Vol. 51, No. 10
A recent U.S. Supreme Court ruling will stir up a new wave of retaliation claims.
The past predictions of legal experts have come true: Retaliation claims filed against employers have risen dramatically. In fact, the number of retaliation claims filed with the Equal Employment Opportunity Commission (EEOC) has jumped 35 percent over the past decade, according to Mary Jo O'Neill, regional attorney with the agency's Phoenix District Office.
And now those numbers are likely to increase even more, courtesy of a late-June ruling from the U.S. Supreme Court in the case of Burlington Northern & Santa Fe Railway Co. v. White (126 S. Ct. 2405).
The ruling expands the definition of employer retaliation, making it easier for employees to file such claims. Specifically, it allows workers to file retaliation suits even when an employment action does not diminish their pay, hours or benefits, or cause them to suffer a monetary loss of any kind.
The high court also reached the startling conclusion that anti-retaliation law potentially extends to any employer conduct, even when it is not work-related.
Most legal experts agree that HR professionals will now have their work cut out for them in the retaliation arena. As a result of this ruling, HR will have a "huge" role in helping employers fend off retaliation claims, predicted John Dorana partner in Greenberg Traurig in Phoenix and a member of the Management Labor & Employment Roundtable (MLER)in a series of exchanges among management employment attorneys, lawyers representing employees, the EEOC, consultants, HR professionals and in-house counsel.
Most notably, HR professionals will need to take a renewed, and perhaps different, role in establishing policy and in training managers to be better practitioners of good HR.
The Facts of the Case
In the Burlington Northern case, the Supreme Court grappled with a fundamental question: What kind of employer behavior constitutes retaliation under Title VII of the Civil Rights Act of 1964?
The case centered on Sheila White, who worked in the railroad's Tennessee Yard and was assigned to operate a forklifta cleaner, less onerous task than those performed by other yard workers.
But White lost this plum assignment after making an internal sexual harassment complaint against her foreman, Bill Joiner. After an investigation, Joiner was disciplined.
When Marvin Brown, the manager in charge, informed White of the investigation's results, he also told her she would no longer be operating the forklift because co-workers complained that she had received the cushier position despite having less seniority than some of her peers. As a result, White was assigned to perform the more arduous tasks performed by other yard workers.
White reacted by filing a complaint with the EEOC, alleging sex discrimination and retaliation. She also filed a second discrimination charge with the EEOC for retaliation, alleging that Brown had placed her under surveillance.
Around the time of the second charge, White had a disagreement with her new foreman, Percy Sharkey. Sharkey reported the disagreement to Brown, who decided that White's behavior constituted insubordination and that she should lose her job. Within three days of the second EEOC charge being mailed to Brown, he suspended White without pay. Under a company procedure, the suspension would convert to a discharge unless successfully challenged in grievance procedures.
White successfully challenged the suspension and was reinstated with full back pay and benefits. Nevertheless, she sued Burlington Northern in court for sex discrimination and retaliation. A jury found for the employer on the sex discrimination claim but held that its behavior constituted unlawful retaliation. Appeals eventually led to the Supreme Court, which upheld the jury's verdict.
The court held that White's removal from the forklift and her suspension constituted retaliation, even though her job statusincluding pay, hours and benefitsdid not change, and even though she did not suffer a monetary loss.
The fact that Burlington Northern reinstated White with back pay was immaterial as to whether it violated the law. Citing Congress' desire to promote "unfettered access to statutory remedial mechanisms," the court ruled that the sweep of the anti-retaliation law extends to any employer conduct, even when it is not work-related, that is severe enough to deter a reasonable employee from exercising her legal right to object to discrimination.
The court also ruled that whether such conduct reaches this threshold cannot be spelled out comprehensively. Rather, each case will have to be evaluated within its own context.
The Supreme Court cautioned, though, that Title VII's anti-retaliation provision "does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace." An employer can retaliate through actions taken outside the workplace such as by filing false criminal charges against a former employee who complained about discrimination.
"Context matters," the Supreme Court stated. "A supervisor's refusal to invite an employee to lunch is normally trivial, a nonactionable petty slight. But to retaliate by excluding an employee from a weekly training lunch that contributes significantly to the employee's professional advancement might well deter a reasonable employee from complaining about discrimination" and consequently might be retaliatory, according to the court.
Potential Aftereffects of the Decision
The court's decision to assess "context" will result in more cases being filed and fewer of them being resolved on summary judgment, according to Corbett Gordon, senior counsel with Fisher & Phillips LLP in Portland, Ore., and an MLER member.
"Any time a court needs to weigh factual issues, it is an invitation for employees or former employees to sue, because 'context' questions are factual and raise a matter for the jury. This is bad news for employers, since the defense costs of taking a case through trial are considerable, even if the company wins in the end," Gordon reflects.
The EEOC's O'Neill applauds the ruling and says it will sweep away a number of court-imposed obstacles that get in the way of her agency and other plaintiffs. (She also points out that even before the decision, in fiscal year 2004 alone, retaliation charges resolved by the EEOC resulted in monetary payments from employers that exceeded $90 million. This figure does not include employer judgment and settlement payments through litigation.)
The court's expansion of what constitutes retaliation may encourage employees with performance issues, in particular, to assert claims of discriminationeven ones that lack meritsimply to gain the protections of anti-retaliation provisions of Title VII.
Although retaliation claims arise in myriad ways, "they are most commonly brought by employees with a history of performance problems," according to Eric Hemmendinger of Shawe Rosenthal LLP, a Worklaw Network affiliate in Baltimore.
"Typically, the employee first complains of discrimination after some adverse decision like discipline or non-promotion due to a performance problem," he says. "As the problem continues and the employer takes progressively stronger action, the employee complains that the additional action is in retaliation for his earlier complaint."
Bill Berger, a shareholder in Stettner Miller & Cohn PC, a Worklaw Network affiliate in Denver, raises the prospect that the ruling could be expanded to affect the way retaliation is handled under other laws, as well. "Since Title VII is the nation's flagship antidiscrimination statute, the likelihood is that Burlington Northern will have a liberalizing influence on other anti-retaliation lawsand more litigation will result," he says.
Other legal experts, however, see natural and practical factors that will limit the scope of this ruling.
One attorney who holds that view is William Ryan of the Donati Law Firm in Memphis, Tenn.one of the plaintiffs' attorneys who represented Sheila White against Burlington Northern. "You still have to have strong evidence of retaliatory motive," he notes.
He also points out that financial issues may serve to limit such litigation. "It's still going to be hard to get plaintiffs' attorneys to take cases where the employee hasn't lost any money since most of our cases are on a contingency fee basis and the economics usually don't make sense," he says. "That's even true with cases like this one that allow for attorneys' fees."
Ryan says his firm "almost didn't take White's case despite what we felt was overwhelming evidence of retaliation and sex discrimination." He explains that "filing cases for the hope of attorneys' fees is a risky business proposition. Indeed, we've gone seven years without a penny for the time we've spent and expenses we've incurred, and if the Supreme Court hadn't gone our way, we'd be out completely."
Greg Guidry, a partner with Onebane Law Firm in Lafayette, La., and an MLER member, feels that "much of what is going to happen here is more 'hype' than a major change in the law. The main value of this case is that it serves as an excellent tool for HR professionals to get management's attention in emphasizing the need for HR input on employment decisions and for preventative training. Otherwise, I don't think the case signifies any real shift in the workplace landscape."
HR's Heightened Role
While the ultimate scope of this ruling's effect may be subject to debate, this much is clear: In light of the Burlington Northern decision, the best way for employers to avoid liability for retaliation is to prevent it from ever happening. Hearing employee grievances and rectifying past offensesas Burlington Northern did by reinstating White after her suspensionwon't necessarily win the case before a judge or jury.
Thus, HR professionals and employers will need to give managers guidance and tools to keep them from making a decision that isor appears to beretaliatory. And that will require HR to review its policies, modify its training and establish a mechanism for reviewing all pertinent management decisions for potential retaliatory effect.
HR professionals will need to start by adding an anti-retaliation policyor updating an existing oneto reflect the Supreme Court's decision. The policy should make it crystal clear that workplace retaliation will not be tolerated.
Michael Patrick O'Brien, a partner with Jones Waldo Holbrook & McDonough PC in Salt Lake City, recommends that the policy include the following:
- A clear statement that, like discrimination and harassment, retaliation is prohibited by both law and company policy, and that retaliatory acts will lead to discipline and/or discharge.
- A brief illustration of types of conduct that might be prohibited by the policy.
- A mechanism for reporting possible acts of retaliation.
- A statement that complaints will be promptly investigated and resolved as appropriate.
- A statement that complaints will be maintained as confidential to the extent practicable, given the need to investigate and resolve issues.
The EEOC's O'Neill says employers also should provide "specific training on the subject of retaliation, including using Burlington Northern to explain what can constitute retaliation." She recommends that employers:
- Instruct supervisors not to engage in any potential retaliatory action after internal or external complaints have been made.
- Set up checks or reviews by HR, legal or another third party before any status-changing decisions (e.g., new assignments, new offices, a transfer or other actions) are made regarding a complainant.
- Have a trusted person from HR or another source check in periodically with the complainant to make sure everything is OK.
- Be sure to document the actions above.
O'Brien adds that an effective training program will include:
- A straightforward description of the company's anti- harassment policy.
- Examples and stories to explain what acts could be viewed as retaliatory, since retaliation might be even more difficult to define than harassment.
- An explanation of the consequences of engaging in retaliation.
- Practical steps and suggestions on how supervisors should vet possible actions toward protected employees with HR or legal counsel before acting.
Evolved HR and Managerial Roles
As important as training and updated policies are to stem the tide of retaliation claims, the Supreme Court's ruling may have a much more far-reaching impact on the role of HR professionals and managers.
What really is needed is "a paradigm shift," according to Paul Jones, vice president of human resources for USANA Health Sciences Inc. "HR staffs must become the experts who develop leadership teams that, in their own right, are excellent with human relations and employment law," he says. "Line managers must be well-trained in all aspects of HR and have enough information to take proper steps to prevent potential claims and know when help is needed."
Without this shift, Jones believes, HR risks being viewed as nothing more than a meddlesome workplace cop.
James Bramble, USANA Health Sciences' vice president and general counsel, adds that "Burlington Northern reinforces the idea that HR professionals today need to follow a strategic approach where each manager is also considered an HR manager. The responsibility for managing employee behavior rests with the supervisors who interact daily with employees and understand better what a reasonable employee is in a given context. HR must ensure that supervisors are trained and have the knowledge needed to meet this responsibility."
Most attorneys and HR professionals are well aware that it doesn't take a strong discrimination case to make a strong retaliation case. In fact, it's often the weak discrimination claim that produces the big-time retaliation lawsuit.
As employers grapple with the ripples from Burlington Northern, Doran recommends that they "modify the old adage that 'two wrongs don't make a right' into the adage that 'one wrong can make two huge wrongs.' "
Doran cautions that "an act of retaliation can convert an otherwise preposterous and easily defensible discrimination claim into potentially devastating legal liability. Putting it another way, the retaliation claim will breathe life into an otherwise moribund discrimination claim, and an employer's liability will rise from the ashes like the phoenix."
Jathan Janove is a partner with the law firm of Bullard Smith Jernstedt Wilson, a Worklaw Network affiliate, with offices in Portland, Ore., and Salt Lake City, and a frequent contributor to
HR Magazine . Janove, a member of MLER, defends employers and is the author of
Managing to Stay Out of Court: How to Avoid the 8 Deadly Sins of Mismanagement (SHRM & Berrett-Koehler, 2005).