In an 8-0 decision¹, the US Supreme Court ruled yesterday that an employee who was terminated after his fiancée filed a charge of discrimination against their mutual employer could state a claim for retaliation under Title VII of the Civil Rights Act of 1964 (Title VII). Thompson v. North American Stainless, LP, 2011 WL 197638 (U.S. Jan. 24, 2011).

Until 2003, both Eric Thompson and his fiancée, Miriam Regalado, were employees of North American Stainless (NAS). In February 2003, the Equal Employment Opportunity Commission (EEOC) notified NAS that Regalado had filed a charge alleging sex discrimination. Three weeks later, NAS fired Thompson.

Thompson then filed a charge with the EEOC, alleging retaliation. After the administrative process was exhausted, he sued NAS in the US District Court for the Eastern District of Kentucky under Title VII. The district court granted summary judgment to NAS, and on appeal, the US Court of Appeals for the Sixth Circuit affirmed that judgment. The Supreme Court agreed to review the case.

By way of background, Title VII provides that “[i]t shall be an unlawful employment practice for an employer to discriminate against any of his employees … because he has made a charge” under Title VII. The statute permits “a person claiming to be aggrieved” to file a charge with the EEOC alleging that the employer committed an unlawful employment practice, and, if the EEOC declines to sue the employer, it permits a civil action to “be brought … by the person claiming to be aggrieved … by the alleged unlawful employment practice.”

It was undisputed that Regalado’s filing of a charge with the EEOC was protected conduct under Title VII. In the procedural posture of this case, the Court was required to assume that NAS fired Thompson in order to retaliate against Regalado for filing the charge. The case therefore presented two issues: First, did NAS’s firing of Thompson constitute unlawful retaliation? And second, if it did, does Title VII grant Thompson a cause of action?

May a Retaliation Claim be Based on Adverse Action Against a Third Party?

Writing for the Court, Justice Antonin Scalia stated that “ … we have little difficulty concluding that if the facts alleged by Thompson are true, then NAS’s firing of Thompson violated Title VII.” In Burlington N. & S.F.R. Co. v. White, the Court held that Title VII’s anti-retaliation provision must be construed to cover a broad range of employer conduct. Indeed, the Court ruled that the provision prohibits any employer action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”

The Court found it obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiance would be fired. NAS argued that prohibiting reprisals against third parties will lead to difficult line-drawing problems concerning the types of relationships entitled to protection. Although the Court acknowledged the legitimacy of this point, it did not think it justified a categorical rule that third-party reprisals do not violate Title VII: “We think there is no textual basis for making an exception to it for third-party reprisals, and a preference for clear rules cannot justify departing from statutory text.”

In that regard, the Court declined 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 emphasized, however, that “the provision’s standard for judging harm must be objective,” so as to “avoi[d] the uncertainties and unfair discrepancies that can plague a judicial effort to determine a plaintiff’s unusual subjective feelings.”

Does a Third Party Have Standing to Sue?

The more difficult question for the Court in this case was whether Thompson had standing to sue NAS for its alleged violation of Title VII. The statute provides that “a civil action may be brought … by the person claiming to be aggrieved.” Relying on precedent under the Administrative Procedures Act, the Court held that this language 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 violation forms the legal basis for his complaint.” The Court has described the “zone of interests” test as denying a right of review “if the plaintiff’s interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit.” The Court concluded that the term “aggrieved” in Title VII incorporates this test, enabling suit by any plaintiff with an interest “arguably [sought] to be protected by the statutes.”

Applying that test to the facts before it, the Court concluded that Thompson fell within the zone of interests protected by Title VII. “Thompson was an employee of NAS, and the purpose of Title VII is to protect employees from their employers’ unlawful actions.” Moreover, accepting the facts as alleged, the Court reasoned that “Thompson is not an accidental victim of the retaliation-collateral damage, so to speak, of the employer’s unlawful act. To the contrary, injuring him was the employer’s intended means of harming Regalado.” Under these circumstances, the Court found that Thompson was “well within the zone of interests sought to be protected by Title VII.”

Lessons Learned

It is no secret that in recent years, the Supreme Court and many lower courts have broadened the rights of plaintiffs to assert retaliation claims under Title VII and other equal employment opportunity laws. Not surprisingly, charges filed with the EEOC alleging retaliation have increased from 22,278 in 2005 to 36,258 in 2010.

The Supreme Court’s latest decision virtually ensures that employers face the prospect of even more retaliation claims, this time from third parties who are associated with someone who filed a charge with the EEOC or engaged in other protected conduct. Those claims will not be limited to situations where the third party is employed by the same employer as the alleged underlying victim. They could involve claims of third parties who are employed by, or are seeking employment with, other employers. And, the Supreme Court’s decision not to adopt a bright line test and instead to focus on the facts and circumstances of each case means it will be difficult to obtain pre-trial dismissal of these claims.