By Veronica L. Merritt, Esq.[1]

Court Resolves Circuit Split in Defining What Constitutes Actionable Retaliatory Conduct, But Have They Opened a Wide Door for Plaintiffs’ Attorneys?

Over the last decade, the number of retaliation claims under Title VII of the Civil Rights Act of 1964, has risen exponentially, in comparison to the rate of employment discrimination and harassment claims brought under the core provision. The EEOC reports that in 1992, retaliation complaints comprised 15.3% of all charges. As of 2005, that percentage had nearly doubled to 29.5%.1 The rise in retaliation claims seems to indicate a shift in workplace dynamics that may tell a distressing story. While employees are now utilizing their employer’s internal grievance procedures and raising their voices in opposition to perceived unfairness in the workplace, increasingly they feel that they are being penalized by the employer for availing themselves of these measures. Allegations of supervisor backlash, demotions, negative evaluations, promotion denials, alienation and even termination, in the wake of discrimination complaints, present difficult scenarios for employers to defend.

It is becoming a more common occurrence for employers to effectively defend an underlying discrimination claim, yet incur liability for retaliation. In 2004, the EEOC recovered over $90 million dollars in damages on retaliation claims alone—a significant number of which were not even alleged in the initial charge.2 Employers faced additional pressure, due to the fact that exactly how severe and job-related an employer’s conduct must be to constitute cognizable retaliation depended on which circuit court of appeals was asked.

The Fifth and Eighth Circuits opined that employer liability for retaliatory discrimination under Title VII should be restricted to an “ultimate employment decision,” such as hiring, discharging, promoting, and compensation.3 Other circuits applied a more relaxed standard, finding liability for any “materially adverse change” in the terms, conditions or benefits of employment.4 The most lenient analysis, utilized by a minority of courts, is based on whether the challenged conduct “would have been material to a reasonable employee,” and would likely have “dissuaded a reasonable worker from making or supporting a charge of discrimination.”5

Last June, the Supreme Court, in reviewing a decision from the Sixth Circuit, analyzed each of these tests and adopted a standard that appears to be more expansive than any other test previously applied. In Burlington Northern & Santa Fe Railway Co. v. White the Court incorporated the standard applied by a minority of courts, and concluded that Title VII’s anti-retaliation provision covers: “…those (and only those) employer actions that would have been materially adverse to a reasonable employee or job applicant. In the present context that means that the employer’s actions must be harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination.” 126 S. Ct. 2405, 2409 (2006). Even more surprising was the Court’s ruling that prohibited retaliatory conduct need not occur in the workplace or be employment-related. Id.

The Background

In June 1997, plaintiff Sheila White was hired by Burlington Northern’s Memphis rail yard, as a “track laborer” in the maintenance department. Her duties included removing and replacing track components, transporting material, and removing litter and spillage from the track’s right-of-way. Considered a ‘less than glamorous’ position by most railway workers, this job was typically held by less senior laborers in the department. At the time White was hired, she was the only woman. Shortly after White was hired, one of the laborers who primarily operated the forklift, opted to move into another job position. The department manager, aware of White’s previous forklift experience, immediately assigned the fork lifting duties to White. After only a few months working as a forklift driver, White reported to management that she was being harassed by her foreman. Burlington investigated White’s complaint, suspended the harasser and ordered him to complete sexual harassment training. Id. at 2409.

Up to this point, Burlington officials responded appropriately to White’s complaint, applying acceptable standards under Title VII— a viable method for complaints, prompt investigation, and effective remedial action to cease the harassing behavior. Management then, however, contemporaneously decided that White would be reassigned to her former tasks as a general track laborer. Burlington explained that their decision was based on fairness to the other workers, who felt that a “more senior man” should get the “less arduous and cleaner job” of forklift operator. Id. at 2409. Two weeks later, White filed a complaint with Equal Employment Opportunity Commission (EEOC), alleging that the reassignment of her duties constituted gender discrimination and retaliation in response to her harassment complaint against the foreman. Id. Only days after the company received White’s EEOC charge, White had a disagreement with a different foreman and was suspended without pay for insubordination. White challenged the suspension through an internal grievance and was reinstated 37 days later with full backpay. Thereafter, White filed another retaliation charge, based on the suspension. Id.

After exhausting her administrative remedies, White filed suit in federal court where she alleged unlawful gender discrimination and retaliation. White contended that Burlington Northern retaliated against her by changing her job responsibilities and also by suspending her for 37 days without pay. Burlington Northern argued that White’s retaliation claims should fail because, (1) the subsequent reassignment of duties fell within the scope of her job description and (2) White ultimately did not suffer a financial loss from the suspension. The jury rejected White’s Title VII gender discrimination claim, but awarded her $43,250 in damages on the retaliation claims. Though the judgment was affirmed by the Sixth Circuit Court of Appeals, the en banc panel differed as to the applicable standard for analyzing retaliatory action. 364 F. 3d 789.

The New Standard

The core provision of Title VII of the Civil Rights Act of 1964, forbids employment discrimination against an individual with respect to “compensation, terms, conditions, or privileges of employment,” based on “race, color, religion, sex, or national origin.” 6 Title VII’s anti-retaliation provision forbids employer actions that “discriminate against” an employee for “opposing” a discriminatory practice or for “participating in” a hearing or other proceeding related to Title VII prohibited conduct.7 The Court analyzed the linguistic differences between the core provision and the anti-retaliation provision and determined that Congress’ intention was that the provisions served different purposes and provided different protections. While the substantive provision serves to secure employment-related opportunities, “an employer can effectively retaliate against an employee by taking actions not directly related to his employment or by causing him harm outside the workplace.” Id. at 2412.

The Court explained its reasoning by citing to a case where the FBI retaliated against an agent by refusing to provide protection after the agent received death threats from a prisoner. Another example involved an employee who filed false criminal charges against an employer who complained of discrimination. Though the FBI’s refusal to investigate and the employer’s filing of criminal charges, were not directly work-related, such actions could effectively deter an employee from reporting discrimination. The Court’s finding explicitly rejected the rationale applied by most Courts of Appeal, which had long limited actionable retaliation to workplace harms. Id. at 2415.

While explaining how courts are to evaluate retaliatory actions, the Supreme Court specifically limited actionable conduct to that which is ‘materially adverse.’ Employer liability will not arise from “petty slights or minor annoyances” that the employee may be subjected to. Actionable conduct is to be objectively analyzed using a reasonable employee standard, where “the significance of any given act of retaliation will often depend on the particular circumstances.” Id. The Court explained that a schedule change may not materially impact some employees, but could have an impact on a mother with school-age children. Similarly, a reassignment of job responsibilities, even within the same job description, can constitute retaliation where certain job duties are considered more arduous and time consuming (track labor), and other duties indicate a higher level of experience and prestige (forklift operator). Id. at 2417. A jury could therefore conclude that the employer’s actions would have been materially adverse to a reasonable employee.

Similar reasoning was applied to White’s 37-day suspension without pay. Despite Burlington’s contention that the subsequent back pay remedied any adverse impact by making White financially whole, “many reasonable employees would find a month without a paycheck to be a serious hardship.” Id. at 2417. Conversely, an employee who loses one-day’s wages, from one paycheck during one pay period, is not likely to have an actionable claim.8

Practical Impact

The Supreme Court’s ruling should definitely raise antennas for all employers to exercise additional monitoring and scrutiny following a report of discriminatory activity. Allegations of discrimination or harassment that are fairly determined to be unfounded could eventually lead to significant liability due to retaliatory conduct. Whether there was thorough documentation or appropriate follow-up could be the determining factor in assessing liability. The new standard leaves a lot of room for plaintiffs’ attorneys to cast a wide array of activities as questionable when arguing the ‘materiality’ and ‘reasonableness’ of post-complaint events. Unfortunately, the standard not only makes it easier to maintain a retaliation claim, it could present new hurdles to obtaining summary judgment.

Additionally, employers should ensure that their harassment policies and corporate codes of conduct specifically cover complaints of retaliation. Where many corporate policies have traditionally included only general references to anti-retaliation, the implications of the new standard may necessitate a heavier emphasis defining the expanded scope of retaliatory behavior, as well as more focused management training. Most individuals are not likely to assume that non work-related events could amount to retaliation liability for the company.

The good news for employers is that the Court did describe the test as objective, thus eliminating the need to evaluate each plaintiff’s subjective emotions and allowing the lower court to make a final determination as to the sufficiency of the evidence. Nevertheless, it is safe to predict that the number of retaliation complaints will likely surge, and employers should take early measures to institute necessary strategies that specifically deal with the new and difficult issues created by Burlington.

References

[1] Veronica L. Merritt is an Associate in the Birmingham, Alabama office of Ogletree Deakins Nash Smoak and Stewart, P.C. Ogletree Deakins is one of the nation’s largest labor and employment law firms, with 25 offices located across the country. Before coming to Ogletree Deakins, Ms. Merritt clerked for Chief United States District Judge U.W. Clemon, of the Northern District of Alabama.

1 EEOC Charge Statistics FY 1992 Through FY 2005, http://www.eeoc.gov/stats/charges.html.
2 EEOC Retaliation Statistics, http://www.eeoc.gov/types/retaliation. html
3 See Mattern v. Eastman Kodak Co., 104 F.3d 702, 707 (5th Cir. 1997); Manning v. Metropolitan Life Ins. Co., 127 F.3d 686, 692 (8th Cir. 1997); see also, Gupta v. Florida Bd. of Regents, 212 F.3d 571, 587 (11th Cir. 2000).
4 Burlington Northern & Santa Fe Railroad Co. v. White, 364 F.3d 789, 795 (6th Cir. 2004); see also, Von Gunten v. Maryland, 243 F.3d 858, 866 (4th Cir. 2001); Robinson v. Pittsburgh, 120 F.3d 1286, 1300 (3rd Cir. 1997).
5 Washington v. Illinois Dept. of Revenue, 420 F.3d 658, 662 (7th Cir. 2005); see also, Rochon v. Gonzales, 438 F.3d 1211, 1217- 1218 (D.C. Cir. 2006).
6 42 U.S.C. § 2000e-2(a).
7 42 U.S.C. § 2000e-3(a).
8 See Plautz v. Potter, 156 Fed. Appx. 812, 817-818 (6th Cir. 2006).