Faragher (P) worked part-time and during the summers as an ocean lifeguard for the City of Boca Raton (D). P brought an action against Terry, Silverman, and D, asserting claims under Title VII, 42 U. S. C. § 1983, and Florida law. P alleged that Terry and Silverman created a 'sexually hostile atmosphere' at the beach by repeatedly subjecting D and other female lifeguards to 'uninvited and offensive touching,' by making lewd remarks, and by speaking of women in offensive terms. In February 1986, D adopted a sexual harassment policy, which it stated in a memorandum addressed to all employees. In May 1990, D revised the policy and reissued a statement of it. Although the City may actually have circulated the memos and statements to some employees, it completely failed to disseminate its policy among employees of the Marine Safety Section, with the result that Terry, Silverman, Gordon, and many lifeguards were unaware of it. During that 5-year period, Terry repeatedly touched the bodies of female employees without invitation, would put his arm around D, with his hand on her buttocks, and once made contact with another female lifeguard in a motion of sexual simulation. He made crudely demeaning references to women generally, and once commented disparagingly on d's shape. During a job interview with a woman he hired as a lifeguard, Terry said that the female lifeguards had sex with their male counterparts and asked whether she would do the same. Silverman behaved in similar ways. D did not complain to higher management about Terry or Silverman. A Nancy Ewanchew, a former lifeguard, wrote to Richard Bender, the City's Personnel Director, complaining that Terry and Silverman had harassed her and other female lifeguards. Following an investigation of this complaint, D found that Terry and Silverman had behaved improperly, reprimanded them, and required them to choose between a suspension without pay or the forfeiture of annual leave. P had never reported them to higher superiors. The trial court noted that the harassment was pervasive enough to support an inference that d had 'knowledge, or constructive knowledge,' of it. It ruled that D was liable under traditional agency principles because Terry and Silverman were acting as its agents when they committed the harassing acts. The court observed that Gordon's knowledge of the harassment, combined with his inaction, 'provides a further basis for imputing liability on D. The District Court then awarded P $1 in nominal damages on her Title VII claim. The Court of Appeals for the Eleventh Circuit reversed. It ruled that Terry and Silverman were not acting within the scope of their employment when they engaged in the harassment, that they were not aided in their actions by the agency relationship, and that D had no constructive knowledge of the harassment by virtue of its pervasiveness or Gordon's actual knowledge. The Supreme Court granted certiorari.