Who? Me? Individuals Not Just Companies Can Be Held Liable For Retaliation

In an issue of first impression, the United States Court of Appeals for the Seventh Circuit held in Smith v. Bray, 681 F.3d 888 (7th Cir. May 24, 2012) that individuals with a retaliatory motive can be held liable for causing the employer to retaliate against another employee. Just after the Civil War, Congress enacted the Civil Rights Act of 1866 which protects the right of all persons “to make and enforce contracts” regardless of race. A cause of action for retaliation under this statute exists if one person takes action against another for asserting the right to this contractual equality. In the context of employment law, unlawful retaliation can occur when an employer takes an adverse action against an employee for opposing impermissible discrimination. The methods for proving this claim follow the familiar standards of proof for Title VII racial discrimination claims and the familiar direct and indirect evidentiary proof schemes. A plaintiff pursuing this type of claim must show that (1) he engaged in protected activity – that he opposed discrimination in some way, for example; (2) that a material adverse action was taken against him by the individual or that the individual participated in the adverse decision taken against the plaintiff; and (3) that a causal connection exists between 1 and 2. In Smith, the plaintiff-employee’s supervisor and the human resources manager were sued individually. The Seventh Circuit made it clear that liability long has been possible against entities/employers based on the “cat’s paw” theory so this form of vicarious liability also can apply to individuals.

The “cat’s paw” theory gets its name from the fable of a 17th Century French poet, about a monkey who persuaded a cat to pull chestnuts out of the fire, so the cat gets burned and the monkey eats all of the chestnuts. This theory translated into the workplace context means that the employer gets the legal blame even if the actual executive or supervisor who fires or demotes a worker did not act out of a discriminatory intent, but instead the discriminatory or retaliatory intent of another executive or supervisor worked its way into the decision making process. Here, the final decision-maker is the cat and the supervisor or other employee with the discriminatory intent is the monkey.

The key to this type of liability is that plaintiffs must prove that the individual (in Smith, the employee’s supervisor and the HR manager) must have somehow taken the adverse action against the employee or helped cause the adverse action to be taken against the employee and that the individual has a retaliatory motive against the employee. The supervisor settled with the plaintiff-employee and so the case against only the human resources manager, Bray, was considered by the court. Bray was involved at every stage of the plaintiff-employee’s workplace controversies, including his discrimination complaints, discipline, disability leave and termination from employment. Bray had gathered all of the information needed to support the termination packet and she wrote the report requesting termination upon which the company relied to terminate the plaintiff-employee. Thus, it was clear Bray helped cause the plaintiff-employee’s termination. The next critical inquiry was did Bray act out of retaliatory motive? The court said no. No evidence existed that Bray acted based on some sort of retaliatory bias because the plaintiff-employee complained about discrimination. Any evidence that existed was attributed only to the supervisor, not Bray.

Now that it is clear that individuals can be sued and held liable, what does this mean for you? All employers should train their managers on retaliation and emphasize that not only is the company at risk of being sued but so are each of the managers. While these cases most commonly will involve supervisors and managers, it is possible that individual co-workers could be subject to liability if that employee provides information to the company or a supervisor that is relied upon when adverse action is taken against another employee. This is just one prong, however. Remember that retaliatory motive also must be proved and in Smith, this is where the plaintiff-employee’s case failed. Managers must be careful not to take adverse actions against employees who have complained about discrimination or harassment or who have participated in investigations involving these issues. All significant adverse actions to be taken against employees should be reviewed for compliance with company policy and the law and solid documentation should exist to support the decision. Filing of retaliation cases continue to rise each year and this new form of liability only increases the chances that more companies and now individuals will be sued.

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