Last year, employees filed more retaliation claims with the Equal Employment Opportunity Commission (EEOC) than any other type of charge--the first time retaliation has held the top spot among workplace discrimination claims. It's a trend that's likely to accelerate in the wake of the Supreme Court's Jan. 24 decision in Thompson v. North American Stainless.
In that unanimous decision, the court held that an employee who was fired shortly after his fianc?e filed a discrimination claim may sue under Title VII for third-party retaliation. The court thereby expanded the potential universe of people filing retaliation claims to include not only employees who engage in protected activity under Title VII, but also everyone with a close association to someone who is protected.
It is one of several decisions in the past five years in which the high court has sided with an employee in a retaliation case. While the Roberts court has been viewed as pro-business, it has taken a decidedly pro-worker stance on retaliation. In North American Stainless, some court watchers were surprised to see the opinion's author, Justice Antonin Scalia, who is normally a strict constructionist, expand the scope of retaliation protection.
"As a bit of a Supreme Court nerd, I was a bit taken aback that Scalia said the purpose of Title VII is to protect employees from employers' unlawful actions," says Richard Meneghello, a partner at Fisher & Phillips. "It seems like the court is saying that Title VII is a catchall statute that could encompass a lot more potential claims than we could have realized 10 years ago. The concerning thing from an employer's perspective is that we've seen a real sympathy factor for employees from the Supreme Court."
The latest beneficiary of the Supreme Court's sympathy is Eric Thompson. He and his fianc?e, Miriam Regalado, both worked for North American Stainless LP (NAS). Three weeks after Regalado filed a sex discrimination charge with the EEOC, the company fired Thompson. Thompson filed suit, claiming NAS fired him to retaliate against Regalado for filing her discrimination charge.
The Federal District Court for the Eastern District of Kentucky granted summary judgment to NAS. The 6th Circuit first reversed, but later affirmed that decision, saying that because Thompson did not personally engage in a protected activity, "he was not in the class of persons for whom Congress created a retaliation cause of action."
The Supreme Court disagreed, citing its landmark 2006 decision in Burlington Northern v. White, in which the court defined retaliation as employer actions "harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination." In North American Stainless, the justices concluded that it is "obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fianc? would be fired."
NAS argued that allowing Thompson's case to proceed would open up employers to retaliation lawsuits from every terminated employee who has any connection to a complaining employee.
The court acknowledged this argument but did not establish a bright-line test for determining when a relationship qualifies for retaliation protection. Instead, the court said the zone of protection could vary, depending on the circumstances. "We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize," Scalia wrote.
That sets up years of litigation that will test the scope of the expanded zone.
"The courts threw the line drawing back to the lower courts to deal with on a case-by-case basis," says Matthew Rita, a partner at Ford & Harrison.
In his decision, Scalia chose not to be bound by the retaliation language of Title VII, which protects an employee from punishment "because he has opposed" an illegal employment practice or "he has made a charge" alleging such illegal activity (emphasis added). Michael Fox, a shareholder at Ogletree Deakins, points out that Congress did not say "he or someone he is close to." In contrast, the Americans with Disabilities Act (ADA) specifically provides protection to people associated with disabled employees.
"When Congress wanted to expand the zone of protection to people associated with individuals covered under the ADA, they did it," Fox says. "We could have had a principled decision [in North American Stainless] based on the language of the law. The court could have told Congress, 'If you want to expand the zone of protection for Title VII, then do that like you did for the ADA.'"
The court's expansion of retaliation protection will require a different analysis and explanation to juries when these cases are litigated, Fox points out.
"In the past, we've always focused on the terminated person, and the question was, 'Was the motive of the employer to terminate the person because he or she engaged in the protected activity?' The test for people in the zone will be, 'Did the employer terminate Jack to punish Jill?'" Fox says. "Properly explained, the jury hopefully will see that the plaintiff has to establish that the employer was doing this to get Jill. The concern is that before a jury, subtle differences get blown away by the emotional impact of, 'Was this a fair decision?'"
Fox concedes that the number of cases impacted by the expanded zone of protection will be limited.
"But it is one more lifeboat to get the plaintiff over summary judgment," he says. "It may be a small lifeboat, but the harbor is getting pretty full of lifeboats."
For employers, North American Stainless means adding another factor to the checklist of what to consider before subjecting an employee to an adverse employment action.
"In a disciplinary action against an employee in a particular unit, you may need to ask, 'Has anybody in the unit engaged in protected activity, and do I have any current information to tie these two individuals together?'" says Fox. "If there is no current information, you might want to make a note that this was one of the factors you took into consideration."
Fox adds that making it a practice not to delve into employees' personal lives may help protect the employer because he could argue he didn't know two employees were dating or engaged.
A policy banning employment of family members may also be useful. "At the margins, a nepotism policy would reduce the risk of these types of claims," Rita says. But he points out that implementing a new policy or enforcing a policy for the first time could raise its own risks. For example, in some states, terminating an employee who marries a co-worker is prohibited.
Most importantly, the North American Stainless decision is a reminder that performance issues should be carefully documented before an employer takes action against an employee.
"It's not a new lesson," Rita says. "When taking an adverse action against an employee, you want to have a good reason for it, and you want that reason to be well documented. In the absence of a well-documented reason, allegations will fill the void."