Employers Win One, Lose One
Wilke, Fleury, Hoffelt, Gould & Birney, LLP - Labor and Employment News

As you are more than likely aware, both federal and state law prohibit an employer from discriminating against an employee or job applicant on the basis of race, color, ethnicity, religion, gender, or sexual orientation. Additionally, an employer cannot retaliate against an employee or job applicant who complains about workplace discrimination or engages in other protected activity. This past summer, the United States Supreme Court issued a decision that broadens the scope of employer actions that constitute retaliation.

The California Supreme Court also issued a pro-employer decision this summer. The issue before the Court involved the “at-will doctrine.” As you may recall, the at-will doctrine allows an employer to terminate employees without cause when they do not have a written employment contract and the term of employment is of indefinite duration. The Court issued a decision that strengthened this doctrine, providing more protection for employers from “implied contract” claims.

Making A Discrimination Complaint Equals Job Security

In Burlington Northern & Santa Fe Railway Co. v. White, the plaintiff was the only woman working in the Maintenance of Way department at Burlington Northern’s Tennessee yard. Her primary responsibility was to operate a forklift. After a couple of months on the job, she complained to company officials that her immediate supervisor repeatedly told her that women should not be working in the department. She also complained that this same supervisor made insulting and inappropriate remarks to her in front of male co-workers. After she made these complaints, she was reassigned to do less desirable tasks, although within the same job description. She was told that the reassignment “reflected co-worker’s complaints that, in fairness, a ‘more senior man’ should have the ‘less arduous and cleaner job’ of forklift operator.” In another incident, the plaintiff and a co-worker had a disagreement and the co-worker told a company official that the plaintiff had been insubordinate. As a result, the plaintiff was suspended without pay. An internal investigation found plaintiff was not insubordinate and she was reinstated to her position and awarded backpay. Plaintiff sued the company for discrimination and retaliation. She claimed that Burlington Northern’s actions—(1) changing her job responsibilities and (2) suspending her without pay—amounted to unlawful retaliation in violation of Title VII.

The Supreme Court held that the company’s actions constituted retaliation. The Court concluded that Title VII’s anti-retaliation provision does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace. In other words, an employer can be liable for retaliation even if the action taken against the employee does not involve hiring, granting leave, discharging, promoting, and compensating. According to the Court, Title VII’s anti-retaliation provisions cover employer actions that are “materially adverse to a reasonable employee or job applicant.” The Court then explained that an action is “materially adverse to a reasonable employee or job applicant” when the action is “harmful to the point that [it] could well dissuade a reasonable worker from making or supporting a charge of discrimination.” The Court concluded that giving an employee the least desirable tasks within a particular job description and suspending an employee without pay would likely dissuade a reasonable worker from making a complaint and could thus support a retaliation claim.

What this ruling means for employers is that they must be extremely careful when it comes to dealing with employees who have made complaints of discrimination or engaged in other protected activity. The “reasonable worker” standard provides little guidance to employers as to what actions will or will not constitute illegal retaliation. Therefore, you must thoroughly investigate an employee’s complaints and review any proposed changes to be made to the terms and conditions of his employment before they are made. If those changes lead you to believe a reasonable employee would consider them harmful and would prevent him from making a complaint, you should not make such changes.

Challenge To Employment At Will Doctrine Defeated

On the bright side, the California Supreme Court made a ruling favorable to employers in Dore v. Arnold Worldwide, Inc. In this case, plaintiff alleged that during the recruiting process, executives at Arnold Worldwide, Inc. told him they were looking for someone to manage a new account “on a long-term basis.” They also told him that he would play a “critical role in growing the agency” and that the company was looking for a “long-term fix.” The plaintiff accepted the offer of employment. Following his acceptance, the employer sent plaintiff a letter confirming the offer of employment. The letter stated: “Brook, please know that as with all of our company employees, your employment with Arnold Communications, Inc. is at will. This simply means that Arnold Communications has the right to terminate your employment at any time. . . .” The plaintiff acknowledged the letter by signing it. He was subsequently terminated and argued that the employer’s statements during the interview process gave rise to an implied contract that he would be terminated only for good cause.

The California Supreme Court disagreed with plaintiff’s claim. It held that, notwithstanding the employer’s verbal statements implying a long-term relationship, the language in the offer letter that plaintiff could be terminated “at any time” created an unambiguous at-will employment relationship. This decision confirms that employers who include at-will language in their offer letters and employee handbooks will have an easier time defeating a plaintiff’s claims for breach of contract based on allegations of assurances of long-term employment. Therefore, it is important to formally document your employees’ at-will status and to have them sign a document acknowledging this status.

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