Employer Alert! U.S. Supreme Court Ruling Shifts Balance of Power to Employees in the Workplace
Employer Alert!
U.S. Supreme Court Ruling Shifts Balance of Power to Employees in the Workplace
Oregon Lodging Association’s "Lodging News"
August 2006
The United States Supreme Court recently issued a ruling that has substantially broadened claims that a disgruntled employee can bring against his or her employer alleging unlawful retaliation against the employer. Under both Federal and Oregon law, it is unlawful for an employer to retaliate against an employee when that employee raises claims of unlawful conduct against the employer under a variety of laws. In the context of an employee’s allegations of sexual harassment and sex discrimination, the Court set forth a so-called "bright line rule" which many legal experts believe will open the door to a flood of employer retaliation claims under laws such as the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, Sarbanes-Oxley and a multitude of whistleblower protection laws, as well as their state law equivalents.
The Supreme Court’s decision in Burlington Northern & Santa Fe Railway Co. v. White established two clear rules for employee retaliation claims under the Civil Rights Act. First, anti-retaliation claims are not confined to actions that occur in the workplace. Second, the anti-retaliation provision at issue covers all employer actions that are considered to be materially adverse to a reasonable employee or job applicant. According to the Court, this second rule means "the employer’s actions must be harmful to the point that they would well dissuade a reasonable worker from making or supporting a charge of discrimination." To more fully understand how this new ruling will affect your business, it is helpful to consider the following example.
Sheila, a maid in your hotel, claims that the front desk manager, Jim, has sexually harassed her by making sexually explicit comments and telling her that women should stay at home and not work. The General Manager conducts an investigation into the claims raised by Sheila and concludes that Jim has sexually harassed and discriminated against Sheila and Jim is put on 10 days unpaid leave and required to undergo sexual harassment training. When informing Sheila of Jim’s suspension, the General Manager comments that she believed that Jim’s comments were "not that big of a deal" and that Sheila should "toughen up." Under most anti-retaliation provisions, such comments would not have given rise to a retaliation claim before the Court’s decision; however, these comments now could very well be held to meet the second rule noted above. In other words, the question will be whether the General Manager’s comments would dissuade a reasonable worker from making or supporting a charge of discrimination.
Importantly, this second rule is to be considered using an objective "reasonable person" standard, as opposed to whether Sheila actually was dissuaded from making or supporting a charge of discrimination. Also, the rule requires that the alleged action by the employer be "material." The difficulty will lie in determining what constitutes a materially adverse employment action. As one prominent management attorney has noted, "almost any comment by a supervisor or manager of a negative nature of any kind could be construed as dissuading a reasonable person from filing a discrimination charge."
With regards to the first "rule" noted above, an employer can now be held to have violated an anti-retaliation law for conduct that occurs outside of the workplace. In most cases, this will involve claims in the context of bad job references. Of course, the employee would still have to show that the conduct was undertaken by a supervisor or manager, and that the employer knew of the action or tolerated it.
Statistically, retaliation claims by employees are skyrocketing nationwide. Plaintiff’s attorneys will be gearing up to test these new rules in the lower courts. This case should serve as a reminder to all employers of the need for a clear anti-retaliation policy and to ensure that all employees are adequately trained to understand and implement the policy. Moreover, employers need to be highly sensitive when it comes to changing anything in regards to an employee’s current employment conditions when the employee has filed a charge relating to any unlawful practice in the workplace unless the employer can clearly show that such a change is part of the normal employment procedure. Even then, aggressive Plaintiffs’ attorneys will be inclined to continue pressing their clients’ claims in the ongoing effort to further broaden the law in this and other employment contexts. You do not want to be on the other side of these efforts.