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Employer v. employee: when is it forbidden retaliation under title VII?

Does an Illinois employer violate Title VII's anti-retaliation provision by suing a worker who has filed a discrimination claim? If the employer's suit is defensive (a counterclaim or affirmative defense to the employee's claim), almost certainly not. But other kinds of litigation by employers against employee-claimants might constitute forbidden retaliation.

Title VII of the Civil Rights Act of 1964, which prohibits workplace discrimination, (1) depends for its success on employees' willingness to file complaints and act as witnesses. (2) It establishes an administrative procedure whereby the Equal Employment Opportunity Commission ("EEOC") receives employee complaints and works with state and local agencies to settle disputes. (3) But a complainant must file a charge of discrimination to set the process in motion, (4) after which the EEOC may exercise its broad investigatory powers. (5)

In short, Title VII only works if employees feel free to approach officials with their grievances. (6) To that end, the anti-retaliation provision of Title VII, section 704(a), prohibits an employer from retaliating against an employee who makes a charge, testifies, assists, or participates in a Title VII investigation, proceeding, or hearing or otherwise opposes unlawful employment practices. (7)

Workplace retaliation like termination or demotion is clearly forbidden. But does an employer's filing a lawsuit against a claimant constitute retaliation? The short an swer in the seventh circuit, unlike in many other circuits: almost certainly not if the litigation is defensive, such as a counterclaim or affirmative defense to the claimant's lawsuit. On the other hand, if your employer client is using litigation as a sword and not a shield, it might be a different story.

This article looks at the anti-retaliation provision of Title VII and the Supreme Court's Burlington case and related cases that expanded its scope. It also looks at the cases out of the seventh circuit and the northern district, which have held that while 1) there is a presumption against regarding employer litigation against employees as retaliation, 2) that presumption can neverthe less be overcome when an employer initiates litigation against an employee, but 3) defensive litigation by an employer is almost certainly not Title VII retaliation.

Retaliatory conduct defined

An employee who (i) opposes an unlawful employment practice under Title VII and (ii) was the object of an adverse employment action that (iii) was caused by his opposition to the unlawful employment practice (8) is a victim of retaliation. And an employee who reasonably believes he is opposing an unlawful employment practice is engaging in statutorily protected expression. (9) Employers, then, are broadly prohibited from taking adverse action against an employee for opposing an unlawful employment practice. (10)

Employee filing and the retaliation proscription. For employees who believe they have been subjected to discriminatory conduct, filing a discrimination charge with the EEOC effectively reports discrimination to the appropriate governmental authorities. Upon receiving the charge, the EEOC investigates and usually issues a finding.

Afterwards, the employee may bring a civil action against the employer. An employee in Illinois preserves his right to bring a lawsuit against the employer, provided the charge of discrimination was filed with the EEOC within 300 days of the last discriminatory act. (11)

Beyond providing legal recourse for the employee, filing a charge is also a protected activity under Title VII. (12) As a result, the employer may not retaliate against the employee by discharge, discipline, or the like. (13) Indeed, once the employee has filed a discrimination charge, any adverse action he or she suffers as a result can be the basis for a Title VII retaliation claim. (14)

Employer litigation as retaliation.

To what extent does the proscription against retaliation apply to legal action against employees rather than adverse treatment in the workplace? (15) Attorneys for the employer will almost certainly deny allegations of wrongdoing, but might also consider asserting affirmative defenses, counterclaims, and even bringing a separate cause of action against the employee. Will that be perceived as an attempt to intimidate and harass a civil rights claimant?

If so, the employer might be subject to additional liability under Title VII. At the very least, the employee may file an additional charge of discrimination. He or she might also plead a prima facie case of Title VII retaliation if the action is taken against the employee within a suspiciously short period after the charge or complaint is filed. (16)

Burlington expands the definition of forbidden retaliation

In 2006, the United States Supreme Court ruled in the seminal Burlington N & Santa Fe Ry Co v White (17) case that section 704(a) protects an employee from retaliatory action by the employer even if it does not directly alter the terms and conditions of employment.

The Court also answered the question of how harmful adverse action must be to constitute unlawful retaliation under Title VII, (18) adopting the seventh circuit's approach that actions must be "materially adverse" and "harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination." (19)

This standard for materiality has elements of the objective and subjective. The Burlington Court wrote that "[t]he real social impact of workplace behavior often depends on a constellation of surrounding circumstances, expectations, and relationships which are not fully captured by a simple recitation of the words used or the physical acts performed." (20)

The Supreme Court arrived at its ruling by examining the purpose of Title VII and its anti-retaliation provision, as well as the effects its decisions would have upon employees and employers alike, (21) noting that the primary objective of Title VII is to eradicate discrimination in the workplace. (22)

Tellingly, the Court expressed concern that a narrow reading of section 704(a) would not fulfill the section's primary mandate. Limiting the anti-retaliation provision to employment-related actions would not deter the many forms that retaliation can take, because an employer can effectively retaliate against an employee by taking harmful actions outside the workplace that are unrelated to employment. (23)

Although the Court declined to expressly identify retaliatory litigation conduct as an unlawful form of retaliation under Title VII, Burlington twice referenced cases involving employer lawsuits in ruling that the scope of Title VII retaliation must include retaliatory actions taken outside of the workplace. (24) First, the Supreme Court cited a tenth circuit case, Berry v Stevinson Chevrolet, which held that an employee stated a cause of action for Title VII retaliation based upon allegations that the employer filed unfounded criminal charges against her. (25) Second, the Court referenced Bill Johnson's Restaurants, Inc v NLRB (26) which enjoined a retaliatory and baseless lawsuit found to constitute an unfair labor practice under the National Labor Relations Act, 29 USC section 151, et seq. (27)

The seventh circuit's presumption against litigation as retaliation

While Burlington thus opens the door for employees to file Title VII retaliation claims based on litigation conduct, the seventh circuit has been skeptical. Back in the 1998 case Steffes v Stepan Co, (28) the court wrote that "it will be the rare case in which conduct occurring within the scope of litigation constitutes retaliation prohibited by these statutes." (29)

The seventh circuit's presumption against finding litigation conduct retaliatory remains largely undisturbed in the wake of the Burlington decision. One year after Burlington, two northern district cases expressly relied upon the presumption in finding against plaintiffs who premised Title VII retaliation claims on litigation conduct. Hasan v Foley & Lardner, LLP (30) summarily concluded that filing a lawsuit would never be retaliation unless it was an abuse of process, and Ergo v Intl Merchant Services, Inc (31) expressed doubt as to whether counterclaims could ever form the basis of a Title VII retaliation claim. (32)

But while the seventh circuit presumes that litigation conduct is not retaliatory, it has nonetheless been unwilling to extend absolute immunity to attorneys engaged in litigation conduct. (33) In Auriemma v Montgomery, (34) the court would extend immunity only to attorneys engaged in discovery or presenting evidence at trial and reasoned that the grant of absolute immunity "does impose a significant cost upon society in that some persons who are genuinely wronged are denied redress for their injuries." (35) And in Steffes, the court expressed concern that a grant of absolute immunity could interfere with the policies underlying the antiretaliation provisions of Title VII and the Americans with Disabilities Act. (36)

Because of this circuit's reluctance to extend absolute immunity to attorneys engaged in litigation conduct, Illinois practitioners should understand what kind of litigation conduct might rebut the presumption enunciated in Steffes and constitute unlawful retaliation in the wake of Burlington.

Offensive versus defensive litigation

The seventh circuit's decision in Steffes stands for more than just the presumption against litigation as retaliatory conduct and the refusal to grant absolute immunity to litigators. It also recognizes a distinction between employer actions in defense of a discrimination claim, such as filing an affirmative defense or a counterclaim, and those in which the employer initiates legal proceedings:

Defendants in discrimination suits must have some leeway to investigate possible defenses without undue fear of being subjected to additional liability in retaliation suits ... The prerogative to prepare a defense is not broad enough to warrant recognition of an absolute litigation privilege, which would effectively insulate everything done in preparation for litigation, but neither is it so stingy as to offer no protection to the communication at issue here. (37)

Following Steffes, seventh circuit courts are more likely to regard independent legal actions by employers as retaliatory litigation conduct, because defensive legal actions are markedly less threatening to civil rights claimants.

Employer lawsuits can be retaliation.

Indeed, employer lawsuits have been regarded by district courts within the seventh circuit as an appropriate basis for a Title VII retaliation claim when the employer is alleged to have initiated litigation against the employee because of a complaint of discrimination. (38) Further, federal courts may enjoin some retaliatory lawsuits, including state defamation actions, allegedly brought in retaliation against the employee for submitting claims of sexual harassment to the EEOC. (39)

In a 2003 case originating in the northern district of Illinois that anticipated Burlington, the seventh circuit acknowledged retaliatory litigation conduct as a basis for a Title VII retaliation claim. In Ishkhanian v Forrester Clinic SC, (40) Lia Ishkhanian filed a charge of discrimination, alleging that she was forced to resign by her employer, Liposuction and Cosmetic Institute ("LCS"), in response to ongoing sexual harassment by one of the doctors at LCS. (41)

Six months later, LCS sued Ishkhanian in state court for fraud, theft, breach of oral contract and conversion. In her amended complaint, Ishkhanian alleged LCS violated Title VII when LCS retaliated against her for filing a charge of discrimination by suing her in state court. The court ruled that Ishkhanian stated a cause of action for Title VII retaliation, (42) and noted that the seventh circuit did not require that retaliatory activity have a nexus to employment to be actionable. (43)

Courts like Ishkhanian reason that civil lawsuits subject employee-defendants to allegations that may damage their reputations and adversely affect their prospects for future employment. (44) Moreover, the cost of defending a civil suit can have a chilling effect on pursuing charges with the EEOC. (45) After Burlington, the scope of Title VII now undeniably includes adverse action taken against the employee outside of the workplace and in courts of law.

But only baseless counterclaims constitute retaliation. On the other hand, Illinois courts have long distinguished employer lawsuits from counterclaims. Unlike lawsuits, counterclaims will not have a chilling effect on plaintiffs who have already retained counsel, submitted their charges, and filed their lawsuits. (46) Also, it is hard for a plaintiff to show that a counterclaim was filed at a suspicious time, because counterclaims are compulsory under the Federal Rules of Civil Procedure. (47) Thus, the "mere filing of [the defendant's] counterclaim is not an adverse action that can provide a basis for an FLSA retaliation claim." (48)

Burlington has done little to change the approach of seventh circuit district courts to retaliatory-counterclaim cases, an approach that is friendlier to employers than that taken in most federal circuits. One year after the ruling, Ergo stated that "the filing of a compulsory counterclaim is a particularly unlikely basis for a retaliation claim." (49)

Further, to survive summary judgment, a plaintiff must now put forth evidence that the counterclaim is baseless and motivated by retaliatory animus. (50) The court in Beltran v Brentwood North Healthcare Center, LLC (51) explained that a claim is baseless if it is clearly frivolous under state law. (52) Beltran would not foreclose the possibility that a counterclaim could serve as the basis for a retaliation claim in the "'rare case,'" (53) but the Ergo decision flatly acknowledged that the threshold for concluding that a compulsory counterclaim is retaliatory should be high. (54)

And affirmative defenses never constitute retaliation.

Unlike a frivolous counterclaim, affirmative defenses do not expose a Title VII claimant to liability and the risk of a monetary judgment. (55) Since no damages are claimed and only a defense to the suit is raised, presenting an affirmative defense, even a frivolous one, will not support a retaliation claim. (56)

It is also important to distinguish between affirmative litigation conduct against the employee and actions only taken in response to an employee's Title VII claim. (57) Affirmative defenses, even baseless ones, cannot constitute actionable retaliation under Title VII, because they are not likely to chill plaintiffs' exercise of their statutory rights for fear of a monetary judgment.

Litigation tactics rarely constitute Title VII retaliation

The seventh circuit has concluded that litigation tactics, as opposed to a lawsuit itself, are not within the ambit of section 704(a) of Title VII. "An attempt to obstruct the litigation of the underlying discrimination complaint, like oppressive discovery requests and the withholding of other evidence, is inseparable from the litigation of the claim. Accordingly, it is a matter to be resolved pursuant to court rules, not by Title VII." (58)

This reasoning was later codified in the seventh circuit decision of Probst v Ashcroft. (59) There, the plaintiff in an underlying discrimination and retaliation suit alleged that defendants unlawfully retaliated against him by failing to produce relevant documents in a timely manner and unreasonably challenging the amount of claimed damages and attorneys' fees. (60)

In affirming the district court's grant of summary judgment to the defendants, the seventh circuit found that "[n]one of these actions can support a finding of liability in this retaliation lawsuit, because they are all excluded from consideration by the litigation privilege a doctrine that simply precludes actions taken in the adversarial setting of litigation and otherwise redressable through court process from supporting further litigation." (61) Past seventh circuit jurisprudence strongly suggests that the privilege will not amount to a blanket privilege for litigation conduct, but that discovery disputes and other litigation tactics cannot form the basis of a Title VII retaliation claim. (62)

Conclusion

The United States Supreme Court's Burlington decision signals the trend towards expanding the scope of the antiretaliation provision of Title VII. (63) District courts in other circuits have relied on Burlington to find employer lawsuits, counterclaims, and other litigation conduct to constitute unlawful retaliatory conduct. (64)

The seventh circuit has largely resisted this phenomenon by continuing to rely on the presumption against finding litigation conduct retaliatory. As the post Burlington decisions of Ergo and Beltran demonstrate, the northern district of Illinois and other district courts within the seventh circuit are likely to continue to find that virtually all defensive litigation conduct falls short of Title VII retaliation.

Of course, Illinois practitioners are nonetheless well advised to avoid taking offensive litigation conduct, such as bringing lawsuits against claimant employees who have filed charges of discrimination or who are otherwise engaged in protected activity under Title VII. For the moment, counterclaims provide the same relief to employers at a fraction of the risk. Yet, Burlington and its progeny suggest that retaliatory litigation conduct will be the focus of many charges of discrimination to come.

(1.) Burlington N & Santa Fe Ry Co v White, 548 US 53 (2006).

(2.) Id at 67.

(3.) See Alexander v Gardner-Denver Co, 415 US 36, 44 (1974).

(4.) Babrocky v Jewel Food Co, 773 F2d 857, 863 (7th Cir 1985).

(5.) EEOC v A. E. Staley Mfg Co, 711 F2d 780, 783 (7th Cir 1983).

(6.) Id at 783.

(7.) Jordan v Chertoff, 224 Fed Appx 499, 501 (7th Cir 2006), citing 42 USC [section] 2000e-3(a).

(8.) Cullom v Brown, 209 F3d 1035 (7th Cir 2000).

(9.) Hamner v St Vincent Hosp and Health Care Center, Inc, 224 F3d 701, 706-707 (7th Cir 2000).

(10.) Id at 706-707.

(11.) See Hentosh v Herman M. Finch University of Health Sciences/The Chicago Medical School, 167 F3d 1170, 1173-74 (7th Cir 1999).

(12.) See Tomanovich v City of Indianapolis, 457 F3d 656, 663 (7th Cir 2006).

(13.) 42 USC [section] 2000e-3(a).

(14.) Id.

(15.) See Tomanovich, 457 F3d at 663; Burlington, 548 US at 60.

(16.) Boumehdi v Plastag Holdings, LLC, 489 F3d 781, 793 (7th Cir 2007).

(17.) Burlington, 548 US 53 (2006).

(18.) Id at 64.

(19.) Id at 57.

(20.) Id at 69, quoting Oncale v Sundowner Offshore Services, Inc, 523 US 75, 80, 81-82 (1998).

(21.) Burlington, 548 US at 63-64, 68-69.

(22.) Id at 63.

(23.) Id at 63-64.

(24.) Id at 64.

(25.) Id at 64, citing Berry, 74 F3d 980, 986.

(26.) Bill Johnson's, 461 US 731 (1983).

(27.) See Burlington, 548 US at 66, citing Bill Johnson's, 461 US at 747, (employees and union members similarly protected by Title VII and NLRA, respectively, from retaliatory conduct).

(28.) Steffes, 144 F3d 1070 (7th Cir 1998).

(29.) Id at 1075.

(30.) Hasan, 2007 WL 2225831 *10 (ND Ill 2007).

(31.) Ergo, 519 F Supp 2d 765 (ND Ill 2007).

(32.) Id at 780-81 (retaliation claim brought under Fair Labor Standards Act (FLSA), 42 USC [section]201 et seq, still subject to Title VII Steffes presumption against finding litigation conduct retaliatory and also Burlington's "dissuade a reasonable person" standard to analyze the element of adverse action).

(33.) See Auriemma v Montgomery, 860 F2d 273, 276 (7th Cir 1988); See also Steffes, 144 F3d at 1075.

(34.) Auriemma, 860 F2d 273.

(35.) Id at 276.

(36.) Steffes, 144 F3d at 1075.

(37.) Id at 1077.

(38.) Harmar v United Airlines, 1996 WL 199734 *1 (ND Ill 2006), citing EEOC v Levi Strauss & Co, 515 F Supp 640, 643-44 (ND Ill 1981), among others.

(39.) Levi Strauss, 515 F Supp at 643.

(40.) Ishkhanian, 2003 WL 21479072 (ND Ill 2003).

(41.) Id at * 1.

(42.) Id at * 2.

(43.) Id, citing Aviles v Cornell Forge Co, 183 F3d 598, 605 (7th Cir 1999) and Herrnreiter v Chicago Housing Authority, 315 F3d 742, 745 (7th Cir 2002).

(44.) Ishkhanian, 2003 WL 21479072 * 2.

(45.) Id.

(46.) EEOC v K & J Mgmt, Inc, 2000 WL 34248366 * 3 (ND Ill 2000).

(47.) Beltran v Brentwood North Healthcare Center, LLC, 426 F Supp 2d 827, 835 (ND Ill 2006).

(48.) Id; See also Buie v Quad/Graphics, Inc, 366 F3d 496, 503 (7th Cir 2004) (FLSA retaliation claims are governed by the same legal analysis applicable to retaliation claims under Title VII and the Americans with Disabilities Act, 42 USC [section]12101 et seq).

(49.) Ergo, 519 F Supp 2d at 780-81.

(50.) Id at 781.

(51.) Beltran, 426 F Supp 2d 827.

(52.) Id at 834, citing Martin v Gingerbread House, Inc, 977 F2d 1405, 1407 (10th Cir 1992).

(53.) Beltran, 426 F Supp 2d at 835, quoting Steffes, 144 F3d at 1075.

(54.) Ergo, 519 F Supp 2d at 781.

(55.) See Harmar, 1996 WL 199734 at *1.

(56.) Id.

(57.) Id at * 2, citing Baker v Summit Unlimited, Inc, 855 F Supp 375, 376-77 (ND Ga 1994).

(58.) McKenzie v Illinois Dept of Transportation, 92 F3d 473, 486 (7th Cir 1996).

(59.) Probst, 25 Fed Appx 469 (7th Cir 2001).

(60.) Id at 471.

(61.) Id.

(62.) See Auriemma, 860 F2d at 277-78 (absolute immunity extended to parties conducting discovery and presenting evidence at trial does not amount to blanket immunity for attorneys engaged in litigation generally).

(63.) See generally Crawford v Metropolitan Govt of Nashville and Davidson County, Tennessee, 129 S Ct 846 (2009) (extending anti-retaliation provision of Title VII to include protections for employee who spoke out about sexual harassment, not on her own initiative, but in answering questions during employer's investigation of coworker's complaints).

(64.) See Nesselrotte v Allegheny Energy, Inc, 2007 WL 3147038 *12 (WD Pa 2007) (Supreme Court's expansive reading of Title VII anti-retaliation provision in Burlington supports finding that counterclaims which attack integrity of claimant may unlawfully dissuade reasonable individual from proceeding with discrimination complaint); See also Reed v Cedar County, 2007 WL 509186 *6 (ND Iowa 2007) (Burlington decision enables employees to sue for retaliation based on employer counterclaims); See also Walsh v Irvin Stern's Costumes, 2006 WL 2380379 * 1 (ED Pa 2006) (plaintiff-employee's retaliation claim based on defendant-employer's letter threatening to file criminal charges unless plaintiff withdrew her discrimination claims sufficient to survive a motion to dismiss).
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Author:Cholis, Nicholas P.
Publication:Illinois Bar Journal
Date:Dec 1, 2010
Words:3532
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