Wrongful Discharge Law: Three Key 2010 Missouri Supreme Court Decisions

In 2010, the Missouri Supreme Court decided three important cases on the doctrine of wrongful termination in violation of public policy.

Two cases clearly favored employees, easing their burden of proof in one and extending the right to sue to a broader range of employees in the other. The third provided some limits on this right to sue that will be helpful to some employers defending against these claims.

“Contributing Factor” Wrongful Termination Standard: Fleshner v. Pepose Vision Institute, P.C.

Facts

In Fleshner v. Pepose Vision Institute, P.C., 304 SW 3d 81 (2010), an employee received a phone call from a Department of Labor investigator seeking information about her employer. She disclosed facts about hours worked by employees. She then reported this conversation to her supervisor. The company terminated her the next day.

Proceedings

A jury found the employer liable and awarded $30,000 in actual damages and $95,000 in punitive damages.

On appeal, the employer claimed the trial court erred in not using a jury instruction requiring “exclusive causation, but instead using one that required the terminated employee to show only that she was discharged “because of” her conversation with the investigator.

Holding: Public Policy Exception Burden of Proof

The Supreme Court of Missouri applied the following public-policy exception to the at-will employment doctrine:

An at-will employee may not be terminated:

  1. for refusing to violate the law or any well-established and clear mandate of public policy as expressed in the constitution, statutes, regulations promulgated pursuant to statute, or rules created by a governmental body, or
  2. for reporting wrongdoing or violations of law to superiors or public authorities.

If the employer terminates an employee for either of these reasons, the employee has a cause of action in tort for wrongful discharge based on the public-policy exception.

This amounted to an adoption by the state’s highest court of a standard that had been developed and applied by the lower Missouri state courts over the last 25 years, but had never been directly endorsed or rejected by the Supreme Court of Missouri.

Contributing factor, not exclusive causation

The court held that the proper jury instruction on the causal standard for a public-policy exception is “contributing factor.” That is, the terminated employee’s protected activity of refusing to violate law or complaining about unlawful conduct need not be the only reason for termination, just a reason contributing to the employer’s termination decision.

The court reasoned:

[P]ublic policy requires rejection of “exclusive causation” as the proper causal standard for the public-policy exception. Employees would be discouraged from reporting their employers’ violations of the law or for refusing to violate the law if “exclusive causation” were the standard. An employee who reported violations of the law or who refused to violate the law could be terminated, without consequence, by the employer.

Upon a lawsuit alleging wrongful termination in violation of public policy, the employer could assert that, while the employee’s reporting or refusal played a part in the decision to terminate, the employee was also fired for another reason, such as reporting for work late or failing to follow the dress code. “Exclusive causation” would result in an exception that fails to accomplish its task of protecting employees who refuse to violate the law or public policy.

The court stated that trial courts should use a modified MAI § 31.24 instruction, applying the “contributing factor” analysis, until a specific instruction for the public-policy instruction is adopted.

Wrongful Discharge Claim Available to Contract Employees, Not Just At-Will Employees: Keveney v. Missouri Military Academy

Facts

In Keveney v. Missouri Military Academy (2010), a teacher employed under a written employment contract providing the employer could terminate employment for cause alleged he was terminated because he insisted his superiors report to family services authorities evidence that a student was being physically abused. He alleged his superiors refused to report this, told him his job would be jeopardized if he reported it, and terminated his employment the same day.

Proceedings

The terminated employee alleged wrongful discharge and breach of contract. The circuit court dismissed the wrongful discharge claim and claims for punitive damages and emotional distress, but the jury awarded $13,300 in damages for breach of contract, which the employer appealed.

In a cross-appeal, the employee asserted that wrongful discharge claims should be available to contract employees and, alternatively, that contract employees should be able to obtain punitive damages and damages for emotional distress under a whistleblower breach of contract claim.

Holding: Contract Employees May Sue for Wrongful Discharge In Violation of Public Policy

Missouri courts had previously not applied the wrongful discharge cause of action to contract employees. But in Keveney, the Supreme Court of Missouri found three compelling reasons to allow contract employees to pursue such an action:

  1. Limiting the wrongful discharge cause of action to at-will employees fails to recognize the distinct underlying purpose of the wrongful discharge cause of action. “A discharge is ‘wrongful’ because it is based on the employer’s attempt to condition employment on the violation of public policy expressed in applicable constitutional, statutory or regulatory provisions.” This is entirely independent of the terms of the employment contract.
  2. Given the distinct interests at issue in a wrongful discharge action as opposed to a contract action, it follows that the remedies are distinct. An employee discharged in violation of an employment contract can recover the amount of income he or she would have earned absent the breach, less interim earnings. But if an employee is discharged for refusing to violate a public policy requirement, a breach of contract action fails to vindicate the violated public interest or to provide a deterrent against future violations.
  3. It is inconsistent to allow an at-will employee to pursue an action for wrongful discharge while denying a contract employee the same right, because this illogically grants at-will employees greater protection from these tortious terminations, due to an erroneous presumption that the contractual employee does not need such protection.

Applying these principles, the court held in Keveney that contract employees can pursue a claim for wrongful discharge. The Court also found that the terminated employee had satisfied the requirement that he allege his discharge was caused by his refusal to perform an illegal act or engage in conduct that violates public policy.

Public Policy Wrongful Termination Claim Must Be Based Based on Specific Law: Margiotta v. Christian Hospital Northeast Northwest

Facts

In Margiotta v. Christian Hospital Northeast Northwest d/b/a Christian Hospital and BJC Health System, (2010), a terminated at-will employee brought a wrongful termination action against his former employer, alleging he was terminated for reporting violations of federal and state regulations.

He alleged he was terminated because he continuously reported incidents of safety violations pertaining to patient care to his supervisors. Although these reports predated his termination by almost two years, he argued the termination was in retaliation for them.

Proceedings

The trial court granted summary judgment in favor of the employer, and the Supreme Court affirmed.

Holding: Terminated Employee’s Complaints Did Not Allege Violations of Specific Legal Provisions

The Court stated that to prevail on a whistle-blowing claim, a terminated employee must show they “reported to superiors or to public authorities serious misconduct that constitutes a violation of the law and of well-established and clearly mandated public policy” as expressed in “a constitutional provision, a statute, a regulation based on a statute or a rule promulgated by a governmental body.”

However, “not every statute or regulation gives rise to an at-will wrongful termination action. . . . A vague or general statute, regulation, or rule cannot be successfully pled under the at-will wrongful termination theory, because it would force the court to decide on its own what public policy requires.” “The pertinent inquiry . . . is whether the authority clearly prohibits the conduct at issue in the action.”

The Court found that the health care regulations cited as the basis for the terminated employee’s complaints “did not constitute a clear mandate of public policy.” A federal regulation providing that a “patient has the right to receive care in a safe setting” did not specifically address the incidents forming the basis of the complaints. A state regulation cited was inapplicable because it dealt with building safety, not patient treatment, and the terminated employee had complained about the latter.

Family Responsibilities Discrimination Quiz

This quiz was created by The Center for WorkLife Law. It will help you identify family responsibilities discrimination (FRD) issues, and learn more about how employers can prevent FRD. Best of all, this quiz won’t be graded, so it should be painless and instructive.

Questions:

The Number of FRD Cases

Over the past ten years, the number of FRD cases filed by employees has:

a. Remained about the same.

b. Decreased by 50%.

c. Doubled.

d. Increased almost 400%.

The answer is D. According to the WLL 2010 Litigation Update Report, the number of family responsibilities discrimination (FRD) cases filed by employees increased by nearly 400% from 2000-2010. During that time, the number of FRD cases decided by courts increased by nearly 300%. (See WorkLife Employer Alert, February 2010, for more discussion of the 2010 litigation update report.)

Caregivers

The following employees are considered “caregivers” under family responsibilities discrimination law:

a. Mothers and fathers.

b. Grandparents.

c. Children of elderly parents.

d. All of the above.

The answer is D. FRD occurs when an employee suffers discrimination at work based on unexamined biases about how employees with family care-giving responsibilities will or should act. Any employee who takes care of family members is a caregiver for FRD purposes. (See the EEOC’s Enforcement Guidance on Unlawful Disparate Treatment of Workers with Caregiving Responsibilities.)

No Federal Statute

Since there is no federal statute prohibiting family responsibilities discrimination, the following is true:

a. Employers in states that do not have state laws prohibiting FRD can ignore the issue.

b. All employers can ignore the issue because federal law would pre-empt state law on FRD, and there is no federal law prohibiting FRD.

c. All employers need to educate themselves on FRD because liability for discrimination against caregivers can arise in any state under a variety of statutory and common law theories.

The answer is C. All employers need to educate themselves about FRD, and how to prevent it. Although there is no federal statute expressly protecting workers from adverse employment actions based on their family caregiving responsibilities, a rapidly growing body of case law has found protections under at least 15 separate legal theories, including, among others: Title VII, FMLA, Americans with Disabilities Act, ERISA and state and local laws. (See Caregivers as a Protected Class?: The Growth of State and Local Laws Prohibiting Family Responsibilities Discrimination, by Stephanie Bornstein and Robert J. Rathmell, December 2009).

Accommodating Parents

Mrs. Westerby is a stock clerk with excellent reviews at Smiley’s Shoppe, which is open from 10 am to 7 pm M – F. All stock clerks work 9 am to 5 pm. Mrs. Westerby cannot drop her kids off at school until 9:30 am, so she proposes that she work 10 am to 6 pm each day. This would be a first for Smiley’s Shoppe. Smiley’s Shoppe should:

a. Deny Mrs. Westerby’s request because there is no law requiring it to agree to change its hours to accommodate employee childcare needs.

b. Agree to Mrs. Westerby’s request because she is a mother, and mothers should receive special treatment.

c. Deny Mrs. Westerby’s request because granting it is a bad precedent, and other stock clerks may demand individual schedules.

d. Consider Mrs. Westerby’s request, and whether it will interfere with Smiley’s Shoppe’s business. Even though the change may not be required by law, if the change does not affect Smiley’s Shoppe’s business, it would be helpful to grant it to retain a good employee like Mrs. Westerby.

The answer is D. The law does not require employers to accommodate employee child care needs in most cases. However, the company should determine whether the denial of Mrs. Westerby’s schedule change is discriminatory or retaliatory, and whether such a change would negatively affect Smiley Shoppe’s business. Although Smiley Shoppe may not be legally required to make the schedule change, it may want to agree to the change to retain a good employee. See Corporate Voices Study Links Workplace Flexibility for Hourly Workers/Attainment of Business Financial Goals and Core Objectives, by Corporate Voices for Working Families (Washington 2009.)

FMLA Leave

Mr. Philby is a marketing manager at Axel Co. He reports to Mr. McLean. Mr. Philby requests an FMLA leave to care for their newborn. Mr. McLean should:

a. Check on Mr. Philby’s eligibility for FMLA leave, and provide him with the proper forms if he is eligible.

b. Deny Mr. Philby’s request because his wife is at home, and the FMLA only allows one caregiver to take FMLA leave at a time.

c. Ask Mr. Philby if there is any family in the area who can pitch in, since men should be the breadwinners — not the babysitters — in a family.

d. Tell Mr. Philby that he feels bad for his family situation, but that he needs Mr. Philby to work full-time. Mr. McLean offers to help out by pulling strings at recommended day care center for Mr. Philby’s baby.

The answer is A. If Axel Co. is covered by the FMLA, and Mr. Philby is eligible for FMLA leave (or leave under a similar state law), Axel Co. must provide Mr. McLean with the appropriate forms, including a notice of benefits and medical certification for his wife’s health care provider to complete. Mr. McLean must not let his own stereotypes about male and female roles affect his treatment of caregivers of either gender. (See WLL Employer Alert, July 2010, for more information on certain FMLA requirements.)

Damages

In a case for gender discrimination, including claims of family responsibilities discrimination, a plaintiff can recover the following types of damages:

a. Back pay.

b. Future wages (Front pay).

c. Attorneys’ fees

d. Punitive damages.

e. All of the above.

The answer is E. In a case for gender discrimination, including a claim of family responsibilities discrimination, a plaintiff (or plaintiffs in a class action) can recover all of these types of damages and fees. In a 2010 case, Velez v. Novartis, a federal jury in New York ordered Novartis Pharmaceutical, Inc. to pay over $250 million in damages, including punitive damages, to current and former female Novartis employees who brought claims of gender discrimination, including FRD. (See WLL Employer Alert, June 2010, for more discussion of the Novartis case).

Disabilities

Mrs. Magnus, a well-reviewed employee of Pym Co., goes home every day for lunch to help her disabled husband. Mrs. Magnus’ supervisor makes a new rule that bars all Pym Co. employees from leaving the workplace during the lunch break. Mrs. Magnus complains to Pym Co. that this rule discriminates against caregivers. How should Pym Co. respond?

a. There is no need For Pym Co. to respond. Companies have the right to make workplace rules that apply to all employees.

b. HR should find out whether there is a legitimate business reason for adopting the new rule, or whether the rule was adopted to discriminate against Mrs. Magnus because she has a disabled husband.

c. Do nothing. Mrs. Magnus’ husband is disabled, but the Americans with Disabilities Act does not protect Mrs. Magnus because she is not disabled.

The answer is B. Pym Co. has the right to make reasonable workplace rules. The lunch break rule applies to all employees, so it appears not to discriminate against caregivers per se. Nonetheless, HR should investigate further because the adoption of the rule may violate anti-discrimination laws. For example, the Americans with Disabilities Act (ADA) protects employees from “Association Discrimination” — discrimination based on the employee’s relationship to an individual with a disability.

HR also should discuss this new rule with Mrs. Magnus’ supervisor to determine if there is a legitimate business reason for the rule. It is possible that the supervisor adopted the rule to retaliate against Mrs. Magnus, or does not want Mrs. Magnus working at Pym Co. because he believes she will take more time off due to her disabled husband. (See Employer Alert, August 2010, for more discussion of Association Discrimination under the ADA.)

Family Status Discussion in Job Interviews

During a job interview with HR at Burgess Co., Mr. Blunt volunteers that his wife is pregnant with triplets. The HR Manager should:

a. Ask Mr. Blunt about his plans to take time off when the babies arrive. It is legal to ask because Mr. Blunt volunteered the information about the triplets.

b. Not ask Mr. Blunt any questions about his family plans, and assess his suitability for the job based only on Mr. Blunt’s qualifications.

c. Decline to hire Mr. Blunt because the poor guy will have his hands full, and will not be able to do a good job at Burgess Co.

d. Hire Mr. Blunt if he is qualified, but give him extra work so that he knows how hard it will be to keep this job when he has more responsibilities at home.

The answer is B. Mr. Blunt’s family status or plans should have no bearing on Burgess Co.’s decision whether to hire him. An employer should not ask questions about family responsibilities, even if the questions are well meaning, during interviews. This is true even if the employee raises the topic, as Mr. Blunt did in his interview. Mr. Burgess should only be concerned with Mr. Blunt’s ability to perform the job, and not with how he will arrange his family situation to allow him to get to work. (See WLL Employer Alert, October 2010, for more discussion of interviewing practices.)

© 2002-2010 The Center for WorkLife Law

Supreme Court Upholds “Relative” Retaliation Claim; Avoids Setting “Bright Line” Rule — Part II, Assessing Thompson Decision’s Significance

Supreme Court Photo By Flickr User dbking
Previously, we discussed the decision of the Supreme Court in Thompson vs. North American Stainless , which unanimously upheld a retaliation claim by the fiancé of an employee who had filed a discrimination charge. This week, we further analyze the ruling and its significance.

The Supreme Court’s Decision: Today’s Court Less Pro-Business Than Some Claim?

Hans Bader of The Examiner headlined his take on Thompson : “The Supreme Court once again shows it is NOT pro-business.

This is part of a long line of rulings against employers by the Supreme Court, which is not pro-business at all, contrary to the false claims of many liberal reporters who cover the Supreme Court. Many of these rulings against employers, like Lewis v. Chicago (2010), have been unanimous reversals of lower court decisions.

Of course, it’s not a simple matter of pro-or anti-business; the Court applies the law, not its political inclinations (though the latter may play some role). In employment cases, it must rule in a manner supported by both the statutory text and a rather large body of Supreme Court law developed during the four-plus decades since enactment of the 1964 Civil Rights Act.

Thompson Follows Burlington Holding

Thompson is a logical outgrowth of the decision in Burlington Northern vs. White , which was also a “pro-employee,” not pro-big business, ruling.

In Burlington, the Supreme Court unanimously found that a retaliation claim could be based not only on so-called “ultimate employment decisions,” but also on lesser employer actions that are materially adverse — those that might “have dissuaded a reasonable worker from making or supporting a charge of discrimination.” In Burlington, the Court upheld a claim alleging that a reassignment to different duties and a suspension without pay constituted unlawful retaliation.

The Burlington case expanded the potential for cases such as Thompson to be heard — by allowing third-party retaliation claimants to argue that the action taken against them is the type of thing that might have dissuaded their friend or relative from complaining of discrimination. Indeed, the Court bought this reasoning, being compelled to follow Burlington and finding the Thompson holding inevitable under the Burlington standard.

The Increased Popularity of Retaliation Charges

The EEOC reported that 99,922 discrimination charges were filed in 2010, compared with 93,277 in 2009, 95,402 in 2008 and 82,792 in 2007.

Last year, for the first time ever, retaliation under all statutes (36,258) surpassed race (35,890) as the most frequently filed charge, while allegations based on religion (3,790), disability (25,165) and age (23,264) increased. Historically, race had been the most frequently filed charge since the EEOC became operational in 1965.

Retaliation has always been a fairly common charge, often made in conjunction with allegations of another type of discrimination, such as race or gender. (The form for filing charges with the EEOC has boxes to check which type(s) of discrimination are alleged, including retaliation, and multiple boxes can be checked.)

Thompson may further increase the volume of retaliation charges. As Burlington expanded the range of conduct that may support such a charge, Thompson expanded the class of persons who may file such a charge. Between the two cases, the Court has significantly expanded the volume of potential retaliation charges.

True Charges of Retaliation or Merely Unpleasant Termination of Employment Followed by Actual or Feared Long-Term Unemployment?

In a New York Times article earlier this month, “More Workers Complain of Bias on the Job, a Trend Linked to Widespread Layoffs,” Michael J. Zimmer, an employment law professor at Loyola University in Chicago, said, “The uptick in EEOC complaints is directly correlated to the downtick in employment.”

Employment lawyer Michael S. Burkhardt, of Philadelphia’s Morgan, Lewis & Bockius, said that the majority of charges being raised to the EEOC are merely results of the upset of the affected party in being terminated. He also said that some charges are filed with the EEOC if the party suspects they will soon be laid off in order to make their termination more difficult, as the original charge while still employed can become the basis for an additional retaliation charge upon termination.

How Slippery is the Slope?

North American Stainless, the employer in the Thompson case, argued before the Court that upholding the claim in Thompson would have a “slippery-slope” effect — that it would open the door wide for retaliation claims based on all manner of relationships to an employee who exercises rights under the discrimination laws.

It may have been a poor strategy to rely heavily on the slippery slope argument. Such reasoning is so weak it has often been described as a logical fallacy.

The best response to the slippery slope argument is to refuse to take the bait and instead say that while the extreme at the bottom of the slope is indeed obviously unacceptable, somewhere in the middle, part way down the slope, there is a line. Essentially, a court can say, “The line may be fuzzy, but we’ll know when we’re crossing it – and we’re nowhere close in this case.”

Not surprisingly, that’s pretty much what the Court said in Thompson. The Court was cautious about not wanting to expand the right to file third party retaliation claims to more casual relations. Beyond family members – or near family members such as a fiancé or domestic partner – there appear to be a relatively few situations in which a third-party retaliation charge could succeed. A court would probably not rule in favor of mere acquaintance-like work friends.

Thompson is an Example of “ Hard Cases Make Bad Laws

The claim in Thomson was undeniably unusual. It was unusually sympathetic (what a prelude to a wedding!). It was also factually unusual, as it is not often that: (a) both members of an engaged couple work for the same employer and (b) one of them gets fired shortly after the other complains of discrimination.

All too often, appellate court decisions remind one of the old maxim, “Hard cases make bad law,” meaning “exceptional legal cases aren’t suitable as the source of generalized laws.” There may be an important legal issue at stake in “hard cases,” such as Thompson, but the facts are exceptional, and the decision is likely to have a negative impact on much less exceptional cases. Even if courts stop well short of the bottom of the “slippery slope,” litigation of less exceptional cases testing that limit will be encouraged by a “hard case.”

What is the lawyer’s obligation in such a case? Obviously the lawyer’s obligation is to the client’s representation, not the law’s development. Yet the client will also be affected if the outcome is “bad law.” So, particularly in deciding whether to attempt to have a case heard by the Supreme Court (or, as in this case, reheard en banc at the Circuit level), a valid consideration a good attorney should raise is whether this is the best possible case to make into a test case. Perhaps North American could have or should have settled after losing the Circuit panel decision or even while the plaintiff was pursuing a grant of certiorari by the Supreme Court (almost always a long shot) — especially if it had some decent facts on why it fired the fiancé.

Advice on Preventing Third-Party Retaliation Claims

There is concern about an employer’s ability to make a termination decision when the employee’s relationship to others who complained of discrimination must be taken into account.

David Murphy of Morrison & Foerster’s Palo Alto law office said, “As a result of this decision, employers when taking more serious disciplinary or other significant employment actions need to be aware of whether the employee involved is related to or involved with a prior discrimination claimant in anything more than a ‘mere acquaintance’ status.”

This would be true if the best practice in employment decision-making was to first assess whether an employee had any protected characteristic (both visible, such as race or age, or invisible, such as having exercised rights under workers’ compensation, discrimination, or other laws) and then take special care with those who have such a characteristic, while relaxing scrutiny and allowing supervisors freer reign and discretion with the prototypical unprotected employees — white males under 40 with no disabilities who never complained about anything or exercised any protected legal rights.

This is not the best practice. Though employment lawyers always like to know about protected characteristics when advising on an employment decision, our advice should not be dependent on that fact. The best practice to follow is to treat everyone the same under similar circumstances, and to document decisions well in case it is necessary to defend them to the EEOC or in court, protected characteristic or not. That is what compliance with equal employment opportunity law requires. A decision can’t be based on whether a person is a certain protected age, race or sex, or has engaged in activities protected against retaliation – or is in a relationship with someone who has — but on whether it is a good decision.

Prior to terminating an employee, rather than investigating whether they have family or friends who have made discrimination complaints and thus might provide a basis for a third-party retaliation claim, an amployer might be better off having defenses of ignorance and fair treatment. If North American’s decision-makers who fired the plaintiff in Thompson hadn’t even known about the relationship with the fiancé or about the fiancé’s discrimination charge, such ignorance would have been a powerful defense!

Closing Thoughts on Defending Third-Party Retaliation Claims

Brian Van Vleck, in an article called “Retaliation by Association is Illegal—Thompson vs. North American Stainless, L.P.” in the California Workforce Blog, brings up a good point about the possibility of termination in relation to retaliation discrimination.

But this alleged scenario — terminating employee A for the sole purpose of hurting employee B — is probably not very common in the real world. A more likely scenario is that once a whistleblower is terminated, his supporters or protégées may find themselves on the chopping block because they are now perceived as part of a disfavored or disloyal faction which has just lost its patron.

So Van Vleck is suggesting a subtle distinction: that between a third-party termination that truly has a retaliatory motive of punishing the originally complaining employee and one that has a motive of punishing the third party in a form of guilt by association. That might be a tough distinction to get across on summary judgment or before a jury – which is not to say one shouldn’t attempt it in an appropriate case.

Another good approach to defense of a Thompson-type third-party retaliation claim would be to focus on applying the Burlington test to the relationship between the parties involved. One would ask, for example, how many employees who truly felt aggrieved by discrimination would be dissuaded from filing a charge by the thought that a beer-drinking buddy, sometime dating companion, or frequent lunch-mate might get fired – and how likely it would be that the employer took such an action with a retaliatory motive.

Supreme Court Upholds “Relative” Retaliation Claim; Avoids Setting “Bright Line” Rule — Part I, the Decision

Ruling in Thompson Fiancé Retaliation Case

Court Uphold’s Fiancé’s Retaliation Complaint

In Thompson vs. North American Stainless, the Supreme Court addressed whether a friend or relative of an employee who made a complaint of discrimination may pursue a claim that they suffered retaliation because of that complaint — despite not having been the one who made it.

In a brief opinion penned by Justice Scalia, the Court unanimously held that such claims may be brought under some circumstances, including those before the Court in Thompson, in which the person alleging retaliation was the original discrimination complainant’s fiancé.

The Court expressly “decline[d] to identify a fixed class of relationships for which third-party reprisals are unlawful,” leaving this to case-by-case determination. The Court did, however, provide some useful guidance to lower courts confronting this issue:

We expect that firing a close family member will almost al­ways [be actionable], and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.

Third-Party Retaliation Issue Raised By Simple Story of Employee and Her Fiancé

The story leading to the retaliation charge dates back to February 2003, when Miriam Regalado filed a gender discrimination charge against North American Stainless, her employer at the time, after being fired.

Three weeks later, Regalado’s fiancé, Eric Thompson, was also terminated. Thompson then filed his own discrimination charge, claiming his termination was in retaliation for Regalado’s discrimination charge.

This charge led to a lawsuit that made its way to the Supreme Court after a 2006 summary judgment for the employer, a Sixth Circuit reversal, and then a 2009 en banc rehearing in which the Sixth Circuit affirmed the original summary judgment, reasoning that because Thompson did not “engag[e] in any statutorily protected activity, either on his own behalf or on behalf of Miriam Regalado,” he “is not included in the class of persons for whom Congress created a retaliation cause of action.”

This simple statement of facts at the Supreme Court level may leave some readers wondering why it took from 2003 to 2011 to obtain a final ruling from the Supreme Court. Part of the explanation is that each step along the way takes time, while issues are briefed and, at some stages, orally argued.

But part is that cases that appear factually simple by the time they reach the Supreme Court look that way because the issues have been narrowed throughout the process, including in the Court’s opinion-writing work. It is a safe bet that at earlier stages there was a major factual dispute as to why Thompson was let go, involving depositions of witnesses and document review; and legal arguments about whether the facts surrounding his termination supported an inference of retaliatory motive.

The Court’s opinion, though final as to the legal issue, merely paves the way for the parties to continue to litigate those issues, as the Court “remanded for further proceedings consistent with this opinion.”

Supreme Court Addressed Two Distinct, But Related Legal Issues in the Thompson Decision

The Court stated the issues this way:

  1. Did NAS’s firing of Thompson constitute unlawful retaliation?
  2. If it did, does Title VII grant Thompson a cause of action?

It might seem obvious as a matter of common sense that if the answer to the first question is that the firing was unlawful, of course Thompson could sue. But who ever said common sense applied to the law?

Not everyone can sue just because unlawful conduct has occurred. For example, an unlawfully terminated employee’s landlord can’t sue because the firing led to the fired employee’s inability to pay rent. Much difficult law has been developed concerning who can sue, often described as “standing to sue.”

In this instance, common sense was quite obviously right: Thompson, after all, was the injured person, not someone remotely affected, so if retaliating against him is unlawful he can sue for it. But whoever said lawyers don’t raise obviously losing arguments — and even take them all the way to the High Court?

Here, the Court actually found that the standing issue was “[t]he more difficult question.”

The Supreme Court’s Ruling On the Fiancé’s Retaliation Claim

The Court’s ruling on the first question, whether Thompson’s firing could be unlawful retaliation, was guided by the Court’s 2006 ruling in Burlington N. & S. F. R. Co. v. White. In Burlington, the Court held:

[T]he anti-retaliation provision does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace. … [T]he provision covers those (and only those) employer actions that would have been materially adverse to a reasonable employee or job applicant. … [T]he employer’s actions must be harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination.

Showing remarkable common sense, undoubtedly cutting through plenty of legal obfuscation in the briefs and arguments, the Court said:

We think it obvious that a reasonable worker might be dissuaded from engaging in protected activity [such a filing a charge] if she knew that her fiancé would be fired.

NAS made a classic “slippery slope” argument, contending that:

Prohibiting reprisals against third parties will lead to difficult line-drawing problems concerning the types of relationships entitled to protection. Perhaps retaliating against an employee by firing his fiancée would dissuade the employee from engaging in protected activity, but what about firing an employee’s girlfriend, close friend, or trusted co-worker? Applying the Burlington standard to third-party reprisals, NAS argue[d], will place the employer at risk any time it fires any employee who happens to have a connection to a different employee who filed a charge with the EEOC.

The Court wisely declined to take the bait, stating:

Although we acknowledge the force of this point, we do not think it justifies a categorical rule that third-party reprisals do not violate Title VII. [W]e adopted a broad standard in Burlington because Title VII’s antiretaliation provision is worded broadly. … [T]here is no textual basis for making an exception to it for third-party reprisals, and a preference for clear rules cannot justify departing from statutory text.

As noted above, the only additional guidance the Court provided was to state the polar extremes that a close family member would normally have a retaliation claim if terminated, while a a mere acquaintance suffering a milder reprisal would not.

The Court’s Ruling on the Fiancé’s Standing to Sue

On this issue, the Court had to apply different statutory language, that providing a remedy to a “person claiming to be aggrieved” by a violation. Again, one would think Thompson obviously fit the bill, and the Court agreed, but only after wading through a somewhat dense argument about whether this definition is coextensive with Article III jurisdiction. The Court held it was not:

If any person injured in the Article III sense by a Title VII violation could sue, absurd consequences would follow. For example, a shareholder would be able to sue a company for firing a valuable employee for racially discriminatory reasons, so long as he could show that the value of his stock decreased as a consequence.

Instead, the Court adopted a “zone of interests” test used in other contexts, which provides standing to sue to anyone who “falls within the ‘zone of interests’ sought to be protected by the statutory provision whose violation forms the legal basis for his complaint.”

Applying this standard, the Court easily found Thompson had a right to sue because he:

was an employee of NAS, and the purpose of Title VII is to protect employees from their employers’ unlawful actions. Moreover, accepting the facts as alleged, Thompson is not an accidental victim of the retaliation — collateral damage, so to speak, of the employer’s unlawful act. To the contrary, injuring him was the employer’s intended means of harming Regalado. Hurting him was the unlawful act by which the employer punished her.

In part II of our coverage of the Thompson case, we’ll look at some commentary from new and old media, and some practical implications of the case.

NLRB Announces Proposed Rule Requiring Posting of Notice on Employee Rights

NLRB logo

On December 21, the National Labor Relations Board (NLRB) did something it rarely does: it indicated its intent to change labor law requirements through the regulatory process, rather than its normal process of case-by-case adjudication.

See full text of NLRB’s proposed rule on employee rights notice posting, including introductory commentary. NOTE: This is just a proposed rule at this time, with a sixty-day comment period now open.

NLRB Press Release Summary of Proposed Notice-Posting Rule

The NLRB press release states:

The rule would require employers to notify employees of their rights under the National Labor Relations Act.

[T]he Board “believes that many employees protected by the NLRA are unaware of their rights under the statute. The intended effects of this action are to increase knowledge of the NLRA among employees, to better enable the exercise of rights under the statute, and to promote statutory compliance by employers and unions.”

Private-sector employers (including labor organizations) whose workplaces fall under the NLRA would be required to post the employee rights notice where other workplace notices are typically posted. If an employer communicates with employees primarily by email or other electronic means, the notice would be posted electronically as well. The notice would be available from the agency’s regional offices and could also be downloaded from the NLRB website.

The proposed notice is similar to one recently finalized by the U.S. Department of Labor for federal contractors. It states that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to choose not to do any of these activities. It provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints.

Key Elements of NLRB’s Proposed Employee Rights Notice-Posting Rule

  • All employers subject to National Labor Relations Act (NLRA) must post notice.
  • Employers must post the required notice of employee rights conspicuously, including all places where notices to employees are customarily posted.
  • Electronic posting by email or on internet or intranet is also required if employer customarily communicates with employee by such means.
  • Translated version may be required if significant portion of workforce is not proficient in English.
  • The NLRB will enforce the new rule by processing alleged failure to post the employee rights notice as an unfair labor practice charge.
  • In addition to remedy of order requiring posting along with a remedial notice, NLRB may enforce rule by tolling statute of limitations for filing an unfair labor practice charge and treating willful failure to post as evidence of unlawful motive in case in which motive is at issue.

Full Text of Proposed Notice

The National Labor Relations Act (NLRA) guarantees the right of employees to organize and bargain collectively with their employers, and to engage in other protected concerted activity. Employees covered by the NLRA are protected from certain types of employer and union misconduct. This Notice gives you general information about your rights, and about the obligations of employers and unions under the NLRA. Contact the
National Labor Relations Board (NLRB), the Federal agency that investigates and resolves complaints under the NLRA, using the contact information supplied below, if you have any questions about specific rights that may apply in your particular workplace.

Under the NLRA, you have the right to:

  • Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.
  • Form, join or assist a union.
  • Bargain collectively through representatives of employees’ own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.
  • Discuss your terms and conditions of employment or union organizing with your co-workers or a union.
  • Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.
  • Strike and picket, depending on the purpose or means of the strike or the picketing.
  • Choose not to do any of these activities, including joining or remaining a member of a union.

Under the NLRA, it is illegal for your employer to:

  • Prohibit you from soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking
    lots or break rooms.
  • Question you about your union support or activities in a manner that discourages you from engaging in that activity.
  • Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.
  • Threaten to close your workplace if workers choose a union to represent them.
  • Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
  • Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
  • Spy on or videotape peaceful union activities and gatherings or pretend to do so.

Under the NLRA, it is illegal for a union or for the union that represents you in bargaining with your employer to:

  • Threaten you that you will lose your job unless you support the union.
  • Refuse to process a grievance because you have criticized union officials or because you are not a member of the union.
  • Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
  • Cause or attempt to cause an employer to discriminate against you because of your union-related activity.
  • Take other adverse action against you based on whether you have joined or support the union.

If you and your co-workers select a union to act as your collective bargaining representative, your employer and the union are required to bargain in good faith in a genuine effort to reach a written, binding agreement setting your terms and conditions of employment. The union is required to fairly represent you in bargaining and enforcing the agreement.

Illegal conduct will not be permitted. If you believe your rights or the rights of others have been violated, you should contact the NLRB promptly to protect your rights, generally within six months of the unlawful activity. You may inquire about possible violations without your employer or anyone else being informed of the inquiry. Charges may be filed by any person and need not be filed by the employee directly affected by the
violation. The NLRB may order an employer to rehire a worker fired in violation of the law and to pay lost wages and benefits, and may order an employer or union to cease violating the law. Employees should seek assistance from the nearest regional NLRB office, which can be found on the Agency’s website: www.nlrb.gov. You can also contact the NLRB by calling toll-free:1-866-667-NLRB (6572) or (TTY) 1-866-315-NLRB (1-866-315-6572) for hearing impaired.

The National Labor Relations Act covers most private-sector employers.Excluded from coverage under the NLRA are public-sector employees, agricultural and domestic workers, independent contractors, workers employed by a parent or spouse, employees of air and rail carriers covered by the Railway Labor Act, and supervisors (although supervisors that have been discriminated against for refusing to violate the
NLRA may be covered).

This is an official Government Notice and must not be defaced by anyone.

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