Analysis by Leonid M. Zilberman on Recent Employment Rulings by the Supreme Court Appears in San Diego Daily Transcript

Leonid M. Zilberman, a partner at Wilson Petty Kosmo & Turner, recently analyzed the Supreme Court's recent ruling in an adverse employment case. In this precedent-setting case, the Court clarified what could constitute actionable retaliation in the workplace. Mr. Zilberman reviewed the history of the case, the unique positions taken by each party, and the implications this case will have on employers for years to come.

The San Diego Daily Transcript featured Mr. Zilberman's article in its July 12, 2006 issue. Below is a reprint of the article:

Supreme Court signals era of harmony on adverse employment actions

By Leonid M. Zilberman
Wednesday, July 12, 2006

Until the June 22 United States Supreme Court decision in Burlington Northern & Santa Fe Railroad v. White, there were multiple standards as to what constitutes an "adverse employment action" in retaliation claims under Title VII of the Civil Rights Act and California's anti-discrimination laws. Some federal courts held that an employee who complains of retaliation essentially had to be fired or demoted before he or she could sue. Other courts held that any action reasonably likely to deter an employee from asserting rights under Title VII supported a retaliation claim. In its 8-1 ruling in Burlington Northern, the Supreme Court has now articulated a single definition for what constitutes an adverse employment action, at least at the federal level.

Burlington Northern will make it more difficult for employers to summarily adjudicate Title VII retaliation claims, and retaliation claims may rise based on this decision. As a result, employers who regularly seek to remove cases to federal court may think twice about doing so. And, California employees may once again begin to pursue federal claims despite other obstacles federal courts present.

Background

White sued Burlington for sexual harassment under Title VII. After White complained to company officials about being sexually harassed, she was demoted. White filed a second discrimination compliant. After a conflict with her supervisor, White was suspended for "insubordination." Burlington eventually reinstated White with full back pay. White persisted with her sexual harassment and retaliation claims. After trial, a jury awarded her $43,500 in compensatory damages.

Burlington appealed the verdict, advocating that the court adopt the "ultimate employment decision" standard when analyzing retaliation claims. The Sixth Circuit rejected Burlington's argument, holding that Title VII can be applied to adverse employment actions less serious than termination. The court found that White's temporary suspension, lack of pay and job changes were sufficient to be a violation of Title VII.

Burlington appealed to the U.S. Supreme Court, which considered whether White's temporary suspension and demotion was actionable retaliation that affected the terms and conditions of employment. The court also had to determine how harmful the actions must be to fall within the scope of Title VII's anti-retaliation protection. The court had three distinct choices adopted by various circuits:

(1) The most employer-friendly standard that prohibits actions defined as "ultimate employment decisions" such as terminations and demotions;

(2) The more broadly adopted "materiality" standard, also articulated last year by the California Supreme Court in Yanowitz v. L'Oreal, which requires that the action materially change the terms and conditions of employment;

(3) The EEOC's "deterrence" standard, which is defined as any action that is reasonably likely to deter the charging party or others from engaging in protected activity.

The opinion

Justice Breyer, writing for the majority, wrote that any action that materially harms an employee who has complained of discrimination and would dissuade a reasonable worker from making or supporting a charge of discrimination can constitute actionable retaliation. The court did not agree with the "materiality" standard espoused by Burlington Northern because no such limiting words (related to the "terms or conditions of employment") appear in the anti-retaliation provisions of Title VII.

In order to prevent the harm envisioned in the anti-retaliation provisions of Title VII, Breyer wrote, a court cannot solely focus on actions that occur in the workplace. An employer can effectively retaliate against an employee by causing harm outside the workplace. Thus, the anti-retaliation provisions, unlike the substantive provisions of Title VII, are not limited to purely discriminatory actions that affect terms and conditions of employment. "Title VII depends for its enforcement upon the cooperation of employees who are willing to file complaints and act as witnesses." For this reason, the court held, the anti-retaliation provisions must be broadly interpreted to help assure the cooperation upon which the statute's primary objective depends.

At the same time, the court made it clear that a plaintiff must show that a reasonable employee would have found the challenged action materially adverse by dissuading the employee from making or supporting a charge of discrimination. "Trivial harms" described as "petty slights or minor annoyances," "personality conflicts and snubbing" that often take place in the workplace are not actionable. Thus, it can be said that the court adopted a modified materiality standard.

As the old adage goes, "bad facts make bad law." Applying this standard, the court found a sufficient evidentiary basis to support the jury's verdict that Burlington Northern retaliated against White. Specifically, the job reassignment and 37-day suspension without pay would have dissuaded a reasonable employee from complaining or assisting in complaints about discrimination, regardless of White's reinstatement with full pay.

The implications

This case could have substantial implications for the administration of Title VII claims. Most obviously, the court has articulated a much broader test for retaliation than had previously existed in many federal circuits. Both White's suspension and the company's transfer of White to a less desirable job independently established an actionable retaliation claim. The court appears to support the proposition that job-relatedness is not necessary to find retaliation.

This is a big victory for employees who have previously had to reach high hurdles in some jurisdictions to prevail on retaliation claims. This decision may also be a win for employers because the court has established an objective "reasonable" person test regarding what types of "petty or trivial" employee slights do not constitute retaliation. This case now provides concrete examples of what actionable retaliation means. Nonetheless, because the court construed the "materiality" term broadly (even including non-work related conduct), it has invariably increased the scope of supervisor conduct for which employers are automatically liable.

Ironically, the California plaintiffs' Bar, which usually attempts to avoid federal court, may now argue that Burlington Northern sets an expanded standard, beyond that set in Yanowitz last year. In Yanowitz, the California Supreme Court specifically rejected the "deterrence" test used by the Ninth Circuit and upheld the "materiality" standard. Like the U.S. Supreme Court, it also reaffirmed that "mere offensive utterances" and co-worker ostracism will not suffice. In Burlington Northern, the U.S. Supreme Court went one step further and avoided the requirement that the adverse action must be related to the "terms and conditions of employment," arguably expanding the scope of retaliation claims.

To access the full article from the San Diego Daily Transcript, click here. And to download a PDF reprint of the article, please click here.