Employers Beware: Liability for Retaliation May Exist
Even Where There Is No Sexual Harassment
By Brad A. Levin
Consider the following circumstances. Your company is sued by a woman who asserts that she was sexually harassed while she was your employee, claiming that she had been subjected to a hostile work environment. You prevail against her claim, as the court finds that the acts were not severe enough or frequent enough to constitute sexual harassment. The court also finds that your manager promptly took effective steps to address the problem when the claim was made. As a result, the court summarily dismisses the sexual harassment claim against your company.
The court now turns its attention to another issue. Sometime after the sexual harassment claim was brought to your manager's attention and properly addressed, the same employee is terminated for repeatedly being rude to your customers. Based on this termination, your former employee brings an additional claim for retaliatory discharge, alleging that she was terminated in retaliation for her sexual harassment complaint. Since the court found that there was no unlawful harassment by your company in the first place, must you still worry about a claim for retaliation?
You bet you do!
The Kelly Case
In the recent case of Kelly v. United Road Towing, a Chicago federal district court ruled that even if you are "out of the woods" on a former employee's sexual harassment claims, and that employee was terminated for reasons unrelated to the sexual harassment complaint, you may still have liability for a claim of retaliatory discharge.
In the Kelly case, the court found that while the conduct in question may have been vulgar and mildly offensive, it was not so severe or pervasive as to constitute sexual harassment. The court also noted that the company had a written sexual harassment policy which was given to each employee, that the acts complained of completely ceased once the complaint was made, and that the supervisor involved was disciplined by the company following a prompt investigation. As a result, the court granted summary judgment dismissing the sexual harassment claim.
Despite the company's success in defending against the sexual harassment claim, however, the court held that the separate claim for retaliation would not be dismissed. The court even stated that the employer might be liable for punitive damages in connection with the retaliation claim if the employee could prove malice or reckless indifference. The court reached this conclusion by finding that the former employee had made out a prima facie case for a retaliation claim because she established that (1) she engaged in a protected activity; (2) her job performance met with her employer's job expectations; (3) her employer subjected her to a materially adverse employment action; and (4) her employer treated her less favorably than other similarly situated employees. The court went on to say that a reasonable jury could find that the stated reason for termination was just a "pretext" for the employer to terminate its employee in retaliation for her sexual harassment complaint.
Lessons Learned
The Kelly case and others like it should serve as a cautionary tale to employers. These cases illustrate the various land mines that companies must avoid under federal employment law, including liabilities associated with claims based on retaliatory discharge. In light of these cases, it is important to know what precautions are necessary to avoid sexual harassment and retaliation liability. For example, you should have a properly drafted sexual harassment policy and know how to respond to and investigate claims. You should also obtain legal advice when considering terminating an employee who has lodged a sexual harassment or other type of claim against your company, regardless of the merits of the employee's claim.
Brad A. Levin, a Principal in the firm's Business & Finance group, represents a diverse range of clients in both day-to-day and strategic transactions. His transactional practice includes counseling clients in stock and asset acquisitions, as well as in merger and joint venture transactions. As part of his corporate practice, Brad advises companies and private equity funds in connection with raising capital through private placement securities offerings. He also provides legal guidance in a broad range of employment matters, including hiring practices, terminations, disciplinary procedures, and non-compete and non-solicitation agreements. Brad can be reached at 312.521.2689 or blevin@muchshelist.com.
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