Plaintiffs were employed as internal auditors for defendant The Boeing Company.  As internal auditors, plaintiffs were responsible for helping defendant comply with SOX requirements and assessing the effectiveness of its internal controls and procedures for financial reporting.  Plaintiffs expressed concerns to defendant’s management and Human Resources about perceived pressure and deficiencies in defendant’s audit practices that they viewed as potential violations of SOX.  Defendant maintained a policy that prohibited the release of information to the media without prior approval from defendant’s communications department.  Despite this policy, plaintiffs discussed defendant’s SOX compliance with a newspaper reporter and emailed the reporter company documents.  Shortly thereafter, an article was published by the Seattle Post-Intelligencer which concluded that defendant’s internal and external audits failed to protect against theft and fraud.  Defendant learned of plaintiffs’ communication with the newspaper reporter when an investigation revealed that plaintiffs forwarded the reporter company documents from their work email accounts.  After plaintiffs admitted to speaking with the newspaper reporter about defendant’s audit practices and providing her with company documents, defendant terminated plaintiffs’ employment for violating the media policy.  Plaintiffs then filed lawsuits against defendant alleging that they were terminated in violation of the whistleblower provisions of SOX.  The district court granted summary judgment in favor of defendant.

The Ninth Circuit affirmed the district court’s summary judgment in favor of defendant, holding that the plain language of the SOX whistleblower provision only protects an employee’s disclosure of information to a federal regulatory or other law enforcement agency, Congress, or the employee’s supervisor.  As the newspaper reporter was not one of the three recipients expressly enumerated by SOX, plaintiffs’ disclosure to the newspaper reporter was not protected activity.  The Ninth Circuit rejected plaintiffs contention that their disclosure of perceived SOX violations to the newspaper reporter was protected because reports to the media may eventually “cause information to be provide” to members of Congress or law enforcement agencies.  The Ninth Circuit declined “to adopt such a boundless interpretation of the statute” because if Congress wanted to protect reports to the media under SOX, it could have listed the media as one of the entities to which protected reports could be made.              

The Ninth Circuit’s complete opinion can be viewed here.

The Court first had little trouble finding that the act complained of — the firing of a worker because his fiance filed a charge of discrimination — was “retaliatory” under Title VII.  Applying its recent decision in Burlington Northern v. White (2006), the Court concluded that “a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired.” 

The Court declined to adopt a categorical rule that third-party reprisals do not violate Title VII.  Leaving open a vast sea of future litigation over the issue, the Court observed that they “decline[d] to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.”

The Court next interpreted the “person aggrieved” language in Title VII in similar fashion to the Administrative Procedure Act:  “a plaintiff may not sue unless he ‘falls within the ‘zone of interests’ sought to be protected by the statutory provision whose violation forms the legal basis for his complaint.’ “

The official syllabus of the Court’s opinion is as follows: 

Held:

1. If the facts Thompson alleges are true, his firing by NAS constituted unlawful retaliation. Title VII’s antiretaliation provision mustbe construed to cover a broad range of employer conduct. Burlington v. White, 548 U. S. 53. It prohibits any employer action that ” ‘well might have “dissuaded a reasonable worker from making or supporting a [discrimination] charge,” ’” id., at 68. That test must be applied in an objective fashion, to “avoi[d] the uncertainties and unfair discrepancies that can plague a judicial effort to determine a plaintiff’s unusual subjective feelings.” Id., at 68–69. A reasonable worker obviously might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired. Pp. 2–4.

N. & S. F. R. Co.

2. Title VII grants Thompson a cause of action. Pp. 4–7. 2 THOMPSON v. NORTH AMERICAN STAINLESS, LP Syllabus

(a) For Title VII standing purposes, the term “person aggrieved” must be construed more narrowly than the outer boundaries of Article III. Dictum in Trafficante v. Metropolitan Life Ins. Co., 409 U. S. 205, suggesting that Title VII’s aggrievement requirement reaches asfar as Article III permits, is too expansive and the Court declines tofollow it. At the other extreme, limiting “person aggrieved” to the person who was the subject of unlawful retaliation is an artificiallynarrow reading. A common usage of the term “person aggrieved” avoids both of these extremes. The Administrative Procedure Act, which authorizes suit to challenge a federal agency by any “person. . . adversely affected or aggrieved . . . within the meaning of a relevant statute,” 5 U. S. C. §702, establishes a regime under which a plaintiff may not sue unless he “falls within the ‘zone of interests’sought to be protected by the statutory provision whose violationforms the legal basis for his complaint,” Lujan v. National Wildlife Federation, 497 U. S. 871, 883. Title VII’s term “aggrieved” incorporates that test, enabling suit by any plaintiff with an interest ” ‘arguably [sought] to be protected’ by the statutes,” National Credit Union Admin. v. First Nat. Bank & Trust Co., 522 U. S. 479, 495, while excluding plaintiffs who might technically be injured in an Article IIIsense but whose interests are unrelated to Title VII’s statutory prohibitions. Pp. 4–7.

(b) Applying that test here, Thompson falls within the zone of interests protected by Title VII. He was an employee of NAS, and TitleVII’s purpose is to protect employees from their employers’ unlawful actions. Moreover, accepting the facts as alleged, Thompson is not anaccidental victim of the retaliation. Hurting him was the unlawful act by which NAS punished Regalado. Thus, Thompson is a personaggrieved with standing to sue under Title VII. P. 7.

567 F. 3d 804, reversed and remanded.

SCALIA, J., delivered the opinion of the Court, in which all otherMembers joined, except KAGAN, J., who took no part in the consideration or decision of the case. GINSBURG, J., filed a concurring opinion, in which BREYER, J., joined.

Joyce Quinlan began working for Curtiss-Wright in 1980, eventually obtaining the position of Executive Director of Human Resources.  Following a reorganization of the human resources department, Kenneth Lewis, who was hired just a few years prior to the reorganization, became Quinlan’s supervisor.  Quinlan believed that she should have been promoted over Lewis, who had significantly less experience than she did, and she consulted the advice of counsel regarding a possible sex discrimination claim. 

In the meantime, Quinlan began copying files from the human resources department, including documents containing confidential information, that she felt supported her claims of discrimination and provided the documents to her attorney.  After the initiation of the lawsuit and in the course of discovery, Curtiss-Wright became aware that Quinlan had been copying confidential materials.  The company subsequently terminated Quinlan for theft of company property.  Quinlan then amended her complaint to add a retaliation claim. 

After one mistrial, a jury returned a verdict in favor of Quinlan for $10.6 million.

On appeal, the defendant argued that the trial judge had erred in instructing the jury on the retaliation claim.  The jury instructions stated that while Quinlan’s conduct in copying the documents was not protected activity, the use of those documents by her attorneys in the process of prosecuting the lawsuit was protected activity for which she could not have been properly terminated.  The court declined to recognize a distinction between taking confidential documents from an employer and making use of them later on in litigation.  The court reasoned that such a distinction could produce “the undesirable result of encouraging employees to go through their employers’ files and copy confidential material, secure in the knowledge that employers could do nothing so long as that material was later used in litigation.”  The court held that the jury instructions were erroneous and that the defendant was entitled to a new trial on the retaliation claim.

The defendant also argued that Quinlan had failed to establish a prima facie case of retaliation with respect to her claim that she was terminated for filing her discrimination suit, citing a lack of sufficient evidence of a causal connection.  In support of its contention, the defendant pointed to evidence that Quinlan was not terminated until seven months after she filed suit.  Quinlan, on the other hand, had presented testimony that the company CEO had gone “ballistic” when he became aware of the lawsuit.  The court stated that the plaintiff’s evidence, though hardly overwhelming, was sufficient to have properly reached the jury. 

The court agreed with the defendant, however, that the question of punitive damages should not have gone to the jury.  The court stated that punitive damages may only be awarded under New Jersey’s anti-discrimination law when there is “both actual participation in the wrongful behavior on the part of upper management, and when the wrong-doer’s behavior is especially egregious.”  The court interpreted the second prong as requiring proof of actual malice.  Here, the court found that the record did not support a finding of malice on the part of the defendant, stating that the plaintiff remained in her position and received a bonus and a raise even after she filed suit.  Thus, the court held that the question of the defendant’s liability for punitive damages should not have been submitted to the jury.

Note:  The New Jersey Supreme Court agreed to review the appellate court’s decision on November 10, 2009, before the case was set for retrial. A decision is still pending.

Contributed by Claudia Guzman

Youssef Bouamama worked for Go Daddy Software, Inc. (“Go Daddy”).  Bouamama was a Moroccan-born Muslim who began his employment with Go Daddy shortly after the 9/11 terrorist attacks.  Between December 2001 and February 2002, Bouamama’s supervisor questioned him about his background and religion after overhearing Bouamama speaking French.  Bouamama was promoted in July 2002, and at that time complained to a human resources representative about the questions he had been asked several months prior.  At some point, Bouamama also heard this supervisor make derogatory comments about Muslims, but did not report these comments to anyone at Go Daddy, citing a culture where you could be fired for complaining.

In April 2003, a new manager re-organized Bouamama’s department.  He was informed that his position was to be eliminated, but that he could apply for a position in the newly-structured department.  Several days after receiving this notice, the new manager asked where he was from, and whether he was Muslim.  Bouamama testified that the manager responded, “You know, you’re lucky that I like you.”  He reported this exchange to the HR rep. that same afternoon.  On April 9, Bouamama interviewed for a new position, but was not hired.

According to the Court, Bouamama’s complaints were enough to allow a reasonable person to conclude that the statements went beyond “isolated incidents.”  To constitute protected activity, a court must find that the employee “reasonably believes” he is reporting conduct that violates Title VII.  Supervisor comments that Bouamama overheard, but did not report, could be considered as part of the context in which the reported comments were made, and were relevant to the reasonableness of Bouamama’s belief.  The jury awarded Bouamama $5,000 for mental and emotional pain and suffering and $135,000 for lost earnings. The jury also awarded $250,000 in punitive damages.

The dissenting justice called the trial’s result a miscarriage of justice, writing that “[n]o rational person could have thought that two conversations with two different men in different contexts and at widely separated times constituted a pattern of discriminatory conduct by Go Daddy.”

Bridget Wright, a former employee of Southwest Airlines (“Southwest”), alleged that she had been retaliated against for requesting leave under the Family and Medical Leave Act (“FMLA”).  The district court granted summary judgment for Southwest, and the Fourth Circuit affirmed.

On appeal, Wright argued that the district court erred in finding that her supervisors were unaware of her request for FMLA leave at the time they decided to terminate her.  The court stated that to establish a claim for retaliation, a plaintiff must prove that:  1) she engaged in a protected activity; 2) an adverse employment action was taken against her; and 3) a causal link exists between the protected activity and the adverse employment action.  The burden then shifts to the employer to advance a legitimate, non-discriminatory reason for the employment action.  Upon this showing, the burden shifts back to the plaintiff to show that the employer’s reasons were mere pretext.

The Fourth Circuit acknowledged that Wright had engaged in a protected activity and that an adverse employment action had been taken against her.  The court found, however, that Wright had not established a causal connection between the protected activity and the employment action.  The court stated that to prove a causal link under the third element for retaliation, a plaintiff must show that the employer had knowledge of the protected activity.  The court found that because Wright had failed to prove that the supervisors responsible for her termination were aware of her protected activity, she had failed to establish a prima facie case of retaliation.

Contributed by Claudia L. Guzman

Here is the blogroll of commentary on the decision:

The Word on Employment Law

Pennsylvania Labor & Employment Blog

Ohio Employer’s Law Blog

Jottings By An Employer’s Lawyer

Connecticut Employment Law Blog

SCOTUS Blog

Workplace Prof Blog

Section 219 of the Act is a whistleblower protection provision.  The text of Section 219 can be found here.

(a) No manufacturer, private labeler, distributor, or retailer, may discharge an employee or otherwise discriminate against an employee with respect to compensation, terms, conditions, or privileges of employment because the employee, whether at the employee’s initiative or in the ordinary course of the employee’s duties (or any person acting pursuant to a request of the employee)-

‘‘(1) provided, caused to be provided, or is about to provide or cause to be provided to the employer, the Federal Government, or the attorney general of a State information relating to any violation of, or any act or omission the employee reasonably believes to be a violation of any provision of this Act or any other Act enforced by the Commission, or any order, rule, regulation, standard, or ban under any such Acts;

‘‘(2) testified or is about to testify in a proceeding concerning such violation;

 “(3) assisted or participated or is about to assist or participate in such a proceeding; or

‘‘(4) objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee (or other such person) reasonably believed to be in violation of any provision of this Act or any other Act enforced by the Commission, or any order, rule, regulation, standard, or ban under any such Acts.

The Act creates an administrative process for complaints by individuals who believe they have been discriminated against in violation of the statute, and provides for de novo review by a U.S. district court after the conclusion of the administrative investigation or the expiration of 210 days after the filing of the administrative complaint with the Department of Labor.  Unlike many other employment laws, the Act contains a penalty for frivolous or bad faith complaints:  “the Secretary may award to the prevailing employer a reasonable attorneys’ fee, not exceeding $1,000, to be paid by the complainant.”  Not exactly a high stakes penalty, but it is an attempt to level the playing field.

Hat tip to Jottings By An Employer’s Lawyer, which has a post on the new law here.

The majority relied on prior decisions under 42 U.S.C. section 1982 in reaching its decision, invoking the principle of stare decisis.  Justice Thomas, writing in dissent, referred to the majority’s invocation of stare decisis as “hiding behind the fig leaf.”  He concluded his dissent as follows:

“As in Jackson, “[t]he question before us is only whether [s 1981] prohibits retaliation, not whether prohibiting it is good policy.” . . . “By crafting its own additional enforcement mechanism, the majority returns this Court to the days in which it created remedies out of whole cloth to effectuate its vision of congressional purpose.”  That the Court does so under the guise of stare decisis does not make its decision any more justifiable.”

It is difficult to see how a law that prohibits race discrimination can be read to imply a prohibition against retaliation.  But in both the CBOCS case and the Gomez-Perez v. Potter case (a federal-sector employment case reaching the same conclusion under the Age Discrimination in Employment Act, also decided today), the Court reached the conclusion that a statute prohibiting discrimination necessarily implies a cause of action for retaliation.

Various employment law blogs are already commenting on the decision today:  Ohio Employer’s Law Blog; Connecticut Employment Law Blog; Jottings By An Employer’s Lawyer.

After his separation from employment, Darveau entered into a separation agreement with his former employer, Detecon, Inc.  The release did not cover FLSA claims.  Darveau filed a federal court lawsuit against Detecon alleging that he was not exempt from overtime under the FLSA.  Shortly thereafter, Detecon filed a state court lawsuit against Darveau alleging fraud in connection with a pre-termination transaction.  Darveau amended his federal court complaint to add a claim of retaliation under the FLSA.  The district court dismissed all of Darveau’s claims on summary judgment.

On appeal, the Fourth Circuit affirmed the dismissed of Darveau’s overtime claim, but reversed the dismissal of the retaliation claim.  The Court found that the filing of the overtime complaint was objectively reasonable at the time it was filed and therefore Darveau had engaged in protected activity.  Relying on recent Supreme Court precedent in Title VII retaliation cases, the Court then found that the filing of the lawsuit constituted “adverse action” against Darveau.  Accordingly, the Court remanded the case to the district court.

This case is a logical consequence of the Supreme Court’s decisions in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), and Burlington N. & Santa Fe Ry. Co. v. White, 126 S.Ct. 2405 (2006), where it extended the anti-retaliation provisions of Title VII beyond workplace-related or employment-related retaliatory acts and harm.  As with employment-related “retaliatory acts,” the mere filing of a charge of discrimination or lawsuit does not automatically cloak the employee with immunity from legitimate action by the employer.  Nevertheless, employers should pay close attention to how its decisions to take action against such an employee might be viewed by a jury.