Is an employer liable for harassment by supervisors?
In general, the answer is yes. An employer is usually held "vicariously liable" for the acts of its supervisors in the context of the workplace. Essentially, a supervisor IS the employer, so their actions are actually considered to be those of the employer itself. However, the employer is only automatically held liable if the employee suffers some kind of "tangible employment action". In other words, something of substance must have happened to the employee other than being harassed (e.g. demotion, reduction of work hours, loss of benefits). If no tangible employment action is taken, the employer is only liable for the harassment if they are put on notice of the harassment and it fails to act reasonably and promptly to prevent or correct the situation, and the victim unreasonably failed to take advantage of the corrective opportunities provided by the employer. (Ellerth/Faragher defense under Title VII.)