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June 29, 2006Client Alert

Employees Now Protected From "Materially Adverse" Retaliation, Even if Occurring Outside of Work

A few days ago, the United States Supreme Court issued an important decision that provides further definition regarding unlawful retaliation in the work place. While you may read much about this decision in the coming weeks and hear of dire predictions of its consequences by various consultants, the decision largely affirms the existing retaliation standard already used by the courts in the Seventh Circuit and Wisconsin. This should serve as some comfort to employers versed in administering work place complaint and resolution procedures. However, three things will happen: (1) there will be an increase in the number of retaliation charges filed (Across the U.S. retaliation charges have already doubled since the early 1990s.); (2) the type of retaliatory "harms" alleged will likely expand by employees, including off-the-job harms; and, (3) more of these cases will go to trial, rather than being resolved at the summary judgment stage.

At issue in last week's case were discreet complaints made by the only female worker in a railway yard. Burlington Northern and Santa Fe Railroad Co. v. White, 548 U.S. _____ (June 22, 2006). The railroad hired Sheila White as a track laborer in the rail yard, but soon thereafter an opening occurred for a forklift operator position and she was given this plum assignment. A few months later, Ms. White complained to her superiors that her immediate supervisor was harassing her: he repeatedly said that women should not be working there, and he made other insulting and inappropriate remarks to her in front of her male co-workers. After investigation, the railroad suspended Ms. White's supervisor for ten days, and ordered him to attend sexual harassment training. Around this same time, Ms. White was reassigned from forklift duty back to the track laborer tasks to which she was originally assigned. These tasks were, without dispute, more menial and physical, as well as less prestigious in the eyes of the workers. Ms. White was told at the time of the reassignment that this was done because co-workers were complaining that a "more senior man" should have the job of forklift operator.

Ms. White filed a charge of discrimination with the EEOC claiming that this reassignment was both discriminatory and retaliatory under Title VII. A few days later, a dispute erupted between Ms. White and her new supervisor, who claimed that Ms. White had been insubordinate to him. Ms. White was suspended without pay. After investigation, the employer determined that Ms. White had not been insubordinate and reinstated her and provided her full back pay. Ms. White filed another charge with the EEOC claiming that this indefinite suspension without pay was another form of retaliation for her original complaint. These two claims of retaliation (reassignment and unpaid suspension) were the focus of the case: namely, were these actions taken in retaliation against Ms. White for filing the original harassment charge against her supervisor? A jury hearing this case believed that she had been retaliated against and awarded her $43,500 in compensatory damages, including $3,250 in medical expenses. (Ms. White sought treatment for depression during the indefinite, unpaid suspension.)

The U.S. Supreme Court emphasized an important distinction between Title VII's prohibition against discrimination and retaliation. Namely, Title VII's prohibition against discrimination is expressly limited to work place conduct (by the words of the statute): it is unlawful to discriminate against an individual with respect to that individual's terms and conditions of employment. In contrast, Title VII's anti-retaliation provision prohibits "discrimination" generally against any employee or applicant who has opposed an unlawful practice or participated in a charge alleging an unlawful employment practice. The Court noted that the purpose of protecting individuals from retaliation was to encourage individuals to be free to make complaints and to protect those individuals in that process. The Court noted that prior circuit courts had protected employees from acts taken against an employee not directly related to his employment or which caused harm outside the work place. Thus, the Court found "the scope of the anti-retaliation provision extends beyond work place-related or employment-related retaliatory acts and harm."

Thus, the types of retaliatory acts a complaining employee may allege are now clearly not limited to work place harm. This has been the state of the law in the Seventh Circuit and Wisconsin; however, this is a change in the law in other Circuits around the country. You may count on an increase in claims alleging non-work-related retaliation being made. Such off-duty issues need to be addressed in internal investigations.

Beyond finding that retaliation occurring outside of the work place is covered by Title VII, the Court also enunciated a new standard as to what constitutes retaliation. Namely, the Court ruled that the anti-retaliation provision "covers those (and only those) employer actions that would have been materially adverse to a reasonable employee or job applicant. In the present context, that means 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." In arriving at this conclusion, the Court specifically agreed with the "materially adverse" standard previously adopted by the Seventh and District of Columbia Circuits.

First, the Court was careful in emphasizing the need for material adversity in order to separate significant from trivial harm. The Court cited a prior decision which emphasized that petty slights, minor annoyances, and simple lack of good manners are not actionable. The Court also emphasized that the standard includes that of a reasonable employee. This is an important legal standard in that it requires the court to judge the harm to an individual in an objective way and allows the Court to administer and decide these types of issues. In a sense, the U.S. Supreme Court is encouraging district courts to continue to be the gatekeeper on employment claims at the summary judgment stage. We believe we can continue to have success obtaining dismissals of employment claims for our employer clients at the summary judgment stage.

The most novel aspect of the ruling is the Court's newly enunciated dissuade standard: namely, "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." From a defense point of view, this is the most problematic part of the standard and will likely be where the battles are won or lost at summary judgment or the court pushes the case forward to a jury for its determination. As a court tries to determine whether or not an employer's acts might dissuade a reasonable person from complaining, it is to consider the full context of the employment relationship. In citing to the Oncale decision, the Court reasoned "the real social impact of work place behavior often depends on a constellation of surrounding circumstances, expectations, and relationships which are not fully captured by a simple recitation of the words used or the physical acts performed." In looking at this context, the Court provides as an example a schedule change in an employee's work schedule. Such a change may make little difference to many workers, "but may matter enormously to a young mother with school age children." In another example, the Court notes that it may be an unactionable "slight" for a supervisor to retaliate against an employee by not inviting the employee to lunch, but the retaliation line would be crossed if the supervisor is excluding a complaining employee from weekly training lunches which contribute significantly to the employee's progress.

As Justice Alito notes in his concurrence, this "dissuasion" analysis will likely invite a factually intensive balancing between the interests of the employee in making the complaint of discrimination, and the harm which allegedly befalls the employee. The Court is to examine those interests and those harms through a rubric of whether the motivation of the employer's actions is to dissuade the employee from making a complaint in the first place.

At least in the short term, plaintiff lawyers will have a field day. If this all seems more amorphous, you are correct. Previously, the courts had engaged in fairly predictable line drawing: "this conduct of a pay cut is actionable retaliation but this nonselection to a work place committee is not actionable." Now, the courts are invited to focus on the subtleties and nuances of the effects of various harm to complaining employees and the employer's motivation behind such conduct.

Certain bedrock principles still remain. Employers should continue to quickly, thoroughly, and respectfully investigate complaints of employees. Appropriate warnings against retaliation should continue in written policies and to those interviewed during internal investigations. Protocol should include following up with the complaining employee after the investigation to ferret out retaliation concerns. Those accused of discrimination should be insulated from future allegations of retaliation through independent review of subsequent, substantial decisions affecting the complaining employee. Other best practices can and should be implemented.

If you have questions regarding this or other employment issues, please contact Scott C. Beightol at scbeightol@michaelbest.com or 414.225.4994.

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