In an increasingly litigious business environment and worker-friendly political climate, more employees are suing employers -- often successfully -- for retaliation. What should HR do?
For HR leaders, retaliation claims seem to be coming from every direction -- including some unexpected angles.
Take the case of a global marketing manager who claimed her former employer continued to retaliate against her -- even after she was fired -- because, at one point, she had filed a gender-discrimination complaint.
The alleged retaliation? A year-and-a-half after she left, company officials persuaded organizers of an independent global-marketing conference to keep the woman from participating. Company officials acknowledged they took the action, but said it was because the former manager was hard to work with, and her area of expertise wasn't appropriate.
The woman had been fired three months after filing the gender-discrimination complaint. While the company denied any retaliation in the firing, it signed a confidential severance agreement with the woman and thought the case was closed.
It thought wrong. In her later lawsuit, the manager alleged she was kept from participating in the conference because of the earlier discrimination charge -- and that she was the victim of post-employment retaliation. Her reputation in the close-knit global-marketing community, she claimed, was seriously damaged. The company ultimately settled the suit for under six figures.
Bill Martucci, the attorney who defended the company in that lawsuit, says the case illustrates both the growing pervasiveness of retaliation claims, and the new kinds of risk that employers are facing -- of which post-employment retaliation is just one example.
When it comes to employee claims, "unquestionably, retaliation is the greatest challenge for employers today," says Martucci, the Washington-based global employment practice leader of Shook, Hardy and Bacon.
Martucci is one of Human Resource Executive®'s 100 Most Powerful Employment Attorneys for 2012, a list prepared exclusively for the magazine by Lawdragon, a Los Angeles-based networking site for lawyers and clients.
Martucci and other attorneys on the list were asked to talk about this widening phenomenon of retaliation claims, and what HR leaders can do to protect their organizations.
There is little doubt that retaliation is the claim of choice these days. According to the U.S. Equal Employment Opportunity Commission, the number of retaliation claims has grown from about 23,000 in 2006 to about 37,000 in 2011 -- a more-than-60-percent increase in just five years. Retaliation claims are now more prevalent than charges of racial discrimination (35,000 claims in 2011), which, for years, led all other categories.
The EEOC defines retaliation as an adverse action, such as a firing or denial of promotion, taken against an employee for engaging in an activity protected by law. Employees typically allege they were retaliated against because they complained of a problem -- such as harassment, discrimination or workplace conditions -- or because they requested an accommodation based on a disability or religion.
More Claims, Not More Retaliation
The attorneys interviewed say it is not that employers are retaliating more -- some believe there is less retaliation than ever -- but that workers are increasingly accusing their employers of retaliation as a means of seeking redress for an underlying complaint, such as discrimination.
Plaintiffs' lawyers, they say, are recognizing that, while juries may have difficulty determining whether discrimination occurred, they are far more likely to believe that an employer would retaliate against a worker who has -- rightly or wrongly -- filed a complaint.
"I think the man on the street understands revenge, even if he doesn't understand discrimination or wrongful termination," says Fred Alvarez, a partner at Wilson Sonsini Goodrich & Rosati in Palo Alto, Calif., where he heads the firm's employment-law-litigation practice.
What the jury thinks, says Alvarez, is, " 'Of course the boss was mad because she accused him of sexual harassment -- of course he was going to get even. That's why he fired her.' "
As society and the workplace become more diverse, he says, and more women and minorities are in important jobs, "it's a lot harder to make the case that a company really doesn't want women or minorities. But it's easier to believe someone is retaliating -- revenge never goes out of style."
Or, as Martucci puts it, "With discrimination, the jury may be a bit doubtful, and ask that the plaintiff prove the case. But it's almost a default that the jury believes the retaliation happened -- it's almost as if the employer has the burden to show there was no retaliation."
As a result, he says, juries often see retaliation as a compromise verdict when evidence of discrimination or harassment is unclear.
Another reason for the rise in retaliation claims, say attorneys, is that the courts and administrative agencies have made it easier for employees to prevail, and new laws and regulations have expanded what can be considered protected activity.
For example, as the rights of the disabled have been expanded, there has been a rise in claims relating to disabilities -- and with that, an increase in employees who say they were retaliated against for making those claims, says Colleen Regan, a partner in the Los Angeles office of Seyfarth Shaw.
She has also seen more of a willingness among employees to use retaliation claims as covers for their poor job performance. Regan cites two recent cases in which women, fearing they would be fired for poor performance, apparently filed sexual-harassment complaints so that, if they did get fired, they could claim retaliation.
The economic downturn, with its massive layoffs, is also playing a role. "Almost anybody who loses his job doesn't understand why he got laid off and the other guy didn't," says Alvarez. Employees, he says, naturally look for a reason, and if they remember they complained about something at one point, they often conclude that's the reason they were laid off.
Often, say attorneys, retaliation claims are set off by hidden landmines. For example, many employers mistakenly think the National Labor Relations Act applies only to unionized companies -- and so believe they are free to take action against workers who complain internally or externally about issues such as wages and benefits, working conditions or problems with supervisors, says Jim Redeker, a partner in the Philadelphia office of Duane Morris.
But the Act applies to virtually all employees -- and company policies that prohibit such discussions would violate the law, he says.
During the past year, he says, he has represented companies in four retaliation cases in which employees were fired because they complained about their supervisors on Facebook. In each case, the companies cited policies that warned against disloyalty, or breaching confidentiality, or treating co-workers with disrespect. Those policies violated the NLRA, says Redeker.
While the law does not prohibit policies against divulging business-related confidential information, companies cannot prevent employees from releasing information relating to the terms and conditions of employment -- including saying that the supervisor is a "jerk" or the workplace is a "hell-hole," says Redeker.
However, he says, most company confidentiality policies do not distinguish between the two types of information.
In addition, the National Labor Relations Board believes notions such as confidentiality and respect for co-workers are too subjective, and would leave employees wondering whether unionizing -- or simply trying to improve conditions on their own -- would subject them to discipline or discharge, says Redeker. The NLRB believes that uncertainty would chill employee freedom to engage in protected activity, he says.
Employers can reduce their risk of retaliation claims by drafting -- and following -- policies that do not violate the NLRA, he says.
Troublesome Cases with Executives
Not all retaliation cases are equal, and attorneys say claims brought by senior executives can be much harder to defend against than those from other employees. Executives often claim they were retaliated against for whistleblowing, though other executive cases commonly involve alleged racial, sexual or age discrimination.
What they have in common, says Terry Sanchez, a partner in the Los Angeles office of Munger, Tolles & Olson, is that executives tend to be more articulate, make better witnesses and -- because they are usually well-funded -- are better able to attract top plaintiffs' attorneys.
Executives' retaliation claims are also often successful because it is harder at a high level to create a record indicating the person has a performance problem, says Sanchez.
"Often, they don't get a formal report card, and it is hard to give them a written warning letter, because then trust is lost," he says.
"So, there is typically not a lot of documentation."
What defending against executive retaliation requires, he says, are more subtle ways of creating that documentation. Instead of a warning letter, Sanchez recommends "a thoughtful note or email about the disagreements you've been having, and what you expect the improvements to be."
In one case, says Sanchez, a CEO was not happy with an executive's performance, though that person's division was doing well. The CEO knew that, at some point, he might have to fire the executive.
On Sanchez' recommendation, the CEO sent the executive a handwritten note discussing his performance, but saying he was looking forward to working with the executive to overcome their disagreements.
Despite a second handwritten note, the executive's performance did not improve, and he was fired. The executive claimed he was retaliated against for whistleblowing. When the case went before a mediator, the executive said he had not been told of any performance problems.
"We were able to pull out these two personal notes," says Sanchez. "It was very persuasive." The executive lost his claim of retaliation.
Employers can also protect themselves by making sure executives' bonuses and compensation are consistent with performance.
"We've seen cases," says Sanchez, "where they fired the executive, they said he was terrible, but you see the bonus and compensation rise every year. It's hard to reconcile those two things."
Changing the Culture
Perhaps the best way HR leaders can protect their organizations, some attorneys say, is to create a culture that gives employees confidence they will not be retaliated against if they complain.
"People assume a revenge motive when anybody complains about anything," says Alvarez. "The way to address this from a senior HR level is to be strategic. Build a case that you don't have any hostility toward anybody who makes complaints. And do that before any complaints are made."
HR leaders, says Alvarez, should "create an environment where complaining about things is welcomed and encouraged [and dealt with respectfully]. When somebody makes a complaint, you thank them and look into it."
Then, if an employee alleges retaliation, managers can respond, "Why would we be mad at you? We thanked you and looked into it -- why do you think I'm mad at you?"
Alvarez recommends establishing written policies that "invite employees to raise workplace issues as they see them. That puts you on the high ground."
Martucci notes that, when employees do file discrimination or other complaints, they are often on the lookout for possible retaliation, and watch to see whether they are treated differently.
To avoid a possible retaliation complaint, HR needs to quickly identify and address any concerns the employee might have. "It's almost as if you're in the hospitality industry, and you say, 'How can I help you?' " he says. Such stepped-up attention, however, must be provided to everyone in the work area, so that the complaining employee is not, in fact, treated differently.
Regan and other attorneys say manager training is an important element in creating the kind of culture that can reduce the risk of retaliation claims.
"You want to train your managers on how to receive a complaint from an employee without getting defensive," she says. "Don't just blow employees off -- even if you can't give them a remedy, they will feel like you're listening."
Retaliation claims can also be reduced, she says, by educating managers on the importance of maintaining good morale, and by training them to check -- before taking an adverse action -- to see whether the employee has ever filed a complaint.
Knowledge is Power
Attorneys agree this last point is critical. Too often, they say, a manager will fire or take other action against an employee without realizing the person has filed a discrimination, harassment or other complaint.
A key concern is that employees with performance problems -- and those who face possible termination -- sometimes engage in whistleblowing, says Eugene Scalia, a partner in the Washington office of Gibson, Dunn & Crutcher.
To avoid a retaliation claim for whistleblowing, he says, the human resource, legal and compliance departments need to coordinate their actions.
Some employers believe it is better that the manager who fires an employee doesn't know of any prior complaints -- that way, he or she cannot be accused of retaliation. But Redeker and other attorneys advise against that.
"First, it's hard to prove a negative -- that the firing manager didn't know," says Redeker.
There is also the risk that a supervisor who is the subject of a complaint might try to get the employee fired by telling a higher manager, falsely, that the employee has performance problems.
Courts have ruled that if the higher manager, unaware of the complaint, fires the employee based on that false information, the employer could be guilty of retaliation, says Redeker.
Martucci says another problem for HR is that employers often carefully investigate the initial discrimination or other complaint, but then do only a cursory follow-up of a subsequent retaliation complaint.
"There is the tendency on the part of even very fine, experienced, senior HR leaders to not realize that the retaliation claim triggers a whole new lens of analysis," he says.
However, because it is often much easier to prove retaliation than the underlying complaint, human resource professionals must treat the two complaints separately -- and make sure the retaliation charge gets its own, thorough investigation.
Retaliation is likely to remain a complex and troubling issue for HR, attorneys say. While discrimination cases can be nuanced, retaliation cases can have even more subtleties, says Redeker.
For example, the courts have said retaliation can include shunning an employee, such as not inviting the person out to lunch with co-workers, or not providing the person with important information before a meeting.
Says Regan, "There are so many landmines you might not even be aware of."
That's why she tells her clients, " 'Before anybody in your organization gets fired, check with a lawyer.' "