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Preventing and Resolving Retaliation:
The Employer’s Challenge
By Trisha Brinkman & Barry Chersky

Media Headlines:

Retaliation Nation: A Recent US Supreme Court Ruling Will Stir Up a New Wave of Retaliation Claims
California Supreme Court Expands Liability for Retaliation
Court Boosts Retaliation Claims; Spike in Filings Expected
Supreme Court Ruling Will Certainly Encourage a Greater Number of Disgruntled Employees to Consider Retaliation Claims
Supreme Court Ruling is Guaranteed to Generate More Litigation

Introduction

Based on several court cases, including one decided by the US Supreme Court on June 22, 2006, many organizations are experiencing increased concern about the issue of retaliation. The headlines in several HR trade magazines and legal newsletters emphasize the vulnerability employers have and predict an increase in retaliation claims. Clearly, it is prudent for employers to make every effort to minimize or eliminate the risk.

This article reviews background information on several key cases and provides guidelines on preventing and effectively resolving retaliation complaints.

Defining Retaliation

The review of case law reveals the analysis and interpretation of what constitutes unlawful retaliation vary.

The US Supreme Court heard Burlington Northern &Santa Fe Railway Co. v. White, No 05-259, which was argued on April 17, 2006 and decided on June 22, 2006. Below is background information (Excerpts courtesy of HR Magazine, SHRM).

Title VII prohibits an employer from discriminating against an employee because he or she has opposed an employment practice declared unlawful by Title VII or because he or she “made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing” under Title VII. The statute does not define the term “discriminate against,” but courts have interpreted it to mean that plaintiffs must show they were subjected to an “adverse employment action.”

Federal courts and the federal enforcement agency, the Equal Employment Opportunity Commission (EEOC) have interpreted the phrase “adverse employment action” in differing ways. Some courts hold that to be actionable, the “adverse employment action” must be an “ultimate employment decision,” such as hiring, granting leave, discharging, promoting or compensating.

The EEOC and other courts have taken a more lenient approach saying retaliation claims to be “any adverse treatment that is based on a retaliatory motive and is reasonably likely to deter a charging party or others from engaging in protected activity.” [Emphasis added by the authors.] The 6th Circuit used another standard. It took a fact-specific and case-specific approach, "describing the kinds of material employment actions that rise above the level of trivial” and looking to “indices that might be unique to a particular situation.”

Illustrating the need for Supreme Court direction in this area, five of the 13 6th Circuit judges hearing the case argued that the 6th Circuit should have adopted the EEOC’s “reasonably likely to deter” test because it is more consistent with the language of Title VII, congressional intent and the Supreme Court case law-even though they agreed with the outcome of the appeal.

According to the facts of the case, Sheila White was the only female forklift operator at the Tennessee Yard of Burlington Northern. White said her supervisor repeatedly told her women should not be working in the maintenance-of-way department and made insulting and inappropriate comments to her in front of male colleagues. The supervisor was suspended for 10 days and was ordered to attend sexual harassment training. However, White was removed from forklift duty and assigned to perform only standard track laborer tasks. The road master said a “more senior man” should have the “less arduous and cleaner job” of forklift operator.

White sued under Title VII, alleging retaliation and was then suspended for 37 days for being insubordinate when she disagreed with her supervisor. She filed an internal grievance which concluded she was not insubordinate. She was awarded back pay for 37 days and filed an additional retaliation charge as a result of the suspension. The district court found in her favor and awarded her $43,500 in compensatory damages and $3,250 in medical damages. The 6th Circuit affirmed the decision which was appealed to the Supreme Court where it was affirmed.

The company argued there should be a link between the challenged retaliatory action and the terms, conditions or status of employment to establish unlawful retaliation. The Supreme Court adopted a lower standard, determining that Title VII’s prohibition on retaliation provides broad protection beyond actions directly related to employment if the actions would dissuade a reasonable worker from bringing a discrimination charge. This standard is consistent with rulings in the 7th Circuit, the D. C. Circuit as well as the EEOC.

The company further argued that a reassignment of duties could not be retaliation when the former and present duties fell within the same job description. “We do not see why that is so,” the court stated. “Almost every job category involves some responsibilities and duties that are less desirable than others.” The court also stated, “Context matters. A schedule change in an employee’s work schedule may make little difference to many workers, but may matter enormously to a young mother with school age children.” [Emphasis added by the authors.]

Additionally the court reasoned that even though White ultimately received back pay for the 37 day suspension, she lived without income for 37 days and did not know whether or when she would return to work. She obtained medical treatment for her emotional distress. The court stated, “A reasonable employee facing the choice between retaining her job (and paycheck) and filing a discrimination complaint might well choose the former.” [Emphasis added by the authors.]

This case is an important reminder of how seriously courts, including the US Supreme Court, take the issue of retaliation. It is critical for managers to make sound, job-related business decisions and to ensure all employees know managers will take all complaints seriously.

In another case involving retaliation, Sylvester v. SOS Children’s Village Illinois, Inc., 7th Cir., No 05-4219 (July 12, 2006), the 7th Circuit Court of Appeals allowed an employee to proceed with a retaliation claim on the basis of circumstantial evidence showing her employer “set her up” to be insubordinate, making it easier for employees to prove retaliation claims (excerpted from HR News, SHRM).

Rosemary Sylvester and three other women signed a letter submitted to the chairman of the board of directors claiming the executive director, Job West, sexually harassed them by commenting on the sexuality of staff members and making sex-based remarks. The facts were insufficient to prove a case of sexual harassment. One of the board members characterized the letter as an attempt by two of the signatories to protect themselves from termination for poor performance.

The board fired both and considered firing Sylvester, who had a positive performance evaluation, shortly before. They decided they would wait until they saw Sylvester’s response to the news the two other employees had been terminated. The next day Sylvester was terminated for insubordination because she left a meeting in which Job West gave her the news of the terminations. When she asked West, “What guarantee do I have from you that you will stop talking to me in a profane, derogatory and untrue manner?,” he asked her to leave his office. Sylvester asked if legal counsel was present at the previous evening’s meeting. West responded, “Yes.” Sylvester then left the room and was immediately fired.

Sylvester filed a retaliation claim. The trial court granted summary judgment in favor of the employer. The court of appeals reversed, holding that Sylvester had enough evidence to prove retaliation, because a reasonable jury could conclude that she “was being set up.” The court concluded “that the defendant’s officers who met the night before knew she was sure to be upset by the firings, and that West was being invited to interpret that predictable reaction as insubordination.” The court held that less than “a rich mosaic” of circumstantial evidence is necessary to prove a direct case of retaliation. [Emphasis added by the authors.]

Courts are consistently ruling that the bar is being lowered on how much circumstantial evidence is necessary to prove a case of retaliation. In this case, George Kraehe, shareholder with Gilkey &Stephenson PA, commented, “Employers should not intentionally anger their employees and then fire them for getting angry.” Employers should consider the impact their decisions might have if they were to be examined under the scrutiny of a court of law and a jury of our peers.

Background information on a third case involving retaliation, Yanowitz v. L’Oreal USA, Inc., Cal. LEXIS 8594, California Supreme Court, August 11, 2005 is excerpted from Long &Levit LLP, Employment Law Update, Douglas J. Melton. The CA Supreme Court recently decided an employee who “reasonably believes” a supervisor’s order is discriminatory and refuses to follow that order may claim retaliation for an “adverse employment action,” even if the order was perfectly legal. An employee need not explicitly state s/he is opposing unlawful discrimination to be protected from retaliation. As one dissenter said, this case “presents the question of whether a person can be a whistle blower without blowing the whistle.”

The case involved a Regional Sales Manager (Manager) for L’Oreal USA, Inc. The Manager had worked for L’Oreal for 24 years, her work was always “above expectations” and she was named Regional Sales Manager of the Year in 1997.The manager claimed her boss, the General Manager (GM), toured one of the stores and told the Manager she needed to fire an Associate because she was “not good looking enough” and the GM instructed the Manager to “get someone hot.” The Manager repeatedly asked for an adequate justification before she would fire the Associate (who was among the top sellers of men’s fragrances in the store). The Manager never received justification, and refused to comply with the order.

The GM then subjected the Manager to “heightened scrutiny and increasing hostile evaluations.” The alleged retaliation included:

  1. soliciting negative information about the Manager from her subordinates
  2. auditing the Manager’s travel and expense reports,
  3. public criticism of the Manager in the presence of subordinates and peers,
  4. calling a special meeting to criticize the Manager’s “dictatorial management” and criticizing her for being “too assertive,” and
  5. imposing new requirements on how the Manager supervised her sales territory.

The Manager went on disability leave for stress and never returned. She sued under the FEHA charging unlawful retaliation. The trial court granted summary judgment for L’Oreal and dismissed the case, finding the Manager had not engaged in protected activity. The Court of Appeal reversed, holding that a manager’s refusal to carry out an improper order is a protected activity, and an employer may not retaliate against her based on that refusal. The Supreme Court agreed.

In the opinion of the CA Supreme Court, as long as “the circumstances surrounding an employee’s conduct are sufficient to establish that an employer knew that an employee’s refusal to comply with an order was based on an employee’s reasonable belief that the order is discriminatory,” the “employee [need] not explicitly inform the employer that the order was discriminatory.” The Court adopted the “materiality test” previously used by some CA courts and by many federal courts under Title VII. Under the materiality test, an adverse employment action is one that “materially affects the terms and conditions of employment.”

Under Retaliation Guidelines provided by the Equal Employment Opportunity Commission (eeoc.gov), “Protected activity includes:

Opposition to a practice believed to be unlawful discrimination

Opposition is informing an employer that you believe that he/she is engaging in prohibited discrimination. Opposition is protected from retaliation as long as it is based on a reasonable, good-faith belief that the complained of practice violates anti-discrimination law; and the manner of the opposition is reasonable.

Examples of protected opposition include:

  • Complaining to anyone about alleged discrimination against oneself or others;
  • Threatening to file a charge of discrimination;
  • Picketing in opposition to discrimination; or
  • Refusing to obey an order reasonably believed to be discriminatory.

Examples of activities that are NOT protected opposition include:

  • Actions that interfere with job performance so as to render the employee ineffective; or
  • Unlawful activities such as acts or threats of violence.

Participation in an employment discrimination proceeding.

Participation means taking part in an employment discrimination proceeding. Participation is protected activity even if the proceeding involved claims that ultimately were found to be invalid. Examples of participation include:

  • Filing a charge of employment discrimination;
  • Cooperating with an internal investigation of alleged discriminatory practices; or
  • Serving as a witness in an EEO investigation or litigation.
  • A protected activity can also include requesting a reasonable accommodation based on religion or disability.

In Fiscal Year 2004, The EEOC received 22,740 charges of retaliation discrimination based on all statutes enforced by the EEOC. The EEOC resolved 24,751 retaliation charges in 2004, more than were filed during the course of the Fiscal Year, and recovered more than $90 million in monetary benefits for charging parties and other aggrieved individuals (not including monetary benefits obtained through litigation).” The EEOC’s Charge Statistics for Fiscal Year 2006 indicate 22,555 charges of retaliation discrimination were filed, 29.8% of the total number of charges filed.

Preventing and Resolving Retaliation Complaints

Many managers and HR professionals have expressed concerns about how to manage employees once a retaliation complaint has been filed. Some fear every employment decision taken by the employer will be viewed as another form of retaliation. In the aftermath of receiving a complaint and conducting an investigation it is crucial to ensure fair and objective criteria are used.

Following effective guidelines can go a long way to ensuring employees perceive they are being treated fairly.

GENERAL GUIDELINES FOR MANAGERS

Summary

There has been a wide range of reactions to the retaliation court cases particularly from legal experts. Some fear a spike in claims by disgruntled employees while others state that employees still need to produce strong evidence of retaliation. Some plaintiffs’ attorneys are not highly motivated to represent cases on a contingency basis where there has not been any monetary loss.

Preventing and effectively resolving retaliation claims are critical elements in reducing the incidents of retaliation. Guidelines have been provided by the EEOC (see www.eeoc.gov) and other enforcement agencies since 1980. The vast majority of employers have policies and procedures in place. The enforcement of these policies and procedures is essential.

Numerous studies conducted over the past twenty years consistently indicate the vast majority of employees do not complain about prohibited harassment or retaliation. Studies have also shown that of those who do come forward with a complaint, approximately 50% report they experience some form of retaliation. All employers must renew their commitment to providing a safe, respectful environment for everyone.

Copyright 2007