Recent Decisions Add to Employers' "To Do" Lists

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New decisions seem to keep popping up everywhere, adding to the complexity of managing employees.  Two recent ones deserve some special attention: Burlington Northern and Santa Fe Railway Co. v. White, decided on June 22, 2006, by the Supreme Court of the United States , and U-Haul Co of California, decided on June 8, 2006, by the National Labor Relations Board.  The former makes it easier for disgruntled employees to claim retaliation under Title VII; the latter may call into question the enforceability of many individual employee-employer arbitration agreements.

In Burlington Northern and Santa Fe Railway Co., the Supreme Court held unanimously that the anti-retaliation provision of Title VII applies not only to adverse actions taken by employers in the workplace (i.e., the anti-retaliation provision is not limited to actions affecting employment terms and conditions), but also to any employer action that would have been “materially adverse to a reasonable employee or applicant.”  The significance of the decision may not be obvious from the holding.  However, examination of the facts of the case shows how little may be required for an employee to successfully establish retaliation.

White, the only woman in her department, operated a forklift for Burlington .  After she complained, her immediate supervisor was disciplined for sexual harassment, but she was removed from forklift duty to standard track laborer tasks.  No loss of pay resulted, and the job was in the same classification as her previous job.  White complained to the Equal Employment Opportunity Commission (EEOC), stating that her removal from her job was gender discrimination and was in retaliation for her complaint of sexual harassment.  Burlington later suspended White for insubordination without pay, which led to another EEOC complaint.  Burlington later reversed itself on the suspension, finding that White had not been insubordinate, reinstated her, and awarded her backpay for the 37 days she was suspended.  No harm; no foul.  Right?  The jury, the Sixth Circuit, and now the Supreme Court, each said “wrong.”

The Supreme Court decided that both the reassignment and the suspension, individually, were enough to show retaliation.   Each, according to the Court, could have “dissuaded a reasonable worker from making or supporting a charge of discrimination.”  There was considerable evidence that the track laborer duties were more arduous and dirtier than those of the forklift operator position, and that male employees who resented White for occupying it considered the latter position a better job.  Similarly with the suspension, although White had received backpay, the Court believed many reasonable employees would find a month without pay a serious hardship.  White described her physical and emotional hardship to the jury, noting that she obtained medical treatment for emotional distress. An indefinite suspension without pay could well act as a deterrent to the filing of a discrimination complaint, even if the suspended employee eventually receives backpay, according to the Court. 

The Court did attempt to throw employers accused of retaliation a “bone.”  It assured employers that the anti-retaliation provision does not mean that “any” action claimed by an employee will be enough to establish retaliation.  Trivial or “petty” retaliation will not usually be enough.  There must be some harm to the employee:

A supervisor's refusal to invite an employee to lunch is normally  trivial, a nonactionable petty slight. But to retaliate by excluding an employee from a weekly training lunch that contributes significantly to the employee's professional advancement might well deter a reasonable employee from complaining about discrimination.

Under any reasonable reading of this paragraph, the Court is saying that sometimes   simply failing to invite an employee to lunch could be actionable.  Hardly enough to help employers breathe a sigh of relief.

While the Supreme Court was busy making sure that employees have an “unfettered” (their word, not mine) right to claim discrimination without consequence, the NLRB was taking its turn at bat by trying to undermine one of the more promising options available to employers when attempting to limit the proliferation of wrongful discharge and related suits by disgruntled employees and former employees: arbitration. Once again attempting to exert its authority on employers in the non-unionized environment, the NLRB pointed its arsenal at broadly worded arbitration clauses in private  employment contracts. 

In U-Haul Co. of California, a non-union employer had implemented an arbitration requirement as a condition of employment.  The policy provided that a number of specific state and federal claims would be subject to mandatory arbitration.  The policy also contained apparent catch-all, boilerplate language requiring that “any other legal or equitable claims and causes of action recognized by local, state, or federal law or regulations” would be within the scope of the arbitration clause.

The NLRB held (2-1) that the arbitration policy violated the National Labor Relations Act because it would reasonably tend to inhibit employees from filing charges with the Board.  Specifically, it decided that the catch-all language “any other legal or equitable claims and causes of action recognized by local, state, or federal law or regulations” could reasonably be construed by employees to include a requirement that employees arbitrate disputes for which they could file unfair labor practice charges with the Board.  This might make employees reasonably believe that they are precluded from filing such charges with the Board.

Importantly, the policy at issue did not state anywhere that an employee could not file an unfair labor practice charge.  Nor was there evidence in the record showing that the requirement had either been intended to apply, or been applied, to such activity.  Interestingly, there was no discussion in the decision of the “deferral concept” often applied by the Board to arbitration provisions in collective bargaining agreements.  A concept, it seems, that allows for the peaceful co-existence of an arbitration agreement and the unfair labor practice processes of the NLRB.

A wise employer will take these decisions into account in managing its workforce.  Managers should be provided a “refresher” course on an employee’s right to complain without retaliation about many workplace issues.  This should include an explanation that almost anything, in the right circumstances, can amount to retaliation.  If the employer has an arbitration agreement with employees, the language used in the arbitration provision should be reviewed, and if necessary, updated to make explicit an employee’s right to file an unfair labor practice charge with the NLRB.

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