                                                      SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

                               Ilda Aguas v. State of New Jersey (A-35-13) (072467)

Argued September 23, 2014 -- Decided February 11, 2015

PATTERSON, J., writing for a majority of the Court.

         In this appeal, the Court considers two issues that were generally addressed, but not expressly decided, in
Lehmann v. Toys ‘R’ Us, Inc., 132 N.J. 587, 592 (1993), and subsequent decisions: (1) the impact of an employer’s
anti-harassment policy on an employee’s claims of negligence or recklessness and vicarious liability; and (2) the
definition of a supervisor for purposes of a hostile work environment sexual harassment claim.

         In 1999, the Department of Corrections (DOC) instituted a written policy prohibiting discrimination in the
workplace, and mandated that all employees be trained with respect to it. The policy incorporates procedures with
regard to reporting, investigating, and remediating claims of misconduct, and “encourages” employees to promptly
report incidents of harassment. Plaintiff, a corrections officer, was hired in 2004, and received a copy of the policy.

          Plaintiff was supervised by Darryl McClish, the highest-ranking supervisor during her shift. McClish
oversaw the work of sixty employees, and was assisted by two male officers, Sergeant Hill and Sergeant Sands.
Plaintiff alleges that, beginning in October 2009, McClish sexually harassed her on several occasions, and, on one
occasion, Hill made inappropriate comments toward her and directed a female officer to pat-frisk her. The parties
dispute the timing of plaintiff’s reports of sexual harassment, and plaintiff did not file a written complaint with the
DOC. On March 8, 2010, the DOC’s Equal Employment Division (EED) advised plaintiff that it had initiated an
investigation of her verbal complaint of sexual harassment. After several weeks and twenty interviews, the EED
investigator ultimately concluded that plaintiff’s allegations were unsubstantiated.

          On March 10, 2010, two days after the EED commenced its investigation, plaintiff filed this action alleging
that McClish and Hill subjected her to a hostile work environment based on her gender, and that the State retaliated
against her because of her objections to that harassment, in violation of the New Jersey Law Against Discrimination,
N.J.S.A. 10:5-1 to -49 (LAD). Plaintiff did not allege that the DOC took any tangible employment action against
her. In its answer, the State pled, as affirmative defenses, its “prompt and remedial action” in response to plaintiff’s
claim, its policy against discrimination, harassment and retaliation, and its “thorough investigation” of plaintiff’s
complaint. Following discovery, the trial court granted summary judgment to the State. The court held that plaintiff
had presented a prima facie showing that she had been subjected to severe and pervasive sexual harassment, and that
the conduct created a hostile or abusive work environment for her. It concluded, however, that the State had
established an affirmative defense, determining that the DOC’s policy required the filing of a written complaint by
an employee. The trial court thus held that Plaintiff had failed to take steps required by the policy.

          Plaintiff appealed, and an Appellate Division panel affirmed the trial court’s grant of summary judgment.
The panel agreed with the trial court that the State had established an affirmative defense, and rejected plaintiff’s
claim that the State was liable under the agency principles of Restatement § 219(2)(d), holding that plaintiff had
failed to show that McClish used his authority to control her day-to-day working environment to aid his sexual
harassment of her. The Court granted plaintiff’s petition for certification. 216 N.J. 86 (2013).

HELD: For claims alleging vicarious liability for supervisory sexual harassment under Restatement § 219(2)(d), the
Court adopts as the governing standard the test set forth by the United States Supreme Court in Burlington Industries v.
Ellerth, 524 U.S. 742, 765 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775, 807-08 (1998). The employer in a
hostile work environment sexual harassment case may assert as an affirmative defense that it “exercised reasonable care
to prevent and correct promptly any sexually harassing behavior,” and “the plaintiff employee unreasonably failed to
take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise,”
provided that the employer has not taken an adverse tangible employment action against the plaintiff employee.
1. In Lehmann v. Toys ‘R’ Us, Inc., this Court held that an employer may be vicariously liable, in accordance with
principles of agency law, for sexual harassment committed by a supervisor that results in a hostile work
environment. 132 N.J. 587, 592 (1993). The agency principles adopted by the Court in Lehmann are set forth in
Restatement § 219, and, since this Court’s decision in Lehmann, courts have recognized two primary categories of
claims against employers for sexual harassment committed by their employees under Restatement § 219: (1) direct
causes of action against the employer for negligence or recklessness under Restatement § 219(2)(b), and (2) claims
for vicarious liability under Restatement § 219(2)(d). (pp. 17-22)

2. The Court turns first to plaintiff’s claim for negligence and recklessness under Restatement § 219(2)(b). In
Gaines v. Bellino, 173 N.J. 301, 312-14 (2002), the Court identified five factors that are relevant to a negligence
claim against an employer in a sexual harassment case. Under the Gaines analysis, the DOC’s anti-harassment
policy is relevant to the elements of plaintiff’s Restatement § 219(2)(b) cause of action. Thus, if plaintiff’s
negligence and recklessness claim is challenged on remand, or is tried before a jury, evidence of the State’s anti-
harassment policy should be considered in accordance with the factors identified in Gaines. (pp. 23-25)

3. With regard to claims pursuant to Restatement § 219(d)(2), the Court’s prior jurisprudence strongly supports the
availability of an affirmative defense, based on the employer’s creation and enforcement of an effective policy
against sexual harassment, in a vicarious liability claim based on Restatement § 219(d)(2). Although the Court did
not delineate in Lehmann the precise role that an anti-sexual harassment policy should play in a vicarious liability
sexual harassment case brought under Restatement § 219(2)(d), it foresaw a fact-specific inquiry in which the
employer’s implementation of a meaningful anti-harassment policy, or its failure to do so, would be, in many cases,
an important factor. The Court’s subsequent authority affirms this principle. See, e.g., Cavuoti v. New Jersey
Transit Corp., 161 N.J. 107, 113, 120-21 (1999); Gaines, supra, 173 N.J. at 320. (pp. 25-30)

4. As in other LAD analyses, the Court also considers federal law construing Title VII with respect to vicarious
liability claims premised on principles of agency. In Ellerth and Faragher, the Supreme Court integrated the agency
principles of Restatement § 219(2)(d) with the legislative objective of deterring sexual harassment by promoting
effective anti-harassment policies, and adopted a two-pronged affirmative defense to liability or damages. This
Court concurs with the Supreme Court that the Ellerth/Faragher analysis provides a fair and practical framework for
supervisor sexual harassment cases, and, accordingly, expressly adopts the Ellerth/Faragher analysis for such
matters in which a hostile work environment is claimed pursuant to the LAD, and no tangible employment action is
taken. Thus, in further proceedings in this case, the State may avoid vicarious liability under Restatement §
219(2)(d) by demonstrating by a preponderance of the evidence that the DOC exercised reasonable care to prevent
and correct promptly any sexually harassing behavior, and that plaintiff unreasonably failed to take advantage of any
preventive or corrective opportunities provided by the DOC, or to avoid harm otherwise. (pp. 31-42)

5. This matter also presents a second issue, namely the definition of a supervisor for purposes of claims based on
sexual harassment giving rise to a hostile work environment. The Court in Lehmann did not expressly define
“supervisor” for these purposes. It alluded, however, to the “power delegated to [a supervisor] to control the day-to-
day working environment,” and distinguished between a “supervisor” and the employer’s “upper management.”
Lehmann, supra, 132 N.J. at 620, 622-23. The Court thus suggested that the term supervisor included a broader
range of managers than the senior executives who set policy for an employer. In its decision today, the Court,
therefore, declines to adopt the more restrictive definition of “supervisor” recently prescribed by the Supreme Court
majority in Vance v. Ball State University, 133 S. Ct. 2434, 2443 (2013). The Court agrees instead with the Equal
Employment Opportunity Commission, and adopts its more expansive definition that includes not only employees
granted the authority to make tangible employment decisions, but also those placed in charge of the complainant’s
daily work activities. Thus, an allegedly harassing employee is the complainant’s supervisor if that employee had
the authority to take or recommend tangible employment actions affecting the complaining employee, or to direct
the complainant’s day-to-day activities in the workplace. (pp. 42-48)

6. If the trial court is called upon to determine plaintiff’s punitive damages claim on remand, it should assess
whether plaintiff has shown by clear and convincing evidence that the DOC committed “egregious conduct,” and if
so, whether she has presented clear and convincing evidence that “upper management” either participated directly in
sexual harassment, or showed “willful indifference.” The court should assess such claims in accordance with the
Punitive Damages Act, N.J.S.A. 2A:15-5.9 to -5.17 (PDA) and this Court’s prior holdings. (pp. 48-51)


                                                           2
         The judgment of the Appellate Division is REVERSED, and the matter is REMANDED to the trial court
for proceedings consistent with this opinion.

        JUSTICE ALBIN, DISSENTING, joined by CHIEF JUSTICE RABNER, expresses the view that the
LAD, under Lehmann, provided greater protection than federal law in hostile work environment cases, and that
Lehmann did not authorize an affirmative defense applied to supervisory liability under the Restatement § 219(2)(d)
approach.

        JUSTICES LaVECCHIA, FERNANDEZ-VINA, and SOLOMON and JUDGE CUFF (temporarily
assigned) join in JUSTICE PATTERSON’s opinion. JUSTICE ALBIN filed a separate, dissenting opinion in
which CHIEF JUSTICE RABNER joins.




                                                         3
                                     SUPREME COURT OF NEW JERSEY
                                       A-35 September Term 2013
                                                072467

ILDA AGUAS,

    Plaintiff-Appellant,

         v.

STATE OF NEW JERSEY,

    Defendant-Respondent.


         Argued September 23, 2014 – Decided February 11, 2015

         On certification to the Superior Court,
         Appellate Division.

         Paul R. Castronovo argued the cause for
         appellant (Castronovo & McKinney, attorneys;
         Mr. Castronovo and Sara Fern Meil, of
         counsel; Mr. Castronovo, Ms. Meil, and Megan
         Frese Porio, on the briefs).

         Jessica S. Allen, Assistant Attorney
         General, argued the cause for respondent
         (John J. Hoffman, Attorney General of New
         Jersey, attorney; Lewis A. Scheindlin,
         Assistant Attorney General, of counsel; Gail
         R. Beran, Deputy Attorney General, on the
         briefs).

         Thaddeus P. Mikulski, Jr., argued the cause
         for amicus curiae National Employment
         Lawyers Association of New Jersey.

         Mark A. Saloman argued the cause for amicus
         curiae Employers Association of New Jersey
         (Proskauer Rose, attorneys; Mr. Saloman,
         Nicholas M. Tamburri, and John J. Sarno, on
         the brief).

    JUSTICE PATTERSON delivered the opinion of the Court.


                               1
    In Lehmann v. Toys ‘R’ Us, Inc., this Court held that an

employer may be vicariously liable, in accordance with

principles of agency law, for sexual harassment committed by a

supervisor that results in a hostile work environment.   132 N.J.

587, 592 (1993).   Citing Restatement (Second) of Agency § 219(2)

[hereinafter Restatement], the Court held that when a supervisor

acts beyond “the scope of his or her employment, the employer

will be vicariously liable if the employer contributed to the

harm through its negligence, intent, or apparent authorization

of the harassing conduct, or if the supervisor was aided in the

commission of the harassment by the agency relationship.”      Id.

at 624.

    In this case, plaintiff Ilda Aguas (Aguas), a corrections

officer, alleges that two of her supervisors subjected her to

sexual harassment in the workplace.   Aguas asserted negligence

and vicarious liability claims premised on the New Jersey Law

Against Discrimination, N.J.S.A. 10:5-1 to -49 (LAD).    She

appeals from the Appellate Division’s decision affirming the

trial court’s grant of summary judgment dismissing her claims.

    Aguas’s appeal requires that we determine two issues that

were generally addressed, but not expressly decided, in Lehmann

and subsequent decisions by this Court.   First, we address the

impact of an employer’s anti-harassment policy on an employee’s

negligence or recklessness claim under Restatement § 219(2)(b),

                                2
and on a vicarious liability claim under Restatement §

219(2)(d).     We reaffirm that an employer’s implementation and

enforcement of an effective anti-harassment policy, or its

failure to maintain such a policy, is a critical factor in

determining negligence and recklessness claims under Restatement

§ 219(2)(b).

    For claims alleging vicarious liability for supervisory

sexual harassment under Restatement § 219(2)(d), we adopt as the

governing standard the test set forth by the United States

Supreme Court in Burlington Industries v. Ellerth, 524 U.S. 742,

765, 118 S. Ct. 2257, 2270, 141 L. Ed. 2d 633, 655 (1998) and

Faragher v. City of Boca Raton, 524 U.S. 775, 807-08, 118 S. Ct.

2275, 2292-93, 141 L. Ed. 2d 662, 689 (1998).     Under the

Ellerth/Faragher analysis, the employer in a hostile work

environment sexual harassment case may assert as an affirmative

defense to vicarious liability that it “exercised reasonable

care to prevent and correct promptly any sexually harassing

behavior,” and “the plaintiff employee unreasonably failed to

take advantage of any preventive or corrective opportunities

provided by the employer or to avoid harm otherwise,” provided

that the employer has not taken an adverse tangible employment

action against the plaintiff employee.     Ellerth, supra, 524 U.S.

at 765, 118 S. Ct. at 2270, 141 L. Ed. 2d at 655; Faragher,



                                   3
supra, 524 U.S. at 807-08, 118 S. Ct. at 2292-93, 141 L. Ed. 2d

at 689.

    The Ellerth/Faragher affirmative defense derives from

agency principles adopted by this Court in Lehmann.   It furthers

the LAD’s purpose of eliminating sexual harassment in the

workplace by motivating employers to maintain effective anti-

harassment policies, and by encouraging employees to take prompt

action against harassing supervisors in accordance with those

policies.   Lehmann, supra, 132 N.J. at 626.   The affirmative

defense is consonant with this Court’s prior jurisprudence and

advances the legislative goal of the LAD.

    Second, we consider the factors that trial courts should

apply when determining whether an employee, accused of sexually

harassing another employee, is that individual’s supervisor -- a

term undefined in the LAD and our prior case law -- for purposes

of a hostile work environment sexual harassment claim.     We hold

that an allegedly harassing employee is the complainant’s

supervisor if that employee had the authority to take or

recommend tangible employment actions affecting the complaining

employee, or to direct the complainant’s day-to-day activities

in the workplace.

    So that the trial court may decide this case in accordance

with these standards, we reverse the Appellate Division’s



                                4
affirmance of summary judgment dismissing Aguas’s claims and

remand this matter to the trial court for further proceedings.

                                 I.

    Effective on December 16, 1999, the New Jersey Department

of Corrections (DOC) instituted a written policy prohibiting

discrimination in the workplace and mandated that all employees

be trained with respect to it.   The policy states a commitment

“to providing every State employee and prospective employee with

a work environment free from discrimination or harassment.”     It

proscribes “sexual (or gender-based) harassment of any kind[.]”

Among other prohibited behaviors, the policy bars “[u]nwanted

physical contact such as intentional touching, grabbing,

pinching, brushing against another’s body or impeding or

blocking movement,” as well as “[v]erbal, written, or electronic

sexually suggestive or obscene comments, jokes or

propositions[.]”

    The DOC policy imposes special responsibilities on

supervisors.   It charges supervisors to ensure “a work

environment that is free from any form of

discrimination/harassment” and subjects supervisors who fail to

meet its requirements with sanctions that may include

termination of employment.

    The DOC policy incorporates “the State of New Jersey Model

Procedures with regard to reporting, investigating, and where

                                 5
appropriate, remediating claims of discrimination/harassment,”

pursuant to N.J.A.C. 4A:7-3.2.1   It requires the designation of a

responsible individual or individuals to handle employee

discrimination and harassment complaints.   The policy

“encourages” employees subjected to harassment to “promptly

report the incident(s) to either a supervisor, or directly to

the [DOC’s] Equal Employment Division/Affirmative Action

Officer,” without specifying that the employee must report the

incident in writing.    The policy mandates that the DOC conduct

investigations of such complaints “in a prompt, thorough and

impartial manner” that respects “the privacy of all persons

involved.”

     The DOC Commissioner is charged with making a final

determination as to whether a policy violation has occurred.     If

a complaint is substantiated, the DOC is required to “take

prompt and appropriate remedial action to stop the behavior and

deter its reoccurrence,” including interim separation of the

alleged harasser from the complainant employee pending a final

determination.   The DOC policy bars retaliation against a

complaining employee.


1 N.J.A.C. 4A:7-3.1 generally sets forth the State’s policy
prohibiting hostile work environment harassment and other forms
of discrimination in the workplace. The State policy governs
all State employees and all employment practices, and mandates
that every State agency implement procedures for internal
complaints of harassment. N.J.A.C. 4A:7-3.1(a), (g).
                                  6
    In 2004, Aguas was hired by the DOC as a Corrections

Officer Recruit.    The following year, she became a Senior

Corrections Officer, assigned to the third shift, 10:00 p.m. to

6:00 a.m., at the Edna Mahan Correctional Facility for Women

(Edna Mahan).   Aguas acknowledged that she received a copy of

the DOC anti-discrimination and harassment policy, but denied

receiving training with respect to that policy.    However, Aguas

twice instituted written complaints pursuant to the DOC’s anti-

discrimination policy, the first a discrimination complaint

filed in 2005 against a female co-worker, and the second a

workplace violence complaint filed in 2007 against a different

female co-worker.   The DOC found both complaints to be

unsubstantiated.

    Aguas was supervised by Darryl McClish (McClish), an Area

Lieutenant who has worked for the DOC since 1989 and at Edna

Mahan since 2009.   During the third shift, McClish was the

highest-ranking supervisor at the correctional facility,

overseeing the work of sixty employees.    He was assisted in that

role by two male officers, Sergeant Robin Hill (Hill) and

Sergeant Eric Sands (Sands).

    Aguas alleges that McClish sexually harassed her on several

occasions, beginning in October 2009.   She asserts that on one

evening that month, as she completed her shift and left the

facility, McClish stood next to her very closely and asked “are

                                  7
we going to a telly,” which she interpreted as a reference to a

motel.   Aguas contends that McClish then made a comment about

another officer, Lieutenant Rudolph Walz (Walz), suggesting that

Aguas had a romantic relationship with Walz.     McClish denies

this allegation.

    Later the same evening, Aguas took her handcuffs home in

contravention of the DOC policy, and McClish called and demanded

her immediate return to the correctional facility.     Aguas

alleges that when she returned with the handcuffs, McClish

sniffed the handcuffs and asked, “[w]here you been?     If you just

want to borrow them, let me know.”     She contends that McClish

then “sat in [her] lap face-to-face while blowing his whistle

and gave her a ‘lap dance’ by grinding his pelvis into [her] and

shaking his face close to her face.”     Aguas alleges that McClish

persisted in this behavior despite her warning to stop, and that

another corrections officer and a lieutenant on the scene

purposely looked in the other direction while the conduct was

occurring.   McClish agrees that he ordered Aguas to return to

the facility with the handcuffs, but otherwise denies Aguas’s

allegations regarding this incident, and denies that he touched

Aguas with his waist, hip or groin on any occasion.

    Aguas next alleges that later in the same month, McClish

massaged her shoulders, out of view of any other employees, when

he and Aguas were conducting nightly rounds of the corrections

                                 8
facility.    She asserts that he then “stuck out his buttocks

toward [Aguas], flexed his arms and said, ‘[d]o me a favor and

take my radio off my hip.    I worked out and I’m sore,’” a

direction that she declined to follow.    McClish denies both

allegations.

    Aguas contends that a few days after that incident, McClish

commented twice, in her presence, about her alleged relationship

with Walz.   She asserts that immediately after she complained to

McClish about the comments, McClish approached her from behind,

“put her in a hold with her hands behind her back and pulled up

to her shoulder blades.”    According to Aguas, McClish then “bent

[Aguas] over the table with his genital area touching [her]

buttocks and repeatedly said, ‘[w]hat are you going to do?’”

Aguas asserts that she immediately kicked and head-butted

McClish repeatedly and that the two fell to the floor, prompting

McClish to release her.     She alleges that McClish then “started

bobbing like a boxer” and repeated his question, “[w]hat are you

going to do?”

    According to Aguas, when she returned from a trip to the

bathroom a few minutes later, “McClish got very close behind

[her] and start[ed] dancing, whooping, waving his arms, and

blowing his whistle while repeatedly saying ‘[w]oohoo!’ as if

[she] was a stripper.”     Aguas claims that McClish then made a

derogatory comment about Walz.    She asserts that when she

                                  9
confronted McClish about this behavior days later, telling

McClish that his alleged actions made her feel uncomfortable and

“like a whore, like a slut,” he responded that he was not sorry.

McClish denies these allegations in their entirety, and

maintains that the conversations recounted by Aguas did not

occur.

       Aguas contends that on January 23, 2010, she set off the

alarm in the metal detector at Edna Mahan.    According to Aguas,

Hill asked her whether she had “piercings in [her] breasts

because I know you don’t need an underwire bra,” and directed a

female officer to repeatedly pat-frisk Aguas.    Hill testified

that, in compliance with the DOC policy, he ordered a female

officer to pat-frisk Aguas after she failed to clear the metal

detector.2   Hill denied making the remark alleged by Aguas.

       Finally, Aguas contends that Sands subjected her to “hyper-

scrutiny,” selectively reprimanding her for uniform violations

committed by several officers, for smoking outside on her break

with a sweater around her shoulders, and for not carrying a red

pen.




2 The DOC policy then in effect required officers to pass through
a metal detector before entering the facility, and provided that
if an individual failed to clear the metal detector after four
attempts, security would be notified and the officer would be
pat-frisked by another officer of the same gender.
                                 10
    The parties dispute the timing of Aguas’s reporting of her

sexual harassment allegations.    Aguas contends that she reported

McClish’s harassment to Walz on several occasions beginning in

October 2009.   Walz testified, however, that Aguas reported to

him only the conversation with Hill involving the metal

detector, and the excessive scrutiny of her uniform, and that

she did not complain to him at any time about alleged sexual

harassment by McClish.

    Aguas reported her allegations that McClish sexually

harassed her to Captain and Acting Chief Robert Ryan (Ryan), the

highest officer in command, and Ryan advised her to meet with

Assistant Administrator Helen Adams (Adams).    Aguas asserts that

she rejected Adams’s advice to report the harassment in writing

because she feared retaliation.    She declined the DOC’s

alternative suggestion that she participate in a group meeting

with the DOC officials, McClish, Sands and Hill.   Aguas contends

that Adams gave her forms to prepare a written report and a

referral to the facility’s psychologist.

    According to Aguas, she became distraught at the meeting

with Adams and was subsequently hospitalized for a migraine and

placed on medical leave.   A few days later, Aguas received two

text messages from a fellow Edna Mahan officer, which she

interpreted as a warning not to file a written complaint.    Aguas

did not file a written complaint with the DOC.

                                  11
    On March 8, 2010, the DOC’s Equal Employment Division (EED)

advised Aguas in writing that it had initiated an investigation

of her verbal complaint of sexual harassment.   Over the next

several weeks, an EED investigator interviewed Aguas, McClish,

Walz and seventeen other witnesses, and obtained statements from

others.   The EED investigator summarized her findings in a

report dated April 21, 2010.   The investigator concluded that

Aguas’s allegations were unsubstantiated, and advised Aguas of

that conclusion in writing.

                                II.

    On March 10, 2010, two days after the EED commenced its

investigation of her complaints, Aguas filed this action.     She

named the State as the sole defendant and asserted claims under

the LAD for compensatory and punitive damages and other relief.

Aguas alleged that the sexual harassment by McClish and Hill

subjected her to a hostile work environment based on her gender,

and that the State retaliated against her because of her

objections to that harassment, in violation of the LAD.    Aguas

did not allege that the DOC took any tangible employment action

against her.

    In its answer, the State pled, as affirmative defenses, its

“prompt and remedial action” in response to Aguas’s claim, its

policy against discrimination, harassment and retaliation, and

its “thorough investigation” of Aguas’s complaint.

                                12
     Following discovery, the trial court granted the State’s

motion for summary judgment.   The court held that Aguas had

presented a prima facie showing that she had been subjected to

severe and pervasive sexual harassment, and that the conduct

created a hostile or abusive work environment for her.       It

concluded, however, that the State had established an

affirmative defense.   The court noted that the DOC had a written

policy against discrimination, harassment and retaliation that

included a procedure for reporting through the EED, a procedure

that Aguas had used in the past.     The trial court construed the

policy to require the filing of a written complaint by an

employee.   It held that Aguas had failed to take steps required

by the policy.   The trial court therefore dismissed Aguas’s LAD

sexual harassment claims, based on theories of negligence and

recklessness, as well as vicarious liability.     Due to its

rejection of Aguas’s claims for compensatory damages, the trial

court also granted summary judgment dismissing Aguas’s claim for

punitive damages.3

     Aguas appealed, and an Appellate Division panel affirmed

the trial court’s grant of summary judgment.     The panel

concluded that the State exercised due care in its investigation




3 In a decision that was not appealed, the trial court also
dismissed Aguas’s retaliation claim.

                                13
of Aguas’s claim and concurred with the trial court’s dismissal

of Aguas’s negligence and recklessness claim.   It also agreed

with the trial court that the State had established an

affirmative defense, by indisputable proof, based upon the DOC’s

adoption and implementation of a policy against discrimination

and sexual harassment, a policy that Aguas admittedly received

in writing annually.   The panel rejected Aguas’s claim that the

State was liable under the agency principles of Restatement §

219(2)(d), holding that Aguas had failed to show that McClish

used his authority to control her day-to-day working environment

to aid his sexual harassment of her.   It also affirmed the trial

court’s dismissal of Aguas’s claim for punitive damages.

    We granted Aguas’s petition for certification.    Aguas v.

State, 216 N.J. 86 (2013).

                               III.

    Aguas argues that the Appellate Division created a novel

test, in contravention of this Court’s decision in Lehmann and

public policy, which requires an employee to file a formal

report under the employer’s policy before pursuing legal

remedies.   She concedes that an employer may present evidence of

its implementation and enforcement of an explicit policy against

sexual harassment and its provision of an effective

investigatory and remedial procedure in defense of a negligence

claim.   She denies that a plaintiff in a sexual harassment case

                                14
has the burden of proof, and instead contends that the

employer’s policy gives rise to an affirmative defense as to

which the defendant has the burden of proof.   Aguas argues that

in any event, the State cannot establish such a defense based on

the record in this case.

    Aguas contends that the Appellate Division misapplied

Lehmann by declining to find the State vicariously liable based

on principles of agency.   She argues that under Lehmann, when a

supervisor sexually harasses a subordinate, the employer is

presumed liable whether or not the subordinate reports the

harassment, and that the Ellerth/Faragher analysis does not

govern cases involving supervisors under the LAD.   Finally,

Aguas contends that the Appellate Division improperly affirmed

the dismissal of her claim for punitive damages because she

established an underlying violation of the LAD.

    The State counters that the DOC implemented an effective

anti-sexual harassment policy, enforced that policy and took

immediate remedial action in response to Aguas’s complaint, and

that it was Aguas’s duty to utilize the grievance procedure.     It

argues that sexual harassment by a supervisor is not a per se

violation of the LAD except where a tangible employment action

is taken against the employee who has alleged harassment.      The

State asserts that the United States Supreme Court’s

Ellerth/Faragher analysis applies to cases involving

                                15
supervisors, and that unless the supervisor’s harassment prompts

a tangible employment action and the plaintiff seeks equitable

relief, the employer may assert an affirmative defense under

that analysis.

    Amicus curiae National Employment Lawyers Association of

New Jersey (NELA) argues that the Appellate Division contravened

Lehmann and other authority by holding that McClish, the

highest-level manager on his shift at Edna Mahan, lacked

sufficient authority to be considered a supervisor for purposes

of vicarious liability.   NELA asserts that the Appellate

Division improperly focused on McClish’s authority to discipline

Aguas and affect her economic status, rather than on his

capacity to oversee her day-to-day work.    NELA argues that New

Jersey law does not require an employee who is a victim of

sexual harassment to formally report the harassment in writing

in order to trigger an investigation and remediation.

    Amicus curiae Employers Association of New Jersey (EANJ)

urges the Court to hold that an employer cannot, as a matter of

law, be liable for a hostile work environment under the LAD if

it took prompt remedial action in response to an employee’s

complaint of sexual harassment.    EANJ argues that the DOC

satisfied its duty of care by implementing and enforcing a

detailed procedure.   It asserts that Aguas should be barred from

recovering under the LAD because she unreasonably failed to take

                                  16
advantage of preventive and corrective measures that were

available to her.

                                 IV.

                                  A.

    We first consider the impact of the DOC’s anti-harassment

policy on Aguas’s two claims for sexual harassment giving rise

to a hostile work environment:    her direct claim for negligence

and recklessness against the State based on Restatement §

219(2)(b), and her claim that the State is vicariously liable

for sexual harassment committed by McClish and Hill under

Restatement § 219(2)(d).    The decisions that defined these

claims provide the setting for our analysis.

    In Lehmann, supra, this Court recognized sexual harassment

in the workplace as a form of discrimination that is prohibited

by the LAD.   132 N.J. at 601 (citing Meritor Sav. Bank v.

Vinson, FSB, 477 U.S. 57, 106 S. Ct. 2399, 91 L. Ed. 2d 49

(1986); Erickson v. Marsh & McLennan Co., 117 N.J. 539, 555-56

(1990)).   The Court recognized two forms of sexual harassment

that are actionable under the LAD.     The first is “quid pro quo

sexual harassment,” in which “an employer attempts to make an

employee’s submission to sexual demands a condition of his or

her employment.”    Ibid.   Aguas does not assert a quid pro quo

harassment claim in this case.



                                  17
    The second cause of action for sexual harassment, at issue

here, is a claim for “hostile work environment sexual

harassment.”   Ibid.   To prove this claim, a plaintiff must show

that the harassment “(1) would not have occurred but for the

employee’s gender; and it was (2) severe or pervasive enough to

make a (3) reasonable woman believe that (4) the conditions of

employment are altered and the working environment is hostile or

abusive.”   Id. at 603-04 (emphasis omitted).

    As the Court identified the elements of a hostile work

environment sexual harassment claim in Lehmann, it also

addressed the issue of employer liability for sexual harassment

by a supervisor or co-employee.    Id. at 615-24.   It held that

“the employer is directly and strictly liable for all equitable

damages and relief” to the extent that an employee subjected to

discrimination or sexual harassment seeks equitable remedies,

that is, restoration “to the terms, conditions, and privileges

of employment the employee would have enjoyed but for the

workplace discrimination or harassment.”    Id. at 617.   With

respect to claims for damages, however, the Court declined to

hold an employer strictly liable for sexual harassment committed

by its employee.   Ibid.   Instead of strict liability, the Court

adopted as the measure of employer liability a fact-sensitive

standard derived from the law of agency.    Id. at 620.



                                  18
     In its rejection of strict liability, the Court relied on

Meritor, then the United States Supreme Court’s sole authority

on hostile work environment sexual harassment cases.      Id. at

618-19 (citing Meritor Sav. Bank, supra, 477 U.S. at 72, 106 S.

Ct. at 2408, 91 L. Ed. 2d at 63).4     In Meritor, supra, the United

States Supreme Court majority declined to impose strict

liability on employers in hostile work environment harassment

cases and instead invoked the agency principles set forth in

Restatement §§ 219-237.   477 U.S. at 69-70, 72, 106 S. Ct. at

2407-08, 91 L. Ed. 2d at 61, 63.      In a concurring opinion,

Justice Marshall urged the adoption of a strict liability

standard in both quid pro quo and hostile work environment

cases.   Id. at 74-78, 106 S. Ct. at 2409-11, 91 L. Ed. 2d at 64-

66 (Marshall, J., concurring).   Justice Stevens joined both


4 The Court “has frequently looked to federal precedent governing
Title VII of the Civil Rights Act of 1964, 42 U.S.C.A. § 2000e
to § 2000e-17 (‘Title VII’), as ‘a key source of interpretive
authority.’” Id. at 600 (quoting Grigoletti v. Ortho Pharm.
Corp., 118 N.J. 89, 97 (1990)); see also Quinlan v. Curtiss-
Wright Corp., 204 N.J. 239, 261-63 (2010). That rule is not
absolute; this Court has declined to follow federal law when
that law sharply diverges from prior authority construing the
LAD. See, e.g., Alexander v. Seton Hall Univ., 204 N.J. 219,
232-35 (2010) (declining to follow United States Supreme Court’s
approach to wage discrimination claims in Ledbetter v. Goodyear
Tire & Rubber Co., 550 U.S. 618, 127 S. Ct. 2162, 167 L. Ed. 2d
982 (2007), in light of “settled prior case law” contrary to the
Supreme Court’s holding.) Thus, we evaluate the analysis
adopted by federal courts construing Title VII to determine
whether that analysis furthers the objectives of the LAD and
comports with our prior holdings.


                                 19
opinions because he shared the majority’s rejection of strict

liability and the concurring opinion’s construction of Title

VII.   Id. at 73, 106 S. Ct. at 2409, 91 L. Ed. 2d at 64

(Stevens, J., concurring).

       Contrary to the argument of our dissenting colleagues, who

contend that in Lehmann the Court “declined to follow” the

Meritor majority in favor of Justice Marshall’s strict liability

approach, post at ___ (slip op. at 9-10), the Court actually

embraced the agency analysis of the majority in Meritor.    It

concurred “with Justice Stevens that there is no inherent

contradiction between the majority’s adoption of agency

principles and Justice Marshall’s observation that a

supervisor’s delegated authority often goes beyond the power to

hire and fire.”   Lehmann, supra, 132 N.J. at 619.   The Court

noted:

                We recognize that although we have
           declined to hold employers strictly liable for
           hostile work environment sexual harassment by
           supervisors, we have created a standard that
           may often result in employers being held
           vicariously liable for such harassment.     We
           note that there is an important difference
           between   strict   liability   and   vicarious
           liability under agency law.    Under a strict
           liability standard, an employer would always
           be liable for supervisory hostile work
           environment sexual harassment, regardless of
           the specific facts of the case. We think that
           in some cases strict liability would be unjust
           –- for example, “where a supervisor rapes one
           of his subordinates in the workplace.”


                                 20
          [Id. at 623-24 (emphasis in original) (quoting
          Lehmann v. Toys ‘R’ Us, Inc., 255 N.J. Super.
          616, 661 (App. Div. 1992) (Skillman, J.A.D.,
          dissenting)).]

     The agency principles adopted by the Court in Lehmann are set

forth in Restatement § 219, which recognizes four exceptions to

the general rule that an employer is not liable for its employee’s

conduct beyond the scope of his or her employment:

          1.   A master is subject to liability for the
          torts of his servants committed while acting
          in the scope of their employment.

          2.   A master is not subject to liability for
          the torts of his servants acting outside the
          scope of their employment, unless:

               (a) the master intended the conduct or
               the consequences, or

               (b) the master was negligent or reckless,
               or

               (c) the conduct violated a non-delegable
               duty of the master, or

               (d) the servant purported to act or to
               speak on behalf of the principal and
               there   was   reliance   upon   apparent
               authority,   or   he    was   aided   in
               accomplishing the tort by the existence
               of the agency relation.

          [Restatement § 219.]

     As the Court noted in Lehmann, supra, the agency principles

of Restatement § 219 “are sufficiently well-established to

provide employers with notice of their potential liability, and

also sufficiently flexible to provide just results in the great


                                 21
variety of factual circumstances presented by sexual harassment

cases and to accomplish the purposes of the LAD.”    132 N.J. at

619.

       Since this Court’s decision in Lehmann, our courts have

recognized two primary categories of claims against employers

for sexual harassment committed by their employees under

Restatement § 219.    The first is a direct cause of action

against the employer for negligence or recklessness under

Restatement § 219(2)(b).    See, e.g., Gaines v. Bellino, 173 N.J.

301, 312-14 (2002).    The second is a claim for vicarious

liability under Restatement § 219(2)(d).    See ibid.   Although

direct claims for negligence or recklessness under Restatement §

219(2)(b) and claims for vicarious liability under Restatement §

219(2)(d) are often discussed in tandem, they are analytically

distinct from and independent of one another.    When both are

pled in a sexual harassment action, as they are in this case,

the two claims must be addressed separately.

       Guided by our jurisprudence and agency principles adopted

as the benchmark for employer liability, we consider in turn the

relevance of the DOC’s anti-harassment policy to Aguas’s

negligence and recklessness claim based on Restatement §

219(2)(b), and the role of that policy in Aguas’s vicarious

liability claim premised upon Restatement § 219(2)(d).

                                 B.

                                 22
    As the parties agree, the DOC’s anti-harassment policy is

central to the determination of Aguas’s claim for negligence and

recklessness under Restatement § 219(2)(b).   The negligence

standard imposes on Aguas the burden to prove that the State

failed to exercise due care with respect to sexual harassment in

the workplace, that its breach of the duty of due care caused

the plaintiff’s harm, and that she sustained damages.     See

generally, Komlodi v. Picciano, 217 N.J. 387, 409 (2014);

Robinson v. Vivirito, 217 N.J. 199, 208 (2014) (citing Jersey

Cent. Power & Light Co. v. Melcar Util. Co., 212 N.J. 576, 594

(2013); Weinberg v. Dinger, 106 N.J. 469, 484 (1987)).

    In Gaines, supra, the Court identified five factors that

are relevant to a negligence claim against an employer in a

sexual harassment case.   173 N.J at 313.

         Those factors include[] the existence of: (1)
         formal policies prohibiting harassment in the
         workplace; (2) complaint structures for
         employees’ use, both formal and informal in
         nature; (3) anti-harassment training, which
         must   be  mandatory   for   supervisors   and
         managers, and must be available to all
         employees of the organization; (4) the
         existence of effective sensing or monitoring
         mechanisms to check the trustworthiness of the
         policies and complaint structures; and (5) an
         unequivocal commitment from the highest levels
         of the employer that harassment would not be
         tolerated, and demonstration of that policy
         commitment by consistent practice.

         [Ibid. (citing Lehmann, supra, 132 N.J. at
         620).]


                                23
Applying that standard to the Restatement § 219(2)(b) negligence

claim before it, the Court found that because of the

deficiencies in the employer’s policy, a genuine issue of

material fact barred summary judgment with respect to two of the

factors relevant to a negligence claim against an employer under

Restatement § 219(2)(b).     Id. at 315-17, 319.

    The Court further noted that Lehmann had recognized that

“the existence of effective preventative mechanisms may provide

evidence of due care on the part of the employer.”      Id. at 314

(citing Lehmann, supra, 173 N.J. at 621-22).       It observed that

in Lehmann, the Court declined “to hold that the absence of such

mechanisms, or any part of them, automatically constituted

negligence, and [] similarly rejected the converse proposition

that the presence of such mechanisms categorically demonstrated

the absence of negligence.”    Ibid. (citing Lehmann, supra, 132

N.J. at 621-22).   As the Court stated in Gaines, however, “[t]he

efficacy of an employer’s remedial program is highly pertinent

to an employer’s defense.”    Ibid.

    Under the Gaines analysis, the DOC’s anti-harassment policy

is relevant to the elements of Aguas’s Restatement § 219(2)(b)

cause of action.   If Aguas’s negligence and recklessness claim

under Restatement § 219(2)(b) is challenged in a dispositive

motion on remand, or is tried before a jury, evidence of the



                                  24
State’s anti-harassment policy should be considered in

accordance with the factors identified in Gaines.

                               C.

    Under Restatement § 219(d)(2), an employee may assert that

the employer is vicariously liable for sexual harassment

committed by its employee because the sexual harasser purported

to act on the employer’s behalf and “there was reliance upon

[his or her] apparent authority,” or because the harasser “was

aided in [his or her misconduct] by the existence of an agency

relation[ship]” with his or her employer.   See Lehmann, supra,

132 N.J. at 619.

    In Lehmann, the Court held that a vicarious liability claim

under Restatement § 219(2)(d) “requires a detailed fact-specific

analysis” and stated a four-part test for the factfinder:

         1.   Did the employer delegate the authority
         to the supervisor to control the situation of
         which the plaintiff complains . . . ?

         2.   Did   the    supervisor   exercise    that
         authority?

         3.   Did the exercise of authority result in
         a violation of [the LAD]?

         4.   Did the authority delegated by the
         employer to the supervisor aid the supervisor
         in injuring the plaintiff?

         [Id. at 620 (citation omitted).]




                               25
    If each of these questions are answered in the affirmative,

“then the employer is vicariously liable for the supervisor’s

harassment under [Restatement] § 219(2)(d).”   Ibid.

    This Court’s prior jurisprudence does not address in detail

the analytical framework under which an employer’s anti-

harassment policy may be considered in a hostile work

environment sexual harassment claim involving a supervisor.

Nonetheless, that jurisprudence strongly supports the

availability of an affirmative defense, based on the employer’s

creation and enforcement of an effective policy against sexual

harassment, in a vicarious liability claim based on Restatement

§ 219(d)(2).

    First, the Restatement provision at the heart of the

Court’s analysis in Lehmann sets forth agency principles that

directly implicate an employer’s policy, or its lack of a

policy, against sexual harassment in the workplace.     See id. at

619 (citing Restatement § 219(2)(d)).   The existence and

enforcement of a policy charging supervisors with ensuring a

harassment–free workplace is central to the questions raised by

Restatement § 219(2)(d):   whether a harassing supervisor

“purport[s] to act or to speak on behalf of the principal,”

whether “there was reliance upon [that supervisor’s] apparent

authority,” and whether a harasser was “aided in accomplishing”



                                26
the harassment by “the existence of the agency relation.”

Restatement § 219(2)(d).5

     Second, in rejecting strict liability, the Court in

Lehmann, supra, clearly envisioned that an employer would be

permitted to argue that vicarious liability should not be

imposed in the circumstances of the individual case.     See 132

N.J. at 624 (explaining that “[u]nder agency law, an employer’s

liability for a supervisor’s sexual harassment will depend on

the facts of the case”).

     Third, the Court held that any legal test governing

vicarious liability claims should motivate employers to create

and enforce a policy against harassment.   Id. at 626.    The Court

observed that an effective legal test allows employees “to know


5 Our dissenting colleagues argue that Model Jury Charge (Civil)
2.25 demonstrates that New Jersey law rejects an affirmative
defense in a supervisory sexual harassment claim against an
employer. Post at ___ (slip op. at 5-7). Following Lehmann,
this Court has never addressed the jury charge that should be
given in a supervisory sexual harassment case. If, as the
dissent suggests, the Model Jury Charge endorses a strict
liability test in cases such as this, then the charge is
inconsistent with Lehmann, Cavuoti and Gaines. See Lehmann,
supra, 132 N.J. at 617-20; Gaines, supra, 173 N.J. at 314;
Cavuoti, supra, 161 N.J. at 120-21. In fact, the jury charge
cited by the dissent derives from the Lehmann Court’s adoption
of the inquiry set forth in Restatement § 219(2)(d): whether the
supervisor “purported to act or to speak on behalf of the
principal and there was reliance upon apparent authority, or was
aided in accomplishing the tort by the existence of the agency
relation.” Restatement § 219(2)(d). The Ellerth/Faragher
affirmative defense, which directly addresses that question,
should be included in our Model Charge.


                               27
their rights in a given set of circumstances,” and permits

“employers to set policies and procedures that comply with that

test.”   Id. at 603.   Noting that “[c]ourtrooms are not the best

place to prevent or remedy a hostile work environment,” id. at

625, the Court observed:

               The most important tool in the prevention
          of sexual harassment is the education of both
          employees and employers.      Consensus among
          employees and employers should be the goal.
          We think that providing employers with the
          incentive not only to provide voluntary
          compliance programs but also to insist on the
          effective enforcement of their programs will
          do   much  to   ensure   that   hostile   work
          environment discrimination claims disappear
          from the workplace and the courts.

          [Id. at 626.]

    The Court’s intention that its legal test motivate

employers to implement and enforce “voluntary compliance

programs” strongly signals that such compliance programs, if

effective and enforced, may give rise to an affirmative defense

to an LAD claim.   Ibid.

    Thus, although the Court did not delineate in Lehmann the

precise role that an anti-sexual harassment policy should play

in a vicarious liability sexual harassment case brought under

Restatement § 219(2)(d), it foresaw a fact-specific inquiry in

which the employer’s implementation of a meaningful anti-

harassment policy, or its failure to do so, would be, in many

cases, an important factor.   See id. at 620, 622-24.

                                 28
    The Court’s subsequent authority affirms this principle.

In Cavuoti v. New Jersey Transit Corp., a case involving the

standard for an award of punitive damages against an employer in

supervisor sexual harassment litigation, the Court reiterated

that an employer’s anti-harassment policy is a significant

factor in such cases.    161 N.J. 107, 113, 120-21 (1999).   This

Court commented that “like the [United States] Supreme Court we

have afforded a form of a safe haven for employers who

promulgate and support an active, anti-harassment policy.”     Id.

at 120-21.    The Court further observed:

              A   company   that    develops   policies
         reflecting a lack of tolerance for harassment
         will have less concern about hostile work
         environment or punitive damages claims if its
         good-faith    attempts     include    periodic
         publication to workers of the employer’s anti-
         harassment policy; an effective and practical
         grievance process; and training sessions for
         workers, supervisors, and managers about how
         to   recognize    and    eradicate    unlawful
         harassment.

         [Id. at 121.]

    Finally, in Gaines, supra, the Court expressly confirmed

the availability of an affirmative defense to vicarious

liability based on an effective policy against sexual

harassment.   It held that “[a] defendant is entitled to assert

the existence of an effective anti-sexual harassment workplace

policy as an affirmative defense to vicarious liability;

however, material issues of disputed fact in the context of a

                                 29
motion record can deny a defendant summary dismissal based on

that defense.”   173 N.J. at 320.

    Notwithstanding that clear language, our dissenting

colleagues inexplicably assert that the Court “never hint[ed]

that an affirmative defense applied to supervisory liability

under the Restatement § 219(2)(d) approach.”    Post at ___ (slip

op. at 7).   The dissent also asserts that in Gaines, the Court

stated only that an affirmative defense is available to an

employer in a negligence case under Restatement § 219(2)(b).

Post at ___ (slip op. at 8).   In fact, the Court expressly

recognized in Gaines an affirmative defense to a Restatement §

219(2)(d) claim for vicarious liability.     See Gaines, supra, 173

N.J. at 320; see also Godfrey v. Princeton Theological Seminary,

196 N.J. 178, 200 (2008) (stating that “[t]he means employed by

an institution to deter harassment, and the enforcement of those

means, may be considered when assessing that institution’s

vicarious liability”).

    Thus, the Court’s prior case law provides important

guidance with respect to this issue.   In Lehmann, Cavuoti and

Gaines, the Court acknowledged the value of effective anti-

harassment policies in combatting sexual harassment in the

workplace, and recognized that employers will be motivated to

implement and enforce such policies if their policies provide a

defense to a claim of vicarious liability.     See Gaines, supra,

                                30
173 N.J. at 320; Cavuoti, supra, 161 N.J. at 120-21; Lehmann,

supra, 132 N.J. at 619, 626.

     As in other settings involving the LAD, we consider federal

law construing Title VII with respect to this issue.   In Ellerth

and Faragher, the United States Supreme Court addressed Title

VII vicarious liability claims premised on principles of agency.

These cases, which had not been decided when this Court decided

Lehmann, represent part of the evolution in federal law that has

occurred as employer anti-harassment policies have become more

prevalent in the workplace.

     Ellerth and Faragher arose from a supervisor’s alleged

sexual harassment of a subordinate, which gave rise to a hostile

work environment.6   The Supreme Court confirmed that Restatement

§ 219(2)(d) provides the analytical framework for supervisory

sexual harassment cases because “[t]he agency relationship

affords contact with an employee subjected to a supervisor’s

sexual harassment, and the victim may well be reluctant to

accept the risks of blowing the whistle on a superior.”




6 In Ellerth, an employee alleged that she was subjected to
sexual harassment by a vice president of the company that
employed her. Ellerth, supra, 524 U.S. at 747, 118 S. Ct. at
2262, 141 L. Ed. 2d at 644. In Faragher, a lifeguard sued the
municipality for which she worked, alleging that her immediate
supervisors sexually harassed her. Faragher, supra, 524 U.S. at
780-81, 118 S. Ct at 2280, 141 L. Ed. 2d at 672.
                                31
Faragher, supra, 524 U.S. at 803, 118 S. Ct. at 2291, 141 L. Ed.

2d at 686.

    The Supreme Court noted, however, that the proper analysis

“calls not for a mechanical application of indefinite and

malleable factors set forth in the Restatement . . . but rather

an inquiry into the reasons that would support a conclusion that

harassing behavior ought to be held within the scope of a

supervisor’s employment, and the reasons for the opposite view.”

Id. at 797, 118 S. Ct. at 2288, 141 L. Ed. 2d at 682.    The

Supreme Court further observed that the agency principles it

espoused must be consonant with Meritor, in which it had

declined to impose strict liability on employers in supervisor

sexual harassment cases.   Id. at 804, 118 S. Ct. at 2291, 141 L.

Ed. 2d at 686 (footnote omitted); see also Ellerth, supra, 524

U.S. at 755, 118 S. Ct. at 2266, 141 L. Ed. 2d at 649.     In

Faragher, supra, the Court explained that “there is obviously

some tension between [Meritor’s] holding and the position that a

supervisor’s misconduct aided by supervisory authority subjects

the employer to liability vicariously; if the ‘aid’ may be the

unspoken suggestion of retaliation by misuse of supervisory

authority, the risk of automatic liability is high.”    Faragher,

supra, 524 U.S. at 804, 118 S. Ct. at 2291, 141 L. Ed. 2d at 686

(footnote omitted).



                                32
     The Supreme Court identified two “basic alternatives” by

which Meritor’s rejection of strict liability could be

reconciled with the Restatement’s analysis:   a requirement that

a plaintiff provide proof that the supervisor affirmatively

invoked his or her authority, or the recognition of “an

affirmative defense to liability in some circumstances, even

when a supervisor has created the actionable environment.”

Ibid.   The Court rejected the first alternative, noting the

vagueness and impracticality such a test:

          Application of the standard is made difficult
          by its malleable terminology, which can be
          read to either expand or limit liability in
          the context of supervisor harassment. On the
          one hand, a supervisor’s power and authority
          invests his or her harassing conduct with a
          particular threatening character, and in this
          sense, a supervisor always is aided by the
          agency relation. See Meritor, 477 U.S. at 77,
          106 S. Ct. at 2410, 91 L. Ed. 2d at 66
          (Marshall, J., concurring in judgment) (“It is
          precisely because the supervisor is understood
          to be clothed with the employer’s authority
          that he is able to impose unwelcome sexual
          conduct on subordinates”). On the other hand,
          there are acts of harassment a supervisor
          might commit which might be the same acts a
          co-employee would commit, and there may be
          some circumstances where the supervisor’s
          status      makes      little      difference.

          [Ellerth, 524 U.S. at 763, 118 S. Ct. at 2269,
          141 L. Ed. 2d at 654.]

     In reconciling the test of Restatement § 219(2)(d) with

Meritor’s rejection of strict liability, the Supreme Court

embraced the second alternative: the recognition of an

                                33
affirmative defense.   Id. at 765, 118 S. Ct. at 2270, 141 L. Ed.

2d at 655; Faragher, supra, 524 U.S. at 805-06, 118 S. Ct. at

2290, 141 L. Ed. 2d at 686.   In so doing, the Supreme Court

emphasized the legislative goal of deterring sexual harassment

by promoting responsible efforts by employers to detect,

address, and punish it.   Ellerth, supra, 524 U.S. at 764, 118 S.

Ct. at 2270, 141 L. Ed. 2d at 654; Faragher, supra, 524 U.S. at

805-06, 118 S. Ct. at 2290, 141 L. Ed. 2d at 686.   As this Court

construed the LAD in Lehmann, the Supreme Court held that the

“‘primary objective’” of Title VII was “not to provide redress

but to avoid harm.”    Faragher, supra, 524 U.S. at 805-06, 118 S.

Ct. at 2292, 141 L. Ed. 2d at 688 (quoting Albemarle Paper Co.

v. Moody, 422 U.S. 405, 417, 95 S. Ct. 2371, 5 L. Ed. 2d 280,

296 (1975)); see also Lehmann, supra, 132 N.J. at 625-26.      The

Court noted in Faragher, supra, the advice of the United States

Equal Employment Opportunity Commission (EEOC) to employers to

“‘take all steps necessary to prevent sexual harassment from

occurring, such as . . . informing employees of their right to

raise and how to raise the issue of harassment.’”   524 U.S. at

806, 118 S. Ct. at 2292, 141 L. Ed. 2d at 688 (quoting 29 C.F.R.

§ 1604.11(f) (1997)); see also Ellerth, 524 U.S. at 764, 118 S.

Ct. at 2270, 141 L. Ed. 2d at 654.

    Given the clear objective of Title VII to prevent sexual

harassment in the workplace, the Supreme Court arrived at the

                                 34
conclusion that was reached by this Court in Lehmann, Cavuoti

and Gaines:   the imposition of strict liability on an employer

when it has taken no tangible employment action against the

plaintiff employee, without respect to that employer’s efforts

to foster a workplace free from harassment, would contravene the

legislative goal of deterrence.    Faragher, supra, 524 U.S. at

806, 118 S. Ct. at 2292, 141 L. Ed. 2d at 688; see Ellerth,

supra, 524 U.S. at 764, 118 S. Ct. at 2270, 141 L. Ed. 2d at

654.   The Supreme Court observed:

           It would therefore implement clear statutory
           policy and complement the Government’s Title
           VII enforcement efforts to recognize the
           employer’s affirmative obligation to prevent
           violations and give credit here to employers
           who make reasonable efforts to discharge their
           duty. Indeed, a theory of vicarious liability
           for misuse of supervisory power would be at
           odds with the statutory policy if it failed to
           provide employers with some such incentive.

           [Faragher, supra, 524 U.S. at 806, 118 S. Ct.
           at 2292, 141 L. Ed. 2d at 688; see also
           Ellerth, supra, 524 U.S. at 764, 118 S. Ct. at
           2270, 141 L. Ed. 2d at 654.]

       The Supreme Court identified another factor that was

central to its analysis.   Invoking “the general theory of

damages,” the Supreme Court observed that a complainant in a

sexual harassment case “has a duty ‘to use such means as are

reasonable under the circumstances to avoid or minimize the

damages’ that result from violations of [Title VII].”       Faragher,

supra, 524 U.S. at 806, 118 S. Ct. at 2292, 141 L. Ed. 2d at 688

                                  35
(quoting Ford Motor Co. v. EEOC, 458 U.S. 219, 231 n.15, 102 S.

Ct. 3057, 3065 n.15, 73 L. Ed. 2d 721, 732 n.15 (1982)).     It

held that “[i]f the plaintiff unreasonably failed to avail

herself of the employer’s preventive or remedial apparatus, she

should not recover damages that could have been avoided if she

had done so.”   Id. at 806-07, 118 S. Ct. at 2292, 141 L. Ed. 2d

at 688; see also Ellerth, supra, 524 U.S. at 765, 118 S. Ct. at

2270, 141 L. Ed. 2d at 655.

    In Ellerth and Faragher, the Supreme Court thus integrated

the agency principles of Restatement § 219(2)(d) with the

legislative objective of deterring sexual harassment by

promoting effective anti-harassment policies.   It adopted the

following standard:

         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, see Fed. Rule
         Civ. Proc. 8(c).    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.

         [Faragher, supra, 524 U.S. at 807, 118 S. Ct.
         at 2292-93, 141 L. Ed. 2d at 689; see also

                                36
          Ellerth, supra, 524 U.S. at 765, 118 S. Ct. at
          2270, 141 L. Ed. 2d at 655.]

     The Supreme Court further commented that

          [w]hile proof that an employer had promulgated
          an anti-harassment 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.

          [Faragher, supra, 524 U.S. at 807, 118 S. Ct.
          at 2293, 141 L. Ed. 2d at 689; Ellerth, supra,
          524 U.S. at 765, 118 S. Ct. at 2270, 141 L.
          Ed. 2d at 655.]

     We concur with the Supreme Court that the Ellerth/Faragher

analysis provides a fair and practical framework for supervisor

sexual harassment cases.7   Consistent with the focus of

Restatement § 219(2)(d) on the nexus between the employer’s

delegation of authority and the harassment, the Ellerth/Faragher

affirmative defense may not be asserted “when the supervisor’s

harassment culminates in a tangible employment action, such as


7 Relying on a selection of academic commentary disapproving the
Ellerth/Faragher analysis, our dissenting colleagues ignore the
many state appellate courts that have found the affirmative
defense to provide an equitable and workable framework for
supervisor sexual harassment claims based on a hostile work
environment. Post at ___ (slip op. at 13-17), see, e.g., Bank
One v. Murphy, 52 S.W.3d 540 (Ky. 2001); Frieler v. Carlson
Mktg. Grp., 751 N.W.2d 558 (Minn. 2008); Parker v. Warren County
Util. Dist., 2 S.W.3d 170 (Tenn. 1999); Waffle House, Inc. v.
Williams, 313 S.W.3d 796 (Tex. 2010); Brittell v. Dep’t of
Corr., 717 A.2d 1254 (Conn. 1998); Natson v. Eckerd Corp., Inc.,
885 So. 2d 945 (Fla. Dist. Ct. App. 4th Dist. 2004); Sangster v.
Albertson's, Inc., 991 P.2d 674 (Wash. Ct. App. 2000).
                                37
discharge, demotion or undesirable reassignment.”   Faragher,

supra, 524 U.S. at 808, 118 S. Ct. at 2293, 141 L. Ed. 2d at

689; Ellerth, supra, 524 U.S. at 765, 118 S. Ct. at 2270, 141 L.

Ed. 2d at 655.   No affirmative defense is available in such

cases because “[w]hen a supervisor makes a tangible employment

decision, there is assurance the injury could not have been

inflicted absent the agency relation . . . .   Tangible

employment actions are the means by which the supervisor brings

the official power of the enterprise to bear on subordinates.”

Ellerth, supra, 524 U.S. at 761-762, 118 S. Ct. at 2269, 141 L.

Ed. 2d at 653-54.

    In addition, the defense provides no protection to an

employer whose sexual harassment policy fails to provide

“meaningful and effective policies and procedures for employees

to use in response to harassment.”   Gaines, supra, 173 N.J. at

317; see also Lehmann, supra, 132 N.J. at 626 (stating that the

LAD requires an “unequivocal commitment from the top that [the

employer's opposition to sexual harassment] is not just words[,]

but backed up by consistent practice”); accord Faragher, supra,

524 U.S. at 806-07, 118 S. Ct. at 2292, 141 L. Ed. 2d at 688;

Ellerth, supra, 524 U.S. at 765, 118 S. Ct. at 2270, 141 L. Ed.

2d at 655.   In short, the affirmative defense provides no

benefit to employers who empower sexually harassing employees

who take tangible employment actions against their victims,

                                38
employers who fail to implement effective anti-harassment

policies, and employers whose policies exist in name only.

    Conversely, the Ellerth/Faragher framework motivates

employers and employees to accomplish the paramount objective

identified by this Court in Lehmann:   the prevention of sexual

harassment.   See Lehmann, supra, 132 N.J. at 625-26.   The

prospect of an affirmative defense in litigation is a powerful

incentive for an employer to unequivocally warn its workforce

that sexual harassment will not be tolerated, to provide

consistent training, and to strictly enforce its policy.      See

ibid.; accord Faragher, supra, 524 U.S. at 806-07, 118 S. Ct. at

2292, 141 L. Ed. 2d at 688; Ellerth, supra, 524 U.S. at 764-65,

118 S. Ct. at 2270, 141 L. Ed. 2d at 655.   The Ellerth/Faragher

defense similarly motivates a complainant in a sexual harassment

case to report the offense internally, and thereby enable his or

her employer to take immediate action against a harassing

supervisor or coworker.

    In contending that we authorize employers to “hide behind a

paper anti-discrimination policy,” post at ___ (slip op. at 2),

and permit defendants to “seek cover behind an ineffective anti-

discrimination policy,” post at ___ (slip op. at 4), our

dissenting colleagues’ rhetoric fundamentally mischaracterizes

our decision.   So that the dissent’s description of our opinion

does not confuse employers, employees, counsel or trial courts

                                39
with respect to this pivotal issue, we restate: an employer that

implements an ineffective anti-harassment policy, or fails to

enforce its policy, may not assert the affirmative defense.     See

Faragher, supra, 524 U.S. at 806-07, 118 S. Ct. at 2292, 141 L.

Ed. 2d at 688; Ellerth, supra, 524 U.S. at 764-65, 118 S. Ct. at

2270, 141 L. Ed. 2d at 655.

     Accordingly, we expressly adopt the Ellerth/Faragher

analysis for supervisor sexual harassment cases in which a

hostile work environment is claimed pursuant to the LAD, and no

tangible employment action is taken.   See Entrot v. BASF Corp.,

359 N.J. Super. 162, 187 (App. Div. 2003) (anticipating adoption

of Ellerth/Faragher affirmative defense, and holding that “there

is no barrier to the application of a Title VII defense [based

on Ellerth/Faragher] to an LAD action”).8


8 The Appellate Division opinion on which our dissenting
colleagues rely, Schmidt v. Smith, 294 N.J. Super. 569 (App.
Div. 1996), aff’d, 155 N.J. 44 (1998), is not to the contrary.
Post at ___ (slip op. at 5). In its brief review of claims of
direct liability under Restatement § 219(2)(b) and vicarious
liability under Restatement § 219(2)(d), the Appellate Division
simply summarized portions of this Court’s discussion of these
claims in Lehmann. See Schmidt, supra, 294 N.J. Super. at 578-
79. Contrary to the suggestion of the dissent, the Appellate
Division neither stated nor implied that Lehmann precludes the
assertion of an affirmative defense to a claim of vicarious
liability based on Restatement § 219(2)(d). Ibid.    Although
the dissent contends that the Appellate Division “pointed out
that unlike supervisory liability,” negligence claims permit an
employer to present evidence of its due care giving rise to a
defense, post at ___ (slip op. at 5), such a distinction is
nowhere to be found in Schmidt. See Schmidt, supra, 294 N.J.
Super. at 578-79.
                               40
    In a hostile work environment sexual harassment case under

the LAD in which the plaintiff alleges employer vicarious

liability under Restatement § 219(2)(d), the plaintiff has the

initial burden of presenting a prima facie hostile work

environment claim.   If no tangible employment action has been

taken against the plaintiff, the defendant employer may assert

the two-pronged affirmative defense of Ellerth and Faragher.     To

establish that defense, the defendant employer has the burden to

prove, by a preponderance of the evidence, both prongs of the

affirmative defense: first, that the employer exercised

reasonable care to prevent and to correct promptly sexually

harassing behavior; and second, that the plaintiff employee

unreasonably failed to take advantage of preventive or

corrective opportunities provided by the employer or to

otherwise avoid harm.   See Faragher, supra, 524 U.S. at 807, 118

S. Ct. at 2293, 141 L. Ed. 2d at 689; Ellerth, supra, 524 U.S.

at 746, 118 S. Ct. at 2262, 141 L. Ed. 2d at 644.    The employee

may rebut the elements of the affirmative defense.

    Thus, in further proceedings in this case, including any

summary judgment proceedings that may follow remand, the State

may avoid vicarious liability under Restatement § 219(2)(d) by

demonstrating by a preponderance of the evidence that the DOC

exercised reasonable care to prevent and correct promptly any

sexually harassing behavior, and that Aguas unreasonably failed

                                41
to take advantage of any preventive or corrective opportunities

provided by the DOC, or to avoid harm otherwise.      See Faragher,

supra, 524 U.S. at 807, 118 S. Ct. at 2292, 141 L. Ed. 2d at

688; Ellerth, supra, 524 U.S. at 765, 118 S. Ct. at 2270, 141 L.

Ed. 2d at 655.

                                  V.

    The second issue raised in this case, the definition of a

supervisor for purposes of claims based on sexual harassment

giving rise to a hostile work environment, is a pivotal factor

in the application of the agency principles set forth in

Restatement § 219(2)(d).    Liability under Restatement §

219(2)(d) predicated on a supervisor’s misconduct raises a

critical question of fact -- the parameters of the authority

conferred on the alleged harasser and whether he or she is

properly considered a supervisor.      See Restatement § 219(2)(d).

    The Court in Lehmann did not expressly define “supervisor”

for purposes of deciding vicarious liability sexual harassment

cases under agency law.    It alluded, however, to the “power

delegated to [a supervisor] to control the day-to-day working

environment.”    Lehmann, supra, 132 N.J. at 620.    Further, in the

context of its discussion of punitive damages, the Court

distinguished between a “supervisor” and the employer’s “upper

management.”    Id. at 622-23.   The Court thus suggested that its

concept of a supervisor, for purposes of the agency analysis

                                  42
that it proposed, included a broader range of managers than the

senior executives who set policy for an employer.    Id. at 623.

    Similarly, in Cavuoti, supra, in which the definition of

“upper management” for purposes of a claim for punitive damages

was the primary issue, the Court cited federal authority for the

principle that it is an alleged harasser’s functional authority

in the workplace, not simply his or her power to hire and

terminate a subordinate, that defines his or her status as a

“supervisor.”   161 N.J. at 124-25.

    In its role as the agency charged with the enforcement of

Title VII, the EEOC provided guidance to employers regarding the

meaning of the term “supervisor” for purposes of sexual

harassment cases.   U.S. Equal Emp’t Opportunity Comm’n, No.

915.002 Enforcement Guidance on Vicarious Liability for Unlawful

Harassment by Supervisors 3-5 (June 18, 1999) [hereinafter “EEOC

Guidance”], available at

http://www.eeoc.gov/policy/docs/harassment.pdf.     Applying the

Ellerth/Faragher analysis, the EEOC cautioned that the

determination of whether an alleged harasser is a “supervisor”

turns on job function, not job title, that it “must be based on

the specific facts,” and that a supervisor’s authority “must be

of sufficient magnitude so as to assist the harasser explicitly

or implicitly in carrying out the harassment.”    Id. at 4.



                                43
    The first of the two definitions of “supervisor”

promulgated by the EEOC focuses on the supervisor’s capacity to

undertake the adverse employment decisions that, if made, bar an

employer from invoking the Ellerth/Faragher affirmative defense.

Under that definition, “[a]n individual qualifies as an

employee’s ‘supervisor’ if he or she is authorized to undertake

tangible employment decisions affecting the employee.”       Ibid.

The EEOC Guidance defines “tangible employment decisions” to

include, but not to be limited to, “hiring and firing, promotion

and failure to promote, demotion, undesirable reassignment, a

decision causing a significant change in benefits, compensation

decisions and work assignment,” and “suspension” or other

“progressive discipline.”   Id. at 4, 6-7 n.31.   The EEOC

explained:

         An individual whose job responsibilities
         include the authority to recommend tangible
         job decisions affecting an employee qualifies
         as his or her supervisor even if the
         individual does not have the final say. As
         the Supreme Court recognized in Ellerth, a
         tangible employment decision “may be subject
         to review by higher level supervisors.”     As
         long as the individual’s recommendation is
         given substantial weight by the final decision
         maker(s), that individual meets the definition
         of supervisor.

         [Id. at 4 (footnote omitted).]

    The EEOC’s second definition of “supervisor” reflects the

language of the second clause in Restatement § 219(2)(d), which


                                44
requires that the sexual harasser be “aided in accomplishing the

tort by the existence of the agency relation.”     Restatement §

219(2)(d).   Citing the lifeguard supervisor setting of Faragher,

the EEOC deems “[a]n individual who is authorized to direct

another employee’s day-to-day work activities” as a supervisor,

“even if that individual does not have the authority to

undertake or recommend tangible job decisions.”    EEOC Guidance,

supra, at 4.   The EEOC stated:

         An individual who is temporarily authorized to
         direct   another    employee’s    daily    work
         activities   qualifies    as   his    or    her
         “supervisor”   during    that   time    period.
         Accordingly, the employer would be subject to
         vicarious liability if that individual commits
         unlawful harassment of a subordinate while
         serving as his or her supervisor.

         On the other hand, someone who merely relays
         other officials’ instructions regarding work
         assignments   and   reports  back  to   those
         officials does not have true supervisory
         authority. Furthermore, someone who directs
         only a limited number of tasks or assignments
         would not qualify as a “supervisor.”      For
         example,   an   individual  whose   delegated
         authority is confined to coordinating a work
         project of limited scope is not a supervisor.

         [Id. at 5.]

    In Vance v. Ball State University,      U.S.    ,   , 133 S.

Ct. 2434, 2443, 186 L. Ed. 2d 565 (2013), a closely divided

United States Supreme Court adopted a substantially narrower

definition of “supervisor” than that of the EEOC for purposes of

employer vicarious liability in supervisor sexual harassment

                                  45
cases.   There, the majority construed Ellerth and Faragher to

envision not two definitions of the term “supervisor,” but “a

unitary category of supervisors, i.e., those employees with the

authority to make tangible employment decisions.”     Ibid.   It

held:

            [A]n employer may be vicariously liable for an
            employee’s unlawful harassment only when the
            employer has empowered that employee to take
            tangible employment actions against the
            victim, i.e., to effect 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.”

            [Ibid. (quoting Ellerth, supra, 524 U.S. at
            761, 118 S. Ct. at 2257, 141 L. Ed. 2d at
            633).]

    We decline to adopt the restrictive definition of

“supervisor” prescribed by the Supreme Court majority in Vance.

In light of our fact-specific approach to sexual harassment

cases, we respectfully disagree with the Supreme Court’s

rejection of the EEOC’s definition of supervisor on the grounds

that it relies “on a highly case-specific evaluation of numerous

factors.”    Ibid.   We agree with the EEOC that the term

“supervisor,” defined more expansively to include not only

employees granted the authority to make tangible employment

decisions, but also those placed in charge of the complainant’s




                                  46
daily work activities, accurately reflects the two different

settings envisioned by Restatement § 219(2)(d).

    Moreover, this broader definition comports with this

Court’s holding in Lehmann, in which the Court recognized the

importance, in Restatement § 219(2)(d) sexual harassment cases,

of a supervisor’s authority to control the day-to-day working

environment.   Lehmann, supra, 132 N.J. at 132.   It is also

consistent with the holding in Cavuoti, in which the Court

rejected the notion that only the power to hire and terminate a

subordinate distinguishes a supervisor from a co-employee.

Cavuoti, supra, 161 N.J. at 124-25.   The EEOC definition takes

into account the broad range of employer structures and factual

settings in which sexual harassment occurs.

    Most importantly, the more expansive definition of

“supervisor” furthers the paramount goal of the LAD:   the

eradication of sexual harassment in the workplace.   It prompts

employers to focus attention not only on an elite group of

decision-makers at the pinnacle of the organization, but on all

employees granted the authority to direct the day-to-day

responsibilities of subordinates, and to ensure that those

employees are carefully selected and thoroughly trained.

    In any additional proceedings in this case following

remand, the question of whether McClish or Hill served as

Aguas’s “supervisor” should be determined in accordance with the

                                47
two definitions set forth by the EEOC.     Under that standard, the

allegedly harassing employee should be considered a supervisor

for purposes of Aguas’s hostile work environment claim if

either:     (1) he was authorized to undertake tangible employment

decisions affecting Aguas; or (2) he was authorized by the DOC

to direct her day-to-day work activities at Edna Mahan.

                                  VI.

    Finally, we consider Aguas’s claim for punitive damages.

The trial court premised its dismissal of Aguas’s punitive

damages claim on its determination that the record supported no

claim for compensatory damages in this case and accordingly did

not undertake a detailed analysis of the punitive damages claim.

We briefly review the standard that governs such a claim.

    A plaintiff asserting a punitive damages claim in a LAD

case against a public entity such as the DOC must meet a high

standard.    A public sector employer “whose egregious conduct

violates the LAD may be held ‘liable for punitive damages . . .

only in the event of actual participation by upper management or

willful indifference.’”     Lockley v. Dep’t of Corr., 177 N.J.

413, 424 (2003) (quoting Cavuoti, supra, 161 N.J. at 117).       The

plaintiff must prove egregious conduct on the part of the

defendant by clear and convincing evidence.     Id. at 432 (citing

L. 1995, c. 142, § 11); see also Lehmann, supra, 132 N.J. at

624-25 (quoting Leimgruber v. Claridge Assocs., 73 N.J. 450, 454

                                  48
(1977)).   For such damages, “a higher level of culpability than

mere negligence” is required.   Lehmann, supra, 132 N.J. at 626.

    For purposes of this analysis, defining the employer’s

“upper management” is a fact-sensitive inquiry that does not

“depend[] on labels or titles but on whether an employee

possesses ‘significant power, discretion and influence.’”

Lockley, supra, 177 N.J. at 424 (quoting Cavuoti, supra, 161

N.J. at 123).   This Court has explained that

           upper management would consist of those
           responsible to formulate the organization’s
           anti-discrimination      policies,     provide
           compliance programs and insist on performance
           (its governing body, its executive officers),
           and those to whom the organization has
           delegated the responsibility to execute its
           policies in the workplace, who set the
           atmosphere    or   control    the   day-to-day
           operations of the unit (such as heads of
           departments, regional managers, or compliance
           officers). For an employee on the second tier
           of management to be considered a member of
           “upper management,” the employee should have
           either (1) broad supervisory powers over the
           involved employees, including the power to
           hire, fire, promote, and discipline, or (2)
           the delegated responsibility to execute the
           employer’s   policies   to   ensure  a   safe,
           productive and discrimination-free workplace.
           Obviously such instructions should be tailored
           to the facts of the case and might be
           accompanied by special interrogatories when
           several officers are presented as members of
           “upper management.”

           [Cavuoti, supra, 161 N.J. at 128-29.]

Thus, this fact-sensitive inquiry requires consideration of the

following:   (1) the employee’s position in the employer’s

                                49
hierarchy; (2) the employee’s function and responsibilities; and

(3) the amount of discretion the employee exercises.   Lockley,

supra, 177 N.J. at 424.

     Although claims brought pursuant to the LAD are excluded

from the statutory cap set by the Punitive Damages Act, N.J.S.A.

2A:15-5.9 to -5.17 (PDA), in N.J.S.A. 2A:15-5.14, the PDA’s

“general requirements for procedural and substantive fairness

are mandated.”   Baker v. Nat’l State Bank, 161 N.J. 220, 229

(1999).   Pursuant to N.J.S.A. 2A:15-5.12(c), if the trier of

fact determines that an award is appropriate in an LAD case

against a public sector employer, it sets the amount of that

award by considering all relevant evidence relating to the

factors set forth in N.J.S.A. 2A:15-5.12(b), “the profitability

of the misconduct to the defendant” and when the misconduct was

terminated.9

     Consequently, if the trial court is called upon to

determine Aguas’s punitive damages claim on remand, it should

assess whether Aguas has shown by clear and convincing evidence

that the DOC committed “egregious conduct,” and if so, whether

she has presented clear and convincing evidence that “upper




9 A fourth factor identified in N.J.S.A. 2A:15-5.12(c), the
defendant’s financial condition, is generally not considered
when the defendant is a public entity because it “does not
further the goal of deterrence as it does in the private
sector.” Lockley, supra, 177 N.J. at 430-31.
                                50
management” either participated directly in sexual harassment,

or showed “willful indifference.”    The court should also assess

Aguas’s claims in accordance with the PDA and this Court’s

holdings in Cavuoti and Lockley.

                              VII.

    The judgment of the Appellate Division is reversed, and the

matter is remanded for further proceedings in accordance with

this opinion.

     JUSTICES LaVECCHIA, FERNANDEZ-VINA, and SOLOMON; and JUDGE
CUFF (temporarily assigned) join in JUSTICE PATTERSON’s opinion.
JUSTICE ALBIN filed a separate, dissenting opinion in which
CHIEF JUSTICE RABNER joins.




                               51
                                         SUPREME COURT OF NEW JERSEY
                                           A-35 September Term 2013
                                                    072467

ILDA AGUAS,

    Plaintiff-Appellant,

         v.

STATE OF NEW JERSEY,

    Defendant-Respondent.



    JUSTICE ALBIN, dissenting.

    The majority opinion turns back the clock for employees

victimized by sexual harassment in the workplace and gives

greater protection to supervisors who abuse their authority to

create a hostile work environment.    Today’s decision tears down

the central pillar of our landmark decision in Lehmann v. Toys

‘R’ Us, 132 N.J. 587 (1993), which announced that an employer

would be vicariously liable for sexual harassment committed by

one of its supervisors.     Lehmann allowed no quarter for

supervisory sexual harassment and provided for no affirmative

defense for the employer.    We said so in clear, unmistakable

terms, leaving no doubt that under New Jersey’s Law Against

Discrimination (LAD), N.J.S.A. 10:5-1 to -49, this State’s

workers had safeguards not present under federal law.




                                  1
     The Appellate Division, the United States District Court of

New Jersey, and the New Jersey Supreme Court Committee on Civil

Jury Charges all recognized that under Lehmann, when the

supervisor is the sexual harasser, the employer has no

affirmative defense and cannot hide behind a paper anti-

discrimination policy.    Civil Jury Charge 2.25 reaffirmed in

2013 what we said twenty years earlier in Lehmann -- that an

employer is vicariously liable if a supervisor creates a hostile

work environment through sexual harassment.     Model Jury Charge

(Civil) 2.25 “Hostile Work Environment Claims Under the New

Jersey Law Against Discrimination (Sexual and Other Harassment)”

(February 2013).     Trial courts have been guided by that charge

for eighteen years.    The majority now says it was all a mistake.

     I cannot pretend that the majority’s retreat from Lehmann

will not have real-life negative consequences for the targets of

workplace discrimination.    Going forward, sexually harassed

employees -- mostly women -- will be less likely to find relief

in our courts, and therefore will be less likely to take their

grievances there.1    And employers will have less incentive to use

greater care in selecting supervisors who will enforce rather

than violate anti-discrimination policies.    This is not a sky-




1 Lehmann’s basic assumption is that women are the most frequent
victims of sexual harassment in the workplace. See Lehmann,
supra, 132 N.J. at 615.
                                  2
is-falling prediction but a stark reality for anyone who

understands what our jurisprudence was and what it has now

become.

    The Law Against Discrimination is one of New Jersey’s most

progressive legislative schemes.     Under the LAD, vicarious

supervisory liability was a critical remedy both in making

discriminated employees whole and in deterring workplace

harassment.   Because the majority has abandoned that remedy

without any compensating benefit, I respectfully dissent.

                                I.

    In our landmark decision in Lehmann, supra, 132 N.J. at

615-25, we set forth the different pathways for employer

liability under our LAD when an employee is subjected to a

hostile work environment through sexual harassment.     In cases

involving a hostile work environment persisting through an

employer’s alleged negligence, we allowed for an employer to

show that it exercised due care by effectuating an anti-

discrimination policy accessible to employees.     Id. at 621-22

(relying on Restatement (Second) of Agency § 219(2)(b) (1958)).

However, we took a different approach when the supervisor was

the perpetrator of sexual harassment.    In that circumstance, we

clearly stated that an employer would be vicariously liable for

the supervisor’s sexual harassment of a subordinate because the

employer delegated to the supervisor the authority to control

                                 3
the workplace.   Id. at 620 (relying on Restatement (Second) of

Agency, supra, § 219(2)(d)).   The employer could not seek cover

behind an ineffective anti-discrimination policy that did not

deter a supervisor from misusing the power delegated to him.

    In Lehmann, we stated that whether an employer is liable

for the hostile work environment created by a supervisor

controlling the day-to-day activities of an employee depends on

how a factfinder decides four questions:

         1. Did the employer delegate the authority to
         the supervisor to control the situation of
         which the plaintiff complains?

         2. Did the supervisor exercise that authority?

         3. Did the exercise of authority result in a
         violation of the LAD?

         4. Did the authority delegated by the employer
         to the supervisor aid the supervisor in
         injuring the plaintiff?

         [Ibid.]

We further stated that “[w]hen the answer to each of those

questions is yes, then the employer is vicariously liable for

the supervisor’s harassment under § 219(2)(d).”   Ibid.    In

supervisory liability cases, Lehmann posed no fifth question

asking whether an employer should be excused because of a

purportedly effective anti-discrimination policy available to

its harassed employees.




                                 4
    Lehmann’s simple formulation of employer supervisory

liability was understood by our courts and by various Supreme

Court Committees given the task of preparing a jury charge

consistent with our holding in Lehmann.

    Writing for the Appellate Division in Schmidt v. Smith, 294

N.J. Super. 569, 578 (App. Div. 1996), aff’d, 155 N.J. 44

(1998), Judge Keefe noted that the “Lehmann Court provided a

check list for the determination of whether a supervisor who

creates a hostile work environment was aided in accomplishing

that tort by the power delegated to him or her to control the

day-to-day working environment.”    Judge Keefe quoted the above

four-question test in Lehmann and stated:   “When the answer to

each of these questions is yes, then the employer is vicariously

liable for the supervisor’s harassment under § 219(2)(d).”

Ibid. (citing Lehmann, supra, 132 N.J. at 619).   Judge Keefe

pointed out that unlike supervisory liability, the standard

governing sexual harassment negligence claims allows an employer

to present evidence of due care, such as “some effective

preventative mechanisms such as anti-harassment policies, formal

and informal complaint structures and monitoring mechanisms.”

Id. at 579 (citing Lehmann, supra, 132 N.J. at 621).

    The Supreme Court Model Civil Jury Charge Committee,

comprised of preeminent judges and lawyers, has formulated and

revised a supervisory-liability charge four times since 1997,

                                5
each time asserting that an employer has no defense to a

supervisor’s sexual harassment if the factfinder answers the

four Lehmann questions in the affirmative.   As recently as

February 2013, the Model Civil Jury Charge Committee issued

instructions on employer liability when a supervisor or non-

supervisor creates the hostile work environment.2   Civil Jury

Charge 2.25 provides that an employer is liable “if it delegated

to [the harassing supervisor] the authority to control the

working environment and [the harassing supervisor] abused that

authority to create a hostile work environment.”    Model Jury

Charge (Civil) 2.25(4)(b).   The jury is (and has been) provided

with the following instructions:

               To prove that defendant [employer’s name]
          is liable to plaintiff based on its delegation
          of authority to [name(s) of alleged harassing
          supervisor(s)], plaintiff must prove each of
          the following elements by a preponderance of
          the evidence:


2 Model Jury Charge (Civil) 8.49, which instructs the jury on
supervisory sexual harassment, was approved by the Supreme Court
Model Civil Jury Charge Committee in October 1997. Model Jury
Charge (Civil) 8.49 “Supervisory Sexual Harassment” (October
1997). Model Jury Charge (Civil) 2.25, which instructs the jury
on hostile work environment claims under the LAD, was approved
by the Supreme Court Model Civil Jury Charge Committee in
November 1999. Model Jury Charge (Civil) 2.25. Then, in 2000,
the Committee revised the charge, based on Lehmann. Notices to
the Bar, Updates to Model Civil Jury Charges, 159 N.J.L.J. 258,
258 (Jan. 17, 2000). The charge was revised again, in February
2013, to “address an employer’s liability under the LAD for
supervisory acts of sexual harassment.” Notices to the Bar,
Model Civil Jury Charges Updates, 213 N.J.L.J. 554, 554 (Aug.
12, 2013).
                                   6
                 (1) That defendant [employer’s name]
                 delegated authority to [name(s) of
                 alleged   harassing  supervisor(s)]   to
                 control the situation of which plaintiff
                 complains; and

                 (2) [name(s)    of   alleged   harassing
                 supervisor(s)] exercised that authority;
                 and

                 (3) [name(s)    of   alleged   harassing
                 supervisor(s)] exercise of authority
                 resulted in unlawful harassment; and

                 (4) the     authority    delegated    by
                 defendant [employer name] to [name(s) of
                 alleged harassing supervisor(s)] aided
                 [name(s)     of    alleged     harassing
                 supervisor(s)] in harassing plaintiff.

                 If you find that the plaintiff has proved
            each of these elements, then defendant
            [employer’s name] is liable for the alleged
            unlawful harassment.    If any one of these
            elements is not proved, then defendant
            [employer’s name] cannot be held liable based
            on its delegation of authority.

            [Ibid.]

    That charge has been given to juries for eighteen years.

In Gaines v. Bellino, 173 N.J. 301, 313 (2002), we reaffirmed

the basic formula found in this jury charge derived from

Lehmann, never hinting that an affirmative defense applied to

supervisory liability under the Restatement § 219(2)(d)

approach.    We did so even though Faragher v. City of Boca Raton,

524 U.S. 775, 807, 118 S. Ct. 2275, 2293, 141 L. Ed. 2d 662, 689

(1998) and Burlington Indus. v. Ellerth, 524 U.S. 742, 764-65,

118 S. Ct. 2257, 2270, 141 L. Ed. 2d 633, 655 (1998), which

                                  7
provide an affirmative defense to supervisory liability, were

both on the books.   In Gaines, supra, we only stated that when

an employee alleges employer negligence in causing a hostile

work environment, under Restatement § 219(2)(b), the employer

can assert the affirmative defense that it had an anti-

discrimination policy in place.   173 N.J. at 313-14.

    Moreover, that Cavuoti v. New Jersey Transit Corp., 161

N.J. 107, 120-21 (1999), permits an affirmative defense to a

punitive-damage claim against a company in a LAD case, in no way

contradicts Lehmann’s no-affirmative defense to a compensatory-

damage claim involving supervisory liability, as the majority

suggests.   Nowhere in Cavuoti does the Court contravene the

supervisory-liability test for compensatory damages crafted in

Lehmann.

    Last, if Cavuoti and Gaines stood for the proposition that

an affirmative defense applies to vicarious supervisory

liability -- as the majority asserts -- then it stands to reason

that this Court in 1999 and 2002 would have directed the Model

Civil Jury Charge Committee to amend the Model Charge to conform

to that view.   But that never happened.   Only now does the

majority give the directive to the Committee to amend the Charge

to include an affirmative defense.

                                  II.



                                  8
    In Lehmann, supra, we understood that we were pursuing our

own path, a different path in construing the LAD as providing

greater protection against workplace discrimination than that

afforded by federal courts construing Title VII.   132 N.J. at

600-01, 603, 618-20.   Indeed, we eschewed the standard set forth

by the United States Court of Appeals for the Third Circuit for

hostile work environment sexual harassment.    Id. at 603.   We

stated:

          [W]e announce a new test in the hope of
          creating a standard that both employees and
          employers will be able to understand and one
          that employers can realistically enforce. We
          cannot overstate the importance we place on a
          test that allows employees to know their
          rights in a given set of circumstances and
          that allows employers to set policies and
          procedures that comply with that test.

          [Ibid.]

    Importantly, in Lehmann, supra, we declined to follow the

United States Supreme Court majority’s decision in Meritor

Savings Bank, FSB v. Vinson, 477 U.S. 57, 106 S. Ct. 2399, 91 L.

Ed. 2d 49 (1986).   132 N.J. at 618-21.   Meritor, supra, refused

to accept the notion that “an employer is strictly liable for a

hostile environment created by a supervisor’s sexual advances,

even though the employer neither knew nor reasonably could have

known of the alleged misconduct.”    477 U.S. at 69-70, 106 S. Ct.

at 2407, 91 L. Ed. 2d at 61.   Rather than follow Meritor, in

Lehmann, supra, we cited approvingly Justice Marshall’s

                                 9
concurrence (joined by Justices Brennan, Blackmun, and Stevens)

on supervisory liability:

           [A] supervisor’s responsibilities do not begin
           and end with the power to hire, fire, and
           discipline employees, or with the power to
           recommend such actions. Rather, a supervisor
           is charged with the day-to-day supervision of
           the work environment and with ensuring a safe,
           productive workplace. There is no reason why
           abuse of the latter authority should have
           different consequences than abuse of the
           former. In both cases it is the authority
           vested in the supervisor by the employer that
           enables him to commit the wrong: it is
           precisely because the supervisor is understood
           to be clothed with the employer’s authority
           that he is able to impose unwelcome sexual
           conduct on subordinates.

           [132 N.J. at 618-19 (quoting Meritor, supra,
           477 U.S. at 76-77, 106 S. Ct. at 2410, 91 L.
           Ed. 2d at 65-66 (Marshall, J., concurring)).]

       The United States Supreme Court in Faragher, supra,

declared that it was bound to follow the majority decision in

Meritor.   524 U.S. at 792, 118 S. Ct. at 2286, 141 L. Ed. 2d at

679.    However, as pointed out, in Lehmann, supra, we did not

adopt the reasoning in Meritor.    132 N.J. at 618-21.   Therefore,

we are not bound to follow Faragher in lock-step.

       Faragher, supra, held that an employer is subject to strict

“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 a

tangible employment action is taken, “such as discharge,


                                  10
demotion, or undesirable reassignment.”    524 U.S. at 807-08, 118

S. Ct. at 2293, 141 L. Ed. 2d at 689.     On the other hand,

“[w]hen no tangible employment action is taken” -- for example,

when the harassing conduct causes an employee to suffer a

nervous breakdown or a severe psychiatric disorder -- Faragher

allows an affirmative defense.   See id. at 807, 118 S. Ct. at

2293, 141 L. Ed. 2d at 689.   The affirmative defense comes into

play if the employer can show “(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.”   Ibid.   The Court came to the same holding in

Ellerth, supra, 524 U.S. at 764-65, 118 S. Ct. at 2270, 141 L.

Ed. 2d at 655, which was decided on the same day as Faragher.

Until today, the Ellerth/Faragher affirmative defense standard

was foreign to our LAD jurisprudence.

    Lehmann makes no such distinction between tangible

employment actions and sexual harassment that may cause physical

or psychological harm to the employee.     Under Lehmann, supra, so

long as the “employer grants the supervisor the authority to

control the working environment and the supervisor abuses that

authority to create a hostile work environment,” the employer is

liable for compensatory damages, whatever they may be.     132 N.J.

                                 11
at 624.     Thus, a supervisor who sexually harasses and

psychologically breaks an employee will be liable for

compensatory damages.     Ellerth/Faragher cannot be squared with

Lehmann.

    The United States District Court of New Jersey knew that

our approach in Lehmann was incompatible with Ellerth/Faragher.

In Newsome v. Administrative Office of the Courts, 103 F. Supp.

2d 807 (D.N.J. 2000), the plaintiff asserted violations of Title

VII and the LAD, alleging that she was sexually harassed by her

supervisor at the Administrative Office of the Courts (AOC).

Even in the wake of Ellerth/Faragher, Judge Greenaway stated

that “[a]lthough the New Jersey Supreme Court frequently looks

to Title VII jurisprudence in interpreting the LAD, it has

adopted a slightly broader test than that of the Third Circuit

for hostile environment harassment.”       Id. at 817 (citation

omitted).     Like Judge Keefe and the Supreme Court Model Civil

Jury Charge Committee, Judge Greenaway read Lehmann as not

providing an affirmative defense to supervisory liability for

sexual harassment.     Id. at 822.    In a case in which an employer

delegates to a supervisor the power to control the work

environment, thus facilitating the harassing conduct, Judge

Greenaway held that, under the LAD, “[t]he reasonableness of the

AOC’s actions in implementing anti-harassment policies is no

defense to harassment committed because of the agency

                                     12
relationship.”   Ibid.   Judge Greenaway stated that if a jury

answered affirmatively that the supervisor’s actions “were

sufficiently severe or pervasive to create a hostile work

environment” and that the supervisor “was able to commit those

acts because of the authority delegated him by the AOC,” then

“the AOC will be vicariously liable, irrespective of its anti-

harassment policies.”    Ibid.

     Judge Greenaway understood Lehmann’s distinction between

the LAD and Title VII’s approach to supervisory liability.       It

is that important distinction that the majority paves over

today.

                                 III.

     Today’s decision is at complete odds with the widely held

view that the LAD, under Lehmann, provided greater protection

than federal law in hostile work environment cases.3   “The LAD is


3 See Elliot M. Baumgart & David H. Ben-Asher, If You Don’t Have
a Grievance Procedure, Get One; U.S. Supreme Court Lays Down the
Rules for Avoiding Employer Liability for Sexual Harassment by
Supervisors, 153 N.J.L.J. 492, 496 (Aug. 3, 1998) (“The
discussion in Lehmann of an employer’s effective complaint
mechanisms took place only in the context of the negligence
ground for vicarious liability, in contrast to Faragher and
[Ellerth] -- in which the existence of a complaint mechanism is
clearly available as a defense to all the grounds for vicarious
liability.”); Lisa Manshel, Employer Liability for Supervisors’
Sexual Harassment; Why Faragher and Ellerth Affirmative Defenses
Shouldn’t Apply Under the LAD, 160 N.J.L.J. 609, 609 (May 15,
2000) (“The proponents of [Ellerth/Faragher] seek to use this
affirmative defense to escape liability under the less forgiving
test set forth in Lehmann.”); id. at 615 (“In actuality, the new
affirmative defense is nothing more than a policy decision to
                                 13
remedial social legislation whose overarching goal is to

eradicate the ‘cancer of discrimination.’”    Nini v. Mercer Cnty.

Cmty. Coll., 202 N.J. 98, 108-09 (2010).    Before today, we

heralded this state’s progressive anti-discrimination laws and

jurisprudence.    For example, in Alexander v. Seton Hall

University, 204 N.J. 219, 222, 234-35 (2010), we refused to

follow the United States Supreme Court’s crabbed “framework for

analyzing accrual and timeliness in Title VII wage

discrimination claims” in Ledbetter v. Goodyear Tire & Rubber

Co., 550 U.S. 618, 127 S. Ct. 2162, 167 L. Ed. 2d 982 (2007),

because that framework disadvantaged employees who suffered

discrimination.   We rejected “the sea change that would be

effected were we to adopt the Ledbetter majority approach to

wage discrimination claims under our LAD” in light of our

settled case law.    Alexander, supra, 204 N.J. at 234.     We

therefore allowed for a more expansive statute of limitations

under the LAD for the filing of wage discrimination claims.

Ibid.   Yet, the majority in this case invites a “sea change”

that will disadvantage sexually harassed employees in the

workplace.




shield employers from liability despite the fact that their
policies are not effective. This federal policy contradicts the
intent of the New Jersey Legislature as understood in
Lehmann.”).
                                 14
    If the United States Supreme Court’s interpretation of

Title VII was not the gold standard in Alexander, then why here?

First, the Ellerth/Faragher standard is not in keeping with our

liberal construction of our LAD.     See Nini, supra, 202 N.J. at

108-09 (noting that LAD “should be liberally construed” because

it “is remedial social legislation”).    Second, the

Ellerth/Faragher standard has received substantial criticism.

One commentator has stated the Ellerth/Faragher standard creates

a “risk that internal programs will be merely ‘symbolic

responses -- responses designed to create a visible commitment

to law, which may, but do not necessarily, reduce employment

discrimination.’”   Melissa Hart, The Possibility of Avoiding

Discrimination:   Considering Compliance and Liability, 39 Conn.

L. Rev. 1623, 1646 (2007) (quoting Lauren B. Edelman, Legal

Ambiguity and Symbolic Structures:    Organizational Mediation of

Civil Rights Law, 97 Am. J. Soc. 1531, 1542 (1992)).    Another

commentator has expressed concern that “firms may utilize

compliance systems simply as window-dressing to reduce the

probability of legal liability without addressing the underlying

behavior.”   Timothy P. Glynn, Taking Self-Regulation Seriously:

High-Ranking Officer Sanctions for Work-Law Violations, 32

Berkeley J. Emp. & Lab. L. 279, 312 (2011); see also Anne

Lawton, Operating in an Empirical Vacuum:     The Ellerth and

Faragher Affirmative Defense, 13 Colum. J. Gender & L. 197, 199

                                15
(2004) (noting that United States Supreme Court’s approach

“paved the way for the lower federal courts to interpret the

affirmative defense in ways that further undermine, rather than

facilitate, the goal of deterring sexual harassment in the

workplace”); John H. Marks, Smoke, Mirrors, and the

Disappearance of “Vicarious” Liability:   The Emergence of a

Dubious Summary-Judgment Safe Harbor for Employers Whose

Supervisory Personnel Commit Hostile Environment Workplace

Harassment, 38 Hous. L. Rev. 1401, 1405 (2002) (stating that

post-Ellerth courts are “manufacturing a dubious summary

judgment safe harbor for employers”).

    The Ellerth/Faragher standard, moreover, is not the optimal

method for discouraging sexual harassment in the workplace.

See, e.g., Susan Bisom-Rapp, Bulletproofing the Workplace:

Symbol and Substance in Employment Discrimination Law Practice,

26 Fla. St. U. L. Rev. 959, 972 (1999) (“[T]he implementation of

symbolic policies and procedures in no way guarantees

substantive change for members of the groups that EEO law is

designed to protect.   In fact, symbolic policies and procedures

may provide unjustified optimism that an organization is

governed fairly.”); Joanna L. Grossman, The Culture of

Compliance:   The Final Triumph of Form over Substance in Sexual

Harassment Law, 26 Harv. Women’s L.J. 3, 71 (2003) (“Research

suggests that the affirmative defense rewards compliance without

                                16
ensuring success.”); Kimberly D. Krawiec, Organizational

Misconduct:   Beyond the Principal-Agent Model, 32 Fla. St. U. L.

Rev. 571, 574 (2005) (“[S]ome organizations may employ internal

compliance structures primarily as a window-dressing mechanism

that provides both market legitimacy and reduced organizational

liability for agent misconduct.”); Lawton, supra, 13 Colum. J.

Gender & L. at 198 (expressing concern that courts should not

“reward employers for ‘file cabinet compliance.’”).

       Clearly, Ellerth/Faragher is not offering a better way than

Lehmann for the victims of hostile work harassment, whether

those victims are targeted because of their gender, sexual

orientation, race, religion, or nationality.    If our civil jury

charge on supervisory liability was so wrong because it gave

victims of discrimination an unfair litigation advantage, one

must wonder why it took our Court eighteen years to say so.

Moreover, had the Legislature wanted to include an affirmative

defense to supervisory liability in the wake of

Ellerth/Faragher, it could have amended the LAD.   But it did

not.

       In short, neither precedent, nor experience, nor logic

requires us to adopt a standard that is inferior to our own

standard in Lehmann for supervisory liability in LAD hostile

work environment cases.

                                 IV.

                                 17
    Here are Aguas’s assertions, which we must accept as true

for summary-judgment purposes.   The highest-ranking officer on

the third shift at the Edna Mahan Correctional Facility

repeatedly sexually harassed Corrections Officer Ilda Aguas.       On

one occasion, the shift commander solicited Aguas to go with him

to a motel; on another, he sat on her lap and blew his whistle

while grinding his pelvis into her in the presence of two of

Aguas’s supervisors.

    In another incident, the shift commander pulled Aguas’s

hands behind her back up to her shoulder blades, bent her over a

table with his genital area touching her buttocks, stating “What

are you going to do?”   In yet another incident, the shift

commander danced around Aguas and blew his whistle as though she

were a stripper.   Two superior officers were present but did not

intercede.   Other unwanted encounters included the shift

commander massaging Aguas’s shoulders.

    Aguas reported those egregious episodes of sexual

harassment to a supervising lieutenant numerous times, and his

response was that she should handle the matter herself.      The

supervising lieutenant took the position that he was “not going

to lose [his] job by getting involved in this.”   If Aguas’s

account is true, the State is liable under Lehmann’s

supervisory-liability standard, regardless of whether Aguas made



                                 18
a formal complaint pursuant to the Department of Correction’s

anti-discrimination policy.

    Based on Aguas’s account, one fair inference is that a

climate of fear discouraged the reporting of sexual harassment

against a high-ranking officer.    Common sense tells us that when

the supervisor is the sexual harasser and other superior

officers look the other way, as alleged here, the anti-

discrimination policy touted by the employer has failed.      The

additional hoops that the majority requires Aguas to jump

through under the Ellerth/Faragher standard do not advance the

goals of the LAD, which is to rid the workplace of

discriminatory harassment.    This case exemplifies, if the

allegations are true, how supervisory harassment can beat down

and belittle an employee, who may understandably believe that

she has nowhere to turn but to the courts.

                                  V.

    In the end, this is a case about statutory interpretation,

and our mission is to construe the LAD consistent with the

Legislature’s salutary goal of eradicating sexual harassment in

the workplace.     By imposing vicarious liability on the employer

for a supervisor’s sexual harassment, the Lehmann Court gave

effect to its understanding of the Legislature’s intent in

passing the LAD.    If the majority’s interpretation of the LAD is



                                  19
wrong, as I believe it is, the Legislature can still speak to

the issue.

    CHIEF JUSTICE RABNER joins in this opinion.




                               20
               SUPREME COURT OF NEW JERSEY

NO.    A-35                                      SEPTEMBER TERM 2013

ON CERTIFICATION TO              Appellate Division, Superior Court



ILDA AGUAS,

      Plaintiff-Appellant,

              v.

STATE OF NEW JERSEY,

      Defendant-Respondent.




DECIDED                 February 11, 2015
                Chief Justice Rabner                         PRESIDING
OPINION BY                   Justice Patterson
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY                Justice Albin


                                        REVERSE/
  CHECKLIST                                                   AFFIRM
                                         REMAND
  CHIEF JUSTICE RABNER                                           X
  JUSTICE LaVECCHIA                          X
  JUSTICE ALBIN                                                  X
  JUSTICE PATTERSON                          X
  JUSTICE FERNANDEZ-VINA                     X
  JUSTICE SOLOMON                            X
  JUDGE CUFF (t/a)                           X
  TOTALS                                     5                    2
