National Law Journal, April 17, 2006, Monday

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NATIONAL LAW JOURNAL

April 17, 2006

SECTION: FRONT PAGE; Pg. P1 Vol. 27 No. 83

HEADLINE: Justices may hash out the 'R' word;
FRONT PAGE;
Retaliation cases split lower courts.

BYLINE: Marcia Coyle; Staff reporter

BODY:

Alito? Worker friendly?

Three standards

One test

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Washington--For more than four decades, federal law has barred employers from retaliating against employees who complain of workplace discrimination. This year, the U.S. Supreme Court may decide what exactly retaliation is under that federal law.
The lower federal courts have split in multiple ways over what legal standard should be used in judging an employer's liability under the anti-retaliation provision in Title VII of the Civil Rights Act of 1964, which prohibits job discrimination on the basis of race, color, religion, sex and national origin.
How the Supreme Court resolves that conflict in a challenge arising out of a railroad worker's sexual harassment complaint will have significant implications not just for Title VII cases but for cases under the Americans With Disabilities Act, the Age Discrimination in Employment Act and other civil rights statutes, according to legal scholars and others. Burlington Northern Santa Fe Railway Co. v. White , No. 05-259.
"Lots of other statutes have [anti-retaliation] provisions written in the exact same language," said civil rights scholar Eric Schnapper of the University of Washington School of Law, who has assisted the employee in the high court case. "The implications here are very broad."
Statistics from the Equal Employment Opportunity Commission (EEOC) show that Title VII retaliation complaints nearly doubled between 1992 and 2004--from 10,499 claims to 20,240, noted Allan Weitzman of the Boca Raton, Fla., office of New York's Proskauer Rose who filed an amicus brief on behalf of the Society for Human Resource Management and others supporting Burlington Northern.
"A primary reason for this is confusion as to what does and doesn't constitute employer retaliation," said Weitzman. "The risk of even more litigation is real and there is an urgent need for clarity in this area."
The high court case, which will be argued on April 17, also could open an important window on the newest justices' approaches to interpretation of a major civil rights statute, a context unlikely to produce the kind of unanimity that the high court enjoyed earlier this year in several decisions.
In fact, in what was likely his last decision as a circuit court judge, now Justice Samuel A. Alito Jr. wrote what some employment law experts say was a surprisingly worker-friendly ruling in a case involving retaliation and sexual harassment. But few are willing to predict how he will decide White now that he is no longer bound by the law of his circuit.
Not surprisingly, the high court case has queued up as a classic standoff between management and worker interests.
Burlington Northern is supported by the U.S. Chamber of Commerce, the Equal Employment Advisory Council, the Association of American Railroads and the National Federation of Independent Business Legal Foundation, among others.
Employee Sheila White is backed by the National Employment Lawyers Association, the Lawyers' Committee for Civil Rights Under Law, the National Women's Law Center, the AFL-CIO and others.
The Bush administration also has entered the case, but takes a somewhat unusual stance: It is supporting the worker, but rejecting her arguments as well as the EEOC's generally worker-protective position.
The government criticizes the arguments of both White and Burlington Northern and crafts its own standard.
"Its position is somewhere in between and where it is I couldn't tell you for sure," said Schnapper.
Because much of the government's brief was an attack on the arguments of the party it was supporting, Schnapper said, "We took what I think is the unprecedented step of filing a supplemental brief to respond to those arguments. When the company filed its reply brief, it relied heavily on the government's brief.
"It was an unusual situation."
Neither side in the case was willing to divide its 30-minute time with the government when it sought argument time. The court ultimately took five minutes from each side for the government, whose lawyer will argue second instead of last--its usual position when supporting the respondent in oral arguments.
For White, the only woman to work in the Maintenance of Way division in Burlington's Tennessee Yard in Memphis in 1997, a high court victory would sweeten a bitter irony of the almost last 10 years.
Although she prevailed in the 6th U.S. Circuit Court of Appeals, her reinstatement to her original job as a forklift operator was stayed pending the high court appeal. She returned to the yard job --track laborer--to which she had been reassigned after complaining of discrimination, was injured and is now on disability, according to Schnapper.
White's retaliation claim is based on two separate incidents: her transfer from her job as forklift operator to track laborer--at same pay and benefits--after she complained to company officials about harassing and discriminating treatment by her co-workers and supervisor; and her suspension without pay for 37 days for alleged insubordination, shortly after filing an EEOC charge.
A grievance committee held that the insubordination charge was unfounded, and she later received full back-pay for the suspension.
After receiving a notice to sue from the EEOC, White filed a Title VII suit in federal court and won her retaliation claim and $43,500 in compensatory damages, plus $54,295 in attorney fees. Burlington appealed and prevailed, 2-1, before a three-judge panel of the 6th Circuit.
The panel held that there was no "materially adverse" change in the terms and conditions of White's employment--the circuit's standard for weighing retaliation claims. The en banc 6th Circuit disagreed, holding that the transfer and the 37-day suspension were materially adverse changes.
Besides barring job discrimination based on race, color, religion, sex and national origin (Section 703), Title VII contains a separate provision (Section 704) making it illegal for an employer to discriminate against any employees because the employee made a discrimination complaint, or testified, assisted or participated in a Title VII proceeding--the anti-retaliation provision.
The lower courts essentially have been using three different standards to judge whether an adverse employment action was taken in retaliation against an employee:
Ultimate employment decision: This is considered the most employer-friendly standard and holds that only final employment decisions, such as firing, failing to hire and failing to promote, are adverse employment actions. A majority of circuits has rejected this test.
Materially adverse change: This standard holds that the employee must have suffered a materially adverse change in the terms and conditions of employment, not necessarily an ultimate employment decision.
Reasonably likely to deter: This standard, adopted by the EEOC, is considered the most worker-friendly test. It holds that an adverse employment action is any action that would be "reasonably likely to deter employees from engaging in protected conduct."
In the high court, Burlington, represented by veteran Supreme Court litigator Carter G. Phillips of Sidley Austin's Washington office, argues that the 6th Circuit decision "dramatically expands without warrant" the scope of Title VII's anti-retaliation provision.
And, he argues that White is proposing a standard more protective of retaliation victims than of discrimination victims.
Phillips relies heavily on Burlington Industries v. Ellerth , 524 U.S. 742, a 1998 decision in which the justices defined "tangible employment action" for determining when an employer is vicariously liable for sexual harassment by a supervisor under Section 703.
Ellerth , he notes, requires an "official act of the enterprise" that constitutes a "significant change in employment status."
The standard for Section 703 claims should be the same for Section 704 claims, he argues, and neither of White's retaliation claims satisfies the Ellerth standard.
A supervisor's "alteration of the mix of duties that an employee performs within her existing job classification," said Phillips, simply is not an official act of the enterprise constituting a "significant change in employment status."
"The Sixth Circuit's contrary rule would enmesh the courts in review of minor, commonplace supervisory task assignments, contrary to the Title VII policy against interference with traditional management prerogatives," he writes in his brief.
And the suspension without pay, he argues, was an "interim measure designed to allow [Burlington] to determine if it would approve or disapprove the supervisor's acts."
Holding otherwise, he adds, would undermine Title VII's fundamental purpose of encouraging voluntary compliance if employers could not avoid liability "by reviewing supervisory discipline and making reasoned and informed decisions after investigation."
Proskauer's Weitzman agreed, explaining that if employers have procedures in place to deal with these types of complaints, they should be given the opportunity to deal with the complaint before an employee has an actionable claim.
"I think there's a good chance the Supreme Court will like this idea because it is consistent with what it has done previously and it helps with the courts' crowded dockets by keeping cases [that could be resolved internally] out of the courts," said Weitzman, who also believes only final tangible employment decisions should be the basis for actionable retaliation.
But that's not consistent with the text of Section 704, argue Schnapper and White's high court counsel, Donald A. Donati of the Donati Law Firm in Memphis.
They argue the justices should apply Section 704 as written "to forbid any retaliatory act taken against an employee who engaged in protected activity."
In the alternative, Donati said, the EEOC's "reasonably likely to deter" standard should apply because it too is consistent with the intent of Congress in drafting the provision.
"The text of section 704(a) addresses quite specifically the issue raised by petitioner's brief--the type of impact which a retaliatory act must have on the plaintiff in order to support a section 704 claim," writes Donati.
"What the statute requires--all that the statute requires--is that the retaliatory act be 'against' the plaintiff. The suggestion that the courts fashion some additional limitation on the statutory elements of a section 704(a) claim is inconsistent with the considerable precision with which Title VII as a whole is written," he wrote.
Employers always want the "ultimate decision" test, said employment litigator Debra Katz of Washington's Katz, Marshall & Banks.
"Why would we want to give employers a free pass if they retaliate just under the screen, say they give negative performance appraisals but don't cut pay, or stigmatize and shun someone in workplace, but don't cut their pay?" she asked. "Employers should not be given a free pass for engaging in retaliation that is enough to undermine the basic purposes of this statute."
The government, like Burlington, appears to argue that the court should adopt a "materially adverse change in the terms and conditions of employment" standard, and also relies on the Ellerth precedent.
But even though it agrees with Burlington on the standard, it disagrees with the company that the 6th Circuit's result was wrong.