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Businesses Could Be Retaliating Against Their Workers And Not Even Know It - Do You Know If You Are?

March 2012

By: Sean F. Darke, Esq.

How many times does a business look at employee relationships before terminating that employee? What about discussing with each supervisor whether or not the individual verbally made a complaint about the pay structure or their pay before terminating the individual? Probably never, but after 2011 it must review those issues every time!

Last year should be known as the year of retaliation. The reason why is because the United States Supreme Court wrote several opinions on retaliation that exist under certain federal laws. This article focuses on only two of those decisions. This article also discusses the U.S. Department of Labor's (DOL) reaction to those decisions in its recently released fact sheets.

In January of 2011, in Thomas v. Proctor, the Supreme Court decided whether or not a business that terminated an individual whose fiancé filed a discrimination complaint could have a complaint against the business under the retaliation provision. The Supreme Court said yes, holding that terminating the employee's fiancé is covered under the retaliation provision of Title VII. Under that retaliation provision, the Court held any decision that "might have dissuaded a reasonable worker from making or supporting a charge of discrimination" is considered retaliation.

So what does that mean for businesses? Do businesses need to review employees' relationships with others in the workforce? Does this apply to friends in the workplace? Unfortunately, it's unclear. Businesses need to be aware that they could be retaliating against an employee being terminated if he/she has a relationship with another employee who filed a discrimination claim. Businesses need to review relationships during their investigation in order to protect themselves from possible retaliation claims. Otherwise, a business may be exposing itself to litigation.

In another holding, Kasten v. Saint-Gobain Performance Plastics Corp., the Supreme Court held that oral complaints regarding the payroll system being illegal was enough to trigger the retaliation provision under the Fair Labor Standards Act. And the DOL has now issued fact sheets that are misinterpreting the Supreme Court's holding to issue regulations on the retaliation subject.

Beginning this past January 1 st, the DOL issued regulations on the retaliation provisions under the Fair Labor Standards Act. In the fact sheet, the DOL states "Complaints made to the Wage and Hour Division are protected, and most courts have ruled that internal complaints to an employer are also protected." This added statement is a tactic to intimidate businesses to offer protection to employees who make complaints about wages, which is not covered under the law. Businesses should know that neither the Fair Labor Standards Act nor the United States Supreme Court makes any holding that internal complaints by an employee to the business are protected. The Supreme Court's majority opinion did not address the issue of whether or not any complaint filed with the employer triggers the anti-retaliation provision, but the DOL is attempting to expand the provision. In fact, Justice Scalia actually addressed the issue in his dissenting opinion, stating that the plain meaning of the statute does not cover employees' complaints to the employer. So businesses must be aware of when the anti-retaliation provision is triggered in order to protect itself from litigation, although it is good business practice to take all complaints about wages seriously and address them immediately.

Even though the above regulations address retaliation under the Fair Labor Standards Act, the Supreme Court has addressed this issue with several other laws throughout 2011. It is imperative that businesses understand how their actions could create retaliation claims and how to easily protect themselves from these lawsuits. Wessels Sherman will also be addressing these retaliation provisions, along with other great topics to protect businesses, during its annual Power Seminar in April 27, 2012: "Beware of The Rising Tide: Steps To Avoid The New Most Frequent Employment Claim-Retaliation!

Questions? Please contact Sean F. Darke, Wessels Sherman Shareholder, at (312) 629-9300 or [email protected]