One of your employees has made an internal complaint alleging workplace discrimination. You want to handle the complaint with sensitivity, but because you realize he may later become an adversary in a lawsuit, you know it's imperative that the company not retaliate against him. You inform the employee's supervisors about the complaint and the company's policies on retaliation. However, as time passes, you wonder if the company is going too far in the opposite direction. The employee isn't measuring up to expectations or performing at an acceptable level. Nevertheless, his managers are afraid to address his poor performance for fear of being held liable for retaliating against him. How do you ensure proper performance without triggering huge liability?

In 2009, 36 percent of all charges filed with the Equal Employment Opportunity Commission were for retaliation. That's more than any other type of charge, including race and gender discrimination. The number of retaliation claims has more than doubled since 1997. In addition to employment antidiscrimination laws, many other laws prohibit retaliation based on an employee's opposition to perceived illegality. And in New York City, juries can award unlimited punitive damages for violating the city's antiretaliation prohibition.

Retaliation is generally actionable when a company takes an adverse employment action against an employee simply because he has complained of illegal conduct. The U.S. Supreme Court defines "adverse employment actions" as "harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination."

Retaliation unrelated to merits of the complaint

In most cases, unless the claim is entirely frivolous, if the employee reasonably believes in the merits of his complaint, the company can be hit with a large jury verdict for retaliation. Even a supervisor who is unjustly accused can be found guilty of retaliation for taking an unjustified adverse employment action against the worker. Fortunately, there are several steps you can take to avoid liability.

Have a written antiretaliation policy.

Juries are more likely to credit written documents. Your employee handbook should make clear that your company prohibits retaliation and that individuals engaging in illegal retaliation will be subject to disciplinary action, up to and including termination. Your handbook should also provide a clear procedure for employees to report incidents of perceived retaliation.

Back up your retaliation policy with hands-on training.

Few employees — even company officers — actually read employee handbooks. Therefore, back up your written policy with hands-on training of supervisors and managers. Keep copies of the training materials and records of the attendees.

Counsel accused supervisors.

It's natural for an employee accused of committing an improper act to instinctively retaliate against the accuser. For that reason, you should counsel each person accused and, if necessary, separate and protect the alleged victim.

Institute a formal complaint resolution procedure.

Failure to investigate and address an internal problem in a prompt, respectful, and fair manner can encourage litigation. You can be held liable if the initial recipient of the complaint either ignores it or tells the employee not to pursue it. The best way to avoid bungling the process is to have a written complaint resolution or grievance procedure in place. The procedure should be disseminated to all employees through the employee handbook and direct aggrieved employees to reasonable and neutral decisionmakers.

Individuals designated to receive discrimination complaints are often high-level HR executives, in-house counsel, or respected managers. There should be more than one channel by which a complaint can be made, but it's not wise to have a large pool of employees designated to receive and investigate grievances. Instead, designate a small number of employees, and provide them with outside training on how to respond promptly and effectively to internal complaints.

The complaint resolution procedure should provide as much confidentiality as possible. To prevail in a retaliation lawsuit, an employee must prove that the adverse action was motivated by his complaint. The fewer people that are aware of the complaint, the harder it will be for the employee to prove that the adverse action taken by someone not privy to the complaint was retaliatory. Still, complete confidentiality isn't possible and shouldn't be promised. Investigators will have to inform the accused, witnesses, and other employees and agents (e.g., counsel or management committees) of the charges. Do not promise complete confidentiality. Instead, explain that you will discuss the complaint only on a need-to-know basis.

Make sure the company's response is prompt. An employee making an internal complaint against an employer is under a great deal of stress. An immediate response to the initial grievance reassures the employee that the company is taking the complaint seriously and not "blowing it off" or deliberately making him "wait in the dark." A prompt interview of the complaining worker is crucial.

At the interview, provide the employee with a copy of the company's retaliation policy and ask him if he has experienced any threatened or perceived retaliation. Advise him to alert management immediately if he does.

The next steps

Interview witnesses and the accused.

After meeting with the employee and getting the names of potential witnesses, investigators should meet with the potential witnesses and ask them — without revealing the identity of the accused — if they saw the actions complained of. If witnesses identify the accused, that is strong evidence of guilt. Only then should you interview the accused. Make sure you give him an opportunity to respond to the allegations in the complaint. All witnesses should be advised that they are not to discuss the matter with others. Follow up with the employee who filed the complaint every few days to reassure him that the company is actively pursuing the investigation.

Consider separating the complaining worker from the accused.

If the accused is a direct supervisor, it may put the complaining employee in an extremely uncomfortable position to continue reporting to him during, and even after, the investigation. Additionally, having the employee continue to report to the accused provides more opportunities for retaliation to occur. Consider whether it is feasible to separate the worker from the supervisor, at least pending the outcome of the investigation.

It's important to note that any unfavorable change in an employee's work environment can support a claim of retaliation. If the employee desires reassignment, make sure the terms and conditions of the new assignment are equivalent to his current position. Have him sign a statement acknowledging all the terms and conditions of the new arrangement and that he requested and consented to the reassignment.

Concluding the investigation

When the investigation is finished, the investigators should evaluate the evidence and determine whether there is sufficient evidence to conclude that the alleged illegal conduct took place. They should carefully document their conclusions in a written report (1) detailing the investigative process, (2) listing all witnesses, (3) explaining their conclusions (and supporting facts), and (4) describing the disciplinary or remedial action to be taken if action is warranted.

If there is a finding of wrongful conduct, the company's failure to take appropriate disciplinary action can also be a form of retaliation. Any disciplinary action taken against the accused should be comparable to the disciplinary action others have received in similar circumstances.

Although the report shouldn't be provided to the complaining employee, the accused, or any of the witnesses, you should orally inform the worker and the accused of the outcome of the investigation. If no discrimination or retaliation was found, explain the basis for that conclusion to the employee. Doing so will prevent him from believing that the company sided against him without a legitimate basis. Instruct the employee and the accused to keep the company's findings confidential. Remind them again that retaliation is unlawful and will not be tolerated.

Four to eight weeks after concluding the investigation, check with the employee to confirm that no perceived or threatened retaliation has occurred. Six months later, follow-up again. Document the conversations in your file.

For managers, consistency is the key

Although confidentiality is essential, the employee's direct supervisors should be informed about the complaint at the outset so they can be careful not to take any actions that could be construed as retaliatory. If the supervisor is the accused, give him the same respect, discretion, and sensitivity that you did the complaining employee. Explain that regardless of the merits of the complaint, retaliation is a serious legal issue for the company. Acknowledge that continuing to supervise the employee without retaliation will be difficult, but be clear that it is the company's policy.

An employee can prevail on a retaliation claim only by demonstrating that a supervisor treated him one way before he made the complaint and in a different, less favorable way afterward. Therefore, you should instruct the supervisor to check with you before taking or threatening to take any of the following actions:

  • Terminating the employee. Neutral managers and counsel should carefully review all discharge decisions to ensure that they are based on a documented failure to conform to work-related performance criteria consistent with company norms.
  • Giving negative performance evaluations. While employees should be evaluated honestly, a marked discrepancy between the employee's precomplaint performance evaluations and postcomplaint performance evaluations can strongly suggest that retaliation has occurred.
  • Failing to provide pay raises and promotions. Employees should be treated similarly to other employees who perform at their level.
  • Making assignments to less desirable locations, shifts, and tasks. Managers should be cautious about changing work locations, shifts, and assignments. These actions often have undesirable consequences for the employee that a manager may not be aware of. Keep both the amount and type of work consistent.
  • Demanding unrealistic compliance. Managers should avoid abruptly enforcing policies or work rules, such as attendance policies, that have previously been overlooked or treated lightly.
  • Embarking on a harassment campaign. Although isolated slights and snubs don't equate to "adverse actions" for purposes of a retaliation claim, a consistent pattern of harassing conduct does. Managers should refrain from overt harassment such as name-calling, threats, and subtle harassment (e.g., exclusion from meetings or the "silent treatment").
  • Retaliating outside the workplace. Make it clear to the employee's manager that the company can be held liable for retaliation that takes place outside the office or not on company time. There is simply no "safe" place or way for a supervisor to retaliate against an employee.
  • Mistreating friends and relatives. Managers should understand that the company could be held liable for retaliation if a manager mistreats the employee's friends or relatives as a means of retaliating against him.
  • Providing a negative job reference. The company's obligation to refrain from retaliation also applies to employees who have left the company. Managers should be instructed not to give a negative job reference to a prospective employer. Instead, they should give a neutral reference, providing only the employee's dates of employment and job title. Make sure they know this is company policy and applies to every former employee.

Don't let fear of retaliation stop you from managing employees

In their zeal to guard against potential retaliation claims, companies often go overboard in the opposite direction. They forgo their responsibility to honestly evaluate, criticize, or discipline the employee in favor of a hands-off approach, treating him as an "untouchable."

The bottom line is this: You can and should continue to require employees to meet expectations provided that any corrective action isn't a pretext for retaliation. Managers should continue to treat a complaining worker like any other employee. The only difference is that when an employee has made a complaint, the manager should carefully document the basis for any corrective action. In other words, before taking any adverse action, make sure you have an accurate paper trail that can be used as evidence in court of the employee's performance problems or misconduct. The more documentation there is, the more likely the company will prevail. The other factor to consider is time. The more time that passes between the complaint and the adverse employment action, the less likely a court or jury will find that the adverse employment action was motivated by the complaint.

The best way to prevent and defend against retaliation claims is to prepare for them in advance. Have an effective complaint resolution procedure, and educate supervisors on how they can prevent a retaliation claim without surrendering their obligation to effectively manage a complaining employee.  

As appeared in New York Employment Law Letter, November 2010.