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Divided panel overturns award to worker who claimed retaliation

2nd Circuit finds worker did not suffer adverse action for complaining of sexual harassment

In a series of recent decisions, the Supreme Court affirmed the importance of protecting employees against retaliation for filing harassment or discrimination complaints. But while its landmark 2006 Burlington Northern & Santa Fe Railway v. White decision relaxed the standard for what constitutes retaliation, just how that standard should be applied continues to provoke debate.

Under Burlington Northern, anything that would deter a reasonable employee in the same situation from making a complaint qualifies as a “materially adverse action” supporting a retaliation claim under Title VII. Whether a particular action would deter someone may depend on the context, the court said. Because this is not a bright-line standard, federal district and appeals courts are still grappling with how it applies to a variety of workplace actions, including reassignments, negative performance evaluations and co-worker harassment.

“There are a host of hot topics within the adverse action area where the courts are divided not only across the country, but even within their own circuit,” says Littler Mendelson Shareholder Gregory Keating.  

In an Oct. 31, 2011, decision, the 2nd Circuit addressed the question of whether close scrutiny of an employee after he filed a complaint constituted a materially adverse action—and sided with the employer. It upheld a district court ruling in which a judge overturned a jury verdict awarding $500,000 to a nuclear plant worker who claimed he suffered retaliation after complaining of male-on-male sexual harassment. In Tepperwien v. Entergy Nuclear Operations, the divided panel found that the plaintiff, whose conduct was repeatedly investigated and who received a disciplinary letter—later withdrawn—had not suffered an adverse action.

The decision is noteworthy both for its ruling in the unsettled area of what constitutes a materially adverse action and also for the dissent, which accused the majority of usurping the rightful role of juries in making those calls.

“Jurors are obviously better suited to determining the social impact of contemporary workplace behavior than are judges,” wrote dissenting Judge John Gleeson, who argued that the facts of the case supported the jury’s verdict.

Verdict Reversed

The facts at issue involved a series of steps Entergy Nuclear Operations took after James Tepperwien, a security officer, complained about a trainer who in separate incidents propositioned him, grabbed his buttocks and put his hand through Tepperwien’s hair. After his first complaint, the company opened an investigation, known as a “fact finding,” into Tepperwien’s use of sick time. After his second complaint, a fact finding involving a missing gas mask resulted in Tepperwien receiving a counseling letter that management rescinded when another employee admitted responsibility.

Tepperwien then filed a sexual harassment complaint with the Nuclear Regulatory Commission (NRC). Soon afterward, a supervisor invited him to a plant meeting on his day off. Tepperwien didn’t learn until he arrived that the meeting was about his NRC complaint. His request to tape-record the meeting was denied, and when he pressed the point, he was told he would be fired for noncooperation if he did not stop asking. Two other fact findings followed before Tepperwien resigned.

At the trial for his sexual harassment and retaliation lawsuit, a federal court jury found for the employer on the sexual harassment claim and for Tepperwien on the retaliation claim, awarding him $500,000 in punitive damages but no compensatory damages. The district court judge then directed a verdict for the employer, saying all of Entergy’s actions were not enough to deter a reasonable employee from complaining about harassment.

“Trivial” Actions

In upholding the district judge’s decision and ruling that Entergy’s actions were “trivial,” the appeals panel majority noted the company had good reason to initiate the investigations and no disciplinary action resulted.

“The court can decide that some things are so trivial that they are not materially adverse,” says Paul Mollica, of counsel at plaintiff’s firm Outten & Golden. “What is interesting and troubling about this case is that that jury did find materially adverse action. It’s discouraging that the district court judge and the panel didn’t think the jury members did the job Congress assigned them under Title VII.”   

Jeffrey Braff, a member at Cozen O’Connor, agrees that the panel overstepped its bounds in overruling the jury.

“I don’t see how you come to the conclusion that [the employer’s actions] are petty slights,” Braff adds. “Based on the evidence, at least in the aggregate, it looks like he is being picked on. I think the majority really usurped the fact finding that the jury engaged in.”

But Mollica says the case may turn out to be an outlier because the circumstances were unusual, noting the decision stressed that the context was the high-security environment of a nuclear power plant. The decision cited “significant safety concerns not found in most work environments” in justifying the employer’s tough approach to alleged rule violations.

Keating sees the case falling in line with other circuits’ contention that courts should not act as “super personnel departments,” evaluating everything that happens in the workplace.  

“The bottom line is that it is a good decision for employers—one we can and will cite to the proposition that you have to draw lines somewhere,” he says. “As long as the individual does not suffer any actual material change in the terms and conditions of employment, the court should not find adverse action.”  

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