Allison West puts the threat of retaliation claims very simply, and it should send a chill up the spine of any business owner.
"These claims are really, really something to be afraid of," says West, employment law specialist for the Employers Resource Council. "The biggest risk is going to be your exposure moneywise."
West, with William D. Edwards, a member of the employment and labor law group at Ulmer & Berne LLP, explained during the second in the ERC's Litigation Prevention Series why employers should take the threat of retaliation claims seriously.
A retaliation claim may arise when an employee faces a "significant change in employment status, (that) materially affects terms/conditions of employment."
Among those situations are:
- Hiring, refusal to hire, suspension, demotion, failing to promote, discharge, relocation;
- Reassignment with significantly different responsibilities or change in benefits;
- Threats, reprimands, harassment, negative evaluations and negative job references.
Employers are well aware of their exposure when it comes to sexual harassment and discrimination issues, but less well known are the problems they face when employees file suit claiming illegal retaliation. The Equal Employment Opportunity Commission may not find discrimination took place, but it may find retaliation took place. And that could be just as damaging.
Business owners can be slapped with compensatory and punitive damages, be forced to reinstate an employee and cover the cost of litigation. It's the punitive damages that can really hurt a business, West says.
While defending yourself may cost $50,000 to $100,000, punitive damages could reach into the millions. To emphasize the point, West cited a case in Missouri in which the jury awarded a single dollar in compensatory damages and $50 million in punitive damages.
According to Title VII, the Ohio legal definition states: "Employers are prohibited from retaliating against an individual who: 1) opposed any practice made unlawful by one of the employment discrimination statutes; 2) filed a charge, testified, assisted or participated in any manner in an investigation, proceeding or hearing under the applicable statute."
And it's not only employees who are protected. Applicants, former employees, even people closely related to the complaining party are protected from retaliation.
The protected actions of employees are very clear. The "double whammy" of litigation involves action under the following antidiscrimination laws:
- Title VII/Ohio Civil Rights Act
- Age Discrimination in Employment Act
- Americans with Disabilities Act
- Family & Medical Leave Act
- National Labor Relations Act
- Fair Labor Standards Act
- ERISA, OSHA, EPA, False Claims Act
- State and local laws
Among the statutorily protected activities:
- Filing a workers' compensation claim (or participating in one);
- Jury duty;
- Interfering with political action/voting rights;
- Wage garnishment;
- Complaining about minimum wage/overtime violations
- Child support enforcement;
- Military service.
West and Edwards offer these rules for prevention:
Create a separate, strongly worded antiretaliation policy and publicize it quarterly, and apply company rules consistently. Document all instances of poor performance prior to the protected activity.
"If you must discipline an employee who has made a complaint or has engaged in a protected activity, consider waiting a significant period of time or have higher management and/or legal counsel review the decision," West says.
Carefully consider who is in the need-to-know circle before revealing that employee has engaged in protected activity. Include the topic of retaliation in general annual EEO training for supervisors and managers. And don't forget to follow up with employees to make certain they are not shunned by supervisors and co-workers. Just as important, be careful not to provide a negative employment reference in retaliation for engaging in a protected activity.
Edwards offers these final bits of advice: "Act in haste; repent in leisure. Start practicing prompt, effective documentation, now. Train your employees now, train them often and train them regularly."
Many of the actions employers take are, to put it kindly, ill conceived. As Edwards puts it, "If it wasn't for stupidity, I think I'd be out of business." How to reach: Employers Resource Council, (216) 696-3636; Ulmer & Berne LLP, (216) 621-8400
Daniel G. Jacobs (email@example.com) is senior editor of SBN.