The employer is automatically liable and has no defense if a supervisor’s harassment of an employee causes an adverse action such as termination, lost wages, or a suspension.
However, an employer does have a defense (known as a Faragher/Ellerth defense) if a supervisor creates a hostile work environment for an employee (but no adverse action is taken against the employee, like being fired). Under this scenario, the employer may prevail if it proves:
Finally, if the situation involves a co-worker (non-supervisory employee) harassing another employee, then the employer will be liable for the harassment if the employer knew, or should have known, about the hostile work environment and failed to promptly correct it.
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