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Strategies for Avoiding Employee Retaliation Claims

Deborah Neyens is an attorney, educator, and freelance writer with a B.A. in political science and a J.D. from the University of Iowa.

Employee retaliation claims are on the rise.  Learn how to avoid these claims in the first place.

Employee retaliation claims are on the rise. Learn how to avoid these claims in the first place.

Litigation of employment-based retaliation claims is on the rise. More charges of retaliation are being filed by employees than ever before, and the Equal Employment Opportunity Commission (EEOC) is prosecuting many of these claims.

Retaliation claims are on the rise.

Case in point: on August 23, 2011, the EEOC filed suit against a San Francisco car dealership, Fremont Toyota, claiming the dealership engaged in unlawful national origin harassment and retaliation against its employees. The complaint, filed in the U.S. District Court for the Northern District of California, alleges the dealership's general manager discriminated against four Afghani-American sales employees by, among other things, referring to them as "terrorists" during a staff meeting. After the salesmen reported the harassment, they claim their working conditions became so intolerable they were forced to resign. The suit further alleges that an Afghani-American manager who spoke out on behalf of the four men was fired for opposing the harassment.

The number of retaliation claims filed with the EEOC each year has nearly doubled since 1997. More than a third of all charges filed with the EEOC in fiscal year 2010 included allegations of unlawful workplace retaliation. The number of retaliation claims now exceeds all other categories of unlawful discrimination, including race discrimination, which historically had been the most frequently litigated discrimination claim.

What's behind the dramatic rise in claims?

What's behind the dramatic rise in claims? There are a few factors at play. First, a United States Supreme Court ruling has made it easier for wronged employees and their attorneys to prove unlawful retaliation. Employees used to have to show they suffered some tangible economic harm, such as loss of employment, demotion, or being passed over for a raise, in order to prevail in a retaliation case. In the 2006 case Burlington Northern & Santa Fe Railway Company v. White, the Supreme Court broadened the scope of what is considered retaliatory conduct.

Under the new, lower standard, an employee may be able to prove unlawful retaliation based on any "materially adverse" action that could dissuade a reasonable worker from complaining about discrimination or supporting another employee's complaint. Applying this standard, courts have found the following actions sufficiently adverse to state a claim for retaliation: an increased workload, a transfer to another office or to a less prestigious position, a negative performance evaluation, and revocation of telecommuting privileges.

How do juries view retaliation claims?

Another factor is a growing recognition that juries are more receptive to retaliation claims than other claims of discrimination. Employees are more likely to prevail in retaliation cases and receive significant damages awards than in other types of employment cases. Why? Because juries understand human nature. They realize a supervisor who is wrongfully accused of discrimination or harassment would find it difficult to treat the complaining employee as though nothing had happened. But that's precisely what the anti-retaliation laws require – to exercise superhuman restraint in the face of an accusation.

It's relatively easy for a jury to believe a supervisor struck back against an accusing employee with unlawful retaliation, even if the same jury also concludes the underlying discrimination complaint lacks merit. Employees and their attorneys, recognizing this dynamic and the potential for a huge payout, are becoming more savvy about playing the retaliation card whenever possible.

What does this mean for the employment relationship?

What does this mean for the employment relationship? It doesn't mean that employees can insulate themselves from the consequences of their poor performance or bad behavior simply by making a complaint of discrimination. It does mean, however, that employers need an effective strategy for avoiding retaliation claims.

The first step is to gain a solid understanding of what constitutes unlawful retaliation. The second is to take appropriate measures to ensure it doesn't happen in the workplace. As EEOC San Francisco District Director Michael Baldonado stated in a press release announcing the Fremont Toyota case, "We hope this lawsuit will remind employers to respond properly to complaints about harassment or discrimination, with timely investigation and steps to end any misconduct."

What Is Unlawful Retaliation?

Most federal and state employment discrimination laws contain anti-retaliation provisions. For example, Title VII of the Civil Rights Act of 1964, which contains broad protections against discrimination on the basis of race, color, religion, sex, and national origin, makes it illegal to retaliate against someone for complaining about discrimination, filing a charge of discrimination, or participating in an investigation or lawsuit involving alleged discrimination.

Other laws, such as the Sarbanes-Oxley Act of 2002 (SOX), protect "whistleblowers" who report unlawful activities. SOX, which was adopted in the wake of the Enron and WorldCom scandals, provides protections for employees of public companies who report corporate fraud. Additionally, many states recognize a common law cause of action for wrongful discharge if someone is fired for reasons that violate public policy, like the reporting of illegal or unsafe activities.

In order to prove unlawful retaliation, an employee generally must establish all of the following elements: (1) that he or she engaged in a protected activity; (2) that the employer took some adverse action against the employee; and (3) the existence of a causal connection between the protected activity and the adverse action.

Protected Activity

Under Title VII and other anti-discrimination laws, an employee may establish the first element of a retaliation claim by showing they engaged in either of the following kinds of protected activity: (1) conduct in opposition to unlawful employment practices; or (2) participation in an investigation, proceeding or hearing under the applicable statute.

Protected opposition not only includes making a formal complaint of discrimination, it also includes threatening to make a complaint, complaining about discrimination against oneself or others, and refusing to obey an order believed to be discriminatory. The opposed conduct need not be illegal; the employee need only reasonably believe it to be unlawful. The manner of opposition also must be reasonable. If an employee engages in illegal, disruptive, or dishonest conduct in opposition to unlawful employment practices, the employee generally will not be protected. For instance, an employee who takes confidential patient records or other employees' personnel records in violation of her employer's policy will not be protected even if she is trying to use the records to establish a job bias claim.

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Protected participation includes filing a charge of discrimination or lawsuit, testifying in a legal action against the employer, or providing an affidavit or other evidence during the EEOC's investigation of another employee's discrimination complaint. Generally, an employee who participates in an EEOC proceeding will be protected even if he or she is not acting reasonably or in good faith, in contrast to the reasonableness standard required to prove protected opposition.

Adverse Action

An employee may establish the second element of a retaliation claim by showing the employer took some action affecting the employee's employment status, compensation, benefits, or other terms and conditions of employment. This includes things like discharge, demotion, discipline, reassignment to less desirable work, or exclusion from training made available to other employees. The action must be "materially adverse" so as to dissuade a reasonable person from making or supporting a discrimination claim.

"Petty slights or minor annoyances" are not enough to establish adverse action. An employee claiming he was shunned as a result of his protected activity may not be able to establish unlawful retaliation unless he can show that the ostracism was so severe and pervasive that it impacted his terms and conditions of employment.

Materially adverse acts occurring outside the employment context may be deemed adverse action. For example, giving a negative reference after employment has ended could be sufficient to establish the second element of a retaliation claim.

Causal Connection

In order to establish the third element of a retaliation claim, the employee must be able to show the adverse action was taken as a result of the protected activity. A causal connection is very rarely proven by direct evidence, such as an admission by the decision maker. In most cases, the employee must rely on indirect, or circumstantial, evidence to make her case. The following factors may create an inference of retaliation:

  • Employer knowledge of the protected activity: An employer can't retaliate against an employee for protected activity it the employer isn't aware of it. A showing of prior knowledge is essential to the success of a retaliation claim but, without more, it generally won't be enough to establish a causal connection.
  • Temporal proximity: If the adverse action occurs very close in time after the employer learns of the protected activity, this temporal proximity may be sufficient to establish a causal connection. On the other hand, a significant lapse of time between the two events generally will defeat the claim. A good rule of thumb is lapse of at least six months will be damaging to a retaliation claim.
  • Failure to follow policies and procedures: If the employer fails to follow its own policies and procedures prior to taking action against the employee, this could be evidence of retaliation. For example, if the employer maintains a progressive discipline policy but does not follow all the steps in dealing with the employee, retaliation could be found.
  • Disparate treatment: Likewise, evidence that employer treated the employee differently than other employees who did similar things could create an inference of retaliation.
  • No documented history of performance problems: If the employer can show the employment action was contemplated prior to the protected activity, as documented in the personnel records, it will be difficult to prove retaliation. On the other hand, if the action is inconsistent with a history of positive performance evaluations, raises and bonuses, the employer will have some explaining to do.
  • Inconsistent reasons: If the employer doesn't stick to its original story as to the reason for the adverse action and later comes up with different or additional reasons, this is evidence of pretext that will shoot holes through the employer's defense.

The Burden of Proof

The employee must first make a basic showing that he engaged in protected opposition or participation of which the employer was aware and which followed closely in time by a materially adverse action, with or without other indicia of a causal connection. The employer then may defend itself by showing a legitimate, non-retaliatory reason for taking the action.

The employee gets one last shot to prove the employer's proferred reason was not the real reason and was merely a pretext for unlawful retaliation. Pretext may be found if there are inconsistencies in the employer's documentation or stated reasons for taking action against the employee or between the action and the employer's own policies or past practices.

Ten Strategies for Reducing the Risk of Retaliation Claims

  1. Develop and maintain an effective no retaliation policy. At a minimum, a zero tolerance stance against retaliation should be articulated in the employer's anti-discrimination and harassment policies and as part of its corporate compliance program. Consider also implementing a stand-alone no retaliation policy.
  2. All employees should be trained on the no retaliation policy and on the procedures for reporting complaints. Supervisors and managers should be trained on how to respond to complaints that are brought forward by employees and how an inadequate or inappropriate response could lead to a retaliation complaint.
  3. Effectively manage investigations. If an employee complains about discrimination, the complaint must be treated seriously with a prompt and thorough investigation. Anyone involved in the investigation, including any employees who are interviewed, should be reminded of the no retaliation policy and advised they must maintain strict confidentiality regarding the investigation. Information about the complaint and the investigation should be disclosed on a need to know basis only. If people don't know about the complaint or know who participated in the investigation, it will be difficult for an employee complaining of retaliation to make a causal connection between an employee's protected activity and any subsequent adverse action.
  4. Apply policies consistently. An employer must apply the same standards of performance and conduct across the board. If the employer lets policy violations slide for some employees but disciplines another employee for the same or less serious conduct, it opens the door to claims of disparate treatment that could support a retaliation claim.
  5. Address and document performance issues. Employers should evaluate employee performance on a regular basis (at least annually) and should document and address any performance problems in a prompt manner. Avoid the temptation to ignore the problem or to inflate the performance score. Solid documentation that an employee was not meeting performance expectations and did not improve upon coaching will provide the employer with a legitimate, non-retaliatory reason for taking adverse employment action.
  6. Carefully review discipline and termination decisions. Before taking action, make sure all the reasons for the action are documented and there is objective evidence supporting the reasons. Ensure the stated reason for the action is not contradicted by any documentation pertaining to the employee's performance or work history (such as performance reviews, salary increases, bonus awards). If the employee recently has engaged in any of the following activities, carefully evaluate the facts and circumstances to ensure there is no causal connection between the employee's activity and the adverse action:
    • Reported or complained about any illegal or unethical activity or a violation of company policy or rules.
    • Filed a complaint with an external agency or a lawsuit regarding any work-related matters or participated in an external complaint investigation or other proceeding.
    • Engaged in union activity (such as organizing or picketing) or other concerted activity.
    • Complained to the employer or others about corporate fraud, unsafe work practices or other matters that would affect the public interest.
  7. Be honest about the reason for the adverse action. Don't try to sugarcoat the true reason for taking action against an employee. If the employee is being discharged for poor performance, don't pretend it was due to job elimination. If the position is refilled a short time later, the stated reason will appear to be a pretext for an unlawful reason.
  8. Consider bringing in a new decision maker. If an employee has complained about a supervisor, consider restructuring the environment so the accused supervisor is no longer in a position to make employment decisions about that employee. Be careful that any changes made are not materially adverse to the employee and do not impact the employee's compensation, benefits, and other terms and conditions of employment. Also make sure the new decision maker is acting independently of the "tainted" supervisor's input to dispel any retaliatory inference.
  9. Reconsider and fix bad decisions. Conduct an impartial review of the adverse action and take corrective action if necessary. Prompt rescission of a prior employment action may shield an employer from liability.
  10. Consider a severance package as a last resort. Sometimes an employer just can't get around a bad set of facts. In that case, consider offering the employee a severance package conditioned upon the employee signing a broad release of all employment-related claims. For such a release to be valid, the employee must receive some consideration beyond what she otherwise would be entitled. For example, if an employee is required to sign a release in order to receive her final paycheck, the release would not be legally binding. Consult with legal counsel to make sure the release will hold up in a court of law.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.


Deborah Neyens (author) from Iowa on April 14, 2015:

Thanks for reading and commenting, BizWhiz.

TheBizWhiz on March 07, 2015:

This topic is often overlooked. Thanks for bringing it to the forefront! Great Hub.

Deborah Neyens (author) from Iowa on January 02, 2014:

Thanks you for reading and commenting, Benjamin.

Benjamin Chege on November 09, 2013:

Hi Deborah Neyens. I think in this day and age it is rather sad that some employers still discriminate against other employees. Your guidelines against this vice are not only easy to implement, but also effective. Well thought out hub!! Voted up, useful and awesome.

Deborah Neyens (author) from Iowa on July 18, 2012:

Thanks for the comment and votes, UnnamedHarald. Severance agreements generally are legally enforceable provided the employee receives something of value in exchange for giving up his or her rights, wasn't coerced or tricked into signing the agreement, and the agreement is written in plain, understandable terms. (I'm simplifying a bit here, but that's the basic gist.) A careful employer also will advise an employee to seek legal advice before signing. If the agreement was reviewed by the employee's own attorney, the employee would have a tough time arguing that he or she didn't understand what was agreed to.

David Hunt from Cedar Rapids, Iowa on July 18, 2012:

Very interesting-- especially about the severance document. I often wondered how a severance contract could hold up in court since it's basically an agreement requiring the employee to forego his or her legal rights. I guess the employee offerred such a deal needs to assess the amount versus the likelihood of a successful suit. Voted up, interesting and useful.

Deborah Neyens (author) from Iowa on February 18, 2012:

Thanks for being the first to comment on this lonely little hub, Trsmd. : )

Trsmd from India on February 18, 2012:

I wonder by seeing the hub that you have written a nice one with excellent words and more words, bur still why no comments here, the more words made them to quit? Thanks for SHARING:)

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