Employees who are underperforming or having problems at work often perceive - and correctly so - that many employers are afraid to discipline a worker who has complained of discrimination because that employee may then charge the employer with retaliation. The unfortunate effect of this fear is that underperforming employees often believe they can immunize themselves against disciplinary action by filing a complaint of unlawful activity.
Many employers also believe that retaliation cases are difficult to win, on summary judgment and at trial, because the main issue in all retaliation cases - the employer's intent - poses a factual question that is for a jury, not a judge, to evaluate. And all employers know that juries can be unpredictable, no matter what the merits of the case. In reality, employers need not be held hostage to the fear of retaliation claims. With a solid understanding of the standards of proof required for a retaliation claim, and some creative thinking and planning, employers can be confident that they can win many, if not most, retaliation claims.
In this article, we briefly describe the types of unlawful retaliation and the standards of proof required for a successful claim; we also explain how employers can use this knowledge to prevent and, when necessary, win retaliation lawsuits.
What Is Unlawful Retaliation?
In a nutshell, unlawful retaliation occurs when an employer takes a negative action against an employee because the employee has complained about discrimination or taken some other action that is protected by law. Most federal employment statutes prohibit employers from taking adverse action against an employee who has exercised his or her rights to complain under the statute; anti-retaliation provisions are sometimes called "whistleblower" provisions. A few examples of statutes with anti-retaliation provisions are those prohibiting discrimination (e.g., Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act) and those governing workplace health and safety (e.g., OSHA) or wage-hours, ERISA and the National Labor Relations Act. Corporate counsel are familiar with the Sarbanes-Oxley Act of 2002 (SOX), which, although not an employment-related statute per se, also provides a cause of action for retaliation.
All states and some municipalities are also bound by fair employment practice statutes - plus, in some cases, common law doctrines such as wrongful discharge - that prohibit retaliation against employees who engage in protected conduct. For example, New Jersey's Conscientious Employee Protection Act (CEPA), one of the nation's broadest, goes so far as to prohibit retaliation for complaints of employer misconduct that an employee reasonably believes "is incompatible with a clear mandate of public policy."1 In an attempt to cast the widest possible net, most plaintiffs' lawyers file retaliation claims under federal, state and, where possible, local laws.
How Is Retaliation Proved?
Most retaliation cases follow the three-step burden-shifting methodology applicable to Title VII discrimination decisions, as set forth by the Supreme Court in McDonnell Douglas v. Green.2 Under this framework, the plaintiff sets forth a prima facie case of retaliation. The employer then responds by articulating a legitimate, non-discriminatory reason for the allegedly adverse employment action, and the burden shifts back to the plaintiff to show that the employer's articulated reason is really a pretext for unlawful retaliation. To establish a prima facie case, a plaintiff must show that (1) he or she engaged in "protected conduct"; (2) he or she suffered an "adverse employment action"; and (3) a causal connection exists between the two.
Using The Prima Facie Case To The Employer's Advantage
The prima facie case - and, in particular, the third prong - offers an opportunity for employers to avoid retaliation claims altogether, or to position the claims for dismissal on summary judgment.
1. What Is Protected Activity?
"Protected activity" means participating in activity protected by, or opposing activity prohibited by, the applicable statute. The term "protected activity" is broadly construed, encompassing, for example, a request for reasonable accommodation under the Americans with Disabilities Act, an employee's candid participation in an internal investigation of an Equal Employment Opportunity Commission (EEOC) or SOX charge, a complaint about safety standard violations, and even a supervisor's refusal to stop subordinates from complaining to governmental agencies about corporate wrongdoing.
Most complaints, such as formal complaints filed with governmental agencies or with a corporation's Human Resources Department, are clearly protected activity under the applicable statutes. In limited circumstances, however, an employer might successfully attack the alleged protected activity on the ground that it is not based on a "reasonable," "good faith" belief that the employer's conduct violated the law, which is required.3 Similarly, because the protected activity itself must be reasonable, an employer does not have to tolerate disruptive conduct such as workplace violence or insubordination; a retaliation claim should not survive under such circumstances.4
2. Parameters of an Adverse Employment Action
"Adverse employment action" means essentially an action taken by the employer that negatively affects an employee. Whether an action is held to be adverse depends on the circumstances, and some jurisdictions take a more expansive view than others. While tangible employment actions such as discharge, demotion and suspension are obviously adverse, court decisions make clear that not every decision that makes an employee unhappy is legally cognizable. For example, refusing to give an employee an office instead of a cubicle or assigning undesirable tasks related to the plaintiff's job would usually be held not to be adverse employment actions. Courts do, however, examine the facts of each case to determine the true effect of the employer's action. Several recent court decisions hold that a reduction in responsibilities or in the opportunity for advancement, even without any reduction in salary or benefits, can support a claim for an adverse employment action. A recent Fifth Circuit decision goes one step further, holding that a "retaliatory hostile work environment," such as persistent insults or exclusion from meetings, can support a whistleblower claim.5
3. Disproving Causation Between the Adverse Action and the Protected Activity
Of the three prongs of the prima facie case, the third prong - causation - presents the best opportunity to defeat retaliation claims.
To establish causation, an employee must produce evidence of a link between his or her protected activity and the employer's allegedly adverse action. Examples of such evidence include a comment made by the supervisor about the protected activity or a change in behavior by the supervisor shortly after the protected activity (such as disciplining the employee for conduct that had always been considered acceptable). Even timing alone (temporal proximity) may establish causation if the adverse action was taken "very close" in time after the protected activity.6
On several occasions, we have defeated retaliation claims at early stages of a case by precluding the employee from establishing that the complaint (to the EEOC, for example) was the cause of the supervisor's subsequent adverse conduct toward the employee. This was done, in appropriate cases, by not informing the supervisor that the employee had filed an EEOC charge alleging that the supervisor had discriminated against the employee. Instead, Human Resources or the Legal Department handled the initial stages of the EEOC response without involving or informing the supervisor, and the supervisor continued to deal with the complaining employee unaware that any complaint had been filed. Thereafter, when the supervisor made a decision that the employee sought to characterize as adverse and filed a second EEOC charge alleging that the supervisor had retaliated against the employee for filing the EEOC charge, it was a simple matter to prove that the supervisor could not possibly have retaliated because of the complaint since he did not even know about it.
In other cases, where the performance of an employee who later disclosed her pregnancy was under scrutiny, her claim that her performance was criticized because she was pregnant was easily disproved by producing documentation showing that the performance problems existed before the employer knew of the pregnancy; the pregnancy, therefore, could not have been the cause of the employer's adverse action against the pregnant employee. The decision maker's lack of knowledge of the protected activity - explained in undisputed deposition testimony or in an affidavit - will negate any connection between the protected activity and the adverse action, making summary judgment for the employer more likely. Although withholding this information may sometimes be impossible, in many cases it can work quite effectively.
Employers should take note, however, of cases that hold that causation can exist if a lower-level employee who harbors retaliatory animosity toward the plaintiff provides false information to the decision maker - even if the decision maker is unaware of the unlawful intention. The classic case is that in which the plaintiff's co-worker or immediate supervisor, whom the plaintiff had previously accused of wrongdoing, provides misinformation about the plaintiff's performance to a higher-level supervisor, who then disciplines or negatively evaluates the plaintiff on the basis of the misinformation. As the federal appellate courts have recently split on the issue whether decision-maker status should be imputed to the lower-level employee (and thus liability imposed on the company) in these situations, that issue is ripe for U.S. Supreme Court review.7 In the meantime, to ensure that an adverse employment decision is not tainted by unlawful intention, counsel should independently verify all the information that was considered by the employer in making that decision.
Employers can also increase their arsenal of defense tools by training managers to document performance issues immediately. If an employee's performance is deficient, it should be documented when it first occurs. If the manager waits to document the poor performance until after the employee has filed a complaint, it may well appear that the sudden criticism or increased scrutiny was made in response to the protected activity. Similarly, an adverse action resulting from performance issues that occur after the protected activity is likely to withstand investigation if adequate documentation supports the decision. For example, one judge recently dismissed an executive's SOX whistleblower claim that he was fired for reporting overstatements of company assets because, despite temporal proximity between the executive's report of problems and his termination, the company's documented reason for terminating the executive - violation of the company's revenue recognition policies - supported the employer's decision to discharge him.8
1 N.J.S.A. 34:19-3.
2 411 U.S. 792 (1973).
3 See, e.g., Harper v. Blockbuster Entertainment Corp., 139 F.3d 1385, 1388 (11th Cir. 1998): an employee's complaint of discriminatory grooming policy is unreasonable and therefore not protected activity, because courts universally hold that gender-based distinctions in grooming policies are lawful.
4 See, e.g., Cruz v. Coach Stores, Inc., 202 F.3d 560, 566 (2d Cir. 2000); Matima v. Celli, 228 F.3d 68, 79 (2d Cir. 2000).
5 See Williams v. Administrative Rev. Bd., 2004 WL 1440554 (5th Cir. July 15, 2004).
6 Calero-Cerezo v. U.S. Dept. of Justice, 355 F.3d 6, 25 (1st Cir. 2004).
7 Compare Hill v. Lockheed Martin Logistics Mgmt., Inc. (4th Cir. 2004) (en banc) (granting summary judgment for employer despite plaintiff's co-worker's undisputed role in decision by providing biased information to decision maker) with Cariglia v. Hertz Equip. Rental Corp., (1st Cir. 2004) (discriminatory animus imputed to employer where decision maker relied on information manipulated by non-decision maker with unlawful bias).
8 Klopfenstein v. PCC Flow Techs. Holdings Inc., DOL ALJ No. 2004-SOX-11, 7/6/04.
Barbara M. Roth (firstname.lastname@example.org) is a Partner and head of the Labor and Employment Group of Torys LLP in New York City, and Lauren G. Krasnow (email@example.com) is a Senior Associate in that group. They counsel and represent employers in the full spectrum of employment law issues, providing litigation services, advice on day-to-day employee relations, strategic risk-management planning, and employee and manager training. They thank Deborah L. Shapiro, an Associate at the firm, for her research assistance. Torys LLP is an international business law firm with more than 330 lawyers in New York and Toronto. The firm is known for its successful representation of clients in significant corporate transactions and cases.