Employer’s Vicarious Liability Limited by Unreported Harassment and Narrow Successor Liability: Noiel v. Roseland Management

Introduction

Noiel v. Roseland Management, decided April 28, 2025 by the Fifth Circuit (No. 24-40520), addresses two critical questions in employment discrimination law under Title VII of the Civil Rights Act of 1964 and 42 U.S.C. § 1981: (1) whether an employer may be held vicariously liable for racially hostile conduct by supervisors that an employee never reported through an otherwise effective internal complaint system, and (2) the circumstances under which successor liability attaches to a purchaser of assets for discriminatory acts committed by the predecessor employer. Plaintiff-appellant Shanteria Noiel, a Black certified medical assistant, alleged a racially hostile work environment at a pain-management clinic acquired by Roseland Management, L.L.C. After the district court granted Roseland’s motion for summary judgment, Noiel appealed only her hostile-environment claim. The Fifth Circuit, per curiam, affirmed, establishing that (i) an employer with a valid anti-harassment policy and complaint system is not vicariously liable for unreported supervisor harassment, and (ii) a narrow successor liability argument must be properly preserved and cannot apply where the predecessor remains a viable entity.

Summary of the Judgment

The Fifth Circuit conducted a de novo review of Roseland’s summary-judgment motion. Applying the controlling standards for hostile work environment claims, the court held that:

Except for one patient-originated slur that was reported and remedied, Noiel never used Roseland’s anti-harassment reporting procedures to notify the company of most alleged discriminatory incidents.
Under Faragher v. City of Boca Raton and Burlington Industries v. Ellerth, an employer with an effective reporting system cannot be vicariously liable for a supervisor’s harassment that the employee fails to report, absent a tangible employment action.
Noiel’s argument that Roseland should inherit liability for pre-acquisition harassment under a “successor liability” doctrine was forfeited by failure to raise it below and is meritless where Precision Spine Care remains in operation.
The remaining reported incident (a patient’s refusal of treatment) led to prompt remedial action—Noiel was reassigned away from that patient—and thus cannot form the basis of liability.

Accordingly, summary judgment for Roseland was appropriate, and the Fifth Circuit affirmed.

Analysis

Precedents Cited

Harris v. Forklift Sys., Inc. (510 U.S. 17 (1993))—Defined the standard for a hostile work environment: conduct must be “severe or pervasive” enough to alter employment conditions.
Faragher v. City of Boca Raton (524 U.S. 775 (1998))—Held that when a supervisor creates a hostile environment, an employer is vicariously liable unless it proves (a) that it exercised reasonable care to prevent and correct harassment and (b) that the employee unreasonably failed to use preventive or corrective procedures.
Burlington Industries v. Ellerth (524 U.S. 742 (1998))—Complemented Faragher by clarifying that an employer’s affirmative defense applies when no tangible employment action occurs.
Harvill v. Westward Communications, LLC (433 F.3d 428 (5th Cir. 2005))—Applied Faragher/Ellerth in the Fifth Circuit, emphasizing the need to report harassment under an effective policy.
Rojas v. TK Communications, Inc. (87 F.3d 745 (5th Cir. 1996))—Outlined the narrow “successor liability” exception in labor-law-derived cases, requiring substantial continuity and excusing a purchaser from liability only in limited circumstances.
Fifth Circuit summary-judgment and jurisdictional authorities: West v. City of Houston (960 F.3d 736 (5th Cir. 2020)), Perry v. VHS San Antonio Partners (990 F.3d 918 (5th Cir. 2021)), Milton v. Texas Department of Criminal Justice (707 F.3d 570 (5th Cir. 2013)).

Legal Reasoning

The court first reiterated the five-element test for a Title VII hostile work environment claim. Only the fifth element—notice to the employer and failure to take prompt remedial action—was in dispute. Roseland had a written anti-harassment policy, training, and a clear reporting mechanism. Noiel conceded she received and understood these materials and had used them previously, but did not report most of the alleged incidents. Under Faragher/Ellerth, an employer’s vicarious liability is negated when an unreported hostile work environment claim arises despite an effective remedial scheme, unless the harassment culminates in a tangible employment action (which did not occur here).

On successor liability, the court observed that the doctrine is a narrow exception to asset-purchaser nonliability grounded in labor law. It requires (i) proper preservation of the argument below, (ii) substantial continuity between pre- and post-acquisition employers, and (iii) circumstances justifying imposition of predecessor liability. Noiel had not urged any successor-liability theory before the district court, so the argument was forfeited. Moreover, Precision Spine Care remained viable and had addressed the earlier incidents, so successor liability did not apply.

Impact

Noiel v. Roseland Management reaffirms and clarifies two important points in Fifth Circuit employment-law jurisprudence:

Employers who maintain and publicize an effective, accessible anti-harassment policy and complaint process will avoid vicarious liability for unreported discriminatory conduct by supervisors, so long as no tangible employment action ensues.
Successor liability for discriminatory acts is a limited, forfeitable doctrine—if plaintiffs fail to raise it timely or if the predecessor remains in business and addresses past misconduct, a purchaser of assets need not inherit liability.

Future litigants will find that failure to report harassment under a valid policy is fatal to hostile-environment claims, and that successor-liability theories demand early and explicit invocation in the trial court.

Complex Concepts Simplified

Hostile Work Environment: A situation where repeated or extreme discriminatory conduct based on race (or another protected trait) makes the workplace intimidating or abusive.
Vicarious Liability Defense (Faragher/Ellerth): Even if a supervisor harasses an employee, the employer is not automatically liable if it (a) had clear rules and reporting processes, and (b) the employee did not use them.
Successor Liability: Normally, when one company buys another’s assets, it does not assume the seller’s lawsuits. A narrow exception (from labor cases) allows some claims to follow, but only if certain criteria—like continuity of operations—are met.
Summary Judgment: A court decision without a full trial, granted when there is no genuine dispute over important facts and one side is entitled to judgment as a matter of law.

Conclusion

Noiel v. Roseland Management underscores the critical importance of using employer-provided channels to report harassment and the narrow scope of successor liability in discrimination cases. By affirming summary judgment, the Fifth Circuit reinforced that employers who adopt and enforce robust anti-harassment policies can shield themselves from liability for unreported supervisor misconduct, and that asset purchasers need not absorb predecessor liabilities absent timely preservation and compelling continuity factors. This decision will guide employers in refining internal procedures and shape plaintiffs’ strategies in hostile-environment and successor-liability claims.