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Labor Logic

Prosser

John D. Finerty, Jr.

What protections does Title VII offer to employees who report workplace discrimination or cooperate in the enforcement process to remedy discrimination? Stated differently, when can an employer safely discharge, demote or otherwise discipline an employee if the same employee has also reported discrimination or cooperated in an enforcement proceeding to remedy workplace discrimination? The U.S. Supreme Court will address the issue in Burlington Northern & Santa Fe Railroad Co. v. White, Case No. 05-259. The Court heard oral arguments in the case on April 17, 2006.

The specific issue presented in the case is which standard should apply to evaluate whether an employer has taken an “adverse employment action” against an employee who files a discrimination claim under Title VII. The circuit courts of appeal are split on the appropriate standard, so the Supreme Court has three alternative standards to choose from.

The case comes from the Sixth Circuit that applied a “material adverse change” in the terms and conditions of employment standard. The decision will likely have far reaching impact under Title VII, but may also apply to the Americans With Disabilities Act, Age Discrimination in Employment Act and other employment statutes that use comparable “adverse employment action” language.

Background

Sheila White worked at a Tennessee rail yard run by Burlington Northern. She was assigned to operate a forklift and over the years compiled an unblemished work record. The forklift job, however, was a coveted position in the rail yard because it was not as physically demanding as other jobs in the yard.

White complained to company management that she was forced to endure a general “anti-woman feeling” after a number of alleged sexual harassment incidents.

According to White, co-employees told her they thought women should not be working on a railroad or in the rail yard; one of the employees alleged to have made such a statement was White’s immediate supervisor. The company commenced a formal investigation that substantiated White’s complaints and resulted in her immediate supervisor being suspended and retrained.

The sexual harassment investigation, however, uncovered complaints about White’s job performance. The investigation revealed that part of the “anti-woman” sentiment arose because White did not have the seniority to work the forklift position and male co-employees thought a more senior male employee was entitled to the job. Burlington reassigned a more senior male employee to the forklift position, despite the fact that the employee had never requested a job transfer. The company moved White to a laborer position.

White filed a discrimination charge with the U.S. Equal Employment Commission; she filed a second charge because she believed the company was overly scrutinizing her work performance. Nevertheless, the company suspended White a mere three days after she filed her amended discrimination charge after an alleged incident of insubordination.

In response to her suspension, White filed a grievance under the Collective Bargaining Agreement between her union and Burlington Northern. A hearing officer decided White was wrongfully suspended and awarded her reinstatement with full backpay. White sued Burlington Northern for gender discrimination and retaliation. A jury awarded her $43,500 in compensatory damages on her retaliation claim.

The Sixth Circuit Court of Appeals held that the company’s suspension, later rescinded with full backpay, and the inconvenient reassignment to a rail yard laborer position, constituted an actionable adverse employment action within the meaning of Title VII.

Conflict Among the Courts of Appeal

The Courts of Appeal have adopted three different standards to determine whether an employer’s treatment of an employee constitutes an adverse employment action under Title VII. The Sixth Circuit in this case applied an intermediate standard that creates Title VII liability only when an employer retaliates against an employee by making a “materially adverse change” to the terms and conditions of employment in response to the employee’s claim of discrimination. Two other standards view the statute from diametrically opposed view points.

The Ninth Circuit views the standard from the employee’s perspective; that is, the Ninth Circuit standard would create Title VII liability when an employer engages in any adverse treatment that is “reasonably likely to deter” an employee from engaging in protected activity. In other words, the employer’s conduct is looked at to determine whether a reasonable employee would be deterred from filing a discrimination complaint or cooperating with an EEOC investigation.

On the other hand, the Fifth and Eighth Circuits impose liability only when employers make an “ultimate employment decision” that causes direct economic harm to the employee.

Analysis

Like most employment cases, Burlington Northern v. White presents an issue that requires the Court to balance the interest of employers against employees. Initially, this case is one of statutory interpretation. The statute, however, prohibits only a “adverse employment action” but does not define what that is.

Accordingly, Circuit Courts of Appeals have split over whether the standard contemplates an economically adverse employment action or anything that puts the employee in a worse position vis-a-vie their previous job conditions. None of the three standards developed by the lower courts, however, is perfect.

The intermediate standard of “materially adverse” literally added the term “material” to the statute. The statute, however, puts no restrictions on the type of
employer action that may be considered retaliatory. Therefore, the statutory standard does not necessarily contain a “materially” requirement.

Courts are not, on the other hand, human resources review departments that reconsider every de minimus and immaterial decision employers make. Therein lies the balancing act the Court will need to undertake to devise the appropriate standard.

The “deterrence” standard adopted in the Ninth Circuit and the more restrictive “ultimate decision” standard of the Fifth and Eighth Circuits would both be unworkable, and do an injustice to the statute, for different, but related, reasons.

The Ninth Circuit standard may eliminate deterrence for employees to exercise their rights, but it may also create over-deterrence for reasonable employer conduct.

Employees could bring suits for trivial conduct, workplace personality conflicts and even necessary job actions by the employer.

On the other hand, employers would be more reluctant to make needed changes to the work environment that could improve efficiency for fear of receiving a claim of retaliation. In any event, the “deterrence” standard would seem to be even more difficult to define, especially for employers who would have to predict what the effect of a highly fact specific set of events would have on employees.

The “ultimate employment action” standard is also unworkable, but because it places employees in a vulnerable position. Under this standard, employees who file discrimination claims could have their job titles changed, their supervisory duties taken away, workplace locations changed, or any other number of adverse employment determinations, as long as the change did not have an immediate and adverse economic impact on the employee.

In other words, as long as the employer doesn’t change the employee’s compensation, it would be privileged to take nearly any action it wanted. This was clearly not Congress’ goal in adding the anti-retaliation provisions to Title VII.

For more information on this case or for assistance in defending a Title VII action, contact John D. Finerty, Jr. at Michael Best & Friedrich LLP at (414) 225-8269 or on the Internet at JDFinerty@michaelbest.com.

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