The Faragher-Ellerth Defense: How NJ Employers Try to Escape Liability for Harassment — and How to Beat It

Workplace sexual harassment is far more common than many employers acknowledge, and the employer's response frequently is one of the most important issues in each case. In New Jersey, employers commonly argue that they maintained anti-harassment policies, and the employee failed to report. 

An employer's handbook and training records rarely tell the whole story. Our legal team at Brandon J. Broderick often evaluates how the complaints were handled in practice. Courts look beyond the existence of a written policy. They examine how the employer responded, including the timing of the investigation, the effectiveness of reporting procedures, any retaliation, and whether the misconduct continued after the complaint. 

The Faragher-Ellerth defense fails when an employer's harassment policy exists on paper but breaks down in practice.

This article explains how the Faragher-Ellerth defense operates, what employers must prove to rely on it, how employees overcome the defense with evidence of ineffective workplace practices, and when to contact a sexual harassment lawyer in New Jersey. 

Understanding the Faragher-Ellerth Defense in New Jersey Workplace Harassment Cases

Nearly 40% of women experience workplace sexual harassment at some point during their working lives. New Jersey law holds an employer responsible when a supervisor harasses someone on staff. The Faragher-Ellerth defense is how an employer tries to avoid that responsibility. 

The name comes from two U.S. Supreme Court decisions from 1998, Faragher v. City of Boca Raton and Burlington Industries v. Ellerth. Both cases involved sexual harassment under Title VII of the federal Civil Rights Act. In each one, the court gave employers a limited way to avoid automatic liability for a hostile work environment created by a supervisor.

For a long time, New Jersey courts had not decided whether the defense applied to claims under the state's own law, the Law Against Discrimination. The New Jersey Supreme Court settled the question in Aguas v. State of New Jersey, 220 N.J. 494 (2015). 

It formally adopted the Faragher-Ellerth defense that workers now face whenever a supervisor is the harasser. The plaintiff in Aguas was a corrections officer who reported misconduct verbally without filing a written complaint. The state relied on its policy to defeat her claim, and the court agreed the defense was available.

Aguas parted with federal law on one point, in the worker's favor. The court had to decide who counts as a supervisor. It rejected the narrow definition the U.S. Supreme Court used in Vance v. Ball State University. Instead, it adopted the broader standard urged by the Equal Employment Opportunity Commission. Under New Jersey law, a supervisor includes two kinds of people:

• Anyone with the authority to take or recommend a job action against the worker, such as hiring, firing, or promotion
• Anyone placed in charge of the worker's day-to-day activities, even without power over the worker's job status

The broader definition matters because the defense comes into play only when the alleged harasser is considered a supervisor. Someone with informal authority, such as a shift lead or crew boss who directs another employee's day-to-day work, still qualifies as a supervisor. Understanding where that line is drawn often begins with speaking with a sexual harassment attorney in New Jersey. 

All of this was built on Lehmann v. ToysR' Us, 132 N.J. 587 (1993), the decision that set the state's hostile work environment standard and made prevention of harassment the goal the courts keep returning to.

What New Jersey Employers Must Prove to Use the Harassment Defense

The Faragher-Ellerth defense has two required elements, and the employer must prove both. First, it must show that it took reasonable steps to prevent and promptly correct workplace harassment. Second, it must show that the employee unreasonably failed to use the available reporting procedures.

If the employer cannot establish both parts, the defense does not apply. Employers that fail to take meaningful steps to prevent misconduct cannot rely on an employee's failure to report it. Prompt reporting by the employee may also undermine the defense.

There is an important exception to the Faragher-Ellerth defense. When a supervisor's offensive behavior leads to a tangible employment action, the employer remains liable for the conduct. Tangible employment actions include:

• Being fired or forced to resign
• A demotion or pay reduction
• Transfer to a less favorable position or shift
• Losing a promotion or employment benefits because of the harassment

If the misconduct results in one of those employment actions, the Faragher-Ellerth defense is not available, regardless of the employer's written policies. Our attorneys at Brandon J. Broderick first determine whether a tangible employment action occurred before evaluating how the defense applies. The defense is limited to hostile work environment claims where no tangible employment action took place. 

Proving reasonable care takes more than producing a document. In Gaines v. Bellino, 173 N.J. 301 (2002), the New Jersey Supreme Court held that an anti-harassment policy has to be more than words. It should be backed by real training, a genuine complaint process, investigation procedures, and monitoring to confirm it works. 

The New Jersey Supreme Court revisited the issue in Griffin v. City of East Orange, 225 N.J. 400 (2016). The court identified several factors that distinguish an effective policy. Those factors include formal and informal reporting channels and a clear commitment from organizational leadership that offensive behavior will not be tolerated. 

An employer that skips these steps or ignores sexual harassment reports often has difficulty satisfying the first part of the Faragher-Ellerth defense. That issue frequently becomes an important part of the court's analysis. 

Avoidable Harassment, Employer Responsibility, and Liability Under New Jersey Law

The Faragher-Ellerth defense depends on both parts being satisfied, so challenging either one may be enough. In many cases, the outcome turns on how the workplace operated rather than what the handbook said. Evidence of sexual harassment, along with records and witness testimony, helps show how the employer responded and if reasonable steps were taken to address the misconduct.  

A claim is stronger when the proof shows one or more of the following:

• The policy existed, but employees never received it or were not told how to use it
• Training was skipped, rushed, or provided only as a formality
• Earlier complaints were ignored, or investigations were delayed, one-sided, or superficial
• The only person available to receive a complaint was the alleged harasser, with no alternative reporting option

Any of these circumstances can weaken an employer's argument that it took reasonable steps to prevent the misconduct. In Faragher itself, one of the problems was that the city never distributed its anti-harassment policy to the employees it was intended to protect.

The second part of the defense focuses on the employee's actions. Employers sometimes argue that a worker acted unreasonably by not filing a formal written complaint. But the law doesn’t require a perfect paper trail. A verbal report to a manager may be enough. 

Reporting through a different channel than the one listed in the policy may also be reasonable. That is especially true when the complaint involves harassment by delivery drivers or vendors. New Jersey courts consider the full context rather than focusing on a single fact. They examine what the employee knew, who received the report, and how the employer responded. 

Many workers believe their case depends on the fact that they did not report the offensive behavior sooner. In many situations, the focus shifts to the reporting process itself and the protections available to employees who raise concerns. Our attorneys focus on how the employer responded, including any missed opportunities to prevent or stop the harassment. 

How New Jersey Is Changing the Faragher-Ellerth Defense for Employers

Assembly Bill A2443, along with related bills, would make several changes to how hostile work environment claims are evaluated. Among other things, it would recognize that a single serious incident may support a claim, remove the requirement that a worker show a loss of job benefits, and require employers to maintain written rules and provide regular training. 

The bill has not yet become law, so its final form remains uncertain, but it reflects the direction New Jersey is taking. 

Settlement tactics that once buried these claims face new limits. In Savage v. Township of Neptune (2024), the New Jersey Supreme Court held that an employer cannot use a nondisparagement clause to prevent an employee from speaking about a harassment claim. 

The decision was built on the 2019 amendment to the New Jersey Law Against Discrimination. The law restricts confidentiality provisions that cover details of discrimination and harassment claims. As a result, employees who settle these claims generally retain the ability to discuss their experiences.

Federal law has also changed the role of arbitration in these cases. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act allows employees to invalidate forced arbitration agreements and pursue those claims in court. This gives workers a choice between private arbitration and public litigation, where issues such as the Faragher-Ellerth defense are decided by a judge or jury.

Protection under New Jersey law now reaches more workers than it did in the past. The Domestic Workers' Bill of Rights expanded harassment protections to cover housekeepers, home health aides, nannies, and other domestic workers. 

As these protections continue to expand, the outcome of a case depends on how well the facts fit the available legal standards. 

If you believe you experienced workplace harassment, contact us today for a free consultation with a legal expert in New Jersey.