Retaliation Lawsuits Can Bring Surprising Results


If an employee complains about his employer's conduct, and the conduct isn't actually unlawful, may the employee still have a viable claim for discrimination? Under Title VII of the 1964 Civil Rights Act, the answer is "yes." Under that Act, an employee is entitled to complain (internally to the company or externally to a governmental agency) about what she perceives to be unlawful discrimination by the employer against any company employee. Such complaining or "opposition" is considered protected activity.

Underlying Complaint Can Be Meritless

Surprisingly, this is true even if the underlying discrimination being complained about or opposed did not occur and the administrative charge or lawsuit alleging it is completely meritless. In order to be protected against possible retaliation, the employee merely has to have a good faith belief that the employer is unlawfully discriminating. So even where an employer has legitimate business reasons for taking adverse action against an employee, the employer must proceed carefully where the employee has raised a complaint of discrimination.

In a suit against America Online ("AOL") in Utah, for example, an employee walked into his supervisor's office and saw pornography on the computer screen. The employee then reported his supervisor to higher management, and the supervisor was fired. Later, the employee was also terminated for reasons that, according to AOL, were completely unrelated to his report. Indeed, the company had relied upon the employee's report in making the decision to fire the supervisor. The employee filed suit, claiming that the presence of pornography on the computer screen constituted "sexual harassment" and also that he had been terminated in retaliation for reporting it. The judge dismissed the underlying sexual harassment claim as meritless. Nevertheless, the retaliation claim was allowed to go to the jury, which ruled in favor of the employee.

Violations of Company Policy Admitted in Court Proceedings Have Protection

In Medlock v. Ortho Biotech, Inc., an employee complained about race discrimination to the Equal Employment Opportunity Commission. He then filed a discrimination lawsuit, while he continued to work for the defendant company. The employee claimed he had been denied a salary increase for discriminatory reasons and that the job performance issues raised by the employer were mere pretexts for race discrimination. The company's attorneys took his deposition, in which the employee admitted that he had engaged in activities that were contrary to company policy, including using vulgarities with his supervisors, making disparaging remarks about the company to customers, and disclosing confidential information to the company's competitors.

The company then terminated the employee. At trial, the jury concluded that the employer, in doing so, had unlawfully retaliated against the plaintiff for having pursued his race discrimination claim. Because the firing took place shortly after the employee's deposition and was based on information learned in the deposition, the jury found that the company had unlawfully punished the employee for his "protected activity." The employee was awarded $460,000 in damages, plus attorneys' fees, even though the jury found no merit to his underlying race discrimination claims.

The jury verdict in the latter case highlights another feature of the law on retaliation. The Act also makes unlawful adverse action against an employee because he has "participated" in a court or administrative proceeding that investigates or adjudicates a discrimination claim. The classic example of retaliation for such "participation" would be firing an employee for testifying or providing an affidavit in support of another employee's discrimination claim. Such a protective rule is both reasonable and necessary. Yet as applied by the courts, it can lead to very surprising rulings.

Employee Cannot be Terminated for Participtation in Court Proceeding

In another case, for example, an employee was terminated because of deposition testimony he gave in a lawsuit brought against his employer by a co-worker. The plaintiff co-worker had claimed that the employee, along with others, had sexually harassed her. In his deposition, the employee admitted that he had engaged in some very inappropriate activity, but maintained that the plaintiff was a willing participant, and stated that her claim was unfounded. Nevertheless, when he was fired because of his sworn admissions in the deposition, he sued, claiming the company had retaliated against him for "participating" in the co-worker's lawsuit.

The federal appeals court reversed summary judgment for the employer, holding that even though the employee had participated unwillingly in his co-worker's lawsuit, he could not be terminated if the reason for his termination was based on his admissions in the court proceeding. The case thus illustrates the importance to employers of conducting their own investigations of discrimination complaints, rather than waiting to see what may be discovered as they defend a judicial or administrative complaint.