June 22, 2006 U.S. Supreme Court Expands Retaliation Claims
On Thursday, June 22, 2006 the United States Supreme Court issued a major ruling impacting the law of retaliation. (Burlington, Northern and Santa Fe Railway v. White (“White”).)
In White, the Supreme Court considered the kinds of employer actions that can constitute retaliation under the federal anti-discrimination law, Title VII of the Civil Rights Act of 1964. The Court rejected the employer’s position, which was a bright-line rule under which the employee would be required to establish that the employer’s alleged retaliatory action was directly related to the terms or conditions of employment, and resulted in tangible economic loss. Instead, the Court adopted a more subjective rule, allowing retaliation claims to be based upon any employer action that “would have been materially adverse to an employee or applicant” and can include any actions that could dissuade a reasonable worker from making or supporting a charge of discrimination.
The White case arose out of Tennessee. The plaintiff, Sheila White, was the first woman to be hired into the Maintenance of Way Department of Burlington, Northern’s Tennessee operations. She was initially assigned to operate a forklift. Within a few months of starting her employment, she complained to company officials that her supervisor told her that women should not be working in the Maintenance of Way Department, and that he made insulting and inappropriate comments to her in front of her male colleagues. Burlington investigated, and suspended the supervisor for 10 days and ordered him to attend sexual harassment training. On the same day that Burlington informed White of the outcome of the investigation, it removed her from forklift duty and assigned her standard track laborer tasks, a much more physically demanding position.
White then filed a charge of gender discrimination and retaliation with the EEOC, alleging that her reassignment was based on her gender and in retaliation for her complaint about her supervisor. She filed a second retaliation charge a few months later, alleging that she had been placed under surveillance. A few days after she filed her second charge, White and her immediate supervisor had a disagreement about which truck White was supposed to take from one location to another. The supervisor reported White as being insubordinate and Burlington suspended her without pay. White filed an internal grievance, and after 37 days’ of unpaid suspension she was reinstated with back pay. White then filed another EEOC retaliation charge based upon her suspension.
White then pursued her claim in federal court. She claimed that her reassignment to track laborer duties and her subsequent suspension constituted unlawful retaliation under Title VII. The case was tried to a jury, which awarded her a total of $46,750 on her retaliation claim. On appeal, the Sixth Circuit Court of Appeals initially reversed the judgment for White, but after an en banc review by the entire Sixth Circuit panel, that Court reinstated the judgment for White. Burlington then sought review in the Supreme Court.
The Supreme Court’s Ruling
The Supreme Court voted unanimously to affirm the judgment in White’s favor. All justices except Justice Samuel Alito joined in the Court’s decision, which was authored by Justice Stephen Breyer. Justice Alito concurred in the judgment but wrote a separate opinion.
The Supreme Court announced two significant rules defining the scope of retaliation claims under Title VII. First, the Court announced that employer retaliation need not be limited to discriminatory actions that affect the terms of conditions of employment. Accordingly, employees can sue for retaliation based on employer conduct that is not directly related to the workplace. One example cited by the Court is a case where the employer filed false criminal charges against an employee who complained about workplace discrimination.
Second, the Court rejected a rule that would require a retaliation plaintiff to demonstrate economic harm as a prerequisite to bringing a retaliation claim. Burlington had argued that because it reinstated White with back pay, and because her reassignment to track laborer duties was within the same job classification and did not result in a reduction in pay or benefits, White did not suffer any actionable adverse employment action that could support a retaliation claim.
The Supreme Court rejected Burlington’s argument. It interpreted the statutory language of Title VII’s anti-retaliation provision, which says that an employer may not “discriminate against” any applicant or employee for complaining about discrimination. The Court concluded that this provision extended beyond decisions such as hiring, firing, promotions and demotions. However, retaliation claims cannot be based upon trivial actions. As the Court stated, “A plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which in this context means it might well have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The Court also emphasized that “context matters.” A schedule change that might be inconsequential to one employee might create a significant hardship on a single mother. A refusal to invite an employee to lunch might be actionable if it is a training lunch that might significantly contribute to the employee’s professional advancement.
Under the fact of this case, the Supreme Court found there was sufficient evidence for the jury to conclude that the reassignment and the suspension constituted unlawful retaliation. While the reassignment did not cause economic harm, an involuntary transfer to a dirtier, more arduous job can be a materially adverse change. And, although White was eventually reinstated with back pay from her suspension, going 37 days without pay can create a substantial hardship for an employee. Since both of these actions might dissuade a reasonable employee from bringing forth a discrimination complaint, they met the Supreme Court’s test for actionable retaliation.
White’s Impact in California
White is a significant case that makes it easier for plaintiffs in Title VII cases to bring retaliation claims. The effect of White in California, however, is less clear.
In 2005, the California Supreme Court decided Yanowitz v. L’Oreal USA, Inc. In that case, the Court considered the same issues that were presented in White: what kinds of employer actions can constitute retaliation. The Supreme Court’s resolution of these issues in White is different from the California Supreme Court’s approach in Yanowitz.
First, in Yanowitz, the California Supreme Court ruled that to support a retaliation claim an employment action must “materially affect the terms, conditions, or privileges of employment.” This is at odds with White’s statement that employer retaliation need not be limited to discriminatory actions that affect the terms of conditions of employment.
Second, the California Supreme Court adopted a more restrictive test for the kinds of employment actions that could support a retaliation claim. In White the Supreme Court adopted the “reasonable employee would be deterred” test. But in Yanowitz, the California Supreme Court rejected the deterrence test in favor of a test more closely aligned with the kinds of employer actions that are the subject of traditional discrimination claims, such as hiring, firing, promotions, discipline, and compensation.
Like the Supreme Court in White, the California Supreme Court cautioned that retaliation claims are inherently fact specific, and the impact of an employer's action in a particular case must be evaluated in context. It stated: “Although an adverse employment action must materially affect the terms, conditions, or privileges of employment to be actionable, the determination of whether a particular action or course of conduct rises to the level of actionable conduct should take into account the unique circumstances of the affected employee as well as the workplace context of the claim.”
What This Means
In Yanowitz, the California Supreme Court came to a different conclusion regarding the meaning of language in the California Fair Employment and Housing Act that is the same as the language in Title VII that the Supreme Court interpreted in White. It also relied on some federal appellate decisions the Supreme Court chose to reject. The White/Yanowitz cases represent a rare instance where California’s employment laws are less favorable to employees than Title VII.
However, since Yanowitz is a decision of California’s Supreme Court, it definitively sets forth the current rules under the Fair Employment and Housing Act, and these rules appear more favorable for employers. It remains to be seen how the conflict between White and Yanowitz will be resolved. It is possible that our state courts will migrate toward an interpretation that is more consistent with the federal rule as stated in White, but this will take time and require another case to come before the California Supreme Court.
Even under Yanowitz, the question of what kind of employment conduct can constitute harassment will depend on the unique circumstances of the affected employee as well as the workplace context of the claim. In certain cases, however, an employee might find themselves without a claim in California, but able to prosecute a claim under the more lenient federal standard. This might result in some California retaliation plaintiffs deciding to assert a federal claim along with their state law claims.
Retaliation claims are on the rise, and remain one of the most challenging issues for employers to grapple with, and one of the most difficult employment claims to defend. It is critical that all complaints of discrimination and harassment be promptly and thoroughly investigated, and that any adverse actions taken toward an employee who has complained about discrimination or harassment, or participated in such an investigation, be carefully scrutinized by Human Resources to insure that the action is justified, legitimate, consistent with policy and practice, and properly documented.
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