"[C]ontext Matters"

Saturday, July 1, 2006 - 00:00

When I initially sat down to write this column, I had a number of employment law developments in mind to discuss. I thought that employers and their corporate counsel should be aware of the rise in class action litigation in the employment area, particularly the onslaught of wage and hour class lawsuits. I also thought that the Equal Employment Opportunity Commission's (EEOC) new Systemic Litigation Program (which, in turn, may encourage more EEOC-brought collective actions) was worthy of discussion. Also on the rise are whistle-blowing/Sarbanes-Oxley claims. And, for both unionized and non-union employers, the Change-to-Win/AFL-CIO split and its implications for future union organizing certainly deserve mention.

However, I changed my mind on June 22, 2006, when the United States Supreme Court issued its Burlington Northern and Santa Fe Railway v. White, 548 U.S. __ (June 22, 2006) decision. In Burlington, the Supreme Court was called upon to interpret Title VII's anti-retaliation provision, the section that protects employees who have "complained" about workplace discrimination or harassment.

The Supreme Court held that the anti-retaliation protections of Title VII cover those employer actions that "would have been materially adverse to a reasonable employee or job applicant" as a result of the employee filing a complaint. The Court explained 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."

This new standard is generally not good news for employers. The Court's decision potentially opens up the floodgates of litigation by employees seeking to take advantage of an untested and imprecise standard that may impose liability on employers for a wide-ranging scope of conduct within or outside the workplace.

The Court's decision is especially troubling in that it emphasized that its new retaliation standard is phrased in general terms because "[c]ontext matters." Thus, a reviewing court must consider the plaintiff's particular circumstances when determining the significance of the challenged conduct. "A schedule change in an employee's work schedule may make little difference to many workers, but may matter enormously to a mother with school age children." While emphasizing that "trivial harms" are not actionable retaliation, the Court's new standard has the potential to create a case-by-case approach to litigation - which can only mean less pre-jury trial dismissals of marginal cases, and more expensive litigation and settlements for employers.

The impact of the Court's decision is magnified by its prior recent jurisprudence. Since the Faragher and Ellerth decisions of the 1990's, the Court has generally told employers "police your own workplace," with the added benefit that by doing so appropriately, employers may well avoid employment law liability. In response, employers have encouraged their employees to internally complain about alleged discrimination and harassment. But, with retaliation filings at the EEOC and in the courts already on the rise, the Burlington Court has now expanded Title VII's anti-retaliation protection to employees without giving employers a safe harbor or a bright line standard ( see Justice Alito's concurring opinion).

As a result, employers could be walking on eggshells trying to predict whether particular actions - within or outside the workplace - might dissuade a particular individual - taking into account that individual's particular circumstances and personal characteristics - from complaining about or supporting a claim of discrimination.

Post- Burlington, employers must take particular care to ensure that any actions taken against an employee (whether on or off the job) after a complaint of discrimination or harassment are thoroughly and independently grounded in legitimate business reasons. Further, supervisors and managers should receive guidance/training in how to handle an employee who has complained, to avoid retaliation claims, and an employer's policies/practices should be reviewed to make sure they are sufficiently protective. Lastly, with the specter of a retaliation jury trial made increasingly real by the Court's decision, employers may want to consider alternatives to litigation, such as requiring employees to sign agreements to arbitrate employment law claims or to execute jury trial waivers.

As is apparent, the work of corporate counsel in the retaliation arena has just increased in importance.

Paul Salvatore is a Partner in the New York office of Proskauer Rose LLP.