Employers are well aware that poorly performing employees may lodge baseless retaliation claims as a smokescreen to interfere with legitimate discipline. In fact, the number of employee retaliation claims filed with the EEOC has nearly doubled in the past 15 years, and the law continues to create new opportunities for these kinds of claims. But on June 24, the Supreme Court handed down a win for employers in University of Texas Southwestern Medical Center v. Nassar, rejecting a standard of proof advocated by the EEOC in 2003 and reminding us that court deference to EEOC Compliance Guidelines is far from automatic.
What Happened in Nassar?
Dr. Naiel Nassar, a physician of Middle Eastern descent, worked as both a University of Texas Southwestern Medical Center faculty member and a staff physician at a hospital affiliated with the University. He believed a higher ranked physician was biased against him on account of his religion and ethnic heritage, so he complained of harassment and discrimination to the physician’s supervisor. In a letter, Dr. Nassar ultimately resigned his University position (but accepted a job offer from the hospital for a staff physician position), claiming to have been the victim of religious, racial, and cultural bias against Arabs and Muslims. After reading the letter, the supervisor expressed concern that his accused colleague had been publicly humiliated by Dr. Nassar’s letter and protested to the hospital concerning Dr. Nassar’s job offer, claiming that the University’s affiliation agreement required that all staff physicians also be members of the University faculty. The hospital withdrew Dr. Nassar’s job offer, and he filed suit, accusing the University of Title VII harassment resulting in his constructive discharge and retaliation as a result of the supervisor’s efforts to prevent the hospital from hiring him. A jury found for Dr. Nassar on both counts and awarded him over $400,000 in back pay and more than $3,000,000 in compensatory damages, later reduced by the trial court. The University appealed, and the Fifth Circuit vacated the jury verdict on the constructive discharge claim due to insufficient evidence but affirmed the retaliation award, finding that Dr. Nassar was required only to prove that retaliation was a “motivating factor” for the supervisor’s actions protesting his job offer, not the “but-for” cause of the actions. The University took it up to the Supreme Court.
The Supreme Court’s Decision
The Supreme Court disagreed with the appellate court, finding that Title VII retaliation plaintiffs must prove that retaliation was the “but-for” cause of the challenged employment action, not merely a “motivating factor” for the employer’s action. In so doing, the Court declined to follow 2003 EEOC Compliance Guidelines that advocated for the lesser “motivating factor” standard typically applied by courts to Title VII discrimination claims. The Supreme Court noted that the provision within Title VII applicable to retaliation claims specifically requires an employee to prove that an employer acted “because of” the employee’s protected activity and that Title VII discrimination claims are covered by separate sections of the Act that do not apply in the retaliation context. The Court found the EEOC Compliance Guidelines unpersuasive and not entitled to deference because the document spoke in general terms, contained circular reasoning, and gave no regard to the differences between these specific statutory provisions.
What Employers Need to Know
Nassar has important implications for employers.
The case emphasizes the importance of the ordinary meaning of statutory language, a general topic we addressed when discussing the Gross v. FBL Financial Services, Inc. case in our June 18, 2009 Client Alert. Indeed, Nassar builds upon the textualist approach and stands for the careful and critical examination of employment statutes as described in Gross. We can expect lower courts to consider and now revisit the text, structure, and history of statutes with similar “because of” causation standards. For example, the False Claims Act (FCA) retaliation statute speaks in terms of prohibiting retaliation “because of” lawful acts done by the employee in furtherance of an FCA claim or other efforts to stop one or more violations of the FCA. Several courts prior to Nassar have recognized the mixed motive theory for FCA retaliation cases, see, e.g., Fanslow v. Chicago Mfg. Center, Inc., 384 F.3d 469, 485 (7th Cir. 2004); Norbeck v. Basin Elec. Power Co-op, 215 F.3d 848, 851 (8th Cir. 2000), but other courts seemingly interpret FCA retaliation causation as requiring less than “but for” causation. See, e.g., Shenoy v. Charlotte-Mecklenburg Hosp. Auth., 2013 WL 1943811 (May 3, 2013); McKenzie v. BellSouth Telecom., Inc., 219 F.3d 508, 514 n.4 (6th Cir. 2000). As a result of Nassar, we can expect to see some further attention to this issue.
Nassar will impact the determination of which claims plaintiffs can bring together in a single lawsuit, the standard of proof required for each, and the scope of potential recovery on each claim. Discrimination and retaliation claims often are brought together, but the dissent in Nassar laments that the majority’s decision may confuse juries considering both discrimination and retaliation claims. A predicate question that the lower courts are sure to address is whether the “but for” causation standard precludes juries from considering certain claims together in the first instance. For example, claims of age discrimination and retaliation require a plaintiff to establish “but for” causation. This means that, according to Nassar, the plaintiff would have to prove that both age and retaliation “actually motivated the employer’s decision.” Such jury questions could seemingly lead to an impermissible mixed motive analysis that is now barred for both age and retaliation claims. While the majority of opinions following Gross have not interpreted the “but for” standard to require the dismissal of alternative claims at the pleading stage, lower courts will need to flesh out the potential for early dismissals based on the Nassar standard.
By any standard, Nassar is good news for employers.