Threat to Cut Salary Not Retaliation

By Jeffrey L. Rhodes Jan 8, 2016
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The supervisor of a transgender employee could not establish retaliation had occurred when a part owner threatened to cut her salary in half because she hired the employee, the 5th U.S. Circuit Court of Appeals ruled.

Sage Corporation is a company that owns and operates truck driving schools. Margie Brandon was the director of the San Antonio campus of Sage. Brandon was supervised by Barbara Blake, and both Blake and Brandon reported to Gregg Aversa, Sage’s president. A part owner of the company, Carmella Campanian was Sage's national project director, regional director for the Western United States and school director for the Billings, Montana, site.

In 2010, Brandon interviewed and hired Loretta Eure, a transgender truck driver. Also in 2010, an account that Campanian managed, Sanjel Inc., expanded its contract with Sage. Campanian flew to San Antonio on March 29, 2011, and spent three days implementing driver training as part of the Sanjel expansion. Once Campanian arrived at Sage's campus, she saw Eure through a window and asked, “What is that and who hired that?" Brandon responded that Eure was a qualified instructor. Campanian then explained that Sage did not hire “cross-gender” people and that Brandon would be disciplined for hiring Eure. Brandon replied “Excuse me?” Campanian answered by repeating that Sage did not hire “cross-genders.”

Campanian then reduced Eure's work hours and excluded Eure from the Sanjel project. When Brandon questioned her decision, Campanian asked Brandon if she was stupid and added that the Sanjel people would eat Eure alive. Campanian also told Brandon that Sage was her company, that she was a partner and that the Sanjel account was for her to do with as she pleased. Ultimately, Campanian informed Brandon that her pay would be reduced by 50 percent because she hired Eure.

Brandon and Blake then called Aversa and left a message. But before Brandon heard back from Aversa, on March 31, Brandon sent a resignation e-mail stating that she felt threatened by Campanian’s pay cut statement. Brandon ended the e-mail by stating that she was leaving Sage because she could no longer take the abuse and humiliation from Campanian. Eure also resigned.

On April 1, Aversa apologized to Brandon for Campanian’s behavior. Aversa told Brandon that Campanian did not have the authority to cut her pay or reduce Eure’s hours. Brandon then filed a charge of discrimination with the Equal Employment Opportunity Commission, and received a finding of probable cause that discrimination and retaliation had occurred from the agency. Brandon filed a lawsuit against Sage in federal court, as did Eure, and both claims were dismissed based on Sage’s pretrial motions for summary judgment. Brandon appealed her case to the 5th Circuit. (Eure did so as well but dismissed the claim while on appeal.)

The 5th Circuit found that Brandon could not state a retaliation claim because she knew that Campanian did not have authority to cut her pay when she resigned. Although Campanian had a certain level of authority at, and an ownership interest in, the company, Brandon did not report to Campanian as a supervisor. Campanian did not determine the terms and conditions of employment of Brandon or others, and a final determination regarding Campanian’s threatened pay cut had yet to be made by Sage’s president when Brandon quit. The 5th Circuit ruled that the retaliation standard requires that a reasonable employee would have felt threatened and have been dissuaded from complaining of discrimination by the conduct of an employer representative. Brandon could not meet this standard because it was not reasonable for her to quit before the company had confirmed Campanian’s threat. The company ultimately disowned the threat, and thus Brandon’s resignation was unreasonable.

Brandon v. Sage Corp., 5th Cir., No. 14-51320 (Dec. 10, 2015).

Professional Pointer: Federal case law has recently relaxed the standard for an employee to state a retaliation claim. In the past, an employee had to show that he or she suffered an adverse action, such as a firing, demotion or reduction in salary, because of his or her protected activity. Now, an employee need only show that a reasonable employee would have felt threatened by employer conduct and dissuaded from reporting discrimination. As a result, employers should be vigilant to ensure that management representatives do not act in any way so as to suggest to employees that they will be punished for reporting discrimination by the company.

Jeffrey L. Rhodes is managing partner of the civil division of Albo & Oblon, a business and employment law firm in Arlington, Va.

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