Employers should be aware that their liability for a retaliation claim does not end when the employee leaves the company. One of the 2012 Most Powerful Employment Attorneys and his associate offer some advice on ways employers can protect themselves.
This article accompanies The Trouble with Retaliation.
All too often, employment litigation is associated only with claims of discrimination or harassment or with wage-and-hour claims based on an employer's alleged failure to pay overtime or the minimum wage. While these types of cases do indeed make up a large portion of today's employment litigation, they are nearly always followed by a secondary claim of unlawful retaliation.
Indeed, nearly every federal employment statute includes an anti-retaliation provision.
This includes the obvious statutes -- Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act and the Americans with Disabilities Act -- but also more obscure ones such as the Fair Labor Standards Act, the Occupational Safety and Health Act and the Sarbanes Oxley Act.
Retaliation claims serve as a natural complement to underlying claims of discrimination or improper conduct, making them the most common type of employment claims litigated today. Some litigators have noted that retaliation claims are often the hardest to combat at trial because they provide a means for jury to compensate a plaintiff whom it does not feel was subjected to discrimination but was nevertheless treated unfairly.
The Basics of a Retaliation Claim
Regardless of the applicable statute, retaliation claims share a common premise: An employee was subjected to adverse treatment by an employer because the employee exercised his or her rights to complain about some unlawful act.
Under Title VII, for instance, an employee must show (1) that he engaged in protected activity, e.g., he complained about discrimination and/or was associated with someone who did the same; (2) that he suffered a materially adverse action that would deter a reasonable person from engaging in protected activity; and (3) a causal connection exists between the adverse action and the protected activity.
The standard for establishing a causal connection varies from statute to statute, but the basic framework generally remains the same.
Retaliation claims are not as limited as some employers may think.
Because the statutory schemes that include a retaliation provision are remedial or designed to eliminate unlawful conduct, the retaliation provisions are interpreted broadly -- both in terms of who they protect and what they protect against.
Title VII, which prohibits race, national origin, gender, and religious discrimination, serves as a good example as to both issues. In Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53 (2006), the Supreme Court held that the anti-retaliation provision of Title VII -- which prohibited employers' actions that "discriminate against" employees who engaged in protected activity -- was not limited to actions related strictly to employment.
Because the anti-retaliation provision utilized different language than the anti-discrimination provision, the Court concluded that the anti-retaliation provision was broader and forbid any materially adverse action that could dissuade a reasonable work from making or supporting a charge of discrimination.
In terms of the case itself, the Court's holding meant that the employee, whose job duties were changed to harder duties but ones still within her job description, could nevertheless recover for retaliation.
Retaliation claims are not confined to current employees who engaged in protected activity solely on their own.
In Thompson v. North American Stainless, LP, 131 S. Ct. 863 (2011), the Supreme Court held that Title VII's anti-retaliation provision protected an employee who was fired very shortly after his fiance, who also worked at the employer, filed a charge of discrimination.
And, in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), the Supreme Court held that an employer could be liable for retaliation under Title VII based on actions taken against an employee after the employee's discharge.
The ability of a former employee to recover for post-employment retaliation is often overlooked by employers. However, it poses several important risks to employers and requires them to evaluate their treatment of former employees who engaged in protected activity either during or after their employment.
Post-Employment Retaliation Claims
The legal support for claims of post-employment retaliation is relatively new -- the Supreme Court decided Robinson only 15 years ago, in 1997.
Like most post-employment retaliation cases, Robinson involved a claim that the former employer had given the former employee a negative reference because he filed a charge with the Equal Employment Opportunity Commission alleging race discrimination.
The Court's decision boiled down to an interpretation of the term "employees" in Title VII's operative provision making it unlawful "for an employer to discriminate against any of his employees or applicants for employment" because they raised a complaint, internally or externally, under Title VII.
Citing other provisions of Title VII that contemplated former employees being able to use the statute's protections and noting that disallowing post-employment retaliation claims would deter victims of discrimination from complaining to the EEOC, the Court concluded that term "employees," as used in Title VII's anti-retaliation provision, included former employees.
Since the Supreme Court decided Robinson, post-employment retaliation cases have become more common and diverse. They are not limited just to cases where an individual receives a negative job reference from a former employer about whom the individual had made a prior complaint.
Actionable retaliation may come in multiple forms. For instance, in Shukh v. Seagate Technology, LLC, No. 10-404, 2011 U.S. Dist. LEXIS 33924 (D. Minn. Mar. 30, 2011), the plaintiff alleged that his former employer had spread derogatory and negative rumors about him after his termination because he had filed charge of national-origin discrimination with the EEOC.
Some post-employment actions that may be viewed as retaliatory include refusals to give a job reference, denial of or delays in post-employment benefits, disclosure of an employee's prior complaints about discrimination and suits against a former employee for breach of an employment contract.
Even an employer's exercise of its legal right to challenge unemployment benefits may be viewed as retaliatory. In Ward v. Wal-Mart Stores, Inc., 140 F. Supp. 2d 1220 (D.N.M. 2001), Wal-Mart appealed a former employee's award of unemployment benefits less than a month after the employee was terminated and had filed a discrimination complaint with the EEOC.
The evidence showed that it was Wal-Mart's policy to appeal all award of unemployment benefits. But, because New Mexico law provided that unemployment benefits could only be denied in cases of employee misconduct and because Wal-Mart had acknowledged that the employee was not terminated for improper conduct, the court found that a reasonable jury could find Wal-Mart's actions were retaliatory.
Avoiding Post-Employment Retaliation Claims
The increase in the number of post-employment retaliation cases illustrates that the risk of facing a retaliation lawsuit does not end once an employee is discharged. Post-employment actions employers would otherwise take as a matter of course and view as routine may, in fact, become the basis for a retaliation claim.
For example, what a company may view as its right to give an honest assessment of a former employee's poor performance to a potential employer may expose the company to a retaliation claim if the former employee had made a discrimination complaint.
However, there are ways employers can try to insulate themselves from post-employment retaliations claims. The following are some of the most common policy changes and principles to keep in mind when dealing with former employees who have engaged in some form of protected activity:
* Consider adopting a policy of only providing basic background information about former employees, e.g., name, supervisors, position, dates of employment and job duties.
* Only provide performance information that is supported and documented in an employee's personnel file and/or performance reviews.
* Avoid giving subjective thoughts and criticism about former employees to their prospective employers.
* Never disclose that a former employee filed a charge or internal complaint about discrimination, etc.
* Have reference requests handled by a department and/or individual with no knowledge of a former employee's prior complaints.
* Evaluate the basis for a denial of or challenge to a former employee's claim for post-employment benefits, e.g., continuation of health-care, unemployment benefits, etc.
* Consider the merits and timing of any contemplated litigation against a former employee for the return of company property, breach of an employment contract, etc.
* Discourage and prohibit spreading of rumors and gossip about all employees, both inside and outside the workplace.
* Treat former employees who have engaged in protected activity the same was you would treat any other former employee.
* Ensure that a former employee's protected activity is not considered in the hiring, promotion, and evaluation decisions of the former's employee's spouse or family member who happens to remain employed.
Many of these principles require only modest changes to existing human-resources policies or practices. Some -- like the reference policies -- can be applied company-wide and to all employees, regardless of whether they engaged in protected activity.
With negative-references being one of the most common grounds for post-employment retaliation claims, a general policy of providing only basic background information eliminates the potential for such claims.
William C. Martucci is a partner with Shook Hardy & Bacon in Washington. Brian P. Baggott is an associate in the Kansas City, Mo., office, specializing in complex, commercial and employment litigation.