In Whitten v. Fred’s Inc. 601 F.3d 231 (4th Cir. 2010), the company argued in a sexual harassment lawsuit that a store manager lacked the authority to fire, promote, demote or otherwise make decisions that had an economic impact on the plaintiff. The Fourth Circuit held the ability to take tangible employment actions is not dispositive of supervisory status. Rather, the critical question is whether the particular conduct was aided by the agency relationship. In this case, the court concluded the store manager was a supervisor because he was the highest ranking employee at the store and there was typically no one superior to him to provide a check on his behavior.
In many jurisdictions, the issue of supervisory status of store managers is key to determining employer liability for the manager’s acts and exposure to punitive damages. For many retailers, store managers are given autonomy but not necessarily discretion and judgment in terms of how their stores operate. Therefore, cases such as Whitten may have a large impact given the organizational structure of many retailers. Here the court focused not on the actual conduct and authority of the manager, but rather on the fact that no other employee was as high ranking in the store as him, thus leaving a vacuum as to who is on site to monitor his actions.