In the 1997 case of Beth Ann Faragher v. City of Boca Raton, the U.S. Supreme Court ruled that an employer can be held liable for sexual harassment by its employees under Title VII of the Civil Rights Act if it fails to implement adequate measures to prevent such behavior. The plaintiff, Beth Ann Faragher, had worked as a lifeguard for the city's marine safety section and alleged that her immediate supervisors created a "sexually hostile atmosphere" at work through inappropriate comments and unwelcome physical contact over several years. The court found in favor of Faragher on grounds that her employers did not take reasonable care to prevent or promptly correct any sexually harassing behavior nor did they provide a grievance procedure for complaints about workplace conduct.

In the dissenting opinion for Beth Ann Faragher v. City of Boca Raton, Justice Anthony Kennedy argued that the majority's decision to hold employers liable for sexual harassment by their supervisors even when they were unaware of such behavior was unjust and contrary to Title VII principles. He contended that this ruling would unfairly punish innocent employers who had no knowledge or control over a supervisor's misconduct. Furthermore, he expressed concern about the potential negative impact on workplace relationships as it could lead to an environment where every interaction is scrutinized out of fear of litigation. Instead, he proposed a negligence standard wherein an employer would only be held responsible if they knew or should have known about the harassment and failed to take appropriate action.