When Hamlet uttered the immortal words “Revenge should have no bounds,” he probably wasn’t thinking about twenty-first century employers. As it turns out, “revenge” can be costly, particularly when former employees are involved. Title VII, the federal law that prohibits discrimination based on race, gender, and other protected class status, also prohibits retaliation against current—and former—employees who engage in protected conduct. A former employee who has asserted rights under Title VII may have a claim for retaliation when a former employer declines to rehire the employee, provides a negative reference, or opposes an application for unemployment compensation benefits.

Retaliation claims are increasingly common and can be difficult to defend. The Equal Employment Opportunity Commission (EEOC) reports that retaliation claims have risen to their highest level ever and currently account for over one-third of new charges. Successful claims can result in back pay, front pay, damages for emotional distress, punitive damages, and payment of the former employee’s attorneys’ fees.

Failure to Rehire

An employer’s best defense against a claim of retaliation is often the passage of time. As a rule of thumb, the longer the time between “protected conduct” and the “adverse action,” the more difficult it is for the employee to demonstrate the link between the two that is needed to sustain a claim of retaliation.

However, the passage of time provides little comfort to an employer when the individual claiming retaliation is a former employee. Several courts have measured “proximity in time” in these situations from the time between the protected conduct and the earliest opportunity the employer had to retaliate against the former employee. For example, in Templeton v. First Tennessee Bank, a former employee alleged that her former employer’s failure to rehire her two years after she had filed a complaint of harassment and resigned was illegal retaliation, a theory that the court accepted. Other courts have reached similar conclusions, including a 2002 case, McGuire v. City of Springfield, Ill., in which the court held that a former employee stated a viable claim of retaliation where 10 years had passed between the protected activity and the adverse employment action. While the facts of the McGuire case are unusual, at least two other federal court decisions have reached similar conclusions.

Although the Eighth Circuit, which handles federal court cases from Minnesota and nearby states, has not faced this issue, it is not hard to imagine that it may adopt the same approach because it has issued several pro-employee decisions in retaliation cases, as has the U.S. Supreme Court. As a final word of caution, the EEOC views “no-rehire” clauses in settlement agreements made after an employee has filed a charge of discrimination as retaliatory.

Communications With Prospective Employers

References and other information provided to prospective employers can also form the basis for a claim of retaliation. For example, in Jute v. Hamilton Sundstrand Corp., the court held that a false statement by a former employer—that he could not talk about the former employee because she had a lawsuit pending against the company—could form the basis of a retaliation claim when a job offer she had received was withdrawn after the comment was made. Interestingly, the statement was nearly, but not technically, true, as the former employee had filed an EEOC charge, but had not commenced litigation.

Many employers recognize the need to avoid false statements about a former employee to avoid defamation claims. As a result, often it is wise to adopt, and consistently follow, a policy of simply providing only dates of employment and job titles in response to inquiries from prospective employers. This practice also helps avoid claims of retaliation by former employees.

Opposing Unemployment Compensation Claims and Taking Legal Action

While it may be tempting to oppose a former employee’s claim for unemployment compensation or sue a former employee to “even the score,” meritless claims also have been the basis of viable claims of illegal retaliation. Courts that have reached this conclusion have relied on the U.S. Supreme Court’s statement in Burlington Northern & Santa Fe Ry. v. White that conduct is retaliatory under Title VII if it “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”

For example, the filing of criminal charges against a former employee who filed a Title VII charge has been held to constitute illegal retaliation, as has the threat of filing criminal charges. The same is true with respect to opposing a former employee’s claim for unemployment compensation benefits if the opposition is meritless or contains false statements. While many courts have held that filing a meritless lawsuit can form the basis of a retaliation claim, some have gone further, holding that even a legitimate claim can form the basis for a retaliation claim if the former employee can show that the former employer acted with an improper retaliatory motive.

Our Advice

Remember that Title VII protects not only current employees but also former employees. Think carefully before taking action, and ensure that comments about former employees are limited and factual. If the action is seen as “likely [to] dissuade a reasonable worker from making a claim of discrimination,” the former employer may well face a claim of retaliation. Unfortunately, the retaliation claim may survive even if the underlying claim is dismissed.