Participation, Proxy and Payment: The Three Lessons of 'Townsend'

In its recent decision, Townsend v. Benjamin Enterprises, No. 09 CV 197, 2012 U.S. App. Lexis 9441 (2d Cir. May 9, 2012), the U.S. Court of Appeals for the Second Circuit explicitly addressed two issues of first impression, which impact both employers and employees facing off in retaliation and hostile work environment claims brought under Title VII. In that regard, it is also something employers need to be aware of when preparing and instituting best practice policies.

The first issue involved a retaliation claim and favors employers; the court adopted the position that employees who participate in an internal investigation of discrimination unconnected to a pending EEOC charge are not protected from retaliatory action under the “participation” clause of Title VII’s anti-retaliation provision. The second issue focused on a hostile work environment claim and favored employees; the court held that the Faragher/Ellerth affirmative defense may not be used when the alleged harasser is a supervisor who is considered a proxy or alter ego of the company. Both holdings are actually consistent with circuit courts nationwide and, therefore, will likely not see much significant challenges, unless the Legislature intervenes.