Supreme Court Decision Reminds Employers of Risks of Retaliation Claims

Employers already fear the often-asserted, and often successful, retaliation claim from an employee. The United States Supreme Court has recently confirmed that employment decisions that do not have any adverse monetary consequence may support a retaliation claim. Its decision serves as a compelling reminder that employers must remain vigilant in ensuring that employment decisions are based on sound, documented, performance and business-based reasons and that there are internal controls in place for monitoring this.

Title VII of the Civil Rights Act of 1964 prohibits discrimination because of an employee’s race, color, religion, sex, or national origin. In addition, it forbids an employer from discriminating against an employee because the employee has opposed such discrimination. But just what actions are sufficient to constitute “discrimination” under this “antiretaliation” provision? On June 22, 2006, the United States Supreme Court issued a decision intending to answer this question and clarify the scope of the anti-retaliation provision of Title VII.

In Burlington Northern & Santa Fe Railway Company v. White (No. 05-259), a female employee, Sheila White, who was employed as a track laborer, alleged two acts of retaliation because she complained of gender-based harassment. Following White’s first complaint of harassment by her immediate supervisor, the company disciplined her harasser, but also removed White from her primary duty of operating a forklift, assigning her to perform “more arduous and dirty” tasks included within her job description. After White filed two EEOC charges alleging discrimination and retaliation, based in part on the reassignment of her duties, she was accused of insubordination by another supervisor and suspended without pay. Following a monthlong suspension, White was reinstated and awarded back pay for the time she was suspended. She filed a third EEOC charge alleging retaliation based on the suspension.

White eventually sued her employer in federal court, claiming that both the reassignment of her duties and the suspension constituted retaliation under Title VII. White won at the trial court level and in the Court of Appeals. The case then went to the U.S. Supreme Court, which examined the scope of the antiretaliation provision of the statute. The Court found that the term “discriminate” in the antiretaliation provision is in some ways broader than the term “discriminate” in the substantive discrimination provision. It drew two important conclusions:

• First, the antiretaliation provision does not apply only to employer actions that are related to employment or that occur at the workplace.

• Second, the antiretaliation provision covers only those employer actions that a reasonable employee would have found “materially adverse,” which means the action “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”

In support of its conclusions, the Court reiterated that the purpose of the antiretaliation provision is to prevent an employer from interfering with an employee’s efforts to enforce Title VII’s basic guarantees of equality. It then reasoned that an employer could effectively retaliate against an employee by taking actions not directly related to his employment or by causing the employee harm outside the workplace.

The Court also explained that the “reasonable employee” standard is an objective one, designed to avoid an analysis of an employee’s unusual subjective feelings that an action was materially adverse. Nevertheless, whether a particular action is materially adverse will depend on the particular circumstances. The Court gave the example that changing a work schedule may make little difference to many employees, but could be materially adverse to a mother with young children. In that circumstance, such an action could constitute retaliation if taken in response to the employee’s opposition to discrimination.

Applying its new formulation, the Court found that both actions alleged by White constituted retaliation, and affirmed the jury verdict in White’s favor. Even though White’s reassignment was to other tasks still within her job description (and which she occasionally performed before the reassignment), the action constituted retaliation because the forklift operator task was objectively considered to be a better task. Similarly, despite the fact that White was reinstated with backpay following her suspension, the act constituted retaliation because White suffered the hardship of several weeks without pay. The Court reasoned that a reasonable employee faced with the choice between making a discrimination complaint or avoiding either the reassignment of duties or a suspension might well decide not to file the complaint.

What does this decision mean for employers?

Although this case will be seen as “pro-employee,” employers can take consolation in the Court’s reminder that “it is important to separate significant from trivial harms,” the latter which may include “normally petty slights, minor annoyances and simple lack of bad manners.” But where an employer takes action following an employee’s complaint of discrimination or harassment that would cause a reasonable employee to think twice about complaining in the future, liability may ensue.

What steps can an employer take to minimize risk?

Before suspending an employee, taking disciplinary action, reducing an employee’s ability to earn overtime pay or a shift differential, assigning new or different duties (even if encompassed by the employee’s job description), changing an employee’s shift or work hours, depriving an employee of a request for time off, or taking other actions that may impact the employee inside or outside of the workplace, employers should carefully consider the effect of their actions on an employee who has recently complained of discrimination or other violations of Title VII. Unless the action is seen as one which would not dissuade an objectively reasonable employee from complaining of unlawful acts under the statute, the employer may face exposure on a retaliation claim.

Employers who do not carefully track discrimination complaints also run the risk of inadvertently taking adverse action against an employee who has complained of discrimination in a manner that would create the appearance of retaliation. To avoid this unintended result (and the costly defense of a retaliation claim), supervisors who intend to take personnel actions that may be viewed negatively by employees should first check with human resources or someone who is designated to catalog or track discrimination complaints to confirm whether the individual has recently engaged in protected activity. If so, the employer will want to take extra care to ensure that the managers can articulate sound, business and performance-based reasons for the decision, that these reasons are documented, and that they are accurately communicated to the affected employee.