• The Most Important Employment Case of 2006: Supreme Court to Decide What Constitutes "Retaliation" Under Title VII
  • May 25, 2006
  • Law Firm: Baker, Donelson, Bearman, Caldwell & Berkowitz, PC - Birmingham Office
  • When an employee makes an internal complaint of discrimination, or files a Charge of Discrimination with the Equal Employment Opportunity Commission, employers usually treat that employee with extra caution. After all, if the employee is fired or demoted shortly thereafter, the employee could claim his employer had unlawfully retaliated against him for complaining. But what if the employee complains of a unspoken "tension" in the workplace after making his complaint? What if the employer transfers the employee to another position with the same pay and benefits, but less prestige? What if the employer initially decides to terminate an employee, but is overturned by an internal grievance process, and the employee returns to her job? Is that unlawful retaliation, too?

    The answers to these questions, and others like it, are currently being considered by the United States Supreme Court in Burlington Northern Santa Fe Railroad Company v. White, a case many commentators have labeled the most important employment law case of 2006. In Burlington Northern, the Supreme Court will decide which adverse employment decisions are serious enough to lead to a retaliation lawsuit under Title VII of the Civil Rights Act of 1964.

    The case

    The case arose out of a railroad site in Memphis, Tennessee. In June 1997, Sheila White was hired to operate the forklift at Burlington Northern's Tennessee Yard location. White, who was the only female working at the site, alleged she was sexually harassed by her male supervisor. White's supervisor also allegedly told her that she was not working in a place that was "appropriate" for women. In September 1997, White complained to company officials about specific incidents of alleged harassment committed by her supervisor.

    Ten days later, company officials met with White to inform her that their investigation into her complaint had resulted in the disciplining of her supervisor. At this meeting, however, White was also told that several of her male co-workers resented the fact that she had been hired into the "easier" and "cleaner" forklift position, while male employees with more seniority continued to work as track laborers. White was then told that she was being removed from her initial forklift position and placed in a track laborer position because of her co-workers' complaints. White's pay and benefits remained the same in her new job, but she found the track laborer position to be a tougher and dirtier job. In October 1997, White filed a charge with the Equal Employment Opportunity Commission alleging sex discrimination and retaliation. In early December 1997, White filed an amended charge with the EEOC.

    In mid-December 1997, White was working on a different Burlington Northern site in Blytheville, Arkansas when she began arguing with another male supervisor. Later that day, White was suspended without pay for insubordination.This suspension occurred three days after the relevant decisionmaker had received White's amended charge. White filed a grievance over the suspension with her union four days later. White then filed a third charge with the EEOC, alleging additional types of retaliation. After an internal investigation and hearing of the facts underlying White's suspension, the grievance hearing officer found that White had not been insubordinate and that she had been wrongfully suspended. After a thirty-seven day unpaid suspension, White was reinstated to her position and reimbursed for her lost wages.

    After exhausting her avenues for relief with the EEOC, White filed a lawsuit against Burlington Northern in U.S. District Court in Memphis, alleging sex discrimination and retaliation in violation of Title VII. Specifically, White argued that her employer transferred her to the track laborer position and gave her a 37-day unpaid suspension to retaliate against her for complaining of discrimination. The case was tried to a jury in September 2000. The jury found for Burlington Northern on White's sex discrimination claim, and for White on her retaliation claim. The jury awarded White $43,500 in compensatory damages for her retaliation claim and awarded her attorney's fees. Burlington Northern asked the trial judge to overturn the verdict, arguing that the transfer and reversed suspension were not serious enough employment actions to constitute retaliation. When the trial judge refused, Burlington Northern appealed to the U.S. Court of Appeals for the Sixth Circuit in Cincinnati. The Sixth Circuit unanimously upheld the trial judge's ruling, and Burlington Northern appealed to the U.S. Supreme Court.

    The issue

    The issue presented to the Sixth Circuit and the Supreme Court is the definition of "adverse employment action." This legal threshold is usually employed by courts to screen out frivolous retaliation claims, like when an employee complains of being "looked at funny," from more serious claims. Some courts, like the Ninth Circuit, have a very low adverse employment action threshold, allowing almost any kind of employment decision that would reasonably deter an employee from complaining of discrimination to go to trial. Other courts, like the Fifth Circuit, require an employee to first prove she was subjected to an "ultimate employment decision," like termination, demotion, or a pay cut.

    The source of the split between federal courts is a disagreement over how to interpret the specific federal statute that outlaws retaliation. The federal law banning workplace discrimination forbids "discrimination in the terms and conditions of employment." The Supreme Court has interpreted this provision to require proof that the employee was damaged by a "tangible employment action" before proceeding with his or her case. The federal law banning retaliation, on the other hand, simply forbids "discrimination" against employees for opposing workplace discrimination. Provided this slight difference between the statutes, lower federal courts have had to decide whether Congress intended the two legal provisions to be interpreted consistently, or whether Congress really intended the difference in wording between the two laws to have substantive consequence.

    Before this case, the Sixth Circuit took a moderate stance on this issue, holding that an employee alleging unlawful retaliation must prove she was damaged by a "materially adverse change in the terms of her employment." After considering both the strict and lenient standards mentioned above, the Sixth Circuit declined to adopt a new definition of "adverse employment action" for the purposes of Title VII retaliation cases, and reaffirmed their "materially adverse change" standard. That court believed that this middle-of-the-road definition was forgiving enough to accomplish the policy goals of Title VII's retaliation clause while still imposing enough of a "screen" to filter out lawsuits based on trivialities.

    After deciding to retain their preexisting standard, the Sixth Circuit then applied this standard to the Burlington Northern actions under review. First, the Court found that White's thirty-seven day suspension without pay was an adverse employment action, even though she was later reinstated and reimbursed for her lost wages. While Burlington Northern may have returned White's wages, the Court reasoned, the effect of taking an employee's paycheck away for a month still imposed economic and emotional insecurities that were meaningfully adverse. Second, the Court decided that White's transfer from forklift operator to track laborer was also an adverse employment action, as White's new position was universally recognized to be more arduous, "dirtier," and less prestigious than her previous position. The Court was especially influenced by the trial testimony of male Burlington Northern employees who considered the forklift position a better job, and resented White for possessing it.

    On to the Supreme Court

    Burlington Northern appealed the Sixth Circuit's ruling to the U.S. Supreme Court, who granted review of the matter. In their briefs, the parties staked out clear positions for the Supreme Court to adopt. Burlington Northern argued that the federal laws governing employment discrimination and retaliation should be interpreted to require the same type of "adverse employment action." To rule otherwise, Burlington Northern suggested, would be to treat retaliation victims better than discrimination victims, an outcome hardly in line with the intent of Title VII. Given the Supreme Court's previous jurisprudence regarding "adverse employment actions" in discrimination claims, Burlington Northern argued, White's suspension and transfer were not actionable. White's brief, however, stressed both the clear difference in statutory language between Title VII's specific provisions barring discrimination and retaliation, and recent Supreme Court decisions turning largely on the "plain meaning" of statutory texts. White argued that if the Court adopted Burlington Northern's proposed standards, employers would be permitted to take all kinds of minor, but meaningful actions against complaining employees without risking legal liability.

    On April 18, 2006, the Supreme Court heard oral argument in the case. In their questioning, Justices Ruth Bader Ginsberg and David Souter both voiced skepticism towards Burlington Northern's assertion that White had not suffered a "materially adverse change" in her employment. "Isn't there a difference between sitting on a forklift and picking up steel rails with your bare hands?" Souter asked, adding, "do you agree that 'direct economic effect' can't be the only criterion?" Justice Antonin Scalia and Chief Justice John Roberts, however, appeared concerned that White proposed a legal standard that would permit trivial claims to go forward. Scalia speculated that under White's proposed test, an employee could file a retaliation suit simply because his supervisor failed to say "good morning" to him. A decision in the case is expected in July 2006.

    What it means

    The consequences of the Supreme Court's decision will be meaningful. If the Court were to adopt the Sixth Circuit's position, or perhaps even the "ultimate employment action" standard used by the Fifth Circuit, it could bar the claims of thousands of employees who genuinely feel they have been retaliated against through subtle, and not-so-subtle, employer actions that would not meet this potentially high standard. According to the EEOC, retaliation claims have increased greatly over the past decade, and now make up about 30% of all individual charges filed with the agency. If the Supreme Court opts to side with White, and apply a more lenient standard, employers can expect to see these numbers continue to increase. Employers will have to use even more caution in how they treat employees who complain of discrimination -- even if the employer is confident that the underlying complaint is without merit.

    Given the Supreme Court's recent trend of deciding employment law cases by looking closely to the actual text of the statute, it would not be surprising if the Court drew distinctions from the differences between Title VII's discrimination and retaliation provisions. The recent additions of John Roberts and Samuel Alito do not suggest the Court will change much from this interpretative philosophy. The Court will probably not, however, retreat from its other employment law jurisprudence requiring at least some kind of tangible employment action. Look for the Court to adopt a standard that permits trial courts flexibility to determine on a case-by-case basis whether an employer's actions were objectively, reasonably calculated to deter an employee from exercising her rights under Title VII. Unfortunately for Burlington Northern, its actions will probably be found to have met this standard.