Labor Logic

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John D. Finerty, Jr.

The U.S. Supreme Court addressed the issue of the extent to which Title VII protects employees who report workplace discrimination or cooperate in the enforcement process to remedy discrimination in Burlington Northern & Santa Fe Railroad Co. v. White, Case No. 05-259 (June 22, 2006).

The Court held the anti-retaliation provisions of Title VII are broader than the discrimination provisions, but still require a “material” adverse employment action by the employer before retaliation liability can attach. The decision upheld a jury verdict in favor of an employee who was suspended and lost some job duties in retaliation for filing a gender discrimination and sexual harassment claim.

The specific issue presented in the case was which standard should apply to evaluate whether an employer has taken an “adverse employment action” against an employee after he or she files a discrimination claim under Title VII. The circuit courts of appeal were split on the appropriate standard. The Supreme Court chose the Seventh Circuit’s standard that evaluates whether a reasonable employee would consider the employer’s action to be a “material adverse change.”

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.

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.

Administrative Proceedings

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 for 37 days — only 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 also 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, en banc, held that the company’s suspension (that was later rescinded with full backpay as a result of the arbitration decision), and the inconvenient reassignment to a rail yard laborer position, constituted an actionable adverse employment action within the meaning of Title VII.

Supreme Court’s Holding

This was, in essence, a case of statutory interpretation. The Court compared the discrimination provisions of Title VII, that prohibit discrimination in the “terms and conditions” of employment, to the retaliation provision that is not limited in the same way.

The court wrote, however, that not every employer action would be viewed as retaliatory; there must be a “material adversity,” as distinguished from a “trivial adversity” in the eyes of a reasonable employee. As a result, employer action that would not constitute illegal discrimination may, nevertheless, become illegal retaliation if the action was taken in response to a discrimination claim.

Seventh Circuit Standard Affirmed

The Supreme Court adopted the Seventh Circuit’s test for illegal retaliation as stated in Washington v. Ill. Dept. of Revenue, 420 F.3d 658, 662 (7th Cir. 2005). The Court held there does not need to be a close nexus to employment for retaliation to exist.

Title VII retaliation liability arises 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; under the Seventh Circuit’s test, adopted by the Supreme Court, it is enough if the charge is materially adverse to a reasonable employee and would “dissuade a reasonable worker from making or supporting a claim of discrimination.”

Analysis

The standard of “materially adverse” literally added the term “material” to the statute because the statutory standard does not contain a “materially” requirement. Courts are not, on the other hand, human resources review departments that reconsider every de minimus and trivial decision employers make. Therein lies the balancing act the Court struck to devise the appropriate standard.

Although the law on retaliation in the Seventh Circuit does not necessarily change, Burlington Northern v. White will revive retaliation cases in other circuits, such as the Fifth Circuit, that applied a more restrictive standard.

Further, the Court’s holding is certain to encourage the trend in discrimination litigation of filing retaliation claims in addition to, or in some cases in lieu of, a discrimination claim.

In sexual harassment cases, for example, employers’ policies usually require that employees first lodge complaints with a supervisor or human resources department.

The employer’s response, and any subsequent discipline of the complaining employee, may give rise to a retaliation claim, even if the underlying harassment complaint was of dubious merit. As a result, the retaliation claim may survive dismissal even if the employer prevails on the harassment claim.

John D. Finerty, Jr. is a partner at Michael Best & Friedrich LLP. He can be reached at (414) 225-8269 or on the Internet at [email protected].