On June 24, 2013, the Supreme Court rejected a lower standard of proof for employee retaliation claims under Title VII, finding that a lower causation standard could tempt poorly performing employees to file frivolous claims designed to interfere with the employer's lawful action. The Court held that 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. This decision represents the next step we informed readers of in our June 22, 2009 Client Alert discussing the Court's careful and critical examination of employment discrimination statutes focusing on the ordinary meaning of statutory language requiring proof that an employer acted "because of" a protected characteristic. The textualist approach we described in Gross v. FBL, 129 S. Ct. 2343 (2009), carried the day in Nassar. As set forth below, the decision has important implications for employers seeking early dismissals of retaliation claims under Title VII based on race, color, sex, religion and national origin. The lower courts will flesh out this decision's potential application to other similarly worded statutes impacting employers by analyzing the text, structure and history of the statutes.
FACTUAL AND LEGAL BACKGROUND
Dr. Naiel Nassar, a physician of Middle Eastern descent, worked as both a university faculty member and a staff physician at a hospital affiliated with the university. Dr. Nassar believed that a higher level physician was biased against him on account of his religion and ethnic heritage. Dr. Nassar complained internally to the supervisor of the allegedly biased physician claiming harassment and discrimination, including undeserved scrutiny of his billing practices and productivity and comments that "Middle Easterners are lazy."
Even though Dr. Nassar received a promotion in 2006 with the assistance of the allegedly biased physician, Dr. Nassar continued to believe that she was biased against him. As a result, Dr. Nassar attempted to continue his staff physician position at the hospital, but discontinue his university position. Dr. Nassar obtained a job offer from the hospital and resigned his university position in a letter expressly stating that he was a victim of religious, racial and cultural bias against Arabs and Muslims. After reading this letter, the supervisor expressed concern that his accused colleague had been publicly humiliated by Dr. Nassar's letter and that it was important that she be publicly exonerated. Shortly after, the supervisor 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 then withdrew its job offer to Dr. Nassar.
Dr. Nassar filed suit accusing the university of one count of racially and religiously motivated harassment in violation of Title VII that resulted in his constructive discharge. In his second count, Dr. Nassar accused the university of 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 more than $400,000 in back pay and more than $3,000,000 in compensatory damages, later reduced by the trial court.
The Fifth Circuit Court of Appeals vacated the jury verdict on the constructive discharge claim due to insufficient evidence. The Fifth Circuit, however, affirmed the retaliation award in count two 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.
SUPREME COURT'S DECISION
The Court initially distinguished between retaliation claims and so-called "status-based" claims of discrimination due to race, color, sex, religion and national origin. The latter claims are covered by separate sections of Title VII. The statutory provision applicable to retaliation claims requires an employee to prove that an employer acted "because of" the employee's protected activity opposing unlawful conduct or participating in an investigation, proceeding or hearing concerning unlawful employment practices. The "motivating factor" language, inserted by Congress in the 1991 Civil Rights Act, applies only to status-based claims.
The Court determined that no meaningful textual difference exists between the language in Title VII's clause barring retaliation and the "because of" causation standard applicable to age discrimination as discussed in the Court's 2009 Gross opinion. As a result, the Court rejected the request by Dr. Nassar and amicus United States to apply the lesser "motivating factor" causation standard applicable to Title VII status claims.
In reaching this decision, the Court rejected the attempt by Dr. Nassar and the United States to conflate retaliation with the ban on status-based discrimination in Title VII's detailed statutory scheme. The Court indicated that retaliation claims are made with ever-increasing frequency and the lessened causation standard could tempt poorly performing employees to assert unfounded retaliation claims as a smokescreen to prevent employers from lawfully terminating or taking other disciplinary action. In an important passage, the Court rejected the government's reliance on the 2003 EEOC Compliance Guidelines, which refer to past court decisions equating the status-based standards to retaliation claims and the purposes for punishing retaliation. The Court found the Compliance Guidelines unpersuasive and not entitled to deference because the document spoke in general terms, without regard to the specific statutory provisions and contained circular reasoning.
The dissent states that the Court has "reigned in" retaliation claims, which, in the dissent's view, cannot fairly be separated from status claims. In addition, the dissent indicated that Congress, in the 1991 Civil Rights Act, intended to restore and strengthen laws against discrimination, including retaliation, and the "motivating factor" language does not exclude retaliation claims from its ambit. The dissent further found the EEOC's position in its Compliance Guidelines entitled to respect and deference, viewing the Guidelines as thorough and logical. The dissenting opinion expresses concern with confusion stemming from instructions issued by trial judges to juries in both status based and retaliation claims. The dissent ends with call to action stating that this decision and Vance v. Ball State University should lead to a Civil Rights Restoration Act.
IMPACT OF DECISION FOR EMPLOYERS
Practically, Nassar will impact the determination of which claims plaintiffs may bring together, the standard of proof required and the scope of potential recovery. The dissent laments that confusion may ensue from a trial judge's instructions to juries considering both status-based and retaliation claims. However, a predicate question that the lower courts will 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 the proof would have to establish that both age and retaliation "actually motivated the employer's decision" according to Nassar. Such jury questions could seemingly lead to an impermissible mixed motive analysis. Similar to the chain of events after the Gross decision, lower courts will flesh out the potential for early dismissals of alternative claims based on the Nassar standard.
Nassar represents an important foundational decision that emphasizes the importance of the ordinary meaning of statutory language. Lower courts are expected to consider and 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 a False Claims Act 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) and other courts seemingly interpret FCA retaliation causation as requiring less than "but for" causation. See, e.g., McKenzie v. BellSouth Telecom., Inc., 219 F.3d 508, 514 n.4 (6th Cir. 2000); Shenoy v. Charlotte-Mecklenburg Hosp. Auth., 2013 WL 1943811 (May 3, 2013).
As Nassar indicates, retaliation claims have more than doubled in the past 15 years. While the dissent expresses concern that retaliation claims will be "reigned in" by the but-for standard of proof, new anti-retaliation laws are regularly enacted on the federal, state and local level, increasing the number of potential retaliation claimants. Only time, additional court decisions, employer actions and a multitude of factors beyond the control of courts will determine whether retaliation claims continue to increase. Nassar builds upon the textualist approach and stands for the careful and critical examination of these employment statutes as described in Gross.