United States: Avoiding Liability For Retaliation Claims: Issue Spotting In Real Time

Last Updated: December 4 2014
Article by John Mavros

Introduction

Retaliation lawsuits are the most common claims brought against employers before governmental agencies and are increasing in frequency in the civil court system. According to the Equal Employment Opportunity Commission (EEOC), in 2013, a retaliation claim was made in 41.1% of all charges submitted to the EEOC. This is more than discrimination based on race and more than discrimination based on disability. Even more concerning is the consistent uptick in retaliation allegations. Retaliation claims have increased in number every year since 1997. So, what can employers do to protect themselves against this ever-growing liability?

First, employers must understand what retaliation is. Next, employers must be able to issue spot when a particular set of facts poses a high risk for a retaliation claim. This article will attempt to do both.

Retaliation in a Nutshell

At bottom, retaliation is exactly what it sounds like: taking adverse action against an employee in direct response to something an employee did or didn't do. Simple right? Indeed, why would an employer ever consciously "retaliate" against an employee? While it may seem simple to avoid, liability for retaliation doesn't usually arise in a straightforward or intentional manner.

As a brief overview, employers cannot fire, demote, harass, or otherwise "retaliate" against people (applicants or employees) because they filed a charge of discrimination, because they complained to their employer or other covered entity about discrimination on the job, or because they participated in an employment discrimination proceeding (such as an investigation or lawsuit). It is also a violation for an employer to discharge, or in any other manner discriminate against, an employee because that employee filed a wage/hour complaint or caused to be instituted any proceeding under the Fair Labor Standards Act.

In short, the potential for retaliation arises when an employer takes "adverse" action against an employee after he/she engages in activity that is legally "protected." "Adverse" action can include any action detrimental to the employee's terms and conditions of employment. For example, pay reductions, demotions, or transfers are all potentially adverse actions. A common misconception is that "adverse" action is solely limited to termination. "Protected" activity includes, but is not limited to, taking a medical leave of absence, complaining about unlawful discrimination, and complaining about unlawful pay practices. Remember, the employee need not prove that a complaint turned out to be true, only that it was reasonable to think believe it was.

The Retaliation Problem

Liability for retaliation generally arises when decisions are made by looking at a small set of facts rather than taking a long, hard look at the big picture. When an employee makes a seemingly insignificant comment, or complains about something completely false, decisions are often made without fully considering the import of the employee's actions. HR managers, and their equivalents, must take note and consider them seriously. How is an employer supposed to know what to look for? This is especially difficult when the HR team is bombarded with employee issues, demands from their bosses, and a slew of other "to do" items that can make issue spotting for retaliation difficult to focus on. Here's a short hypothetical to help employers quickly issue spot for retaliation:

An hourly employee ("Susie") works the night shift as a front desk agent. She is often late to work and insubordinate to her supervisor. Susie's supervisor gets tired of these antics and issues a written warning to her for being late to work. The supervisor does not see this as a terminable offense as others have not been terminated for being late, but simply wants Susie to show up to work on time and be respectful. The following month, the same front desk agent continues to show up late and act insubordinate. The supervisor tells the GM verbally that he would like to terminate Susie. The supervisor explains that she is causing problems with scheduling and is further bringing down morale by setting a bad example. The GM does not make an immediate decision, but generally agrees that Susie needs to be let go. The next day Susie mentions to her supervisor that she has not been paid for all the time she worked and is owed wages. She also claims that others may have unpaid wages too. The supervisor quickly looks at her pay stubs and concludes that the complaint is baseless. Subsequently, the GM approves the termination and the hotel issues a termination form stating that it is "pursuant to her 'at-will' employment." After all, they can terminate for any reason and it was obvious that the employee was consistently late to work and insubordinate.

Issue Spotting In Real Time

Given this set of facts, Susie will have colorable claims for retaliation and wrongful termination. A plaintiff's lawyer will vividly describe to the jury how Susie innocently told the hotel about their illegal pay practices and how the employer terminated her because she complained. Susie's attorney will also argue that there is no evidence that Susie was insubordinate. Her lawyer will explain that the hotel wanted to line its pockets and that's why they didn't want to pay her proper wages. Of course, Susie was just trying to fight for her hard earned wages but this is how the hotel deals with people who speak up.

  • Issue No. 1 – Write up the employee immediately and completely. Employers must write up employees for violating of company policy. Susie was written up the first time for showing up late, but Susie was not written up for being insubordinate. She also was not written up the second time she was late and insubordinate. Instead, Susie was just terminated pursuant to her "at-will" employment. These actions create several problems. First, it eliminates any written evidence that she was insubordinate in the first place. Second, without a reason for the termination decision, it will be subject to challenge. It makes the employer look like they are hiding the true reason for the termination when it was as simple as being late to work. In this case, Susie will claim she was retaliated against because she complained about unpaid wages and the employer will not have anything to show otherwise.
  • Issue No. 2 – Be consistent with discipline. Susie was written up and ultimately terminated for being late to work and insubordinate. However, if other employees were showing up to work late without being written-up, Susie's retaliation claim just became much stronger. Employers must not give the impression that they are singling someone out. The best way to do that is to be consistent when implementing discipline. Writing up an employee for showing up late to work, in particular, gives the impression of retaliation if it is not consistently enforced.
  • Issue No. 3 – Investigate all complaints fully and communicate with employee. Employers should not disregard complaints, especially those regarding wages or discrimination. Supervisor may have investigated Susie's complaint, but he did not conduct a full investigation or find out exactly how Susie believed she was owed wages. He also did not inform Susie, in writing, that the complaint was investigated and resolved. This is necessary to "close the loop" with employee, to show that it was handled appropriately. Employers should have written confirmation to the employee that the complaint was handled and resolved.
  • Issue No. 4 - Ensure that all relevant decision-makers know what happened to make an informed decision. All company supervisors and managers must communicate with one another. Here, supervisor should have informed the GM that Susie made a complaint, especially since Susie was the subject of termination. This may have ended up saving the company thousands in legal fees. Armed with this information, the less risky decision would have been to forego termination and simply issue a second write-up for showing up late to work and being insubordinate. While there is no set timeframe for holding off on a termination after any "protected" activity, every day that goes by weakens the causal link to a retaliation claim.
  • Issue No. 5 – Document termination decisions immediately to establish a timeline. Retaliation claims are primarily about timing. As such, employers must be mindful of the timeline they are creating with every adverse action they take. When appropriate, internal employment related decisions should be properly vetted and documented. Here, an e-mail from the GM to supervisor approving the termination the day before Susie's complaint would be strong evidence that her termination was not related to her complaint.

Conclusion

Retaliation claims often arise based on circumstances that the employer may not have even realized existed. Any adverse employment action should be reviewed on a case by case basis, taking into account all available information. Following these issue spotting tips will help keep employers out of the courtroom.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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