In Washington today, the Supreme Court heard arguments in a case that will help define the terms of sexual harassment. Following a background report, Margaret Warner and guests discuss the case and its broader significance.

MARGARET WARNER: For the merits and ramifications of today's case, let's bring in two attorneys who submitted friend of the court briefs. Kathy Rodgers filed in support of Kimberly Ellerth on behalf of the NOW Legal Defense & Education Fund, where she is executive director. And Carol Connor Flowe filed in support of Burlington on behalf of the U.S. Chamber of Commerce. She's an employment attorney in private practice and a member of the Chamber's labor/law advisory committee. And Ms. Rodgers, why did you file on behalf of Ms. Ellerth? Why did you argue that Burlington should be liable?

KATHY RODGERS, NOW Legal Defense & Education Fund: Well, this is a very important issue about whether you have to show this tangible job detriment, a phrase which only lawyers could invent, and actually the--the lower courts are split on this there is conflict and confusion, so it's very important that the Supreme Court resolve it, and we hope they will. Now, obviously our position is that there doesn't need to be tangible detriment in terms of failure to get a promotion or loss of pay or not getting a raise, that, in fact, the threat creates change in the conditions of employment. This woman now has to go to work every day with a sword hanging over her head as to whether one day this day is going to be the day that the threat is carried out. That's an extra burden, and it's discrimination, and she shouldn't have to do that.

MARGARET WARNER: And the case you made--

CAROL CONNOR FLOWE, U.S. Chamber of Commerce: Well, we wouldn't disagree that a threat should be actionable if it's accompanied by other evidence of sexual harassment sufficient to create a hostile environment. The real question here was the standard for which an employer would be liable for that harassment, and what I think really happened was the hostile environment claim in the lower court in this case was that there was no evidence that Burlington had been negligent in trying to eliminate sexual harassment from the workplace. To the contrary, they'd published a policy; they had tried to make people aware that they should complain. She said she knew about it; she didn't tell anybody. And so--

MARGARET WARNER: You mean, she said she knew about the policy.

CAROL CONNOR FLOWE: About the policy and knew she should complain. In fact, she said in her deposition that she didn't tell her supervisor about this harassment because he would have had a duty to report it up to higher levels in the company, so she didn't want people to know. And our position is that if an employer does everything possible to eliminate sexual harassment from the workplace, then they shouldn't be liable unless they knew or should have known and didn't do something about it. Now, if these threats that are never carried out were classified as quid pro quo sexual harassment, then most of the lower courts in the event would put them in a category of strict liability and would hold the employer liable without regard to whether they had taken all kinds of steps--

MARGARET WARNER: Pointing out that in the case law quid pro quo employers have been held much more liable under that than the hostile work environment.

CAROL CONNOR FLOWE: Basically automatically liable. You know, once you establish that the quid pro quo harassment was done by a supervisor, they're automatically liable without anything further. And we think this ought to be evaluated by the negligence standard, that it should be just like any other case of so-called hostile environment sexual harassment; that the employer should be liable only if they knew or should have known and didn't take prompt and effective remedial action.

MARGARET WARNER: All right. What about that point, that if the employer sets up a policy, has a complaint procedure, the employee never uses it, isn't there some limit on the employer's responsibility here?

KATHY RODGERS: No. It's the employer's responsibility to eliminate discrimination from the workplace, and that's what Title VII is aimed at. Having a policy is a positive thing. Having a policy that sits on the shelf, is not enforced, there's no training of supervisors or employees, that's no good. It shouldn't insulate an employer from its responsibility. There's another issue here, which is, even if there is a policy, many women are afraid of retaliation if they use that policy. And that fear is a real one. We cite in our brief a California study where 50 percent of working women who brought complaints were fired. So there is a real fear that things will only get worse if they bring a complaint. So that should not be some kind of an absolute shield for the employer. The other issue here is the quid pro quo versus hostile environment issue and should there be liability. And as of now, we say that this is quid pro quo harassment in this case, but the justices are really looking at it and say, can you always say that they are two different things, and they did that in the Faragher argument, as well as today. And I think that's right. I think the more useful distinction is when it is a supervisor that commits the harassment, that supervisor's conduct is the act of the employer, and the employer should be liable. And the distinction between quid pro quo and hostile environment is irrelevant in the supervisor's situation.

MARGARET WARNER: Well, that seemed to be the point, according to what Jan said, that Justice O'Connor was saying, that essentially a lot of unfulfilled threats are a hostile work environment if you face them. What about that?

CAROL CONNOR FLOWE: Well, we would agree that they may well be hostile environment and that what follows from that is that you evaluate the employer's liability on the basis of a negligence standard, rather than--

MARGARET WARNER: A lower standard.

CAROL CONNOR FLOWE: Right. A lower standard. You know, what I think gets lost sometimes in this debate is the fact that when you don't have the supervisor hiring or firing or promoting or failing to promote, taking what Jan called a company act, that it's very hard for the employer to monitor what's going on without basically having video cameras on their employees. I mean, this isn't like race discrimination, where any time you act or do anything on the basis of race, it's wrong, but sexual relationships between men and women are normal. And it's only when the sexual activity is unwelcome that it becomes unlawful. And so it's much more difficult for an employer--an employer's not going to say you can't have any relationships at all in the workplace--maybe some do but that's, you know, far more unusual. And it's been making that distinction between, well, when is it welcome, when is it unwelcome that becomes more difficult, and that's one of the reasons why we think that this higher standard of liability should only apply when there is actually a company act that's at issue.

MARGARET WARNER: Jan, let me bring in one other thing, which is the Paula Jones case, because there has been a lot of attention to this case in part because of a supposed relationship. What impact would a ruling in this case have potentially on the Paula Jones case as a legal matter?

JAN CRAWFORD GREENBURG, Chicago Tribune: Well, certainly her lawyers would say a ruling for Ellerth would be a big victory because that's one reason why Judge Susan Weber Wright threw out Paula Jones's claim. Judge Wright said that Jones had failed to show any kind of detriment, so, therefore, she didn't really have a right to sue. But I'm not so sure it's that clear. Kimberly Ellerth was subjected to--allegedly to a pattern of, you know, veiled and implied threats over a very long period of time, and that's quite different than the facts in the Jones case as we know them. So while her lawyers would say it's very significant, a ruling for Ellerth, I think that remains to be decided.

MARGARET WARNER: How widely in broader terms now is this Ellerth case being watched? I mean, what are the implications for women?

KATHY RODGERS: Well, the case is being watched very widely. This is a very important case because--

MARGARET WARNER: And I should say men also who feel they're sexually harassed.

KATHY RODGERS: Yes.

MARGARET WARNER: I don't want to be discriminatory here.

KATHY RODGERS: You know, the issue here is do you have to suffer this tangible loss before you have a claim. And actually, the Supreme Court in Faragher, which is the first decision--Jan referred to it earlier--

MARGARET WARNER: That 1986 case.

KATHY RODGERS: 1986 decision said no, you don't, and more recently in the Harris case the court said you know, you don't have to show psychological damage either, a complainant doesn't have to have a nervous breakdown before she has a complaint for sexual harassment. And that needs to be the rule here. The focus has to be on the behavior of the supervisor, and the supervisor is the employer. It is that authority that he has, that he's using to make in this case coercive threats which she had to resist, and so the argument that there was no act; there was an act; there was a threat; and that threat continues to hang out there.

MARGARET WARNER: And briefly, how big is this case for companies in America?

CAROL CONNOR FLOWE: I think it's very important for employers too and for the same reasons, that it's important for employers to know that if they take steps--and I would agree with Kathy--they should be training their employees; they should be publishing their policy, not just letting it sit on the shelf, making sure there's an effective reporting mechanism; but it's important to know that if they take those steps, that they're not going to be held liable unless they've done something wrong, not just when some bad apple does something wrong.

MARGARET WARNER: And Jan, how does this case, very briefly, fit into other sex harassment cases at the court, and when might we expect a decision?

JAN CRAWFORD GREENBURG: Well, I mean, since 1986, the lower courts, as you know, has come up with a whole bunch of different rationales for when sexual harassment is liable, so this year the court really has stepped in and taken four big cases that could kind of define some of their very important issues. This is just one of them. As far as predictions--

MARGARET WARNER: Rulings.

JAN CRAWFORD GREENBURG: The only thing I'll say is that we might not have a ruling till the end of June because it just is so convoluted.

MARGARET WARNER: Okay. Thank you all three very much.