Retaliation Claims ‘Paralyze’ Employers

The National Law Journal - Tresa Baldas / Staff reporter
October 20, 2008

An onslaught of retaliation claims has put employers in a state of paralysis, overlooking bad performance or misconduct for fear of getting smacked with a lawsuit, employers’ lawyers say.

But management-side lawyers are urging companies to fight back, stressing that shoddy work or unethical behavior shouldn’t be ignored just because a retaliation suit could follow. And it likely will follow, they said, noting that retaliation lawsuits are at an all-time high.

According to the Equal Employment Opportunity Commission, retaliation claims reached a record 26,663 in 2007, up by 18% from the year before and double the amount since 1992.

Still, defense counsel maintain, that doesn’t make discrimination or harassment plaintiffs untouchable.

“Do not feel that they can hold you hostage, because if you allow that problem employee to hold you hostage, you’re going to do greater harm to your company than you will in dealing with a potential retaliation claim,” said Thomas McCally of Washington’s Carr Maloney, who has won several retaliation lawsuits for employers. “I recently have dealt with a slew of these, and we’ve won a bunch of them.”

‘Knee-jerk reaction’

The key to winning retaliation claims, McCally said, is having documentation both before and after a complaint is filed to prove an employee had performance problems or engaged in misconduct.

“I think all too often, the knee-jerk reaction from [human resource departments] or supervisors is: As soon as that first complaint comes in, everybody freezes. They almost get paralyzed because they don’t want to do anything toward this employee for fear of a retaliation claim,” McCally said. “That’s the worst tactic to take and the worse position for an employer to be in.”

   *                     *                     *

But weighing heavily on the minds of employers is the steady flow of retaliation lawsuits, some of them very costly.

In July, an Ohio jury awarded $46.6 million to a man who claimed he was retaliated against for refusing to fire three elderly employees.

The man alleged Republic Services Inc., a waste management company, forged documents that criticized his job performance, wrongfully fired him and interfered with his ability to get a new job. The verdict is being appealed. Luri v. Republic Services Inc., No. CV 07 633043 (Cuyahoga, Co., Ohio, Ct. C.P.).

There’s also the 2006 U.S. Supreme Court retaliation ruling that’s had employers nervous for the past two years. In that case, the court held that retaliation isn’t limited to being fired or demoted, but can include more subtle reprisals, such as moving someone to a worse shift, excluding them from meetings or taunting them outside work. Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53 (2006).

But employee-rights attorneys believe retaliation is still a far bigger problem for employees than for employers.

   *                     *                     *

Employee-rights attorney Gary Phelan agreed, saying the toll that retaliation takes on employees is “enormous,” but that the plaintiffs’ bar has become more aggressive at battling the problem.

“There’s a general awareness in the plaintiffs’ bar that retaliation cases are the best cases and they’re easier to prove,” said Phelan of the Stamford, Conn., office of New York-based Outten & Golden.

“Retaliation is all about timing. You complain, and then compare what happened before and what happened after. It makes juries very angry and it lends itself to punitive damages.”