Supreme Court Ruling Opens Door to More Retaliation Claims

A recent U.S. Supreme Court ruling has once again broadened the scope of anti-retaliation protections under Title VII of the Civil Rights Act, which allows employees to file complaints of discrimination.

The Supreme Court ruled that actions by employers can be considered retaliation even if those actions aren't directed at the individual who files a complaint or engages in some other protected activity. In this particular case, the company in question allegedly fired the fiancé of a woman who filed a complaint; overall, the court's decision now means that retaliation against relatives or other people connected to the complainant exposes a company to litigation risk.

The case, Thompson v. North American Stainless, stems from a lawsuit filed against North American Stainless by former employee Eric Thompson, a metallurgical engineer. Thompson alleged that he was fired in retaliation for a discrimination complaint his then-fiancée (and now wife) filed with the Equal Employment Opportunity Commission against North American Stainless, where they both worked.

The U.S. Court of Appeals for the Sixth Circuit had dismissed the case, concluding that Title VII doesn't create a cause of action for third-party retaliation for persons who haven't personally engaged in protected activity. Appellate courts in the Third, Fifth, and Eighth circuits had also made similar rulings.

But the U.S. Supreme Court handed down a unanimous 8-0 decision on Jan. 24 (Justice Elena Kagan recused herself) that reversed the lower court's decision. The Court cited its landmark 2006 opinion in Burlington Northern Railroad v. White, which found that Title VII's anti-retaliation provision “must be construed to cover a broad range of employer conduct.” Therefore, the Court said it had “little difficulty” concluding that the employee's allegations stated a claim for retaliation.

“[The decision] underscores that virtually anyone can fall into one of the protected categories for purposes of anti-discrimination law,” says Patricia Hill, head of the labor and employment law group at Smith Gambrell & Russell. “It's more important than ever that an employer has an [anti-retaliation] procedure and can conduct thorough investigations before taking an adverse employment action.”

The decision is expected to have significant ramifications. “It really opens up the door for a lot more retaliation claims,” says Hill. That's tough news for employers, since discrimination claims are also on the rise. A recent EEOC report found that private-sector workplace discrimination charges hit a record level of nearly 100,000 in fiscal year 2010. The rate of anti-retaliation claims is also soaring, accompanying more than a third of discrimination cases.

“[Claims of retaliation] are easy claims to make these days, and they just became easier,” says John Alan Doran, a shareholder at Greenberg Traurig.

The decision itself is not surprising, Doran says; it simply applies long-standing EEOC interpretations about the scope of Title VII's anti-retaliation provision to include third parties. “It's the lack of guidance that slaps employers in the face,” he says.

In its decision, the high court acknowledged the potential burden such a broad application can impose on employers and courts as they try to determine which third-party relationships are entitled to anti-retaliation protection—but it stopped short of providing any guidance. “Given the broad statutory text and the variety of workplace contexts in which retaliation may occur, Title VII's anti-retaliation provision is simply not reducible to a comprehensive set of clear rules,” the Court said.

“You can't prevent people from filing a charge of discrimination. What you hope to have is appropriate documentation to convince the EEOC or a court that the action you took was appropriate.”

—Lonnie Schooler,

Partner,

Jackson Walker

“As a result of Thompson, I don't think employers have an iota of where to draw the line,” Doran says. “So we're now stuck with the EEOC position becoming the law without any genuine guidance to employers on how to adjust to the law.”

The Court also didn't specify what types of employer conduct could give rise to a retaliation claim in this setting, creating yet another gray area. It did say that firing a close family member “will almost always” qualify under the standard laid down in its Burlington decision, while milder punishments on more distant acquaintances won't. But, the justices also said, “As we explained in Burlington, ‘The significance of any given act of retaliation will often depend upon the particular circumstances.'”

“Essentially, what they're saying is the courts are going to have to look at these one at a time, and that will, by its very nature, create a lot of uncertainty for employers,” says Lonnie Schooler, a partner at law firm Jackson Walker.

Preventative Measures

The Thompson decision highlights the importance of documenting the reasons for any adverse employment action that could spark a discrimination or retaliation claim. “You can't prevent people from filing a charge of discrimination,” Schooler says. “What you hope to have is appropriate documentation to convince the EEOC or a court that the action you took was appropriate.”

Schooler advises companies to work with outside counsel and human resources to come up with the best possible liability protections. An open-door policy that encourages employees to come forward if they have any gripes with the company is also a good idea in addition to documentation, he adds.

EEOC STATS

The U.S. Equal Employment Opportunity Commission

Charge Statistics: FY 2008 – FY 2010

Category

FY 2008

FY 2009

FY 2010

Total Charges

95,402

93,277

99,922

Race

35.6%

36.0%

35.9%

Sex

29.7%

30.0%

29.1%

National Origin

11.1%

11.9%

11.3%

Religion

3.4%

3.6%

3.8%

Retaliation – All Statutes

34.3%

36.0%

36.3%

Retaliation – Title VII only

30.1%

31.0%

31.0%

Age

25.8%

24.4%

23.3%

Disability

20.4%

23.0%

25.2%

Equal Pay Act

1.0%

1.0%

1.0%

Source

Equal Employment Opportunity Commission (2008-2010).

The decision also reinforces the need for proper training of managers, supervisors, and HR departments to avoid any conduct that may be construed as retaliatory. Managers and supervisors should now be considering a new set of questions: Does the person we're punishing or firing have some relationship with a whistleblower? If so, how do we properly document that the relationship has nothing to do with the discipline or termination decision?

“I think, as a result of Thompson, employers are going to have to ask a lot of intrusive questions that they didn't ask before,” Doran says.

Communication among managers, supervisors, and HR departments should also be improved in light of the Thompson decision. When supervisors are disciplining employees, and especially when firing them, make sure that someone with an objective eye can review the evidence and confirm that supervisors are making the right decisions, Hill says.

Another liability protection is to adopt an anti-nepotism rule. Some companies, for example, prohibit spouses from reporting to one another or working in the same department. Some have a blanket ban: no relatives whatsoever. “But even that is not going to avoid the problem, because this case makes it clear you don't have to be related to the individuals to have a claim for retaliation,” Schooler warns.

Employers now must heed the possible relationships or connections between employees before taking an adverse employment action. If taking such disciplinary action, the challenge to the employer is to make sure “it knows who's connected to whom,” says Schooler.