040. Roman continues to serve as MEF’s Director, Chief Operating Officer, and Secretary of the Board. II.App.2936-37 (Pipes testimony).

B. District Court Proceedings

O’Brien brought this suit asserting, inter alia, a hostile-work-environment claim under Title VII. II.App.27-28. Before the district court, O’Brien argued on multiple occasions that MEF should be barred from raising the Faragher/Ellerth defense because Roman qualified as MEF’s proxy, such that any unlawful harassment would be automatically imputed to MEF. II.App.887-91 (summary judgment opposition); II.App.1098-1102 (pre-trial memorandum); II.App.1159, 1171 (proposed jury instructions). O’Brien’s case proceeded to a jury trial. During the charging conference, O’Brien indicated her intent to “re-rais[e] [the] argument[] that there should be a proxy liability instruction that goes to [the] jury,” asserting that “if Mr. Roman is found to be a proxy or alter ego, . . . the inquiry ends there. The liability is automatic. [Defendants] do not get the Faragher-Ellerth defense.” II.App.3018, 3022. The district court denied this request, and O’Brien indicated her intent to preserve the issue for appeal. II.App.3025.

The district court instead instructed the jury that if it found that O’Brien experienced unwelcome harassment that was severe or pervasive, it “must consider” the Faragher/Ellerth defense unless it found that Roman’s harassment culminated in a tangible employment action, and the jury “must find for the Defendants” if it found the elements of the defense satisfied. II.App.3110-13. The district court did not instruct the jury to consider whether Roman qualified as MEF’s proxy, nor did it instruct that the Faragher/Ellerth defense would be unavailable if Roman so qualified. II.App.3110-13.

The court submitted the case to the jury with a general verdict form, which asked only a single question related to O’Brien’s Title VII hostile-work-environment claim: whether she had “proven by a preponderance of the evidence that she was subjected to sexual harassment by the Defendant, Gregg Roman, and that this harassment was motivated by her gender.” II.App.3132. Because the verdict form leaves no option for the jury to answer “yes” to this question and then proceed to consideration of the Faragher/Ellerth defense, the question apparently encompassed both the inquiry into whether actionable harassment occurred and the inquiry into whether such harassment could properly be imputed to MEF. The jury answered this question in the negative, returning a verdict in MEF’s favor on this claim. II.App.3132.

O’Brien filed a motion for a new trial, arguing, inter alia, that the district court erred by failing to instruct the jury regarding proxy liability. II.App.3200-04. The court denied the motion. II.App.3281-93. First, the court believed that automatically imputing liability to the employer for actionable harassment by an employer’s proxy would contravene the Third Circuit’s Model Jury Instructions and Third Circuit precedent, which, according to the court, had never recognized the proxy theory of liability. I.App.4-8. Second, while recognizing that the Supreme Court had discussed the proxy theory of liability in Ellerth, the district court characterized this discussion as “dicta discussing various agency theories” rather than “binding precedent establishing how employers may be held [liable] under Title VII.” I.App.6. The district court instead relied on Supreme Court precedent detailing when harassment by a supervisor can be imputed to an employer, concluding that unless a “supervisor’s harassment culminates in a tangible employment action,” the employer “may escape liability by establishing” the Faragher/Ellerth defense. I.App.6 (quoting Vance v. Ball State Univ., 570 U.S. 421, 424 (2013)).

SUMMARY OF THE ARGUMENT

The district court declined to instruct the jury that if it found that O’Brien experienced sexual harassment, then MEF would be automatically liable if the jury also determined that Roman was MEF’s proxy. But in the EEOC’s view, Supreme Court precedent, fundamental principles of agency law, decisions from this Court and other circuits, and the EEOC’s Enforcement Guidance all support the conclusion that employer liability is automatic and the Faragher/Ellerth defense unavailable where the harasser is not merely a supervisor but instead qualifies as the employer’s proxy. Given the evidence at trial of Roman’s prominent role at MEF, including that he was second-in-command as Director, Chief Operating Officer, and Secretary of the Board; answered only to MEF’s president; and dictated policies for the day-to-day governance of MEF’s main office, the jury reasonably could have found that Roman was MEF’s proxy. A proxy-liability instruction was therefore warranted.

Because O’Brien objected to the district court’s refusal to give the requested instruction, a new trial is required unless there is a high probability that the erroneous instructions did not affect the outcome of the case. No such high probability exists here, given the possibility that (1) the jury’s verdict rested on the Faragher/Ellerth defense and (2) the jury could have found that Roman was MEF’s proxy, making MEF automatically liable.

ARGUMENT

I. The district court erred by refusing to instruct the jury that the Faragher/Ellerth defense would be unavailable if the jury found Roman to be MEF’s proxy.

To prevail on a hostile-work-environment claim, a plaintiff must show the existence not only of actionable harassment but also of some basis for imputing liability for this harassment to the employer. In Faragher and Ellerth, the Supreme Court held that an employer is subject to vicarious liability for unlawful harassment by a supervisor but that the employer may avoid such liability by establishing as a defense that: (1) the employer exercised reasonable care to prevent and promptly correct harassment; and (2) the plaintiff unreasonably failed to take advantage of the preventive or corrective opportunities or failed to avoid harm otherwise. Faragher, 524 U.S. at 807; Ellerth, 524 U.S. at 765. The district court correctly instructed the jury that this defense would be unavailable if the jury found that the harassment culminated in a tangible employment action. II.App.3111-12; Faragher, 524 U.S. at 807-08; Ellerth, 524 U.S. at 765. However, the district court declined to instruct the jury that, even without a tangible employment action, this defense would be unavailable—and the harassment automatically imputed to the employer—if the jury found that Roman was not merely a supervisor but instead was MEF’s proxy.[4] Because an employer is automatically liable for unlawful harassment when that harassment is perpetrated by an employer’s proxy, and because the jury could reasonably have found Roman to be MEF’s proxy given the significant evidence of his authority and influence within the organization, such that his actions could be said to “speak for” and constitute the official actions of MEF, the district court’s refusal to give the requested instruction was erroneous. See Woodson v. Scott Paper Co., 109 F.3d 913, 929 (3d Cir. 1997) (“[W]hen the question is whether the instructions misstate the law, [this Court’s] review is plenary.”).

A. Where the employer’s proxy perpetrates unlawful harassment, it is automatically imputed to the employer and no Faragher/Ellerth defense is available.

In Faragher and Ellerth, the very cases that created the defense for supervisor harassment, the Supreme Court recognized that employer liability is appropriate where the alleged harasser qualifies as the employer’s proxy or alter ego. In Faragher, the Court reviewed its prior case law on employer liability, citing with approval its earlier decision in Harris v. Forklift Systems, Inc., 510 U.S. 17 (1993), where it held a corporation liable for harassment by its president. The Faragher Court explained that it was “[not] exceptional that standards for binding the employer were not in issue in Harris,” given that “the individual charged with creating the abusive atmosphere was the president of the corporate employer” and thus “indisputably within that class of an employer organization’s officials who may be treated as the organization’s proxy.” Faragher, 524 U.S. at 789. The Faragher Court also cited with approval circuit decisions recognizing the appropriateness of liability where the harasser was the company’s owner or occupied a unique position of authority in the employer organization. Id. at 789-90 (citing Burns v. McGregor Elec. Indus., Inc., 955 F.2d 559, 564 (8th Cir. 1992) (employer-company liable where harassment was perpetrated by its owner); Torres v. Pisano, 116 F.3d 625, 634-35 & n.11 (2d Cir. 1997) (noting that a supervisor may hold a sufficiently high position “in the management hierarchy of the company for his actions to be imputed automatically to the employer”); Katz v. Dole, 709 F.2d 251, 255 (4th Cir. 1983) (“Except in situations where a proprietor, partner, or corporate officer participates personally in the harassing behavior,” an employee must “demonstrat[e] the propriety of holding the employer liable[.]”)). Similarly, in Ellerth, the Supreme Court outlined agency principles, including those establishing “indirect liability . . . where the agent’s high rank . . . makes him or her the employer’s alter ego.” 524 U.S. at 758. The Ellerth Court considered whether such liability could apply to the case before it but noted that “[n]one of the parties contend [that the alleged harasser’s] rank imputes liability under this principle.” Id.

In both Faragher and Ellerth, the Supreme Court made clear that it did not intend to depart from these well-established principles of agency law. See Faragher, 524 U.S. at 791-92 (approving of the Court’s past reliance on “basic agency principles” in Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57 (1986), and explaining that “Meritor’s statement of the law is the foundation on which we build today”); Ellerth, 524 U.S. at 754-55 (endorsing Meritor’s reliance on “principles of agency law” to determine appropriate standards of employer liability). In crafting the defense for supervisor harassment, Faragher and Ellerth thus “buil[t] upon rather than repudiate[d] the theory of proxy/alter ego liability articulated in the Court’s prior cases.” Townsend v. Benjamin Enters., 679 F.3d 41, 52 (2d Cir. 2012).

Following Faragher and Ellerth, “[e]very Court of Appeals to have considered this issue has held that the Faragher/Ellerth affirmative defense is unavailable when the supervisor in question is the employer’s proxy or alter ego.” Id. at 52; see Ackel v. Nat’l Commc’ns, Inc., 339 F.3d 376, 383-84 (5th Cir. 2003) (recognizing that the “Faragher/Ellerth affirmative defense is unavailable” where the harasser is “within that class of [the employer’s] officials who may be treated as the organization’s proxy”); Johnson v. West, 218 F.3d 725, 730 (7th Cir. 2000) (finding that “[v]icarious liability automatically applies” when harasser qualifies as employer’s proxy); see also Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 517 (9th Cir. 2000) (holding that Faragher/Ellerth is “inapplicable as a defense to punitive damages when the corporate officers who engage in illegal conduct” can be “considered proxies for the company”).

In addition, other circuits, while not specifically addressing the Faragher/Ellerth defense, have suggested that automatic liability is appropriate where the employer’s proxy perpetrates the unlawful harassment. Mallinson-Montague v. Pocrnick, 224 F.3d 1224, 1232 (10th Cir. 2000) (approving of jury instruction stating that “the employer is liable for any unlawful employment practices” of harasser who “operates as the alter ego of the employer”); Dees v. Johnson Controls World Servs., Inc., 168 F.3d 417, 421-22 (11th Cir. 1999) (vicarious liability applies where “the supervisor holds such a high position in the company that he could be considered the employer’s ‘alter ego’”); see also EEOC v. Xerxes Corp., 639 F.3d 658, 678 (4th Cir. 2011) (Motz, J., concurring) (harassment by employer’s proxy “would certainly be imputable to the employer”). Indeed, district courts have noted a consensus in the case law that automatic liability is appropriate where the alleged harasser qualifies as the employer’s proxy. Accord Rios v. Mun. of Guaynabo, 938 F. Supp. 2d 235, 253 (D.P.R. 2013) (noting consensus); Kimsey v. Akstein, 408 F. Supp. 2d 1281, 1301 (N.D. Ga. 2005) (same).

These decisions accord with the EEOC’s Enforcement Guidance, which recognizes that “[a]n employer is liable for unlawful harassment whenever the harasser . . . fall[s] ‘within that class . . . who may be treated as the organization’s proxy.’” EEOC Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors, 1999 WL 33305874, at *18 (June 18, 1999) (quoting Faragher, 524 U.S. at 789). In that situation, the “unlawful harassment is imputed automatically to the employer” and “the employer cannot raise the [Faragher/Ellerth] affirmative defense, even if the harassment did not result in a tangible employment action.” Id. As this Court has recognized, this Enforcement Guidance “constitute[s] a body of experience and informed judgment to which [this Court] . . . may properly resort for guidance.” Sheridan v. E.I. DuPont de Nemours & Co., 100 F.3d 1061, 1068 (3d Cir. 1996) (en banc) (quoting Meritor, 477 U.S. at 65); see also Townsend, 679 F.3d at 53 (relying on this guidance in holding that Faragher/Ellerth defense is unavailable where harasser is employer’s proxy).

The district court believed that this Court’s Model Jury Instructions and precedent were inconsistent with imposition of automatic liability for harassment by an employer’s proxy, but this conclusion was incorrect. First, while it is true that the Model Jury Instructions do not speak to proxy liability or its interaction with the Faragher/Ellerth defense, they also do not rule out the application of proxy liability in the Title VII context. See Third Circuit Model Jury Instructions: Civil §§ 5.1.3-5.1.5, https://www.ca3.uscourts.gov/sites/ca3/files/5_Chap_5_2020_August.pdf. Moreover, such model instructions are “not-binding on this, or any, court.” United States v. Maury, 695 F.3d 227, 259 (3d Cir. 2012).

In addition, while the district court was correct that this Court has never imposed automatic employer liability based on a harasser’s proxy status, this Court has twice suggested that a “bas[is] for employer liability” exists in those situations where the alleged harasser qualifies as the employer’s proxy. Suders v. Easton, 325 F.3d 432, 448 n.10 (3d Cir. 2003) (listing among “possible bases for liability” those “cases in which the position of the harasser makes him an alter ego of the employer”), vacated on other grounds sub nom. Pennsylvania State Police v. Suders, 542 U.S. 129 (2004); Durham Life Ins. Co. v. Evans, 166 F.3d 139, 152 n.8 (3d Cir. 1999) (listing among “other bases for liability” those “cases in which the harasser’s high rank makes him the employer’s alter ego”). Because the parties in Suders and Durham did not claim that the harasser qualified as the employer’s proxy, this Court simply had no occasion to apply the proxy theory of liability to the specific cases before it. See Suders, 325 F.3d at 448 n.10 (noting that proxy theory was “not relevant to [plaintiff’s] appeal”); Durham, 166 F.3d at 152 n.8 (noting that proxy theory was “not relevant to [the Court’s] decision”).

Thus, it cannot be said that this Court has “explicitly declined to . . . explore the proxy theory of liability within the Title VII context.” I.App.5 n.2. To the contrary, this Court simply has not had the opportunity to do so in any depth. However, several district courts within the Third Circuit, many relying on Durham, have had this opportunity and have found the Faragher/Ellerth defense barred where the harasser qualifies as the employer’s proxy. EEOC v. Donohue, No. 2:09-CV-280, 2011 WL 4572020, at *21 (W.D. Pa. Sept. 30, 2011) (citing Durham and other cases for proposition that where alleged harasser is “an ‘alter-ego’ of the employer, liability is automatic and the Faragher/Ellerth defense is unavailable”); Strauser v. Jay Fulkroad & Sons, Inc., No. 4:03-CV-2017, 2005 WL 2020636, at *8 (M.D. Pa. July 28, 2005) (reading Durham as having “recogniz[ed] [the] existence of [the] alter-ego theory of liability,” which if proven “would prevent defendant from relying on the Ellerth/Faragher affirmative defense”); see also Lidwell v. Univ. Park Nursing Care Ctr., 116 F. Supp. 2d 571, 579 (M.D. Pa. 2000) (finding that “an employer’s liability is rather straightforward” where alleged harasser qualifies as employer’s proxy); Griffin v. Allegheny Answering Serv., Inc., No. 04-1484, 2005 WL 8174538, at *8 (W.D. Pa. Nov. 1, 2005) (if alleged harasser were proxy, “no affirmative defense would be available”).

The district court also believed that the Supreme Court’s discussion of proxy liability in Ellerth constituted mere “dicta discussing various agency theories,” rather than “binding precedent establishing how employers may be held [liable] under Title VII.” I.App.6. But Ellerth specifically relied on these agency principles to determine when “an employer has vicarious liability” for unlawful harassment, noting that Congress “directed federal courts to interpret Title VII based on agency principles” by defining “the term ‘employer’ . . . under Title VII to include ‘agents.’” 524 U.S. at 754 (quoting 42 U.S.C. § 2000e(b)); see also Vance, 570 U.S. at 428 (noting that Ellerth “looked to the Restatement of Agency for guidance” in “identifying the situations in which . . . vicarious liability is appropriate”). And, with respect to alter-ego liability specifically, the Ellerth Court made clear that this was not an abstract theory but instead a concrete means of “imput[ing] liability” in harassment cases. 524 U.S. at 758 (considering whether alter-ego liability applied to Ellerth’s case but noting that “[n]one of the parties contend [that the alleged harasser’s] rank imputes liability under this principle”). Similarly, Faragher, which the district court did not discuss, drew a specific connection between the proxy theory and principles of employer liability, suggesting that a harasser’s proxy status results in his “actions [being] imputed automatically to the employer.” 524 U.S. at 789-90 (quoting Torres, 116 F.3d at 634). Thus, rather than simply expounding on “various agency theories,” both Faragher and Ellerth relied on these principles to determine “how employers may be held [liable] under Title VII.” I.App.6.

Finally, while the district court was correct that the Supreme Court has refused “to make employers strictly liable whenever a supervisor engages in harassment that does not result in a tangible employment action,” I.App.7 (quoting Vance, 570 U.S. at 430), a proxy “is more than simply one of [the employer’s] supervisory employees,” Mallinson-Montague, 224 F.3d at 1232. The Supreme Court’s discussion of the rationale for the Faragher/Ellerth defense establishes why this distinction between proxies and mere supervisors matters. In examining vicarious liability for supervisors, the Court deemed “the aided-by-agency-relation principle” of § 219(2)(d) of the Restatement (Second) of Agency (“Restatement”) to be the “appropriate starting point.” Faragher, 524 U.S. at 802; see also Ellerth, 524 U.S. at 759-60. For liability to be appropriate under this standard, the Court stated, “something more than the employment relation itself” is required; otherwise an employer would be liable for all supervisor and co-worker harassment. Ellerth, 524 U.S. at 760. In cases where a harassing supervisor took a tangible employment action against a subordinate, the Court explained, it was “beyond question” that “more than the mere existence of the employment relation aid[ed] in commission of the harassment,” because such an action “requires an official act of the enterprise” and usually entails “the imprimatur of the enterprise.” Id. at 760, 762. But “[a]bsent such an official act, the extent to which the supervisor’s misconduct has been aided by the agency relation . . . is less certain” and “[t]hat uncertainty . . . justifies affording the employer the chance to establish” the Faragher/Ellerth defense. Pennsylvania State Police, 542 U.S. at 148-49.

In contrast, where an employer’s proxy perpetrates the unlawful harassment, there is no such “uncertainty” regarding the employer’s role in the unlawful harassment. Proxy liability does not stem from the aided-by-agency-relation principle of § 219(2)(d) of the Restatement, which addresses situations where the servant independently “cause[s] harm because of his position as [an] agent,” see Restatement (Second) of Agency (1958) § 219, cmt. e, but instead from § 219(2)(a), which addresses situations where “the master” itself “intended the conduct or the consequences,” id. § 219(2)(a); Ellerth, 524 U.S. at 758; see also Townsend, 679 F.3d at 52 (explaining that proxy liability “holds an employer liable in its own right for wrongful harassing conduct, rather than vicariously liable for actions of the employer’s agents” (emphasis added)). Where the harasser possesses such significant authority as to “speak for the corporate employer,” Ackel, 339 F.3d at 384, the harasser is, for all meaningful purposes, acting as the employer itself, and thus the employer can be said to have acted with tortious intent, see B. Glenn George, Employer Liability for Sexual Harassment: The Buck Stops Where?, 34 Wake Forest L. Rev. 1, 11 (1999) (in cases of proxy liability, “the harasser and the employer are considered one; thus, the ‘employer’ has acted with actual intent”).

Thus, when the harassment is perpetrated by the employer’s proxy—as when, in a separate context, harassment by even a low-level supervisor culminates in a tangible employment action—it is clear that the harasser is carrying out an “official act of the enterprise,” Ellerth, 524 U.S. at 762, because the harasser and the employer are one and the same, see Faragher, 524 U.S. at 790 (explaining that automatic liability for harassment culminating in tangible employment actions can be viewed as “a variation of the ‘proxy’ theory,” resting on the notion that “when a supervisor makes such decisions, he ‘merges’ with the employer and his act becomes that of the employer”); Townsend, 679 F.3d at 52 n.12 (adopting this interpretation of Faragher). In such circumstances, automatic liability is warranted and recourse to the Faragher/Ellerth defense is inappropriate.

B. The evidence presented at trial of Roman’s significant authority within MEF and control over MEF’s affairs warranted instructing the jury to determine whether he qualified as MEF’s proxy.

The evidence presented at trial that Roman was the “man in charge,” with significant independent decision-making authority and pervasive control over the day-to-day governance of MEF, warranted giving the jury an opportunity to determine whether he was MEF’s proxy. Indeed, the district court based its refusal to give the requested proxy instruction not on a paucity of evidence regarding Roman’s potential proxy status but instead on the legal conclusion that the proxy theory of liability did not apply at all in the Title VII context. I.App.4-8.

Merely serving as a supervisor who exercises control over a subordinate does not suffice to establish proxy status. See, e.g., Townsend, 679 F.3d at 55-56 (mere supervisory status not sufficient); Mallinson-Montague, 224 F.3d at 1233 (same); Johnson, 218 F.3d at 730 (supervisor not proxy); Torres, 116 F.3d at 634-35 (same). Instead, the nature of the harasser’s position and authority must be such that the harasser can be considered to embody or “speak for” the employer. Ackel, 339 F.3d at 384; see also Johnson, 218 F.3d at 730 (looking to whether harasser’s “actions ‘spoke’ for the [employer]”). In making this determination, courts look to factors such as the harasser’s position and role within the employer organization, the degree of policy-making and decision-making authority the harasser possessed, the influence the harasser wielded over the organization’s affairs, and the number of other employees who reported to the harasser and to whom the harasser answered. See, e.g., Townsend, 679 F.3d at 54, 56 (no reasonable jury could reject harasser’s proxy status where harasser was “second-in-command,” answered only to employer’s president, “exercised managerial responsibility for day-to-day operations,” “collaborated with [company president] on corporate decisions including hiring,” and had other “supervisors and managers in the field report[ing] directly to him”); Mallinson-Montague, 224 F.3d at 1233 (proxy instruction appropriate where harasser answered only to company president and was “the ultimate supervisor of all employees” in a given department).

Ultimately, “[o]nly individuals with exceptional authority and control within an organization” will qualify as its proxy. Helm v. Kansas, 656 F.3d 1277, 1286 (10th Cir. 2011). The evidence here suggested that Roman was such an individual. As MEF’s Director, Chief Operating Officer, and Secretary of the Board, II.App.2936-37 (Pipes testimony), Roman was second-in-command, answering only to MEF President Pipes, II.App.2881-82, 2886 (Pipes describing Roman as his deputy and as “number two” in the organization); see also II.App.1936 (O’Brien testimony that “[e]veryone reported to Gregg and then Gregg reported to Dr. Pipes”). Roman’s job was to “run[] the administration” of the organization and he was “in charge of” dictating policies for the day-to-day governance of MEF’s main Philadelphia office. II.App.2886, 2941 (Pipes testimony). One of O’Brien’s co-workers described Roman as “the man in charge” who was “responsible for all of the administration oversight with anybody that worked at [MEF].” II.App.2486 (Barbounis testimony). Roman was also involved in MEF’s mission and strategic vision. II.App.2882, 2886-87 (Pipes’ testimony that Roman’s role extended to writing articles and appearing on television for MEF and “know[ing] the subject, . . . the people, . . . [and] the issues” underlying MEF’s mission). Roman also possessed significant decision-making authority: both Roman and Pipes testified that Roman did not need to clear every decision with or even report every decision to Pipes. II.App.2867-68 (Roman testimony), 2882 (Pipes testimony). Roman was “actively involved” in decisions about hiring and firing, II.App.2940 (Pipes testimony), and “was everyone’s direct supervisor,” II.App.2602 (McNulty testimony). As Pipes acknowledged, there was “no question . . . I delegated to him authority.” II.App.2882.

O’Brien and her co-workers described Roman as the “face” of MEF. II.App.1993 (O’Brien testimony), 2486 (Barbounis testimony), 2603 (McNulty testimony). While Pipes occupied a prominent and visible role, the jury heard testimony that Roman exercised more daily control over MEF’s affairs than Pipes did. II.App.1956-57 (O’Brien testimony that “Pipes was never in the office” and “Gregg was the only one in charge”), 2531 (Barbounis testimony that “Pipes was not a factor in the office” because “Gregg was the one that was always in control”). Indeed, Roman played such a critical role that Pipes had planned to step back and make Roman the “head of the whole organization” before the harassment allegations came to light. II.App.2886-87 (Pipes testimony). This evidence of Roman’s unique and pervasive control over MEF’s affairs strongly suggests that he embodied or “spoke for” MEF so as to qualify as its proxy.

II. A new trial is required because the district court’s error in failing to give a proxy-liability instruction was not harmless.

Harmless error review applies here because O’Brien properly preserved her challenge to the erroneous jury instructions. O’Brien submitted proposed instructions that would have omitted reference to the Faragher/Ellerth defense upon a finding that Roman qualified as MEF’s proxy.[5] II.App.1159, 1171. During the charging conference, she also “re-raise[d]” her “argument[] that there should be a proxy liability instruction that goes to [the] jury,” stating that “if Mr. Roman is found to be a proxy or alter ego, . . . the inquiry ends there. The liability is automatic. [Defendants] do not get the Faragher-Ellerth defense.” II.App.3018, 3022. When the district court refused to so instruct the jury, O’Brien indicated her intent to “preserve[] the issue for appeal,” and the judge agreed, stating “that should be clear. . . . There’s no doubt.” II.App.3025. By properly requesting the instruction and objecting on the record to the court’s refusal to give it, O’Brien clearly preserved her claim of error.[6] See Franklin Prescriptions, Inc. v. New York Times Co., 424 F.3d 336, 339-40 (3d Cir. 2005); Fed. R. Civ. P. 51(c)(1), (d)(1)(B).

Under harmless error review, a new trial is required unless “there is a high probability that the [erroneous instructions] did not affect the outcome of the case.” Woodson, 109 F.3d at 931. For the error here to be harmless, this Court would thus need to find a high probability that: (1) the jury’s verdict did not rest on the Faragher/Ellerth defense; or (2) the jury would have rejected Roman’s proxy status, such that the defense would have remained available even with a proper instruction. Neither finding is appropriate here.

First, this error cannot be held harmless based on a claim that the jury’s verdict did not rest on the Faragher/Ellerth defense. The verdict form does not distinguish between the inquiry into whether actionable harassment occurred and the inquiry into whether this harassment could be imputed to MEF. II.App.3132. Thus, it is impossible to tell from the verdict form whether the jury based its verdict on a finding that Roman did not sexually harass O’Brien or instead on a determination that although he did, MEF is not liable because it established the Faragher/Ellerth defense. This Court’s precedent establishes that where use of a general verdict form gives rise to such ambiguity, a finding of harmless error is inappropriate. Wilburn v. Maritrans GP Inc., 139 F.3d 350, 361 (3d Cir. 1998) (“Where a jury has returned a general verdict and one theory of liability is not sustained by the evidence or legally sound, the verdict cannot stand because the court cannot determine whether the jury based its verdict on an improper ground.”). “Faced with this circumstance, the proper course is for [this Court] to remand for a new trial rather than attempt to divine the basis of the jury’s verdict.” Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 534 (3d Cir. 1998).

Second, it would strain credulity to argue that it is highly probable that a jury would have rejected Roman’s proxy status if given the opportunity to make a determination regarding this issue. As discussed above, the jury heard significant evidence regarding Roman’s unique control over MEF’s daily operations and the significant independent decision-making authority he possessed as MEF’s second-in-command. Supra at 22-23. The erroneous instructions thus cannot be held harmless based on a claim that the jury would have rejected Roman’s proxy status if properly instructed. A new trial is therefore required.

CONCLUSION

For the foregoing reasons, the district court’s judgment should be reversed.

Respectfully submitted,

GWENDOLYN YOUNG REAMS

Acting General Counsel

JENNIfer s. goldstein

Associate General Counsel

ANNE NOEL OCCHIALINO

Acting Assistant General Counsel

/s/ Chelsea C. Sharon

CHELSEA C. SHARON

DC Bar No. 1016006

Attorney, Appellate Litigation Services

Office of General Counsel

Equal Employment Opportunity Commission

131 M St. NE, Fifth Floor

Washington, DC 20507

(202) 921-2889

chelsea.sharon@eeoc.gov

December 3, 2021

[1] The EEOC takes no position on any other issues.

[2] References to the Appendix take the form “[Volume number].App.[page number].”

[3] Several other women filed hostile-work-environment actions against MEF based on Roman’s conduct. See Barbounis v. The Middle East Forum et al., 19-cv-05030 (E.D. Pa.), R.133 at 4 (denying MEF’s summary judgment motion based on evidence of “ongoing sexual and suggestive comments, constant leering at [plaintiff] and physical touching”); Brady v. The Middle East Forum et al., 19-cv-05082 (E.D. Pa.), R.61 (parties reached settlement); McNulty v. The Middle East Forum et al., 20-cv-02945 (E.D. Pa.) (still in discovery); Yonchek v. The Middle East Forum et al., 19-cv-05083 (E.D. Pa.), R.7 (voluntarily dismissed).

[4] Courts refer interchangeably to “proxy” and “alter-ego” liability. We use the term “proxy,” as did the district court.

[5] The trial transcripts indicate that the parties intended to submit additional proposed jury instructions by email near the close of trial, including proposed language regarding a proxy-liability instruction. II.App.2919-21. The district court acknowledged receiving email submissions from the parties, II.App.2932, but these submissions are not part of the record or the appendices submitted on appeal.

[6] O’Brien raised the proxy-liability argument on multiple occasions, including in a pre-trial memorandum seeking to preclude MEF’s reliance on the Faragher/Ellerth defense, II.App.1098-1102, a request that the district court denied, II.App.1560. See also II.App.887-91 (raising issue in summary judgment opposition); II.App.1453-55 (raising issue in response to Defendants’ motion in limine). There is no question that “the district court was fully apprised of [O’Brien’s] position” regarding proxy liability. Franklin Prescriptions, 424 F.3d at 339 (citation omitted).