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U.S. Supreme Court Workplace Retaliation Decision Deals Blow to Employers

June 23, 2006

On June 22, 2006, a unanimous Supreme Court delivered an unexpected blow to employers rights involving the hot-button issue of workplace retaliation. In Burlington Northern v. White, the Court ended a disagreement among lower courts about the standard for when an action by an employer is severe enough to constitute illegal retaliation under Title VII of the Civil Rights Act of 1964. The Court also considered whether an adverse action had to be directly related to the job to be retaliation.

Title VII prohibits harassment and discrimination based on race, color, religion, national origin and sex (gender). That same law prohibits retaliation against an employee for (i) objecting to discrimination or (ii) participating in an investigation or legal proceeding related to alleged discrimination. However, the law does not identify how severe an action by an employer must be, or whether it needs to be an action directly related to the job, to be illegal retaliation.

In this case, Burlington had asked the Supreme Court to overturn a decision by the U.S. Sixth Circuit Court of Appeals, which found that a female railyard worker had suffered materially adverse changes in her employment status after complaining of sexual harassment. Following her complaint, the worker was transferred to a more physically demanding job and later suspended for 37 days without pay for insubordination. Burlington eventually rescinded the suspension and awarded the worker back pay. The jury rejected the discrimination charge but ruled in her favor on the retaliation claim. The trial judge, and later the court of appeals, rejected the employer's arguments that the actions ? the reassignment and suspension ? were not severe enough to be illegal retaliation.

Many had expected the Supreme Court's conservative majority to adopt a pro-employer approach to the issue and find that Burlington's actions were not significant enough to be illegal retaliation. Instead, the justices ruled in favor of the employee. The Court held that the suspension without pay was a serious hardship and a ?materially adverse action, adding, [i]n the present context, that means that the 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. The Court added that any job reassignment was ?not automatically grounds for a lawsuit, but stated that in this case the reassignment involved work that was dirtier, more arduous, and less prestigious.

Importantly, the Court also considered whether an adverse action by an employer not directly related to employment could be illegal retaliation under Title VII. For example, if an employer made a false criminal charge against an employee to police, could that be retaliation? The Court concluded that actions by an employer not directly related to employment could amount to unlawful retaliation under Title VII.

Many anticipate that the Supreme Courts decision will lead to an increase in the number of retaliation lawsuits. In dealing with employees who have complained about discrimination or participated in an investigation, employers should carefully assess even minor actions against the employee as they may lead to costly lawsuits and monetary awards.