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Workplace retaliation claims rise as economy stumbles

Plaintiffs bar sees opportunities outside discrimination suits


The struggling economy is getting part of the blame for more retaliation claims being filed with the Equal Employment Opportunity Commission, employment practices liability attorneys and insurance brokers say.

In fiscal 1998, 18,198 retaliation claims were filed with the EEOC. Last year, the number had increased to 33,613 (see chart, page 20).

While traditional retaliation claims emanating from adverse actions such as being fired, demoted or not promoted for blowing the whistle on a co-worker or filing a workers compensation claim still dominate, high unemployment caused by the recession has resulted in laid-off workers arguing their job termination was caused by employer retaliation.

“You can draw correlations between the recession and layoffs and the rise in the number of retaliation claims,” said Adeola Adele, senior vp and U.S. employment practices liability product leader at New York-based broker Marsh Inc. “Employees whose jobs are terminated and cannot find new employment might think, "Well, you only fired me because two years ago I complained about discrimination, or last month I complained about sexual harassment by a supervisor.'”

Kenneth Ross, executive vp at broker Willis Executive Risks in New York, a unit of Willis Group Holdings P.L.C., agreed. “Many people who have lost their jobs and are going through some relatively difficult economic times may be looking for an unlawful basis for which their termination arose,” he said

Another factor pushing up retaliation claims is a zealous plaintiffs bar, said Aaron Maduff, a partner at employment practices law firm Maduff & Maduff L.L.C. in Chicago. “We're seeing employment lawyers popping out of the woodwork on the plaintiff side because they lost their jobs at the big defense firms,” he said. “Claims that we would routinely turn down we now see being filed by attorneys we've never heard of.”

“Plaintiff attorneys have caught on to these cases,” said Gary Batke, chair of the labor employment group at Columbus, Ohio-based law firm Bailey Cavalieri L.L.C. “They realize that while it may be difficult to prove the client was the victim of discrimination, it's a lot easier to show that he or she was the victim of retaliation.”

Mr. Batke pointed to a recent case—Frank Kevin Fischer vs. United Parcel Service Inc.—that the 6th U.S. Circuit Court of Appeals affirmed in July. “The plaintiff, an African-American, first filed suit against his employer, UPS, in 2000 alleging racial discrimination, harassment and retaliation,” Mr. Batke said. “UPS obtained a jury verdict in its favor in late 2001. The plaintiff continued working for UPS until he was discharged in 2003. He then sued under the retaliation provision of Title VII of the Civil Rights Act of 1964, alleging that the discharge was the result of the prior lawsuit.”

The jury awarded the plaintiff $150,000 in back pay, $650,000 in compensatory damages and $1.3 million in punitive damages, later reduced to $300,000. “It's an example of a retaliation claim being easier to prove than the underlying discrimination claim,” Mr. Batke said.

U.S. Supreme Court decisions also have widened employer liability for a retaliation lawsuit by loosening the standards of harm to win such claims. In Sheila White vs. Burlington Northern & Santa Fe Railway Co., the court ruled in 2006 that an “adverse action” is any action by an employer that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”

Ms. Adele said the ruling indicates, in part, “that if the court finds that the initial complaint of discrimination is unwarranted or without merit doesn't mean the court or a jury can't find that the retaliation occurred.”

She added that another Supreme Court ruling, Vicky S. Crawford vs. Metropolitan Government of Nashville and Davidson County, Tenn., essentially held in 2009 that any employee who provides evidence as part of an internal investigation of another employee's claim also is protected under the anti-retaliation provisions of Title VII. “If the person's employment is subsequently terminated or other adverse employment action is taken against such individual, he or she could argue that the only reason for the adverse employment action is because he or she participated in the investigation,” she said.

A factor also encouraging the rise in retaliation claims is an average award of $770,000 per successful claim, said Willis' Mr. Ross.

“The outcomes are typically severe, with many statutes allowing plaintiffs to collect punitive damages and double damages as a way to discourage other employers from doing the same thing,” said Mr. Batke. “Since these tend to be high-profile cases, there are also the reputational repercussions to consider to the employer's business.”