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Retaliation litigation: more than meets the eye?

Who's beating whom to the punch?

"They're retaliating against me!"

This complaint has been increasingly heard in the workplaces of America over the last several years.

Have laws encouraging employee whistleblowers to unmask misconduct unleashed a backlash of vindictive managers?

Or are savvy workers--and their attorneys--gaming the system to increase job security or obtain a big pay-off?

Neither response is completely accurate. But the retaliation litigation trend bears study.

First, the facts

In fiscal 2011, the leading basis for filing a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) was not race, gender, age, or disability; it was retaliation.

Fully 37% of charges filed alleged retaliation.

Title VII of the 1964 Civil Rights Act prohibits discriminating against an individual "because he has opposed ... an unlawful employment practice ... , or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing ..."

Until 2008, courts were fairly stingy about finding retaliation, unless the plaintiff's employment had actually been terminated for complaining about discrimination or for participating in protected activity.

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But then the U.S. Supreme Court decided in Burlington Northern and Santa Fe Railroad v. White that any action that "materially" adversely effects the terms and conditions of an individual's employment might constitute retaliation, even if there was no reduction in pay nor actual job loss.

This term, in University of Texas Southwest Medical Center v. Nassar, the Supreme Court is poised to open the floodgates of retaliation litigation yet further if it rules that, for a plaintiff to prevail, retaliation for engaging in protected activity need not be the only factor in an adverse employment decision. This would extend "mixed motives" claims from other discrimination areas to retaliation claims.

Increased protection for financial whistleblowers

While we have watched this significant increase in retaliation claims brought in the context of employment discrimination cases, a whole new class of plaintiffs has emerged alleging retaliation under corporate and financial reform laws.

In 2002 the Sarbanes-Oxley Act (SOX) carved out a new civil cause of action for employees retaliated against for speaking up about financial misconduct in their organization.

SOX even provided criminal penalties for egregious cases. But few claims actually made it through to the courts. One reason: a short deadline for asserting claims.  Another: a complicated procedure for filing charges, which was administered by the Occupational Safety and Health Administration.

However, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) beefed up protections and remedies for financial whistleblowers considerably.

Dodd-Frank created a two-tier anti-retaliation program. 

First, the law clarified the SOX provisions for financial whistleblowers generally.

Second, for those whistleblowers who participated in Dodd-Frank's bounty program, administered by the Securities and Exchange Commission (SEC), it provided a whole new and enhanced set of protections:

• Much longer deadlines for making a claim (up to ten years in some cases).

• Right to a jury trial in federal court.

• Possibility of by-passing administrative process completely.

So, if an employee is retaliated against for going to the SEC with his suspicions of financial misconduct (instead, for example, of reporting internally), he stands a chance of recovering up to 30% of whatever award the SEC obtains as a result of the information. But that's not all. He can also avail himself of a much more favorable procedure for a retaliation claim.

Two-faced trend

Whether a retaliation claim is brought under employment discrimination law, under SOX, or under Dodd-Frank, there is no need for the underlying report of misconduct to be found valid for the individual to recover for retaliation.

For example, if an employee's claim of sexual harassment is unsubstantiated after an appropriate investigation, but the employee suffers some adverse change in her terms and conditions of employment, she may still successfully assert a retaliation claim.

This fact may lead someone more cynical than me to conclude that the wave of retaliation claims in recent years is less the result of legislation aimed at encouraging employers to create a speak-up culture, and more that employees anticipating discipline or termination are getting in first by filing a workplace complaint.

One-size-fits-all solution: management training

Luckily, HR professionals don't have to take sides in this analysis. Training managers about your zero-tolerance policy for workplace retaliation and on how to appropriately manage and document employee performance problems should reduce retaliation claims--or at least give the bank a strong defense against them in court.

Talk to managers about why retaliation is prohibited--the laws explained above--and what retaliation is. They may not understand that even simply giving someone the cold shoulder because the individual made a complaint can be perceived as illegal retaliation. Explain the serious consequences for both the bank and the manager if retaliation is found to have occurred.

However, managers must not be cowed into avoiding corrective action where appropriate, even if the employee has filed a workplace complaint. Give the managers tools to use, for example, a performance improvement plan that sets performance objectives over a specified time period, and partner with the manager in implementing these tools.

And don't forget the three rules of human resources: document, document, document!

Yahoo ends telecommuting

How flattering to know my blog is read by CEOs outside the banking industry!

Last month, I went against the trend by suggesting that working from home was an oxymoron. Now, Yahoo's CEO Melissa Mayer is stopping telecommuting in her company.

I focused on the over-use of telecommuting as an ADA accommodation, while I guess Melissa is trying to foster the creativity that comes from face-to-face collaboration (as well as cutting headcount to save money). Anyway, I will follow her experiment with interest.

Marian Exall

Marian Exall ( recently retired after a long career as an employment lawyer and HR professional with more than 25 years' experience advising banks and other employers on compliance issues. She was a principal and co-founder of Employment Law Compliance, Inc. which provides HR compliance solutions to banks. For more information on this or other employment compliance topics, please call Employment Law Compliance at 866-801-6302 or go to

Now retired from blogging as well, Marian also writes fiction. Her latest novel is a mystery called A Slippery Slope. For more information and to order, go to

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