Good question! Yes, power imbalance is taken account but not to the extent that his actions would automatically mean that a certain response is required. Here’s the relevant part of the legislation:

(H)arassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

If her manager had threatened her or implied that her employment or good standing at the company was predicated on her compliance with his sexual demands, you would have seen a very different and legally actionable response. Based on what Ms. Fowler wrote, this sounded like a one time incident. She talks about how HR warned her of the possibility of a negative review as a result. However, it couldn’t ever be proven what really inspired a negative review due to the highly subjective nature of those reviews. Employee reviews are not standardized or regulated in any way, they are merely another employee development tool. As mentioned in the original story, employee reviews don’t have real world consequences outside of the employer. It might have made a difference to this story if that hadn’t been the case though.

On a semi-related note, employers are not allowed to disclose why an employee left a company. In many cases, employers can only disclose employment dates, which is why people provide personal references to paint a more complete employment picture. In some ways because of the unique employment laws in the US, employers benefit — but in some cases it’s the employees.