On June 24, 2013, the U.S. Supreme Court handed down a 5-4 ruling that will have significant implications for employee plaintiffs and employers where a claim of employer retaliation under Title VII is at issue. In University of Texas Southwestern Medical Center v. Nassar, M.D., the Supreme Court vacated and remanded a Fifth Circuit court finding of retaliation that was based on the use of the "motivating-factor" test as the causation standard in a retaliation claim under Title VII. The Court held that Title VII retaliation claims must be proved according to traditional principles of "but-for" causation, not the lesser "motivating-factor" test. Pursuant to the "but-for" test, a plaintiff making a retaliation claim must establish that his or her protected activity was a "but-for" cause of the alleged adverse action by the employer.
The facts involved Naiel Nassar, M.D. a physician of Middle Eastern descent who worked for a university medical center (the "University") that was a part of the University of Texas system and Parkland Memorial Hospital (the "Hospital"). The University and the Hospital had an affiliation agreement, which required the Hospital to offer vacant staff physician posts to University faculty members. Mr. Nassar contended that his supervisor at the University was biased against him on account of religion and ethnic heritage, and Mr. Nassar complained about the biased treatment. Subsequently, Mr. Nassar arranged to continue working only at the Hospital and he resigned his University post. Mr. Nassar then sent a letter to his supervisor and others, stating that he was leaving because of the supervisor's harassment. Another supervisor objected to the Hospital's job offer, and the Hospital withdrew its offer to Mr. Nassar. Mr. Nassar filed suit, alleging that the University had constructively discharged and retaliated against him in violation of Title VII of the Civil Rights Act, 42 U.S.C. § 2000, et seq. A jury found for Mr. Nassar on both claims. The Fifth Circuit vacated as to the constructive-discharge claim, but affirmed the retaliation finding on the theory that retaliation claims require only a showing that retaliation was a motivating factor for the adverse employment action and not its but-for cause.
Analysis of Supreme Court Decision
The Supreme Court outlined the basic principle that causation is an essential element of a retaliation case because when the law grants persons the right to compensation for injury from wrongful conduct "there must be some demonstrated connection, some link, between the injury sustained and the wrong alleged." Nassar at 1.
The Supreme Court has now rejected the "motivating-factor" test for retaliation claims in favor of the "but-for" test. The "but-for" test requires proof that the unlawful retaliation would not have occurred in the absence of the alleged wrongful action or actions by the employer. The Supreme Court reasoned that in defining the proper causation standard for Title VII retaliation claims, it is presumed that Congress incorporated tort law's causation-in-fact standard. In addition, the Supreme Court rationalized that as the retaliation provisions appear in a different section from the status-based discrimination provisions (e.g., employer discrimination on the basis of race, color, religion, sex or national origin in hiring, firing, salary structure, promotion and the like), the causation test applied to retaliation claims may be different from the causation test applied to "status-based discrimination" claims. Most notably, the Supreme Court rejected the Equal Employment Opportunity Commission guidance manual, which prescribes the "motivating-factor" test for employment retaliation claims. The Supreme Court found that the guidance manual lacked the persuasive force that is a necessary precondition to giving deference.
It is important to note that the causation standard for status-based discrimination remains the "motivating-factor" test. Thus, for status-based discrimination cases, it suffices to show that the motive to discriminate was one of the employer's motives, even if the employer also had other lawful motives.
Implications for Retaliation Claims
The Supreme Court's decision is an employer-friendly decision that appears to be aimed at lessening the costs, both financial and reputation-wise, on an employer whose actions were not in fact the result of any discriminatory or retaliatory intent. As such, the Supreme Court has raised the summary judgment hurdle for Title VII retaliation plaintiffs. The Supreme Court reasoned that the proper interpretation and implementation of the retaliation provisions under Title VII and its causation standard are of central importance to the fair and responsible allocation of resources in the judicial and litigation systems, particularly since retaliation claims are being made with ever-increasing frequency. In addition, if the lesser causation standard were to be implemented, it would likely contribute to the filing of frivolous claims, siphoning resources from efforts by employers, agencies and courts to combat workplace harassment.
The Supreme Court's decision should also lessen the effect of a familiar tactic whereby an employee asserts a claim of discrimination in anticipation of some adverse employer action, and then asserts that a subsequent adverse action by the employer was in retaliation for the complaint of discrimination. The Court's holding now requires the plaintiff employee to show that "but for" the assertion of the discrimination claim, the adverse action would not have been taken. This higher causation standard should give employers more flexibility to make employment decisions controlled by business issues and not controlled by fear of litigation when dealing with employees after a claim of discrimination has been made against the employer.