Supreme Court Ruling Bolsters Ability of Third-Party Employees to Bring Retaliation Suits

In a decision bound to affect all employers, on Jan, 24, 2011, the Supreme Court unanimously held that the anti-retaliation provisions of Title VII of the Civil Rights Act of 1964 (“Title VII”) not only protect employees who challenge discrimination, but also co-workers who are related to or a close associate of the employee alleging discrimination. The Supreme Court's ruling in Thompson v. North American Stainless, LP, No. 09-291, expands upon its previous ruling in Burlington Northern and Santa Fe Railway Co. v. White. In Burlington, the Supreme Court held that the anti-retaliation provisions in Title VII prohibit actions that would dissuade a reasonable employee from making or supporting a charge. The Court's recent ruling in Thompson holds that individuals have a right to file a Title VII claim for “association” retaliation as well. By recognizing association retaliation, the Supreme Court has enlarged the field of potential plaintiffs in retaliation cases, and has allowed the petitioner to move forward with a lawsuit against his former employer for his termination, which came weeks after the company learned that his fianc'e, who had also worked for the company, filed a complaint of discrimination with the Equal Employment Opportunity Commission (“EEOC”).

Standard for Retaliation Prior to Thompson

Title VII provides that “[i]t shall be an unlawful employment practice for an employer to discriminate against any of his employees ' because he has made a charge” under Title VII. 42 U.S.C. ' 2000e-3(a). Moreover, the statute permits “a person a claiming to be aggrieved” to file a charge with the EEOC alleging that the employer committed an unlawful employment practice and, if the EEOC declines to sue the employer, it permits a civil action to “be brought ' by the person claiming to be aggrieved ' by the alleged unlawful employment practice.” ' 2000e-5(b), (f)(1). Thus, in addition to prohibiting discrimination, Title VII also prohibits retaliation by an employer against an individual who has made a charge of discrimination and/or who has testified, assisted, or participated in a Title VII proceeding or investigation.

Before Burlington, courts applied varying standards to this language, holding employers liable for widely varying degrees of action. Attempting to provide clarity on this issue for employers and employees, the Supreme Court, on June 22, 2006, issued the Burlington decision. The decision resolved the split among the circuit courts and significantly relaxed the standard employees must meet to prove retaliation. The Supreme Court announced that employees claiming that their employers violated the anti-retaliation provisions of Title VII must prove that the employment action would have been materially adverse to a reasonable employee or applicant, i.e., dissuading a reasonable individual from making or supporting a charge of discrimination.

After the Court's decision in Burlington was issued, it was not clear how and where courts would draw the line in terms of the type of conduct that would be considered retaliatory. What was clear, however, was that employers must carefully consider any action that they planed to take with respect to an employee who made a claim of discrimination.

Factual Background and Procedural History

Petitioner Eric Thompson worked for Respondent North American Stainless (“NAS”) from February 1997 until March 2003. Miriam Regalado, Thompson's now-wife, joined the company in 2000. Soon after Regalado commenced employment with NAS, she and Thompson began dating and subsequently became engaged. Their relationship was common knowledge at NAS.

In September 2002, Regalado filed a complaint against NAS with the EEOC alleging gender discrimination in violation of Title VII. Specifically, Regalado alleged that, because of her gender, NAS demoted her twice and paid her less than similarly situated male employees. NAS received notice of Regalado's complaint in February 2003; three weeks later, NAS fired Thompson for what it asserted were performance-based reasons. Thompson then filed a complaint with the EEOC alleging that NAS actually terminated him in retaliation for Regalado's EEOC complaint. He had not, however, personally engaged in any activities protected by Title VII, either on his own or on behalf of his then-fianc'e.

The United States District Court for the Eastern District of Kentucky granted NAS's motion for summary judgment, concluding that Title VII “does not permit third party retaliation claims.” The full Sixth Circuit Court of Appeals affirmed the decision, reasoning that that because Thompson did not engage in any statutorily protected activity, on either his own behalf or his fianc'e's, he is not included in the class of persons for whom Congress created a retaliation cause of action. The Supreme Court subsequently reversed the Sixth Circuit's ruling and retuned the case for further proceedings.

The Supreme Court's Analysis and Reasoning

In Thompson, the Supreme Court addressed two issues: 1) whether inflicting reprisals on a third party, such as a spouse, family member or fianc', who is closely associated with an employee who engaged in protected activity constitutes unlawful retaliation; and 2) whether Title VII allows such a third-party victim to bring a civil cause of action. Thompson argued that Title VII not only prohibits third-party retaliation, but also gives third-party victims standing to sue, primarily because this furthers Title VII's goal of eliminating discrimination and is consistent with the EEOC's longstanding interpretation of Title VII. In opposition, NAS argued that third parties do not have standing to sue the allegedly retaliating employer under Title VII because permitting such an action would contradict congressional intent and unnecessarily curtail employers' ability to manage their workforces.

Regarding the first issue, the Court followed its 2006 decision in Burlington, in which it held that Title VII's anti-retaliation provision must be construed to cover a broad range of employer conduct and to prohibit any employer action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The Court reasoned that it is “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fianc' would be fired.”

Regarding the second issue, the Court rejected NAS's argument that Thompson was not a “person aggrieved” under that law and instead applied a “zone of interests” test, which allows suit by any plaintiff “with an interest 'arguably [sought] to be protected by the statutes.'” The Court concluded that Thompson fell within the zone of interest protected by Title VII because that statute is intended to protect employees, such as Thompson, from unlawful acts by their employers. On that basis, the Court found that the terminated fianc' fell within the zone of interest protected by Title VII and was a person aggrieved with standing to sue under Title VII.

Although the Court refused to identify a fixed class of relationships for which third-party reprisals are unlawful, it noted that firing a close family member will almost always rise to that level, “while a milder reprisal on a mere acquaintance will almost never do so.”

What Does This Mean for Your Company?

Ten years ago, retaliation claims generated only 27% of the charges filed with the EEOC. Last year, they generated nearly 37% of the EEOC charges, a greater increase over the past 10 years than any other type of charge. http://www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm. And, in 2010, for the first time ever, the number of accusations of employer retaliation under all statutes surpassed race as the most frequently filed charge. Retaliation has proved to be a problematic issue for employers, because weak discrimination claims are frequently transformed by employers into strong retaliation claims. With the Supreme Court's decision in Thompson, we can only expect the number of retaliation cases to increase even more.

The decision in Thompson simply complicates things for employers by expanding the realm of who may bring retaliation suits under Title VII to a yet-to-be-defined group of relatives, friends and close associates of a discrimination claimant. When taking any adverse employment action against employees, employers must recognize that the term “person aggrieved” is now broader than solely the individual who engages in the actual protected activity. Though this ruling does not establish a bright-line test for third-party retaliation claims, an employer must take care not only when the employee has engaged in protected activity himself or herself, but also where he or she is closely associated with someone else who has. Because the Court opted not to identify a fixed class of relationships for which third-party reprisals are unlawful under Title VII, companies will face the practical problem of determining on a case-by-case basis whether certain relationships reach the “zone of interests.”

The slippery slope created by the Court's decision in Thompson with respect to the number of relationships that may be covered under a third-party retaliation claim underscores how important it is for companies to properly document the reasons for any adverse employment actions against an employee. It is now more critical than ever for employers to record evidence of the legitimate business reasons for actions in making employment decisions to avoid allegations of retaliatory animus.

Conclusion

By issuing this decision, the Supreme Court has sent a clear message to employers: Tread with caution not just around employees who have filed charges of discrimination, but also those who are closely associated with the employee who has filed a charge of discrimination. Resist the urge to take any action that could be perceived as retaliatory against those employees.

Tara G. La Fiura practices in the Philadelphia office of Blank Rome LLP. La Fiura represents private- and public-sector employers before federal and state courts and governmental agencies concerning virtually all aspects of employment and labor law. She can be reached at [email protected]. Cara Shafran practices in the firm's Washington, DC, office and concentrates her practice in the areas of labor and employment litigation. She can be reached at [email protected].

In a decision bound to affect all employers, on Jan, 24, 2011, the Supreme Court unanimously held that the anti-retaliation provisions of Title VII of the Civil Rights Act of 1964 (“Title VII”) not only protect employees who challenge discrimination, but also co-workers who are related to or a close associate of the employee alleging discrimination. The Supreme Court's ruling in Thompson v. North American Stainless, LP, No. 09-291, expands upon its previous ruling in Burlington Northern and Santa Fe Railway Co. v. White. In Burlington, the Supreme Court held that the anti-retaliation provisions in Title VII prohibit actions that would dissuade a reasonable employee from making or supporting a charge. The Court's recent ruling in Thompson holds that individuals have a right to file a Title VII claim for “association” retaliation as well. By recognizing association retaliation, the Supreme Court has enlarged the field of potential plaintiffs in retaliation cases, and has allowed the petitioner to move forward with a lawsuit against his former employer for his termination, which came weeks after the company learned that his fianc'e, who had also worked for the company, filed a complaint of discrimination with the Equal Employment Opportunity Commission (“EEOC”).

Standard for Retaliation Prior to Thompson

Title VII provides that “[i]t shall be an unlawful employment practice for an employer to discriminate against any of his employees ' because he has made a charge” under Title VII. 42 U.S.C. ' 2000e-3(a). Moreover, the statute permits “a person a claiming to be aggrieved” to file a charge with the EEOC alleging that the employer committed an unlawful employment practice and, if the EEOC declines to sue the employer, it permits a civil action to “be brought ' by the person claiming to be aggrieved ' by the alleged unlawful employment practice.” ' 2000e-5(b), (f)(1). Thus, in addition to prohibiting discrimination, Title VII also prohibits retaliation by an employer against an individual who has made a charge of discrimination and/or who has testified, assisted, or participated in a Title VII proceeding or investigation.

Before Burlington, courts applied varying standards to this language, holding employers liable for widely varying degrees of action. Attempting to provide clarity on this issue for employers and employees, the Supreme Court, on June 22, 2006, issued the Burlington decision. The decision resolved the split among the circuit courts and significantly relaxed the standard employees must meet to prove retaliation. The Supreme Court announced that employees claiming that their employers violated the anti-retaliation provisions of Title VII must prove that the employment action would have been materially adverse to a reasonable employee or applicant, i.e., dissuading a reasonable individual from making or supporting a charge of discrimination.

After the Court's decision in Burlington was issued, it was not clear how and where courts would draw the line in terms of the type of conduct that would be considered retaliatory. What was clear, however, was that employers must carefully consider any action that they planed to take with respect to an employee who made a claim of discrimination.

Factual Background and Procedural History

Petitioner Eric Thompson worked for Respondent North American Stainless (“NAS”) from February 1997 until March 2003. Miriam Regalado, Thompson's now-wife, joined the company in 2000. Soon after Regalado commenced employment with NAS, she and Thompson began dating and subsequently became engaged. Their relationship was common knowledge at NAS.

In September 2002, Regalado filed a complaint against NAS with the EEOC alleging gender discrimination in violation of Title VII. Specifically, Regalado alleged that, because of her gender, NAS demoted her twice and paid her less than similarly situated male employees. NAS received notice of Regalado's complaint in February 2003; three weeks later, NAS fired Thompson for what it asserted were performance-based reasons. Thompson then filed a complaint with the EEOC alleging that NAS actually terminated him in retaliation for Regalado's EEOC complaint. He had not, however, personally engaged in any activities protected by Title VII, either on his own or on behalf of his then-fianc'e.

The United States District Court for the Eastern District of Kentucky granted NAS's motion for summary judgment, concluding that Title VII “does not permit third party retaliation claims.” The full Sixth Circuit Court of Appeals affirmed the decision, reasoning that that because Thompson did not engage in any statutorily protected activity, on either his own behalf or his fianc'e's, he is not included in the class of persons for whom Congress created a retaliation cause of action. The Supreme Court subsequently reversed the Sixth Circuit's ruling and retuned the case for further proceedings.

The Supreme Court's Analysis and Reasoning

In Thompson, the Supreme Court addressed two issues: 1) whether inflicting reprisals on a third party, such as a spouse, family member or fianc', who is closely associated with an employee who engaged in protected activity constitutes unlawful retaliation; and 2) whether Title VII allows such a third-party victim to bring a civil cause of action. Thompson argued that Title VII not only prohibits third-party retaliation, but also gives third-party victims standing to sue, primarily because this furthers Title VII's goal of eliminating discrimination and is consistent with the EEOC's longstanding interpretation of Title VII. In opposition, NAS argued that third parties do not have standing to sue the allegedly retaliating employer under Title VII because permitting such an action would contradict congressional intent and unnecessarily curtail employers' ability to manage their workforces.

Regarding the first issue, the Court followed its 2006 decision in Burlington, in which it held that Title VII's anti-retaliation provision must be construed to cover a broad range of employer conduct and to prohibit any employer action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The Court reasoned that it is “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fianc' would be fired.”

Regarding the second issue, the Court rejected NAS's argument that Thompson was not a “person aggrieved” under that law and instead applied a “zone of interests” test, which allows suit by any plaintiff “with an interest 'arguably [sought] to be protected by the statutes.'” The Court concluded that Thompson fell within the zone of interest protected by Title VII because that statute is intended to protect employees, such as Thompson, from unlawful acts by their employers. On that basis, the Court found that the terminated fianc' fell within the zone of interest protected by Title VII and was a person aggrieved with standing to sue under Title VII.

Although the Court refused to identify a fixed class of relationships for which third-party reprisals are unlawful, it noted that firing a close family member will almost always rise to that level, “while a milder reprisal on a mere acquaintance will almost never do so.”

What Does This Mean for Your Company?

Ten years ago, retaliation claims generated only 27% of the charges filed with the EEOC. Last year, they generated nearly 37% of the EEOC charges, a greater increase over the past 10 years than any other type of charge. http://www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm. And, in 2010, for the first time ever, the number of accusations of employer retaliation under all statutes surpassed race as the most frequently filed charge. Retaliation has proved to be a problematic issue for employers, because weak discrimination claims are frequently transformed by employers into strong retaliation claims. With the Supreme Court's decision in Thompson, we can only expect the number of retaliation cases to increase even more.

The decision in Thompson simply complicates things for employers by expanding the realm of who may bring retaliation suits under Title VII to a yet-to-be-defined group of relatives, friends and close associates of a discrimination claimant. When taking any adverse employment action against employees, employers must recognize that the term “person aggrieved” is now broader than solely the individual who engages in the actual protected activity. Though this ruling does not establish a bright-line test for third-party retaliation claims, an employer must take care not only when the employee has engaged in protected activity himself or herself, but also where he or she is closely associated with someone else who has. Because the Court opted not to identify a fixed class of relationships for which third-party reprisals are unlawful under Title VII, companies will face the practical problem of determining on a case-by-case basis whether certain relationships reach the “zone of interests.”

The slippery slope created by the Court's decision in Thompson with respect to the number of relationships that may be covered under a third-party retaliation claim underscores how important it is for companies to properly document the reasons for any adverse employment actions against an employee. It is now more critical than ever for employers to record evidence of the legitimate business reasons for actions in making employment decisions to avoid allegations of retaliatory animus.

Conclusion

By issuing this decision, the Supreme Court has sent a clear message to employers: Tread with caution not just around employees who have filed charges of discrimination, but also those who are closely associated with the employee who has filed a charge of discrimination. Resist the urge to take any action that could be perceived as retaliatory against those employees.

Tara G. La Fiura practices in the Philadelphia office of Blank Rome LLP. La Fiura represents private- and public-sector employers before federal and state courts and governmental agencies concerning virtually all aspects of employment and labor law. She can be reached at [email protected]. Cara Shafran practices in the firm's Washington, DC, office and concentrates her practice in the areas of labor and employment litigation. She can be reached at [email protected].