HR Management & Compliance

Don’t Mess with Retaliation

The U.S. 5th Circuit Court of Appeals (which covers Texas) recently issued a published decision, a rarity since most opinions are unpublished and therefore can’t be cited to courts as precedent. It was also a per curiam opinion, i.e., a three-judge panel decided the appeal but no particular judge took credit for writing it.

So, what is the significance? Appellate judges take the approach when they want to let lower-court judges know (1) they are misinterpreting the law, (2) here is a reminder on what the statute means, and (3) they need to be more careful in the future. The 5th Circuit sent the message in a case involving the meaning of employer retaliation under Title VII of the Civil Rights Act of 1964 and Section 1981, which are increasingly popular claims to file.

All is Good Until . . .

Paul Scott, who is black, worked for U.S. Bank from March 2016 until May 25, 2018, when he was fired. He had apparently received solid performance reviews until January 2018. What happened then? He claims he heard a white manager tell his (Scott’s) boss, Damarris Triggs, a black male, that he “intended to terminate four African-American employees.” (Note the racial composition here because it plays a role later in the story.)

Scott warned the four employees. One complained to HR, which, in turn, conducted an investigation and naturally interviewed Scott. He cooperated and was assured by HR that he wouldn’t be subject to retaliation for doing so.

Retaliation ensued, however, and it came quickly, according to Scott. In February, Triggs’ boss, Bennie Wyatt, started giving negative feedback to Scott about the loan portfolio he managed. Triggs allegedly join in the criticism.

The conflict came to a boiling point during a May meeting of the three men. Triggs and Wyatt gave Scott a verbal warning for poor performance based on his April production. He responded that he received a 97% score for May, the highest of his floor, but Wyatt said his “peaks and valleys” were unacceptable. The court opinion continued:

Scott said to Triggs, “Really man, this is harassment.” Triggs then “hit the desk with his fist so hard that it could be heard outside of the room” and exclaimed, “Boy Mr. Paul!” Wyatt then stood up and said, “Hold on, don’t say no more.” Scott said to Wyatt, “This is harassment. Are you trying to terminate me?” Wyatt replied, “No, but you can give me your resignation, if you want to.” Wyatt then suggested that Scott take an “ad hoc vacation day” and that they would “start fresh” the next day. Finally, Wyatt told Scott, “By the way, before you leave you can call HR if you want to. I have her number for you.” Scott interpreted this to be a veiled threat regarding his prior complaints.

The next morning, Scott was terminated, and a retaliation lawsuit followed.

Title VII vs. Section 1981

Let’s look at some basics. First, Section 1981 (part of the Civil Rights Act of 1866) prohibits retaliation against employees who oppose discrimination based on race or ethnicity. Title VII has a wider scope, but Section 1981 is a much better way to rock if an individual wants to roll his former employer, offering:

  • A four-year statute of limitations;
  • No exhaustion of remedies at the Equal Employment Opportunity Commission (EEOC); and
  • Uncapped damages.

Most employees don’t use the provision because, well, most lawyers don’t know about it.

Nevertheless, the key elements of a retaliation claim under Title VII and Section 1981 are identical. Under both laws, a retaliation claim can be filed only if the employee engaged in protected opposition to an unlawful practice. The individual must have a reasonable belief he is opposing unlawful conduct by the employer.

5th Circuit’s Answers to Key questions

Did Scott engage in protected opposition? Yes, he believed firing four African-American employees was against the law because it appeared their race was being considered. If the manager had said “I’m firing four employees,” then no unlawful conduct had occurred even if they ended up all being black.

Was Scott’s belief that he was reporting unlawful conduct reasonable? An employee may oppose conduct, but if the opposition is to the bad manners of a supervisor, then it isn’t protected activity because bad manners aren’t illegal.

In a case from another jurisdiction, a woman popped back into the office after hours and found two coworkers having consensual sexual intercourse on her work desk. When she complained, the company supervisors and HR allegedly laughed it off, telling her to sanitize her desk, and then she was fired. Just because she was protesting something to do with sex didn’t transform her complaint into a sex discrimination claim.

But wait, Scott was opposing something that was about to happen to others, and he merely became a witness in the ensuing probe—does that matter? No. His opposition was “reactive.” But the court’s questions are a little different regarding a witness versus those who opposed the conduct directly:

When examining whether an employee’s belief was reasonable, a court must ask whether a person, not instructed on Title VII law as a jury would be, [could] reasonably believe that she was providing information about a Title VII violation. . . . [Here], Scott alleged he overheard a supervisor state that he intended to terminate four African-America employees.

Considering an employee’s race when deciding whether to terminate the individual is an unlawful employment practice, according to the 5th Circuit. Scott made his statement in response to an investigator’s request along with an assurance of protection.

After giving the statement, Scott claimed U.S. Bank began to retaliate by (1) denying his loans, (2) issuing multiple warnings, (3) sending him to unnecessary training, and (4) ultimately terminating him. Thus, the 5th Circuit found he had alleged enough facts to support a reasonable belief that the employer had engaged in unlawful conduct.

But what about the evidence showing the statement had been reported to a black manager—isn’t that unbelievable? Answer: yes and no. The case was at the motion-to-dismiss stage, right after the lawsuit had been filed. The employer must answer the allegations. It also can tell the court: “Look at the allegations. They do not, when cobbled together, state a claim. So toss the lawsuit now.”

Whether the allegations make sense, however, didn’t matter. All that counts was whether Scott set out the elements of a claim, which he did: “I’m an employee, I opposed what I reasonably believed to be unlawful discrimination, and afterward, something bad happened to me as a result.”

The standard for deciding to dismiss was whether Scott’s claim was plausible. The 5th Circuit said “yes” and sent the case back to the trial court for discovery (pretrial fact-finding). Then, U.S. Bank will likely file a request for summary judgment, in which it asks the court to look at all the facts and dismiss the lawsuit. Scott v. U.S. Bank National Association (5th Cir., November 2, 2021).

Bottom Line

Retaliation cases are dangerous. Why? Most people believe that if you complain at work, then the hammer comes down on you.

Also, employers’ defenses can sound a lot like an infomercial, which often tells a similar “before and after” story: “Yes, you may be overweight [insert ‘before’ photo here], but take these pills or buy this piece of equipment, and you’ll look like this [switch to the ‘after’ photo].”

Same with retaliation: “He was a good employee, but then he complained.” And then and only then did bad stuff happen to him. That’s why it is so crucial to focus on the argument that no protected activity occurred. Here are two examples:

  • A black employee tells the manager, “I should have gotten the promotion, not Joe,” who happens to be white. But the statement isn’t stating opposition to unlawful discrimination because it never mentioned race.
  • A Hispanic employee says to the supervisor, “This place oozes race discrimination. It’s like the humidity: I can’t see it, but I sure can feel it.” The statement mentions discrimination, but it’s so vague as to be useless to an employer in fixing a problem. Thus, it isn’t a protected statement.

Be on guard. Even our conservative appeals court will give current or former employees a chance to prove their retaliation case.

Michael P. Maslanka is a professor at the UNT-Dallas College of Law. You can reach him at Michael.maslanka@untdallas.edu.