Quid pro quo harassment occurs when submission to the harasser's sexual advances is stated a stated or implied condition of employment. It can also occur if submitting or refusing to submit is the basis for an employment decision affecting the victim. The harasser in this type of situation is someone with the authority to make substantive employment decisions about the victim (Pruitt, 2001, p. 26). Examples of quid pro quo harassment are: requesting sexual favors in exchange for a promotion or raise, starting or implying to an applicant that she will be hired if she participates in sexual activity, stating or implying that a person will be demoted or fired if she does not submit to a sexual request, or actually demoting, firing or denying a promotion to someone for refusing to submit (Crouch, 2001, p. 93). Prior to Karibian, claims of sexual harassment under this theory would be dismissed if the harassed employee did not suffer an actual economic loss. Karibian expands an employer's liability for quid pro quo harassment in that an employee need not demonstrate an actual economic loss to prevail on such a claim. In Karibian, the court held that an employee may prevail on a quid pro quo claim regardless of whether the employee rejects the supervisor's advances and suffers economic loss or submits to the advances and suffers no adverse economic consequences (Pruitt, 2001, p. 30). .
Hostile work environment harassment occurs when unwelcome sexual or other gender-based conduct interferes with an individuals work performances or creates an intimidating hostile or offensive work environment. Generally, this type of harassment requires a pattern of conduct, though a single serious incident such as a assault could be enough (Pruitt, 2001, p. 27). Prior to Karibian, an employer could be held liable for a hostile working environment created by a co-worker or supervisor under legal rules of "principal and agent" if the employer either provided no reasonable avenue for complaint of knew of the harassment and did nothing about it.