Chambers v. Trettco, Inc

614 N.W.2d 910, 463 Mich. 297

• Court: Michigan Supreme Court
• Decided: July 31, 2000
• Docket: 114085, Calendar No. 5
• Status: Published

Opinions

Markman, J.

We granted leave to consider whether the Court of Appeals properly held an employer vicariously liable under the Civil Rights Act (cra), MCL 37.2101 et seq.-, MSA 3.548(101) et seq., for sexual harassment by a supervisory employee against a subordinate employee. A divided Court of Appeals panel affirmed the judgment on a jury verdict returned in plaintiffs favor. The majority utilized vicarious liability principles articulated in two recent United States Supreme Court decisions applying the federal Civil Rights Act. We hold that the principles stated in the federal cases relied on by the Court of Appeals do not apply to claims brought under Michigan’s Civil Rights Act. Instead, we adhere to prior Michigan precedent and the specific language of the Michigan statute. We also hold that defendant was entitled to a directed verdict on plaintiff’s claim of quid pro quo sexual harassment. Accordingly, we vacate the Court of Appeals opinion and remand to the Court of Appeals for reconsideration of plaintiffs claim of hostile environment sexual harassment in light of this opinion.

I

Defendant Trettco, Inc., a corporation that manages food service operations for a number of businesses, hired plaintiff as a cook in June 1995, planning to use her in various locations, pending possible placement in a permanent position. Plaintiff was initially assigned to replace a cook who was on medical leave. During her second week in this position, a temporary supervisor, Paul Wolshon, was assigned to cover the duties of the regular on-site supervisor, Jennifer Hos-tutler, who was on vacation. Wolshon was a “float manager” for defendant, meaning that he moved from location to location working as an interim manager as needed. Wolshon lacked the authority to hire, fire, or discipline other employees. Plaintiff, however, believed that Wolshon had the authority to fire her.

According to the trial testimony, during the four-day period that Wolshon was at the facility,¹ he engaged in a course of offensive conduct toward plaintiff, including rubbing plaintiffs buttocks, grabbing her breasts, and repeatedly propositioning plaintiff for sexual favors. Plaintiff testified that she felt intimidated and threatened by Wolshon’s behavior. Defendant had a written sexual harassment policy in its company handbook, which all employees were required to read and sign. The policy defined sexual harassment, explained that persons engaging in sexual harassment were subject to discipline, including immediate termination, and instructed all employees experiencing or witnessing an incident that they considered sexual harassment or discrimination were to report the incident to defendant’s vice president. All defendant’s managers were also required to attend a yearly management-development seminar that included a segment on sexual-harassment education.

On Wednesday, July 6, 1995, defendant’s regional director, Kevin McLaughlin, called the facility and plaintiff answered the telephone. After sensing something “wrong” in plaintiff’s voice, McLaughlin inquired whether there was a problem. Without specifying the nature of the problem, plaintiff indicated that something was wrong and that she needed to talk to him. When McLaughlin sought to get more information over the telephone, plaintiff refused to elaborate. Plaintiff later testified that this was because Wolshon was standing next to her. There was conflicting testimony regarding whether McLaughlin did anything further to determine the nature of the undescribed problem. According to McLaughlin, he called the following day and plaintiff again refused to say what was wrong. Plaintiff testified that he only called on Wednesday. They both agree that McLaughlin said that he would come to the facility on Friday. McLaughlin testified that he did so, but did not speak to plaintiff. Plaintiff and others testified that they did not see him on that day. It is undisputed, however, that at no time during the week did plaintiff ever specifically tell McLaughlin about the sexual harassment perpetrated by Wolshon. Nor did she follow the process outlined in the policy manual for reporting sexual harassment. McLaughlin testified that it never occurred to him that plaintiff might be having problems with her male supervisor.

On the following Monday, when Hostutler returned from vacation, and plaintiff informed her of Wolshon’s conduct. Hostutler immediately telephoned McLaughlin and relayed the news. McLaughlin instructed Hos-tutler to prevent Wolshon from entering the facility, where he was scheduled to work that morning, and to send him directly to the home office. McLaughlin then commenced an investigation of the incident. He instructed Hostutler to have plaintiff prepare a written statement, which was then submitted to McLaughlin. Shortly thereafter, McLaughlin met with plaintiff and Hostutler, and assured plaintiff that she would never have to work with Wolshon again. Thus, as soon as plaintiff reported the sexual harassment, Wol-shon was removed from the facility and plaintiff never again had contact with Wolshon. When the permanent cook returned, plaintiff was transferred to another facility operated by defendant. Plaintiff was eventually discharged in September 1995 when she failed to show up for work for several consecutive days.

Plaintiff then brought suit against defendant, alleging assault, sexual assault, sexual harassment, and retaliatory discharge. Wolshon was not named as a defendant. The trial court dismissed the assault and sexual assault charges on defendant’s motion for a directed verdict. Plaintiff voluntarily dismissed her retaliatory discharge claim before the case went to the jury. Thus, plaintiff advances no claim that the discharge had any connection to the sexual harassment. The trial court denied defendant’s motions for a directed verdict on plaintiff’s claim of sexual harassment, both after plaintiff’s proofs and at the close of all the evidence.

The case was submitted to the jury on separate theories of liability — quid pro quo sexual harassment and hostile environment sexual harassment. The jury verdict form required the jury to answer two specific interrogatories corresponding to these theories, and to only proceed to assess damages if it held for plaintiff on either of these two questions. The jury answered both interrogatories in plaintiffs favor and then assessed damages at $150,000.

n

Defendant appealed, and the Court of Appeals affirmed in a two-to-one decision.² The majority rejected defendant’s argument that plaintiff had failed to prove the existence of a hostile work environment, reasoning that the severe and pervasive sexual harassment occurring during Wolshon’s week in charge was sufficiently outrageous to qualify as a hostile work environment. With respect to defendant’s vicarious liability, rather than analyzing the case pursuant to Radtke v Everett, 442 Mich 368; 501 NW2d 155 (1993), the majority adopted Faragher v Boca Raton, 524 US 775; 118 S Ct 2275; 141 L Ed 2d 662 (1998), and Burlington Industries, Inc v Ellerth, 524 US 742; 118 S Ct 2257; 141 L Ed 2d 633 (1998). In those cases, the United States Supreme Court, applying the federal Civil Rights Act, held:

An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence .... The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. ... No affirmative defense is available, however, when the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment. [Faragher, supra, 524 US 807-808; Ellerth, supra, 524 US 765.]

The Court of Appeals majority concluded that defendant could properly be found to be vicariously liable, because Wolshon’s conduct created a hostile work environment and defendant could not have established the necessary affirmative defense. Regarding defendant’s ability to establish an affirmative defense under Faragher and Ellerth, the majority explained that “the jury could have, and apparently did, reject McLaughlin’s testimony and accept plaintiff’s testimony regarding defendant’s attempts to prevent or correct Wolshon’s sexually harassing behavior.” 232 Mich App 567. Thus, reasoned the majority, “the jury could reasonably infer that defendant was vicariously liable for Wolshon’s sexually harassing behavior because defendant failed to exercise reasonable care to prevent and correct promptly Wolshon’s behavior.” Id. The majority did not address plaintiffs quid pro quo claim because it relied on Faragher and Ellerth for the proposition “that the labels ‘quid pro quo’ and ‘hostile work environment’ are not controlling for purposes of establishing employer liability.” 232 Mich App 562-563 and n 3.

The dissent, asserted that this was not a case of quid pro quo harassment, but only one presenting a claim of hostile environment harassment. It further noted that, in such a case, pursuant to this Court’s precedent, a plaintiff must establish that the employer bears the responsibility for the alleged harassment under the doctrine of respondeat superior, which ordinarily requires a showing of either a recurring problem or that repetition of an offensive incident was likely, and that the employer failed to correct the problem upon receiving notice. Radtke, supra at 382, 395. The dissent found that the evidence in this case was insufficient to satisfy that burden.

We granted leave to appeal and directed the parties to address, among other things, whether the principles adopted in Faragher and Ellerth should apply in cases brought under the Michigan Civil Rights Act. 461 Mich 905 (1999).

m

A

We begin our analysis by reviewing the current principles of Michigan law regarding sexual harassment in employment because this is the law that the trial court and the Court of Appeals were obligated to follow.³ Through the Civil Rights Act, Michigan law recognizes that, in employment, freedom from discrimination because of sex is a civil right. MCL 37.2102; MSA 3.548(102). Employers are prohibited from violating this right,⁴ MCL 37.2202; MSA 3.548(202), and discrimination because of sex includes sexual harassment, MCL 37.2103(i); MSA 3.548(103)(i). In turn, “sexual harassment” is specifically defined to include

unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct or communication of a sexual nature under the following conditions:

(i) Submission to the conduct or communication is made a term or condition either explicitly or implicitly to obtain employment ....

(ii) Submission to or rejection of the conduct or communication by an individual is used as a factor in decisions affecting the individual’s employment ....

(iii) The conduct or communication has the purpose or effect of substantially interfering with an individual’s employment.... [MCL 37.2103(f); MSA 3.548(103)(i).]

The statute expressly addresses an employer’s vicarious liability for sexual harassment committed by its employees by defining “employer” to include both the employer and the employer’s agents. MCL 37.2201(a); MSA 3.548(201)(a).

Sexual harassment that falls into one of the first two of these subsections is commonly labeled quid pro quo harassment. Champion v Nation Wide Security, Inc, 450 Mich 702, 708; 545 NW2d 596 (1996). Sexual harassment that falls into the third subsection is commonly labeled hostile environment harassment. Radtke, supra at 381. We have previously identified the elements that a party must establish in order to make out a claim for sexual harassment with respect to each of these categories.

In order to establish a claim of quid pro quo harassment, an employee must, by a preponderance of the evidence, demonstrate:

(1) that she was subject to any of the types of unwelcome sexual conduct or communication described in the statute, and (2) that her employer or the employer’s agent used her submission to or rejection of the proscribed conduct as a factor in a decision affecting her employment. [Champion, supra at 708-709.]

In order to establish a claim of hostile environment harassment, an employee must prove the following elements by a preponderance of the evidence:

(1) the employee belonged to a protected group;

(2) the employee was subjected to communication or conduct on the basis of sex;

(3) the employee was subjected to unwelcome sexual conduct or communication;

(4) the unwelcome sexual conduct or communication was intended to or in fact did substantially interfere with the employee’s employment or created an intimidating, hostile, or offensive work environment; and

(5) respondeat superior. [Radtke, supra at 382-383.]

Whichever category of sexual harassment is at issue, it is always necessary to determine the extent of the employer’s vicarious liability when harassment is committed by an agent. Because the Civil Rights Act expressly defines “employer” to include agents, we rely on common-law agency principles in determining when an employer is liable for sexual harassment committed by its employees. Vicarious liability exists in the case of quid pro quo harassment because the quid pro quo harasser, by definition, uses the power of the employer to alter the terms and conditions of employment. Champion, supra.

By comparison, we have noted that such strict imposition of vicarious liability on an employer “is illogical in a pure hostile environment setting” because, generally, in such a case, “the supervisor acts outside ‘the scope of actual or apparent authority to hire, fire, discipline, or promote.’ ” Radtke, supra at 396, n 46 (citations omitted). Hence, we have explained:

Under the Michigan Civil Rights Act, an employer may avoid liability [in a hostile environment case] “if it adequately investigated and took prompt and appropriate remedial action upon notice of the alleged hostile work environment.” Downer v Detroit Receiving Hosp, 191 Mich App 232, 234; 477 NW2d 146 (1991) (applying the standard to a Civil Rights Act claim). See also Babcock [v Frank, 783 F Supp 800, 809 (SD NY, 1992)]. Such prompt and appropriate remedial action will permit an employer to avoid liability if the plaintiff accuses either a co-worker, McCarthy v State Farm Ins Co, 170 Mich App 451, 457; 428 NW2d 692 (1988), or a supervisor of sexual harassment. McCalla v Ellis, 180 Mich App 372, 380; 446 NW2d 904 (1989), citing [Meritor Savings Bank, FSB v Vinson, 472 US 57, 72; 106 S Ct 2399; 91 L Ed 2d 49 (1986)]; Downer, supra at 234. An employer, of course, must have notice of alleged harassment before being held liable for not implementing action. Katz v Dole, 709 F2d 251, 255 (CA 4, 1983); Henson [v City of Dundee, 682 F2d 897, 905 (CA 11, 1982)]. [Radtke, supra at 396-397.]

The bottom line is that, in cases involving a hostile work environment claim, a plaintiff must show some fault on the part of the employer. That is the essence of Radtke’s requirement that a plaintiff prove that the employer failed to take prompt and adequate remedial action upon notice of the creation of a hostile work environment.

Therefore, under current Michigan law, whether analyzing quid pro quo harassment or hostile environment harassment, the question is always whether it can be fairly said that the employer committed the violation — either directly or through an agent. The fact that the answer to that question may differ depending on whether the harassment is of the quid pro quo or hostile environment type is not a result of arbitrary rulemaking, but, rather, is firmly rooted in traditional agency principles.

To summarize, an employer is strictly liable only for quid pro quo sexual harassment. In terms of the statute, this means that an agent of the employer must have used submission or rejection of unwelcome sexual conduct or communication “as a factor in decisions affecting [the plaintiffs] employment.” MCL 37.2103(i)(ii); MSA 3.548(103)(i)(ii). When the submission to or rejection of the unwelcome sexual conduct or communication has not been factored into an employment decision, but a hostile work environment has nevertheless been created because unwelcome sexual communication or conduct substantially interferes with an individual’s employment, the violation can only be attributed to the employer if the employer failed to take prompt and adequate remedial action after having been reasonably put on notice of the harassment. Radtke, supra.

Against this backdrop of the current state of controlling legal principles regarding sexual harassment under Michigan law, we turn our attention to whether the principles adopted by the United States Supreme Court in Faragher and Ellerth should now apply in cases brought under the Michigan Civil Rights Act.

B

We are many times guided in our interpretation of the Michigan Civil Rights Act by federal court interpretations of its counterpart federal statute. See, e.g., Sumner v Goodyear Tire & Rubber Co, 427 Mich 505, 525; 398 NW2d 368 (1986). However, we have generally been careful to make it clear that we are not compelled to follow those federal interpretations. See, e.g., Radtke, supra at 381-382. Instead, our primary obligation when interpreting Michigan law is always “to ascertain and give effect to the intent of the Legislature, ... ‘as gathered from the act itself.’ ” McJunkin v Cellasto Plastic Corp, 461 Mich 590, 598; 608 NW2d 57 (2000). Although there will often be good reasons to look for guidance in federal inteipretations of similar laws, particularly where the Legislature has acted to conform Michigan law with the decisions of the federal judiciary, see, e.g., Koes-ter v City of Novi, 458 Mich 1, 15-16; 580 NW2d 835 (1998), we cannot defer to federal interpretations if doing so would nullify a portion of the Legislature’s enactment. See Piper v Pettibone Corp, 450 Mich 565, 571-572; 542 NW2d 269 (1995), quoting Turner v Auto Club Ins Ass’n, 448 Mich 22, 27-28; 528 NW2d 681 (1995) (ascertaining legislative intent starts with the unambiguous statutory language and, where judicial interpretation is permitted, such interpretation must avoid denying effect to portions of the statute).

If this Court were to adopt the principles announced by the United States Supreme Court in Faragher and Ellerth, it would represent a significant change in our approach to determining employers’ vicarious liability for sexual harassment. Specifically, the holdings issued by the United States Supreme Court in those cases both: (1) conflate the concepts of quid pro quo harassment and hostile environment harassment, and (2) shift the burden of proof from the employee to the employer regarding whether the employer should be held vicariously hable “for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee.” Faragher, supra, 524 US 807; Ellerth, supra, 524 US 765. To avoid vicarious liability under this new federal rule, an employer, essentiahy, must establish affirmatively that it was not negligent in failing to prevent the harassment and that the victim was negligent in failing to avail herself of opportunities provided by the employer to avoid the harm from such harassment. Id.

The Court’s decision to conflate quid pro quo sexual harassment and hostile environment sexual harassment was based upon its view of federal law. In Ellerth, the Court noted that § 703(a) of title vn provides only that an employer may not discriminate against an individual “ ‘because of such individual’s . . . sex.’ 42 USC § 2000e-2(a)(l).” Ellerth, supra, 524 US 751-752. The terms “quid pro quo” and “hostile work environment” are nowhere found in the federal statute, nor is “sexual harassment.” The Court found that these labels were useful for roughly grouping different types of cases, but, beyond that, they held limited utility. Id.

As noted earlier, the Michigan Civil Rights Act expressly includes sexual harassment as a prohibited form of sex discrimination, and further provides detailed definitions for sexual harassment that can be easily identified by the labels “quid pro quo” and “hostile work environment.” This stands in contrast to the analogous federal law. Even if we thought it sound policy to blur the distinctions between these types of sexual harassment in order to announce a common rule on vicarious liability that encompasses all sexual harassment, our limited role in interpreting statutes would preclude us from essentially “legislating” in this manner. McJunkin, supra at 598; Piper, supra at 572. Finally, adopting the principles announced in Faragher and Ellerth would be inconsistent with our decision in Radtke, in which we applied agency principles to hold that it is the plaintiff’s burden to prove that the employer failed to take prompt and adequate remedial action upon reasonable notice of the creation of a hostile environment, even where the harassing conduct is committed by a supervisor.

We find no statutory basis for singling out sexual harassment cases, as opposed to other classes of prohibited discrimination, for the application of a new rule of vicarious liability. For example, in cases brought under the Civil Rights Act alleging disparate treatment on the basis of membership in a protected class, the overall burden of proving the elements of a discrimination claim always remains with the plaintiff (although a framework exists for temporarily placing a burden of production on the defendant). See Lytle v Malady (On Rehearing), 458 Mich 153, 177-178 (Weaver, J., joined by Boyle and Taylor, JJ.), 185 (Brickley, J., concurring); 579 NW2d 906 (1998); Town v Michigan Bell Telephone Co, 455 Mich 688, 695-696 (Brickley, J., joined by Boyle and Weaver, JJ.), 707 (Riley, J., concurring in relevant part); 568 NW2d 64 (1997). Absent some articulable basis in our statutory law for treating sexual harassment claims differently than other forms of discrimination, we see no justification for imposing upon defendants the burden of affirmatively disproving vicarious liability, or conditioning the success of that defense on factors not necessarily rooted in traditional agency principles. Instead, we adhere to the established principles of Michigan law regarding sexual harassment and agency that are summarized in part iii(a) of this opinion.

IV

Having established that the legal principles the trial court and the Court of Appeals were obligated to follow are the same principles that control our review of this case, we next address their application by these two courts in this case.

We initially note that the trial court erred by not granting defendant a directed verdict with regard to plaintiffs quid pro quo claim of sexual harassment. In Champion, we held that the rape of an employee by her supervisor amounted to a constructive discharge. We reasoned that the supervisor’s decision to rape the employee, in response to her refusal to comply with his requests for sexual favors, amounted to a decision to discharge her on the basis of her submission to or rejection of those requests. Champion, supra at 710-713.

In this case however, there was no tangible (adverse or otherwise) employment action that was shown to be causally related to plaintiff’s submission to or rejection of Wolshon’s harassment. As explained previously, the sine qua non of a quid pro quo harassment claim is a decision affecting the plaintiffs employment. The tangible employment action in Champion was the plaintiff’s constructive discharge. Here, there was no termination of employment.⁵ As we explained in Jacobson v Parda Federal Credit Union, 457 Mich 318, 327; 577 NW2d 881 (1998), “[wjhile an employer’s action may lead to a constructive discharge, such a discharge itself generally cannot become evident until the employee has, in fact, left the employment. . . . Until the employee resigns, the employer’s action has yet to prove to be one of discharge.”⁶ Viewing all reasonable inferences in plaintiffs favor, Kubczak v Chemical Bank & Trust Co, 456 Mich 653, 663; 575 NW2d 745 (1998), we conclude that the trial court erred in denying defendant’s motion for a directed verdict with respect to plaintiff’s theory of quid pro quo sexual harassment. Because there was no decision affecting plaintiff’s employment, plaintiff’s proofs were insufficient, as a matter of law, to put such a theory of liability at issue.

Finally, because the Court of Appeals erroneously failed to apply controlling Michigan legal principles regarding sexual harassment claims brought under Michigan law, and instead applied the federal principles announced in Faragher and Ellerth, it is necessary that we remand this case to the Court of Appeals for reconsideration of defendant’s challenge to plaintiff’s hostile environment claim under the proper legal framework.

Plaintiff’s testimony clearly established the existence of a hostile work environment. The central question to be addressed on remand is whether plaintiff presented sufficient evidence to demonstrate that defendant “failed to rectify a problem after adequate notice.” Radtke, supra at 395. That is, whether defendant failed to take prompt and appropriate remedial action after receiving adequate notice that Wolshon was sexually harassing plaintiff. As an additional word of clarification, we observed in Radtke that a reasonableness inquiry, accomplished by objectively examining the totality of the circumstances, is necessary to fulfill the purposes of the Michigan Civil Rights Act. Id. at 386-387. This also holds true for an inquiry into the adequacy of the notice. Therefore, notice of sexual harassment is adequate if, by an objective standard, the totality of the circumstances were such that a reasonable employer would have been aware of a substantial probability that sexual harassment was occurring. See Perry v Harris Chernin, Inc, 126 F3d 1010, 1014 (CA 7, 1997) (the law against sexual harassment is not self-enforcing; although an employee has no duty under the law to report discriminating harassment, an employer cannot be expected to correct such harassment unless the employer has reason to know that it is occurring). Finally, we emphasize that the relevant inquiry concerning the adequacy of the employer’s remedial action is whether the action reasonably served to prevent future harassment of the plaintiff.

V. THE DISSENT

In our view, the dissent badly misstates our explanation of the distinctions that cause certain types of misconduct by employees to be attributable to an employer, while leaving employers free from liability for other types of employee misconduct. One initial flaw in the dissent’s criticism is its implicit premise that our decision today relegates the misconduct at issue in this case to the lesser of two categories of sexual harassment. In reality, employers are equally prohibited from engaging in hostile environment sexual harassment and quid pro quo sexual harassment; both of these types of harassment encompass a spectrum of misconduct from least to most egregious. To categorize a given pattern of misconduct as only of the type that possibly gives rise to a claim of hostile environment harassment does not mean that the misconduct is less egregious than other harassment. Rather, it simply allows this Count to determine whether the sexual harasser’s employer, in addition to the sexual harasser himself, is to be held responsible for the misconduct.

The dissent asserts that the majority has added an element to what constitutes a prima facie case of quid pro quo sexual harassment because the dissent disputes that such a showing includes a decision regarding a “tangible employment action.” This appears to be an argument supported only by semantics. A tangible employment action is simply “a decision affecting the individual’s employment,” which is an element of quid pro quo harassment that is explicitly required by the statute.⁷ MCL 37.2103(i)(ii); MSA 3.548(103)(i)(ii). In Champion, we said that “quid pro quo harassment occurs only where an individual is in a position to offer tangible job benefits in exchange for sexual favors or, alternatively, threaten job injury for a failure to submit.” Id. at 713. The dissent’s attempt to distinguish this passage from Champion by asserting that it merely defines those “individuals who have the ability to impose quid pro quo sexual harassment on employees,” post at 329, n 2, is baseless inasmuch as it ignores why the ability to engage in such harassment is limited to persons with supervisory powers. The dissent would have us believe that quid pro quo harassment is limited to persons with supervisory power by happenstance or coincidence, rather than by the fact that a decision regarding a tangible employment action is an indispensable element of quid pro quo harassment, and only persons with supervisory powers could ever effectively make such a decision.

The dissent further argues that in Champion, quid pro quo sexual harassment was a fait accompli when the supervisor, on the basis of his victim’s rejection of unwelcome sexual advances, decided to engage in conduct that we presumed amounted to a constructive discharge. From this, the dissent argues that our opinion is flawed because quid pro quo harassment is determined when the decision affecting employment is made and not when the effect of that decision is felt by the individual.⁸ We do not decide whether an employee must be constructively or actively terminated in order for an employer to be liable, nor do we suggest that the employee’s reaction to harassment is the touchstone of quid pro quo harassment. Instead, we disagree with the dissent’s suggestion that every sexual assault or molestation by a supervisor will automatically amount to quid pro quo harassment. Champion did not hold that all sexual assaults will result in a constructive discharge. In fact, Champion expressly stated that its holding was not intended to “extend unlimited liability to employers whose supervisors rape subordinates.” Id. at 713. Rather, Champion made clear that an action leading to constructive discharge, like an active discharge, can constitute a decision affecting employment.

In Champion, the rape of the employee constituted quid pro quo harassment because, when the decision to rape was made in response to the employee’s rejection of her supervisor’s sexual advance, a constructive discharge contemporaneously occurred. There, the employer’s “decision to use force, in other words, was the equivalent of a decision to discharge because Mr. Fountain should have expected that it would lead to Ms. Champion’s resignation.” Champion at 711. It was this “decision to discharge” that constituted a decision affecting employment. In the present case, there was no “decision to discharge.” This case is therefore, distinguishable from Champion. Yet, our recognition that there was no decision to discharge here is not equivalent to an assertion that the employee loses the quid pro quo protections of the CRA when the employee chooses to continue working. It instead is a recognition that an employee who continues working must bear the burden of proving that the employer nonetheless made a decision affecting employment. We think the dissent misapprehends Champion’s holding by concluding that sexual harassment in the form of sexual assaults or molestation will always be quid pro quo harassment when committed by a supervisor. Some acts of harassment by a supervisor, though statutorily proscribed, fit more readily within the hostile environment protections of the CRA than the quid pro quo protections.

The dissent also argues that a supervisor’s decision to engage in conduct that creates a hostile work environment can suffice as the decision that affects employment and thereby establish quid pro quo harassment — even when there is no other effect on employment other than the substantial interference with employment that qualifies the environment as hostile. However, the plain language of the statute requires that, in cases of quid pro quo harassment, an individual’s “[s]ubmission to the conduct or communication [be] made a term or condition ... to obtain employment” or that “[s]ubmission to or rejection of the conduct or communication by an individual [be] used as a factor in decisions affecting the individual’s employment . . . .” MCL 37.2103(i)(i), (ii); MSA 3.548(103)(i)(i), (ii). This language explicitly distinguishes between the decision to harass and the subsequent decision affecting employment that results from the victim’s reaction to the harassment. Even if we contemplated Wolshon’s pattern of behavior as a series of discrete incidents, there is no evidence suggesting that he engaged in one incident of misconduct on the basis of plaintiff’s reaction to a previous incident. To the contrary, it is manifestly evident that Wolshon understood that his overtures were unwelcome and was indifferent to both plaintiff’s rejection of them and the fact that, as he engaged in this conduct, he was interfering with her employment; this is the very essence of hostile environment sexual harassment.

Although we recognize that plaintiff might well continue to be affected in some way after defendant took steps to assure that she would no longer be subject to Wolshon’s conduct, this does not support the conclusion that her employment would continue to be affected. By the dissent’s reasoning, any unwelcome sexual contact to an employee by a person in a higher position would strictly subject the employer to liability for that contact, regardless of the fact that the employer could not have anticipated the incident, took every precaution to avoid such incidents, disciplined employees responsible for such incidents, and ensured afterward that the victim’s employment was not altered by the incident. The dissent would have us rewrite the statute so as to make employers responsible for any decision occurring at work that affects an individual, rather than only for decisions affecting the individual’s employment.

The dissent simply ignores the statutory definitions of sexual harassment and would simply label all harassment by individuals possessing supervisory authority as “quid pro quo” and all harassment by coemploy-ees as “hostile work environment.” This is an interesting proposition, but it lacks any basis in law. Rather, imposing liability on an employer is predicated on the application of agency principles to the categories of conduct described by the statute, and not on the basis of the dissent’s supervisor/nonsupervisor distinction. It is clear that supervisors can engage in hostile environment sexual harassment, that is distinct from quid pro quo harassment.

Further, the dissent, reasoning that whether plaintiff actually knew of the policy was a significant issue to be resolved by the jury, makes much of the fact that plaintiff testified that she did not actually know of defendant’s policy against sexual harassment. As much as anything else, this demonstrates that the dissent misses the point. Whether defendant can be held responsible for acts perpetrated by Wolshon turns on: (1) the nature of defendant’s relationship with Wol-shon; and (2) any failings on the part of defendant that contributed to Wolshon’s success in harassing plaintiff. Hence, it would be relevant to demonstrate that plaintiff was unaware of defendant’s policy because of an omission on the part of defendant. However, if defendant had done all that could reasonably be expected in order to make plaintiff aware of its policy, it matters little to the issue of vicarious liability if, for reasons not attributable to defendant, plaintiff was not actually aware of the policy. Hence, absent evidence attributing plaintiff’s claimed lack of knowledge to a failing by defendant, the dissent’s argument in this regard carries little weight. To the extent that the dissent’s arguments are relevant, they pertain primarily to the sufficiency of the evidence issues to be considered on remand.

Finally, the dissent disagrees with our decision to remand this case to the Court of Appeals for reconsideration of plaintiff’s hostile environment claim. The dissent perceives that it can glean all it needs to know from the earlier Court of Appeals opinion applying the principles announced in Faragher and Ellerth. Inasmuch as the Court of Appeals placed the burden of proving vicarious liability on the wrong party, we cannot confidently draw the same conclusion as the dissent.

CONCLUSION

In sum, we decline to engraft the principles stated in Ellerth and Faragher to actions for sexual harassment brought under the Michigan Civil Rights Act. Rather, we adhere to the specific statutory language of Michigan law and to prior Michigan precedent construing that language. We also find no basis in law, statutory or otherwise, for deviating from our past incorporation of traditional agency principles to actions brought under the Civil Rights Act or for having different burdens of proof in sexual harassment cases than in other cases alleging other forms of discrimination prohibited under the same act.

Further, we find that the evidence adduced at trial was insufficient, as a matter of law, to make out a claim for quid pro quo harassment because of the absence of any tangible employment action taken with respect to plaintiff. Finally, because the Court of Appeals erroneously failed to follow Michigan law when reviewing defendant’s challenge to plaintiff’s hostile environment claim, we vacate the judgment of the Court of Appeals and remand this case to that Court for reconsideration in light of this opinion. We do not retain jurisdiction.

Weaver, C.J., and Cavanagh, Taylor, Corrigan, and Young, JJ., concurred with Markman, J.

1 Monday of that week was the July 4 holiday.

2 232 Mich App 560; 591 NW2d 413 (1998).

3 “[I]t is the Supreme Court’s obligation to overrule or modify case law if it becomes obsolete, and until this Court takes such action, the Court of Appeals and all lower courts are bound by that authority.” Boyd v W G Wade Shows, 443 Mich 515, 523; 505 NW2d 544 (1993).

4 “A person alleging a violation . . . may bring a civil action for appropriate injunctive relief or damages, or both.” MCL 37.2801(1); MSA 3.548(801)(1).

5 Plaintiff also fails to demonstrate any other “decision affecting employment” as required by the statute.

6 Jacobson involved a dispute over when the constructive discharge in that case took place. That issue is not presented here. Both the majority and dissent in Jacobson appear to have agreed that no constructive discharge has taken place if the employment was never terminated.

7 “Tangible employment action” has become a term of art in cases involving sexual harassment, and is analogous to the term “adverse employment action” in employment discrimination cases based on disparate treatment, but it allows for the idea that, in sexual harassment cases, a decisionmaker could secure an employee’s submission to unwelcome sexual advances by conditioning a beneficial (rather than adverse) change in an individual’s employment status on that submission. See, e.g., Ellerth at 761 (explaining that “[a] tangible employment action constitutes a significant change in employment status, such as hiring, firing, failing to promote,” and comparing this to the holdings in a string of federal cases that stand for the proposition that, in disparate treatment cases, in order for an employment action to be adverse, it must be materially and objectively adverse).

8 The dissent also argues that plaintiff was discharged, albeit several months later and ostensibly for unrelated reasons, and that because plaintiff disputed the reasons given by defendant for that discharge, the question whether plaintiff suffered a tangible employment action should have been left to the jury. This requires us to again explain what should have already been clear. To show quid pro quo harassment, it is not enough to demonstrate harassment and a tangible employment action — there must be a causal relationship between the two. Plaintiff presented nothing to demonstrate that her eventual discharge was a consequence of her rejection of, or submission to, Wolshon’s harassment.