Retaliation and Whistleblower Claims

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1 Retaliation and Whistleblower Claims 2012 Labor and Employment Relations Law Seminar Thomas W. Scrivner This presentation is intended for general information purposes only and does not constitute legal advice. Specific questions and requests for legal advice should be addressed to legal counsel Michael Best & Friedrich LLP

2 Retaliation Claims Are Still On the Rise EEOC stats for FY 2011 Retaliation 37.4% (1.1% up from 36.3%) Race 35.4% (0.5% down from 35.9%) Sex (Gender) 28.5% (0.6% down from 29.1%) Disability 25.8% (0.6% up from 25.2%) Age 23.5% (0.2% up from 23.3%) 2012 Michael Best & Friedrich LLP 2

3 The High Cost of Retaliation Median jury awards for retaliation: highest of all employment claims -- $225,000 median award for discrimination claims -- $200,000 Median settlements for retaliation: tied with discrimination claims for highest median employment settlements at $70,000 (Jury Verdict Research s report for the period ) 2012 Michael Best & Friedrich LLP 3

4 Outcomes of Retaliation Cases ( ) 2012 Michael Best & Friedrich LLP 4

5 Popular Opinion Favors Individuals Over Employers In a dispute between an individual and his/her former employer, whom would you tend to believe? Individual 68% Former Employer 32% Is it common for an employer to retaliate against an employee who reports possible unlawful conduct? Yes 54% Neutral 31% No 15% (Source: Survey conducted by Dispute Dynamic, Inc.) 2012 Michael Best & Friedrich LLP 5

6 What Is A Retaliation Claim? Protected Activity Materially Adverse Employment Action A Causal Relationship 2012 Michael Best & Friedrich LLP 6

7 Protected Activity In general, an employee engages in a protected activity when: The employee makes a complaint to a supervisor, manager, or government agency that her employer is violating a statute or public policy; or The employee participates in an investigation or testifies on behalf of another employee who made a complaint that her employer is violating a statute or public policy. Crawford v. Metro Gov t (2009) (opposition clause applies to witness interviews) 2012 Michael Best & Friedrich LLP 7

8 Protected Activity Not all work place complaints are protected activity To constitute a protected activity, an employee s complaint must be protected by the U.S. Constitution, federal or state statute or state common law Michael Best & Friedrich LLP 8

9 Protected Activity Examples of Federal Statutes That Protect A Workplace Complaint: Civil Rights Act of 1964 ( Title VII ); Age Discrimination in Employment Act of 1967 ( ADEA ); Americans with Disabilities Act ( ADA ); Fair Labor Standards Act, including the Equal Pay Act of 1963; Family and Medical Leave Act ( FMLA ); National Labor Relations Act ( NLRA ); Uniformed Services Employment and Reemployment Rights Act; Polygraph Protection Act of 1988; and Sarbanes-Oxley Act Michael Best & Friedrich LLP 9

10 Protected Activity Each state has statutory law and/or common law that protect employees who make complaints based on certain public policy protections. Each state s protections are different. For example, most states prohibit employers from taking action against an employee who files a workers compensation claim or testifies in a workers compensation hearing Michael Best & Friedrich LLP 10

11 Expanding The Reach Of Protected Activity Association Retaliation Anti-Retaliation Provision of the FLSA 2012 Michael Best & Friedrich LLP 11

12 First Protected Activity Caveat The Employer Must Be Aware Of The Employee s Protected Activity: An employer cannot retaliate against an employee for engaging in protected activity if the employer is unaware of the activity Michael Best & Friedrich LLP 12

13 Second Protected Activity Caveat The Employee s Complaint Must Be In Good Faith: An employee is protected from retaliation only if his complaint of protected activity is in good faith. While this is a relatively low standard and is rarely enforced by the courts, it is important to keep in mind. The Seventh Circuit found that the employee s complaint was not entitled to protection because it was utterly baseless. Mattson v. Caterpillar, Inc., 359 F.3d 885 (7th Cir. 2004) 2012 Michael Best & Friedrich LLP 13

14 Material Adverse Action An employer can be liable for retaliation only if the employee suffers a material adverse action (unless otherwise specified by statute). In June 2006, the U.S. Supreme Court redefined a material adverse action in retaliation claims: A material adverse action is an employment action that might well have dissuaded a reasonable worker from making or supporting a [a protected activity]. Burlington N. & S.F. Ry. v. White (2006) 2012 Michael Best & Friedrich LLP 14

15 Material Adverse Action Supreme Court specifically stated that trivial adverse actions do not rise to the level of retaliation: Petty slights, minor annoyances, and simple lack of good manners are not material adverse actions because such actions are not enough to deter a reasonable employee from reporting discrimination. While a supervisor not inviting an employee to lunch is a petty slight, excluding an employee from weekly training lunches that contribute to the employee s professional development likely would be a material adverse action Michael Best & Friedrich LLP 15

16 Post-Employment Material Adverse Actions Do Not Compound Problems: In 1997, the Supreme Court held that an employer could be held liable for giving a former employee a bad work reference in retaliation for complaining of retaliation. Robinson v. Shell Oil Company, 519 U.S. 337, 136 L. Ed. 2d 808, 117 S. Ct. 843 (1997). Solution: (1) All employee references should go through a central source; and (2) only verify the employee s employment dates and position(s) held Michael Best & Friedrich LLP 16

17 Causation Temporal Proximity If the adverse action is close in time to the protected activity, there may be a presumption of retaliation Cat s Paw Liability 2012 Michael Best & Friedrich LLP 17

18 Employer s Burden Legitimate non-discriminatory reasons needed for all adverse employment actions 2012 Michael Best & Friedrich LLP 18

19 Employee s Ultimate Burden Pretext Employer s explanation not credible 2012 Michael Best & Friedrich LLP 19

20 How To Manage An Employee Who Engages In A Protected Activity Document performance issues Document conversations Offer the opportunity to transfer if applicable and available Follow-up with the employee Remind managers, supervisors and the employee that retaliation is prohibited Enforce Need to Know rule Require that someone other than the alleged discriminator review any disciplinary action taken against the employee Do Not make comments related to the employee s protected activity BE FAIR!!! 2012 Michael Best & Friedrich LLP 20

21 How To Discipline or Terminate An Employee Who Has Engaged In A Protected Activity Fairness and Causal Relation Ask: If this employee did not engage in the protected activity, would the employee still suffer this adverse action; Prove it: Find an employee who did not engage in a protected activity but had the same or similar performance problem; or At a minimum, make sure that an employee who had the same or similar performance or more serious performance problems did not suffer a lesser adverse action 2012 Michael Best & Friedrich LLP 21

22 How To Discipline or Terminate An Employee Who Has Engaged In Protected Activity Fairness and Causal Relation Watch temporal proximity 2012 Michael Best & Friedrich LLP 22

23 How To Discipline or Terminate An Employee Who Has Engaged In A Protected Activity Fairness Did the employee have notice of her performance problems? Was the employee given an opportunity to correct her performance problems? Was the employee treated with respect when she was disciplined or terminated? Who made the decision to take the adverse action? 2012 Michael Best & Friedrich LLP 23

24 How To Discipline or Terminate An Employee Who Has Engaged In A Protected Activity Reason for the Adverse Action The stronger the reason for the adverse action, the less the employer has to worry about establishing fairness The weaker the reason for the adverse action, the more the employer has to worry about establishing fairness 2012 Michael Best & Friedrich LLP 24

25 How To Manage Employees Who Act Like They Now Have Discipline Insurance The same way as any other employee Fairly, consistently, thoroughly and yes, cautiously Michael Best & Friedrich LLP 25

26 The Over Documenter The Rules Stickler The Talker It s All In The Timing But I m The Victim Here Pitfalls 2012 Michael Best & Friedrich LLP 26

27 Preventing Retaliation Claims RETALIATION CLAIMS POOR SUPERVISORS 2012 Michael Best & Friedrich LLP 27

28 Preventing Retaliation Claims Train supervisors to: a) follow the employer s anti-retaliation policy; b) respond to complaints promptly; c) get HR involved right away; d) not focus on validity of complaint; e) not view allegations as a personal attack; f) conduct proper performance evaluations; g) fairly and consistently discipline employees Michael Best & Friedrich LLP 28

29 Recent Noteworthy Retaliation Cases 1) Thompson v. North American Stainless LP (2011) 2) Kasten v. Saint-Gobain (2011) 3) Dellinger v. S.A.I.C. Corp. (2012) 4) Hutchins et al. v. Clarke et al. (2011) 5) Evans v. Federal Express Corp. (2012) 2012 Michael Best & Friedrich LLP 29

30 1 Thompson v. North American Stainless LP (2011) The justices held in an 8-0 decision that federal law protected employees from being fired in response to a relative or close associate filing a discrimination complaint against a common employer. Persons in the zone of interest have the right to sue under Title VII. Take away: review employee s relationships before taking an adverse employment action to assess risk Michael Best & Friedrich LLP 30

31 2 Kasten v. Saint-Gobain (2011) The Supreme Court concluded that Congress intended for the Fair Labor Standards Act (FLSA) to shield workers from retaliation for oral as well as written complaints. The Court was interpreting the statute s language that requires that a complaint be filed in order for an employee to launch a retaliation action Michael Best & Friedrich LLP 31

32 3 Dellinger v. S.A.I.C. Corp. (2012) U.S. Supreme Court refused to hear a petition against a Fourth Circuit ruling that job applicants who say they weren t hired because they had sued past employers for labor law violations could not bring claims under federal anti-retaliation law. As a result, at least in the Fourth Circuit (WV, VA, MD, NC, SC), job applicants are barred from suing potential employers under the FLSA s anti-retaliation provision. The reasoning of the Fourth Circuit s ruling was that only employees (not prospective employees) can sue under the antiretaliation provision. Despite Dellinger, employers (especially those outside of the Fourth Circuit) still take a risk if they deny employment, or rescind an employment offer, based on an applicant's prior assertion of federally protected rights. Moreover, Dellinger specifically addressed the FLSA s anti-retaliation provision and not such provisions under other federal and state laws Michael Best & Friedrich LLP 32

33 4 Hutchins et al. v. Clarke et al. (2011) The Seventh Circuit held that retaliatory speech must involve coercion, intimidation, or threats alluding to punishment to be actionable. The case involved a lawsuit by Milwaukee County Deputy Sheriff David Hutchins under Section 1983 against his boss, Milwaukee County Sheriff David Clarke Jr. Hutchins claimed that Clarke retaliated against him after Hutchins called into a local radio show and criticized Clarke and Clarke then called in to respond and mentioned Hutchins past disciplinary history. However, the Seventh Circuit found that even if some harassment and ridicule might be retaliatory speech under the law, Clarke s statement claiming that Hutchins carried a grudge against him because of the prior disciplinary action did not rise to that level Michael Best & Friedrich LLP 33

34 5 Evans v. Federal Express Corp. (2012) The Ninth Circuit affirmed a decision to throw out a nearly $1 million jury verdict against FedEx Corp., finding that a review of the record showed no factual basis for the verdict. The Court held that two of the allegedly retaliatory actions (brief s from supervisors asking the operations manager to take corrective actions against subordinates) were not adverse employment actions. These [ s] did not materially alter the terms and conditions of [the employee s] employment, and they were not reasonably likely to deter Evans or other employees from engaging in protected activities. Unless appealed, the decision will mark the end of seven years of litigation Michael Best & Friedrich LLP 34

35 2012 Michael Best & Friedrich LLP 35

36 Thank You! 2012 Michael Best & Friedrich LLP 36

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