Huston v. Procter & Gamble, No. 07-2799 (3d Cir. June 9, 2009)

By Paul Mollica

In a co-worker Title VII/state law harassment case, there are several ways to impute knowledge of the harassment to the employer for liability purposes:  the employee can report the harassment through channels, the harassment may be so pervasive that the employer obtains constructive knowledge, or upper-level management may learn of the harassment.  The employee in this case attempted to prove her claim through the last of these routes, but the Third Circuit (affirming summary judgment) defines “management” level too narrowly for her to present a genuine issue of material fact on that issue.

Huston v. Procter & Gamble, No. 07-2799 (3d Cir. June 9, 2009):  The plaintiff, a women on a team of men, complained to HR about the usual kinds of awful behavior (displaying pornography, flashing, foul language).  The result was a “collective guilt” verdict, with everyone on the floor (including the plaintiff) getting a demerit in their records.  The employee was eventually fired for supposedly fabricating an entry in a log.

On appeal, one of the claims presented was hostile work environment under Title VII and Pennsylvania state law.  There is no dispute that as soon as the employee reported the harassment through channels, the company investigated and took corrective action.  The plaintiff contended that before she officially complained, the supervisors on the floor of the shop knew about the behavior but took no steps to prevent it:

“Huston argues that Romanchick and Traver were management level employees because they held the supervisory positions of process coach and machine leader, respectively, and
they had the authority to ‘turn in’ employees who were in breach of plant policies. In particular, Huston suggests that Romanchick qualifies as management level because he facilitated the termination of her employment by reporting on Huston’s data falsification to her manager, Francisco Lanza. P&G counters that Romanchick and Traver were merely technicians, like Huston, and that their duties were limited to ensuring that the production line machines ran smoothly. While charging that Romanchick facilitated the termination of her employment, Huston does not dispute that neither Romanchick nor Traver had the authority to discipline technicians on behalf of P&G or otherwise change their employment status.”

The Third Circuit, affirming the district court, holds that these two figures fell short of “management” for purposes of imputing their knowledge to the company as a whole.  Citing, inter alia, the Restatement (Third) of Agency § 5.03 (2006), the court holds that “there are two parameters limiting when knowledge of facts known by an agent is imputed to the principal: the agent’s duties to the principal; and the materiality — or significance — of the facts in question to those duties.” Thus, to impute an executive’s knowledge to the employer, the executive must be:

“sufficiently senior in the employer’s governing hierarchy, or otherwise in a position of administrative responsibility over employees under him, such as a departmental or plant manager, so that such knowledge is important to the employee’s general managerial duties. In this case, the employee usually has the authority to act on behalf of the employer to stop the harassment, for example, by disciplining employees or by changing their employment status or work assignments. The employee’s knowledge of sexual harassment is then imputed to the employer because it is significant to the employee’s general mandate to manage employer resources, including human resources.”

The panel holds that the two supervisors were not “management” for purposes of imputing their knowledge to P&G:

“In considering Huston’s case, the District Court concluded that Romanchick and Traver did not qualify as management level employees. We agree. Linda Sheehan testified that P&G hired two types of employees at the Mehoopany plant: technicians and managers. She explained that
managers were salaried employees who have the authority to hire, discipline, and discharge technician employees, whereas technicians were paid hourly wages and did not have the
authority to hire, discipline, and discharge. Romanchick and Traver were technicians. Although they happened to perform some oversight functions as process coach and machine leader,
respectively, they remained technicians, generally practicing the same skills and often performing substantially the same functions as the other members on Huston’s work team. They were never managers.”

Not a lot of case law out their on this particular issue, so I expect to see it cited a lot until a split emerges.