In a case of first impression, the Massachusetts Supreme Judicial Court (SJC) held that the anti-retaliation provision of Massachusetts General Laws ch. 151B (Chapter 151B) encompasses adverse actions taken against former employees. Psy-Ed Corporation v. Klein, a procedurally complex case litigated over the course of a decade, involved two former employees, Stanley Klein and Kimberly Schive, sued by their former employer for defamation, civil conspiracy, and tortious interference with contractual relations. The SJC held that Psy-Ed’s suit against Klein and Schive, which it filed several years after their employment relationship ended, can constitute an adverse action under Chapter 151B.

Schive, who is deaf, filed a Massachusetts Commission Against Discrimination (MCAD) charge against Psy-Ed in 1997, alleging disability discrimination. Klein, who was a founder of Psy-Ed, signed an affidavit supporting the Company’s position against Schive. After his employment contract was not renewed, Klein signed a second affidavit in support of Schive. He did not inform Psy-Ed of this second affidavit, and he collected a severance payment after entering into a separation agreement shortly thereafter. When Psy-Ed learned of Klein’s second affidavit in 1999, it terminated mediation proceedings with Schive before the MCAD and filed suit in Massachusetts Superior Court against Schive and Klein, who in turn brought several counterclaims against the Company, including retaliation.

The Superior Court dismissed Klein’s retaliation counterclaim at summary judgment on the grounds that employers cannot take “adverse employment actions” constituting retaliation against non-employees. The SJC reversed, holding that because the plain language of Chapter 151B does not limit retaliation protections to current employees, former employees threatened with litigation or other adverse actions can bring retaliation claims under the statute.

The SJC further held that the large time gap between Schive’s MCAD filing in 1997 and the commencement of Psy-Ed’s lawsuit in 1999 did not defeat the retaliation claims. Instead, the Court considered the timing of the MCAD’s probable cause finding, which was issued two weeks before Psy-Ed filed suit, as “sufficient to raise an inference of causation.” The SJC emphasized that the event giving rise to retaliatory intent may not be the initial discrimination complaint, but that subsequent events—in this case an adverse MCAD decision—can motivate retaliation.

In light of this decision, employers considering litigation or other adverse actions against former employees should exercise caution where those former employees complained of discrimination or supported such complaints of others.