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Retaliation Claims Can Cost Employers Millions

Retaliation - Adverse Actions Can be Risky

Payback, retribution, vengeance – take your pick, these words all describe Retaliation, which means the act of taking revenge (harming someone for something that they have done).  Full definition and details

We’ve been hearing about retaliation quite a bit lately – from headlines like the CVS Case to seeing specific wording regarding retaliation in the fine print of new laws such as the MA Sick Time Law.

For the fourth year in a row, retaliation was the number 1 reason for discrimination claims filed with the EEOC in FY14. The nearly 38,000 retaliation claims accounted for 42.8% of all charges filed, a new record! These cases resulted in an astounding $140.5 million in monetary benefits, and that doesn’t include additional money awarded through litigation.

Today, employers face increased scrutiny and have a greater chance of lawsuits and huge fines if they take any action that is viewed as retaliation against an employee or group of employees. Retaliation can include any negative job action, such as demotion, discipline, firing, salary reduction, limited scheduling, or job or shift reassignment.

One thing is certain -- retaliation is illegal and it’s something that employers need to review and remedy today. The stakes can be quite high if this remains a common practice.

Ripped from the headlines -- The CVS Case and Retaliation

Store security professionals in CVS stores in New York were ordered to profile certain types of customers. Workers contend that they were regularly told to racially profile nonwhite shoppers. The suit says that one of the supervisors routinely told subordinates that “black people always are the ones that are the thieves,” and that “lots of Hispanic people steal.” A second supervisor frequently advised detectives, known as market investigators, to “watch the black and Hispanic people to catch more cases”.

When security workers complained about these practices to officials at CVS, they were subjected to “increased scrutiny, micromanagement and fabricated performance criticism” according to the lawsuit, and all four plaintiffs were eventually fired – a clear act of retaliation.

According to the EEOC, there are three main terms that are used to describe retaliation. Retaliation occurs when an employer, employment agency, or labor organization takes an adverse action against a covered individual because he or she engaged in a protected activity.

More details on these categories

Examples of protected activities include:

  • Complaining to anyone about alleged discrimination against oneself or others
  • Threatening to file a charge of discrimination
  • Picketing in opposition to discrimination
  • Refusing to obey an order reasonably believed to be discriminatory

New laws also guard against retaliation

Lawmakers and the courts have taken notice of similar cases, and virtually all new laws enacted today include verbiage designed to protect employees against employer retaliation, whether it’s discrimination in the CVS case, using earned benefits such as sick or vacation days, using FMLA time, taking maternity leave and other situations. It may take a court case to assert those rights, but in the end the courts will clearly see retaliation and by then it’s all over for the employer.

Looking at some recent laws here in Massachusetts, you can see that retaliation cases have made an impact on how the new laws have been written.  For example, under the Massachusetts Sick Time Law, it states:

Employers are prohibited from interfering with or retaliating based on an employee’s exercise of earned sick time rights, and from retaliating based on an employee’s support of another employee’s exercise of such rights.

Another example, under the MA Maternity Leave Act, the law tip-toes around the word “retaliation”, substituting “adverse action” instead, but supports it:

Pregnancy and childbirth are sex-linked characteristics, and any actions of an employer that adversely affect an employee because of her pregnancy, childbirth or the requirement of a maternity leave may also amount to sex discrimination under M.G.L. c. 151B. [6] Employers may not treat employees and applicants who are affected by pregnancy or related conditions less favorably than employees who are affected by other conditions but who are similarly able or unable to work. [7] Such disparate treatment may constitute sex discrimination.

Retaliation Advice for Employers

Before taking any kind of punitive action, employers are encouraged to review what has happened and more importantly, what you can prove happened.

Answer these 6 questions before acting:

  1. Does the action violate any employer policy or practice?
  2. Does the documentation support the action?
  3. What laws may be implicated?
  4. Does the action pass the “smell test”?
  5. What precedents have bene set previously?
  6. Has the employee been given every reasonable chance to succeed?

See our Infographic for additional details on these questions.

As a best practice, be sure to document everything leading up to an adverse action. Should you face a retaliation claim, it will be up to you the employer to prove your business case.

Final thoughts on Retaliation

By thinking and acting clearly (and training managers and supervisors to do the same), businesses can protect themselves from claims of retaliation. While it may not always seem like the easiest path to take, it is certainly the most affordable!

About MassPay

MassPay provides a cloud-based Human Capital Management (HCM) solution called iSolved, which allows small to mid-sized businesses to utilize technology to streamline their HR & Payroll processes and optimize their workforces. iSolved tracks detailed employee information, administers benefits, calculates work hours, processes payroll, offers employees self-service and keeps businesses in compliance with ACA and other regulations.

MassPay also offers HR Services to provide businesses with guidance on HR/Payroll issues, including adverse actions, and helps them set strategy for company policies, address compliance issues and coaches and trains business owners and their leadership on best practices in hiring, on-boarding, training and performance.