Retaliation: Not smart or productive employer behavior

By G. Phillip Shuler

Recent case law suggests that many employers successfully defend an initial claim of harassment, discrimination or whistle blowing only to lose a retaliation claim that grew out of the initial claim.

Data from 1996-2002 establishes that retaliation claims result in substantial verdicts and judgments.

The median award for manufacturing and industrial companies is $200,000 while the probability range tops at almost $600,000. The total range tops at $28 million. The probability range for all defendants tops at $377,500.

The obvious reason for these high awards is that juries, even courts, do not respond favorably to employers who are perceived as beating up on their employees who exercise their protected rights.

Employees are protected from retaliation for engaging in protected activity even if it is ultimately decided that their underlying claim had no merit. For example, if a plaintiff in a lawsuit alleges sexual harassment and retaliation for making the claim of sexual harassment, it is quite possible for the jury to decide that although the plaintiff was not sexually harassed she was retaliated against for making the claim and thus award actual compensatory and punitive damages.

This data suggests that an employer's job is not complete upon the conclusion of an internal investigation resulting in a finding of no inappropriate conduct. This is the time to be vigilant to ensure that no one in your organization retaliates against the complaining party.

Numerous federal and state statutes and common law causes of action prohibit employers from retaliating against or punishing any employee who participates in protected activity.

Thus, any "negative" conduct toward the employee who made the first report or complaint or any other employee who participated in the investigation can result in a complaint of retaliation, can lead to a lawsuit and may result in judgment against the employer.

Damages can typically include not only actual economic damages but "compensatory damages" including mental anguish and punitive damages.

Some of the statutory bases of retaliation claims are:

• Complaining of discrimination on the basis of race, color, religion, sex or national origin or testifying, assisting or participating in any manner in an investigation, proceeding or hearing relating to a complaint of discrimination on the basis of race, color, religion, sex or national origin.

• Complaining of discrimination on the basis of disability or opposing disability discrimination or testifying, assisting or participating in any manner in an investigation, proceeding or hearing regarding a claim of disability discrimination.

• Complaining of age discrimination or testifying, assisting or participating in any manner in an investigation, proceeding or hearing relating to a complaint of age discrimination.

• Asserting a right to take family or medical leave under the Family Medical Leave Act.

• Filing a complaint under the Fair Labor Standards Act, complaining of, for example, failure to pay overtime or failure to pay minimum wage.

• Complaining about or assisting others in complaining about OSHA violations.

• Seeking to organize other employees to be represented by a labor union, or filing a complaint or giving testimony in a claim under the National Labor Relations Act or the Railway Labor Act.

• Seeking benefits under an employee benefit plan, or filing a claim under such plan.

• Engaging in any lawful act taken to provide information, cause information to be provided (either within the corporation or to an appropriate outside official), or otherwise assisting in an investigation, regarding conduct which the employee "reasonably believes" constitutes a violation of certain criminal provisions, any SEC rule or regulation, or any provision of federal law relating to fraud against shareholders.

Notably, it is not only the employee who raises or files a complaint who is protected, but any employee who participates in the investigation or resolution is also protected against retaliation.

This list covers at least most of the federal retaliation laws, it is not an exclusive list. Many states have statutes or common law causes of action that make other activities "protected."

For example, a Louisiana statute prohibits retaliation for filing a workers' compensation claim and, more importantly, Louisiana's Revised Statutes specifically provide that "No employer shall discharge or in any other manner discriminate against any employee because such employee has testified or furnished any other information in any investigation or proceeding relative to the enforcement of any of the labor laws of this state."

What constitutes retaliation? In order for conduct to constitute retaliation, it must result in at least some harm to the protected employee, however slight. Not surprisingly, different courts have different standards of "harm" to which the conduct must rise to constitute retaliation sufficient to support a lawsuit.

Courts have held the following employment actions and workplace conduct sufficiently harmful to the protected employee to allow that employee to pursue a retaliation lawsuit:

• failure to promote

• refusal to consider paying additional severance pay after the employee's position was eliminated

• demotion with no decrease in pay

• suspension without pay, even though the lost pay was subsequently reimbursed (loss of use of the funds for the time they were unpaid)

• lateral transfer to a different position with different duties

• co-worker harassment

• undeserved performance ratings

• an unfavorable job reference (note that former employees can raise claims of retaliation for protected activity)

• supervisors calling employee a "liar," a "rabble-rouser" and a "trouble-maker"

• ostracism by co-workers including refusal to work with employee, approved and acquiesced in by employer

One form of treatment that can lead to a retaliation charge is selective enforcement of rules. On more than one occasion supervisors, after learning of an employee participating in protected activity, adopt an attitude that can best be characterized as, "So you want to live by the rules - we'll live by the rules."

A workplace that has been somewhat loose or lenient in making its employees abide by the policies and procedures of their employer is suddenly transformed to a workplace in which rules are rigidly enforced - often with regard to only the employee who filed a complaint or participated in other protected activity.

That rigid rule enforcement could, in turn, lead to lower performance ratings or other negative result for the employee who engaged in protected activity. Just because an employer has rules - even written rules - does not mean that supervisors can selectively enforce the rules without drawing a charge of retaliation.

Editor's Note: G. Phillip Shuler is a partner in the New Orleans office of Chaffe, McCall, Phillips, Toler & Sarpy.