Michigan supervisors can be personally liable for discrimination

by William A. Moore, Clark Hill PLC, Detroit

Can a supervisor be sued personally for alleged acts of discrimination in Michigan? Based on a January decision by the Michigan Court of Appeals, the answer is yes.

Supervisors and HR professionals frequently have to address disciplinary issues involving employees who may enjoy “protected” status. In this context, protected status means protected by Michigan’s Elliott-Larsen Civil Rights Act, which prohibits discrimination on account of race, sex, national origin, height, weight and other specified categories.

The answer to the question of whether a supervisor (or HR professional) can be personally sued for discrimination—and held personally liable and made to pay damages—has changed over the years. The issue’s continuing evolution may have reached a conclusion with a Michigan Court decision issued on January 25, 2007. But before we review the facts and the decision in that case, a brief synopsis of Michigan law is in order:

Discrimination liability in Michigan

Michigan law has long recognized that freedom from unlawful employment discrimination is a civil right. An important definition under the Elliott-Larsen Act is that of an “employer.” That term is defined to mean any “person who has one or more employees, and includes an agent of that person.”

At the heart of any plaintiff’s case for discrimination (including sexual harassment, which by definition is a form of sex discrimination), is whether or not it can be fairly said that the employer or the employer’s agent committed a violation of the Elliott-Larsen Act.

Most cases have turned on whether the harassing supervisor or co-worker met the act’s definition of “employer’s agent.” Supervisors meet that definition. Clearly, a supervisor’s actions can be attributed to the employer, and thus a supervisor’s illegal or discriminatory act can be the basis of an employer’s liability. A corporation or company acts through its agents.

The concept of personal liability under the act is not as clear. In 2002, the Michigan Court of Appeals ruled for the first time that a supervisor cannot be held personally liable for a hostile work environment resulting from sexual harassment. The employer was found not responsible because it promptly began an investigation and took reasonable action as soon as it learned of the harassment. The supervisor argued, among other things, that in the absence of employer liability, there was no basis for the supervisor’s individual liability. The court agreed.

The claim of Lula Elezovic against Ford

Even before the 2002 decision, the case of Lula Elezovic had begun its long march through the court system. Elezovic was an employee of the Ford Motor Company; her supervisor was defendant Daniel Bennett.

The basis for the sexual-harassment complaint was that Bennett exposed himself to the plaintiff and engaged in other overtly offensive conduct. Elezovic did not file any formal written sexual-harassment complaint and did not follow Ford’s anti-harassment policy. She did tell two first-line supervisors (friends of hers who were under Bennett in the chain of command) but asked them to keep it quiet.

In June 2005, the Supreme Court of Michigan dismissed Ford from the suit, citing lack of knowledge, but ruled that the act’s language referring to “an agent” extended potential individual liability to the supervisor. The court expressly overruled previous decisions and essentially held that because employers can be held liable under the Elliott-Larsen Act, and because agents are considered employers, agents can be held liable individually under the civil rights act.

But that did not end the discussion. On remand, Bennett was still found not to be responsible because, at the time when he allegedly committed the charged acts of sexual harassment, he was held not to be functioning as Ford’s agent. (In layman’s language, the supervisor’s sexually offensive conduct was not done for his employer’s benefit.)

As agent, supervisor is liable

On appeal back to the Michigan Court of Appeals, that ruling was reversed. Recognizing that the Elliott-Larsen Act’s intention is to “suppress the evil and advance the remedy,” the court held that the harassing supervisor should be held to the same standard as the employer. The court ruled that a jury may find a supervisor to be an agent of the employer who can be held directly and individually liable for discriminatory behavior in violation of the civil rights act while acting in his capacity as the victim’s employer.

Whether or not the Elezovic case can be characterized as “bad law” arising from “bad facts,” the decision is now controlling in Michigan, at least until the state Supreme Court again rules on the issue.

As agents of the employer, supervisors who allegedly commit sexual harassment or other discriminatory acts during the performance of their job duties can be held personally liable whether or not liability can stick against the employer.

Plaintiffs can be expected to take advantage of this state law to sue both the employer and any members of management who have been involved in allegedly discriminatory acts or decision-making.

William A. Moore is a member of Clark Hill’s Labor and Employment Group in the firm’s Detroit office. He can be reached at (313) 965-8674 or at wmoore@clarkhill.com.