Quid Pro Quo Sexual Harassment in Minnesota

What Counts as Quid Pro Quo Sexual Harassment in Minnesota?

Under the MHRA, quid pro quo harassment is an unwelcome sexual advance or request where submission is made “a term or condition, either explicitly or implicitly, of obtaining employment,” or where submission or rejection is “used as a factor in decisions” about the employee’s employment.

The statute defines sexual harassment to include “unwelcome sexual advances, requests for sexual favors, sexually motivated physical contact or other verbal or physical conduct or communication of a sexual nature” when one of three conditions is met (Minn. Stat. § 363A.03, subd. 43):

1. Condition of the job. “Submission to that conduct or communication is made a term or condition, either explicitly or implicitly, of obtaining employment.”
2. Factor in a decision. “Submission to or rejection of that conduct or communication by an individual is used as a factor in decisions affecting that individual’s employment.”
3. Hostile environment. The conduct has “the purpose or effect of substantially interfering with an individual’s employment” or creates an “intimidating, hostile, or offensive” environment.

The first two clauses are the quid pro quo forms. The third is the hostile environment form, which turns on how severe or frequent the conduct was. The MHRA defines “discriminate” to include harassment (§ 363A.03, subd. 13), and it is an unfair employment practice for an employer, because of sex, to discriminate in the “terms, upgrading, conditions, facilities, or privileges of employment” (Minn. Stat. § 363A.08, subd. 2). For the broader rules, see my overview of Minnesota sexual harassment law.

Which Employers and Employees Does Minnesota’s Law Cover?

The MHRA covers a Minnesota employer with as few as one employee and protects an employee “who resides or works in this state.” Its employment-discrimination section does not apply to employment of an individual “by the individual’s parent, grandparent, spouse, child, or grandchild” or “in the domestic service of any person.” Title VII, the federal law, applies on top of it once your company has 15 or more employees.

The MHRA defines an employer as “a person who has one or more employees” (Minn. Stat. § 363A.03, subd. 16). An employee is “an individual who is employed by an employer and who resides or works in this state” (§ 363A.03, subd. 15). A small company with a handful of staff is covered, with one exception: “The provisions of section 363A.08 shall not apply to the employment of any individual: (1) by the individual’s parent, grandparent, spouse, child, or grandchild; or (2) in the domestic service of any person” (Minn. Stat. § 363A.20, subd. 1). Religious associations have a separate exemption in Minn. Stat. § 363A.26.

Title VII makes it unlawful for an employer “to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s . . . sex” (42 U.S.C. § 2000e-2(a)(1)). It reaches an employer “who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year, and any agent of such a person” (42 U.S.C. § 2000e(b)). A company at that size can face both statutes for the same conduct. The prevention side (policies and training) is covered on my sexual harassment compliance page.

Who Counts as a Supervisor Under the Minnesota Human Rights Act?

Under the MHRA, a supervisor is anyone with authority to undertake or recommend tangible employment decisions affecting the employee, or with authority to direct the employee’s daily work activities. That can reach shift leads and department heads who cannot hire or fire on their own.

The Minnesota Supreme Court decided the question in Frieler v. Carlson Marketing Group, Inc., 751 N.W.2d 558 (Minn. 2008). It stated: “We conclude that the EEOC definition should be used for determining whether a person is a supervisor for purposes of sexual harassment claims under the MHRA.” Under that definition, a person is a supervisor if “the individual has authority to undertake or recommend tangible employment decisions affecting the employee; or * * * the individual has authority to direct the employee’s daily work activities.” In Frieler, a shipping-department supervisor who interviewed the employee and took part in a group hiring decision raised a fact question about supervisory status.

Federal law draws the line more narrowly. For Title VII, the U.S. Supreme Court held that an employee is a supervisor “if he or she is empowered by the employer to take tangible employment actions against the victim” (Vance v. Ball State University, 570 U.S. 421 (2013)). The practical result is that a team lead who assigns daily work may count as a supervisor under the MHRA even when Title VII treats that person as a coworker. When the harasser is a coworker, Title VII holds the employer liable “only if it was negligent in controlling working conditions” (Vance).

When Is the Company Liable for a Supervisor’s Sexual Demands?

Under the MHRA, your company is subject to vicarious liability for a supervisor’s harassment, and the employee does not have to prove that anyone else at the company knew. When the harassment ends in a tangible employment action, such as a discharge or demotion, the company has no defense based on its own good conduct.

The Minnesota Supreme Court held in Frieler “that an employer is subject to vicarious liability for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over a victimized employee.” The employee “is not required to prove that his or her employer knew or should have known about the sexual harassment and failed to take timely and appropriate action.” The court adopted the federal framework from Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). It also held that “an employer may not avail itself of this affirmative defense when the supervisor harassment ‘culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment.’”

Ellerth describes a tangible employment action as “a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” For Title VII claims, Vance states the result plainly: “If the supervisor’s harassment culminates in a tangible employment action, the employer is strictly liable.”

For an owner, the deciding question is factual: did the supervisor’s harassment culminate in a tangible employment action of the kind Ellerth lists, such as firing, failing to promote, or “reassignment with significantly different responsibilities”? If it did, Frieler bars the reasonable-care defense, though the company’s prevention efforts may still matter to punitive damages (see the damages section).

When Does the Reasonable-Care Defense Apply?

The reasonable-care defense applies only when the supervisor’s harassment did not end in a tangible employment action. The company must prove both that it acted with reasonable care to prevent and promptly correct harassment, and that the employee unreasonably failed to use the protections it offered.

Frieler adopted the two elements in the federal courts’ words. The company must prove “that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior,” and “that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.” Both elements are the company’s to prove.

A written policy is part of the first element. In Ellerth, the U.S. Supreme Court wrote: “While proof that an employer had promulgated an antiharassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense.”

Under Title VII, a threat that was never carried out changes the analysis. Ellerth held: “Because Ellerth’s claim involves only unfulfilled threats, it should be categorized as a hostile work environment claim which requires a showing of severe or pervasive conduct.”

For hostile environment claims under the MHRA, the Minnesota Supreme Court kept the severe-or-pervasive standard in Kenneh v. Homeward Bound, Inc., 944 N.W.2d 222 (Minn. 2020), and it stated that “the standard must evolve to reflect changes in societal attitudes towards what is acceptable behavior in the workplace.” How courts apply that test is covered in my article on the hostile work environment test.

How Should an Employer Respond to a Complaint of Sexual Demands?

I suggest five steps, in this order: preserve the records, separate the two employees without changing the complaining employee’s job, investigate through someone outside the accused supervisor’s chain, decide and document, and watch for retaliation. Each step builds the record for the reasonable-care defense, which requires that the company “correct promptly” any harassment it learns about.

1. Preserve the records. Keep texts, email, chat messages, schedules, and any performance or pay records touching both employees. Stop routine deletion for both accounts.
2. Separate without penalizing the complainant. Change the accused supervisor’s reporting line or duties first. Moving the complaining employee to a worse shift or role can be reprisal (below).
3. Investigate independently. Use someone outside the accused supervisor’s reporting chain, interview both employees and the witnesses, and write down what each person said. My guide to a workplace investigation walks through the interviews and the report.
4. Decide and document. Record the findings, the action taken, and the reasons. If a job decision about the complaining employee was pending, document who made it and the records it rests on.
5. Guard against reprisal. Tell managers that no one may take reprisal against a person because that person opposed the harassment or participated in the investigation.

Minnesota’s reprisal statute reaches both the company and the accused individual. It is an unfair discriminatory practice “for any individual who participated in the alleged discrimination as a perpetrator, employer,” and others, “to intentionally engage in any reprisal against any person because that person” “opposed a practice forbidden under this chapter or has filed a charge, testified, assisted, or participated in any manner in an investigation” (Minn. Stat. § 363A.15). “A reprisal includes, but is not limited to, any form of intimidation, retaliation, or harassment,” and the statute lists acts such as to “depart from any customary employment practice; transfer or assign the individual to a lesser position in terms of wages, hours, job classification, job security, or other employment status.” Title VII has a parallel rule for an employee who “has opposed any practice” it makes unlawful or “participated in any manner in an investigation, proceeding, or hearing” (42 U.S.C. § 2000e-3(a)). For the elements a reprisal claim requires, see my article on Minnesota’s reprisal statute.

How Does a Human Rights Charge or Lawsuit Proceed?

An employee can either sue in state court or file a charge with the Minnesota Department of Human Rights (the Department). Once the Department serves a charge on your company, the statute requires a written response, and a later lawsuit goes to a jury if either side asks.

The MHRA provides that a person aggrieved “may bring a civil action as provided in section 363A.33, subdivision 1, or may file a verified charge with the commissioner or the commissioner’s designated agent” (Minn. Stat. § 363A.28, subd. 1). The company’s first deadline is in the same subdivision: “The respondent shall file with the department a written response setting out a summary of the details of the respondent’s position relative to the charge within 30 days of receipt of the charge.” I suggest recording the date the charge arrived, because the response period runs from receipt. Check the current text of § 363A.28 and the charge itself for the dates that apply to you. The investigation file from the response steps above can supply the core of that written response.

In court, “a respondent is entitled to a jury trial,” and so is the person bringing the claim (Minn. Stat. § 363A.33, subd. 6). The employee’s own filing deadlines are also set by statute, and the current text controls. If the first contact is a demand letter rather than a charge, my article on what to do when an employee threatens to sue covers the first steps.

What Are the Rules on Damages for Quid Pro Quo Harassment?

A court that finds an MHRA violation must award compensatory damages up to three times the actual damages, including mental anguish, and must order a civil penalty paid to the state. It may add punitive damages and the prevailing party’s attorney fees. Federal Title VII damages carry caps by company size.

The MHRA’s court-action remedies are in Minn. Stat. § 363A.33, subd. 8:

• Compensatory damages: “compensatory damages, including mental anguish or suffering, in an amount up to three times the actual damages sustained.”
• Punitive damages: “In all cases, the court may also order the respondent to pay an aggrieved party punitive damages pursuant to section 549.20.”
• Civil penalty: the court “shall order any respondent found to be in violation of any provision of sections 363A.08 to 363A.19 and 363A.28, subdivision 10, to pay a civil penalty to the state.”
• Attorney fees: “the court, in its discretion, may allow the prevailing party a reasonable attorney’s fee as part of the costs” (subd. 7).

A determination issued by the commissioner “may be heard as a contested case” (Minn. Stat. § 363A.29, subd. 1), and in that case the administrative law judge may award punitive damages “in an amount not more than $25,000 pursuant to section 549.20” (subd. 4).

Punitive damages require “clear and convincing evidence that the acts of the defendant show deliberate disregard for the rights or safety of others” (Minn. Stat. § 549.20, subd. 1). Against the company, for a supervisor’s act, they are allowed only in the cases listed in subdivision 2. The four cases are that “the principal authorized the doing and the manner of the act”; that “the agent was unfit and the principal deliberately disregarded a high probability that the agent was unfit”; that the agent “was employed in a managerial capacity with authority to establish policy and make planning level decisions for the principal and was acting in the scope of that employment”; or that the company or such a managerial agent “ratified or approved the act while knowing of its character and probable consequences.” I suggest documenting the company’s corrective action, because ratifying or approving the act with knowledge of it is one of the listed grounds.

Under federal law, Title VII damages for future pecuniary losses, emotional pain, and other nonpecuniary losses, plus punitive damages, are capped per complaining party, ranging from $50,000 for a respondent “who has more than 14 and fewer than 101 employees” to $300,000 for a respondent “who has more than 500 employees” (42 U.S.C. § 1981a(b)(3)).

What Are the Rules for Settling a Sexual Harassment Claim in Minnesota?

A settlement of a Minnesota sexual harassment claim should meet four rules: the MHRA’s rescission notice, Minnesota’s ban on paying the settlement as wages or severance, the federal tax rule for settlements with a nondisclosure agreement, and the federal limit on confidentiality clauses signed before the dispute. The rescission notice applies to a release of claims not yet filed with the department, another administrative agency, or a judicial body.

1. MHRA release rescission. A release of MHRA claims “may be rescinded within 15 calendar days of its execution, except that a waiver or release given in settlement of a claim filed with the department or with another administrative agency or judicial body is valid and final upon execution,” and the employee “shall be informed in writing of the right to rescind the waiver or release” (Minn. Stat. § 363A.31, subd. 2). A release of future claims “is contrary to public policy and void” (subd. 1). The statute provides: “To be effective, the rescission must be in writing and delivered to the waived or released party by hand, electronically with the receiving party’s consent, or by mail within the 15-day period” (subd. 2). A mailed rescission must be “(1) postmarked within the 15-day period; (2) properly addressed to the waived or released party; and (3) sent by certified mail return receipt requested.” I suggest paying after the rescission period ends and any rescission mailed within it has had time to arrive, because a rescinded release leaves you with no release.
2. No payment as wages or severance. “In a sexual harassment or abuse settlement between an employer and an employee, when there is a financial settlement provided, the financial settlement cannot be provided as wages or severance pay to the employee regardless of whether the settlement includes a nondisclosure agreement” (Minn. Stat. § 181.141).
3. Tax deduction and nondisclosure. Federal law allows no deduction for “any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement,” or for “attorney’s fees related to such a settlement or payment” (26 U.S.C. § 162(q)). A confidentiality term therefore has a tax cost that should be priced into the decision.
4. Clauses signed before the dispute. Under the federal Speak Out Act, “no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in instances in which conduct is alleged to have violated Federal, Tribal, or State law” (42 U.S.C. § 19403(a)).

If the company joins arbitration, conciliation, mediation, or another dispute resolution process before a charge is filed, the MHRA adds a notice duty: “A potential respondent who participates in such a process with a potential charging party before a charge is filed or a civil action is brought shall notify the department and the charging party in writing of the participation in the process and the date the process commenced and shall also notify the department and the charging party of the ending date of the process” (Minn. Stat. § 363A.28, subd. 3(b)).

If the release also covers federal age discrimination claims, federal law adds its own requirements, starting with the rule that a person “may not waive any right or claim under this chapter unless the waiver is knowing and voluntary” (29 U.S.C. § 626(f)). The drafting details for both releases are in my article on Minnesota severance agreement rules.

Next Steps for a Minnesota Employer

When a complaint arrives, three facts set your company’s exposure: whether the accused person is a supervisor under the MHRA’s broader definition, whether the harassment culminated in a tangible employment action such as a discharge, demotion, or undesirable reassignment, and whether your response shows prompt correction. The first is already fixed when the complaint arrives. The second can still turn on a job decision that is pending, because under Ellerth “A tangible employment decision requires an official act of the enterprise, a company act.” The third is one your company still controls, through the investigation and the record it leaves.

If you would like me to review a harassment complaint, your investigation plan, or a proposed settlement and tell you whether the company can use the reasonable-care defense and what its record still needs to show, email [email protected] with a brief description of the situation. My other Minnesota employment law materials cover the related employer questions.