Supreme Court Changes the Standard for Retaliation Claims

Often, it’s not the crime but the cover-up that will do you in. In some ways, that sentiment is applicable to retaliation claims for alleged discrimination in the workplace. Or at least it was, until the Supreme Court’s recent decision in University of Texas Southwestern Medical Center v. Nassar. Previously, an employer facing a discrimination suit was susceptible to a retaliation theory despite establishing legitimate reasons for the alleged discriminatory conduct (usually terminating or demoting the employee).  Specifically, so long as the plaintiff could show that the desire to retaliate for the employee’s pursuit of a charge of discrimination was at least a “motivating factor” behind any adverse employment action, the employer could be held liable. Thus, the potential existed for an entirely well-intentioned employer to be held liable under this standard. Nassar addressed this potential and changed the rules.

The plaintiff’s bar has increasingly pursued retaliation claims pursuant to the older standard. According to statistics maintained by the EEOC, the number of retaliation claims has nearly doubled in the past 15 years. The problem for the employer had been that it often could prove that there was no merit to the underlying discrimination claim, but it remained at risk of judgment for retaliation under the “motivating factor” test.  

In Nassar, the Supreme Court has dramatically altered the playing field. Disagreeing with the prevailing “motivating factor” standard, the Court held that the appropriate standard was “but for” causation. Now, it is no longer sufficient to prove that the adverse employment action may have been motivated in part by a desire to retaliate, it is now necessary to establish by a preponderance of the evidence that the adverse employment action would not have been taken “but for” the alleged motive to retaliate. This is a huge development, and a sea change in how the burden of proof was previously applied.   

This said, what tangible impact will this decision have going forward? It is unlikely that we will see a huge drop-off in the number of retaliation claims. But it most certainly will impact the likely success of such claims, and the value of these claims for settlement purposes. In any case, employers must be ever mindful of the potential for a retaliation claim. A key risk management tool in this regard is to maintain an up-to-date employment manual, including a well-documented termination protocol.

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