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Supreme Court Majority Declares Retaliation Claims Are Becoming Too Numerous - Acts to Curb Their Growth by Making Retaliation Harder to Prove in Court

July 2013

By: James B. Sherman, Esq.

In a recent 5-4 split decision, the U. S. Supreme Court in Univ. of Texas, S.W. Med. Ctr. V. Nassar, (2013), has made it more difficult for plaintiffs to win retaliation claims. No longer can a plaintiff win a retaliation claim by proving his or her employer acted at least in part on account of a retaliatory motive in taking an adverse action following the employee's protected activity (e.g. opposing, or filing a charge of, discrimination). Instead, the Court determined that to prove retaliation a plaintiff must prove the employer would not have taken the challenged action "but/for" the employee's protected activity. The Court's majority had motives of its own and made no secret of them. Noting that retaliation claims brought with the EEOC have nearly doubled in just the past 15 years - from 16,000 in 1997 to 31,000 in 2012 - and that these totals are now second in number only to race discrimination complaints, the Court expressed the need to curb the growth of retaliation claims in order to ensure "the fair and responsible allocation of resources in the judicial and litigation systems."

The facts of this case are instructive to employers of all sizes and industries. The University of Texas Medical Center maintained an affiliation with Parkland Memorial Hospital whereby the Hospital committed to offer vacant positions to faculty of the University. The plaintiff in this case, Naiel Nassar, is of Middle Eastern descent. Dr. Nassar held dual positions with the University and the Hospital pursuant to their affiliation agreement. In 2006, Dr. Nassar accused one of his supervisors at the University, Dr. Levine, of being biased against him on account of his religion and ethnic heritage. Eventually Dr. Nassar resigned his teaching position with the University after arranging a job offer to work exclusively for the Hospital. In doing so, however, Dr. Nassar sent a letter to Dr. Levine's immediate supervisor, Dr. Fitz, along with others at the University, claiming he was resigning due to Dr. Levine's "harassment" which he attributed to "...religious, racial and cultural bias against Arabs and Muslims."

Dr. Fitz became upset with Dr. Nassar's letter of resignation, feeling that it "publically humiliated" Dr. Levine by its unfair and false accusations. Dr. Fitz claimed the need to "publically exonerate" Dr. Levine, knowing that only months earlier Dr. Nassar had received a promotion with her assistance. Dr. Fitz protested the Hospital's job offer to Dr. Nassar, asserting that it violated the affiliation agreement with the University because Dr. Nassar no longer worked there as a faculty member since his resignation. The Hospital thereafter withdrew its job offer to Dr. Nassar. In the ensuing lawsuit brought under Title VII of the Civil Rights Act of 1964, Dr. Nassar claimed his resignation from the University amounted to "constructive discharge" based on Dr. Levine's racially and religiously motivated harassment, and that Dr. Fitz unlawfully retaliated against him for his complaints by her efforts to prevent the Hospital from hiring him. A jury awarded Dr. Nassar over $400,000.00 in backpay and more than $3 million in compensatory damages, which the trial court then reduced to $300,000.00.

On appeal, the 5 th Circuit Court of Appeals threw out the constructive discharge verdict but upheld the retaliation verdict on the basis that Dr. Fitz was motivated, at least in part, to retaliate against Dr. Nassar for his complaints about Dr. Levine. The Supreme Court granted "certiorari" to decide only whether the lower appellate court applied the proper analysis to a claim of retaliation under Title VII. The Court concluded the proper analysis was not applied. Whereas the 5 th Circuit held that Nassar could win his retaliation claim by proving that retaliation was merely "a motivating factor" (i.e. one of perhaps others) for Dr. Levine's interference with his job offer from the Hospital, the Supreme Court determined it should have applied a "but/for" standard. This "but/for" causation standard is more difficult to prove and requires that a plaintiff prove the employer's adverse employment action would not have occurred "but/for" a retaliatory motive.

The Supreme Court did not decide the outcome of this case but vacated the appellate court's decision and remanded the case to the trial court to make findings consistent with its articulated "but/for" standard. Only 5 of the 9 Justices supported the decision, with 4 - Ginsburg, Breyer, Sotomayor and Kagan - dissenting.

So what does the Nassar decision mean for employers? First and foremost, the Court's decision means that plaintiffs now have a higher burden of proof to win claims of retaliation than they do to support claims of what the Court referred to as "status-based" discrimination claims (e.g. race, sex, religion, national origin, disability discrimination). Whereas discrimination claims may be proven by evidence to support the conclusion that a discriminatory motive was likely a "motivating factor" in an adverse employment action, proving retaliation requires showing that the adverse retaliatory action would not have occurred but/for a retaliatory motive. For this particular case on remand, the trial court will need to determine whether Dr. Fitz would not have protested Dr. Nassar's job offer with the Hospital but/for the complaint against Dr. Levine, or if she might have taken the same action even if motivated in part by retaliation - e.g. (a) to "exonerate Dr. Levine's reputation" as she claimed, or (b) perhaps to uphold the affiliation agreement between the University and the Hospital.

However, as with most decisions that come down from the highest court in the land this decision will impact the way all future retaliation claims are analyzed, causing far reaching implications for employers and their employees. Here are some more thoughts on the impact of this decision and what it means for employers:

  • In reaching its decision, the Court ignored the EEOC's position on the burden of proof in retaliation claims. Accordingly, unless and until the EEOC runs to Congress asking for the laws to be amended to circumvent the Court's decision (something that has been done in the past) the tougher "but/for" standard will apply not only in court, but also to EEOC investigations. Employers and their defense lawyers should be sure to assert this new standard and apply it to their analysis of relevant facts in position statements, etc. submitted to the EEOC and other agencies. For example, a position statement in defense of the University of Texas in the Nassar case would cite to this new decision and argue how Dr. Fitz would have taken the same action on Dr. Nassar's job offer from the Hospital, regardless of his complaints about Dr. Levine.
  • A very important lesson for employers from the facts of this case - regardless of the Court's decision and/or how the case is ultimately resolved in the trial court on remand - is that while it is sometimes a good thing that higher level managers support those they supervise to supervise others, that support should be limited to that which is appropriate. For instance, in this case there is little doubt that Dr. Fitz stood squarely in support of Dr. Levine in response to Dr. Nassar's claims of harassment. Perhaps Dr. Fitz was even involved in the University's investigation of those allegations and found, or was aware of an independent investigator's findings, that Dr. Nassar's allegations against Dr. Levine were entirely unfounded. Nevertheless, where Dr. Fitz took that support for Dr. Levine to the level of reaching out in protest of the Hospital's job offer to Dr. Nassar it may have crossed a line that, in the end, will result in reinstatement of that $700,000.00+ damages award to Dr. Nassar. Coupled with attorney fees and costs that now will include trips to the U. S. Court of Appeals and the Supreme Court, the total award would certainly be well over $1 million.
  • Employers must realize that even an "awful" protected claim (i.e. one that is without any merit or even frivolous) is still protected from any and all acts of unlawful retaliation. In another case decided in 2006, the Supreme Court held that a retaliatory act need not result in a tangible adverse employment action but includes really "materially adverse" action taken by an employer that might "well have dissuaded a reasonable worker from making or supporting a charge of discrimination." Being that managers and supervisors are human beings, it can sometimes be hard not to take sides, for instance, if it appears to them that an employee is making frivolous claims of discrimination.
  • Because the "but/for" standard of proof allows employers to defend against claims of retaliation by showing they would have taken the same action regardless of any protected activity of the employee plaintiff, in the future, employers may be able to defeat retaliation claims by showing they believed the employee acted for an improper purpose - for example, by intentionally making false or misleading claims to undermine a disliked supervisor. However, the EEOC would not likely accept this kind of defense even with the Supreme Court's decision in Nassar.
  • The bottom line remains the same for all employers - wherever possible, avoid even the appearance of taking any adverse employment action, in whole or in part, because of any employee's protected activity. An employee's best evidence of retaliatory motive includes: (a) timing, if the employer acts immediately after or very close in time to protected activity; (b) smoking gun verbal or written statements demonstrating motive; or (c) adverse actions that are inconsistent with policy, past practice, or treatment of other similarly situated employees. Employers can control these facts by thinking before acting.

In spite of the Court's new decision in Nassar, don't expect retaliation claims to abate any time soon. When employees engage in "protected activity" the prospect of retaliation claims is always present and usually very complicated and nuanced. Some employers are "frozen with fear" in these instances, refusing to discipline a "protected" employee no matter how out of line they behave. Employers who do not want to turn over the keys to their business in this fashion but who also do not want to wind up facing a viable retaliation claim, need help from experienced employment counsel. For competent, ethical and management oriented legal advice on these and other troublesome workplace issues, contact Attorney James Sherman or any of the other management-side labor and employment attorneys at Wessels Sherman law firm. Call (952) 746-1700 or email jasherman@wesselssherman.com.