When an employer receives an internal complaint about discrimination or harassment from an employee, the prudent course of action is to launch an immediate investigation of the complaint and to take effective remedial action if the employer determines that discrimination or harassment took place. It is the practice of some employers, however, to terminate an internal investigation if the employee files a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) or a similar state or local antidiscrimination agency raising the same allegations as the internal complaint. Although such a practice ordinarily is not undertaken to punish the employee for filing the charge, a recent decision by a state court in Florida points out that terminating an internal investigation upon the filing of an administrative charge can constitute unlawful retaliation, even when the action is taken simply to avoid duplication of investigation efforts and to preserve internal efficiency and resources.

The Court’s Decision in Donovan v. Broward County Board of Commissioners

In Donovan v. Broward County Board of Commissioners, a county bus driver passed over for a promotion filed an internal complaint of race discrimination with his employer. While the employer was investigating the complaint, the bus driver and another bus operator filed discrimination charges with the EEOC and the Florida Commission on Human Relations alleging unlawful failure to promote, thus triggering an administrative investigation of the alleged discrimination. The employer then promptly terminated its internal investigation pursuant to its written policy requiring the termination of pending investigations of discrimination complaints when the employee who made the complaint files a formal charge with the state antidiscrimination agency and/or the federal EEOC. The bus driver challenged the termination of the employer’s investigation as an act of retaliation for filing the administrative charge.

Under Title VII of the Civil Rights Act of 1964 and many state antidiscrimination laws, it is unlawful to retaliate against an employee for filing a complaint with the EEOC or a state agency. In 2006, the Supreme Court made it easier for employees to prove retaliation by holding that unlawful retaliation is not limited to changes in an employee’s job, working conditions, or compensation. Instead, any materially adverse act by an employer can constitute retaliation if it would discourage a reasonable employee from filing or supporting a charge of discrimination. Relying on this new, broader interpretation, the Florida District Court of Appeal held in Donovan that the employer’s investigation policy could be deemed retaliatory. The court reasoned that the termination of an internal investigation upon the filing of an administrative charge forced employees to choose between filing an EEOC charge and losing access to potentially speedy and less adversarial internal dispute-resolution mechanisms or continuing any internal investigation with the risk of losing the right to bring a formal charge if those internal efforts are not resolved before the EEOC’s time period for filing a charge expires. The court concluded that the prospect of losing the right to benefit from the more informal internal investigation process would tend to dissuade a reasonable employee from filing a charge with an antidiscrimination agency. In finding that the employer’s policy of terminating internal investigations when the employee involved files a discrimination charge could constitute retaliation, the court noted that the policy was clearly based on concerns for internal efficiency and economy rather than on an intent to retaliate, but these legitimate reasons for the policy would not save it from being unlawful.

Practical Implications

The ruling in Donovan demonstrates how even rational measures for avoiding duplicative procedures and saving money can lead to significant liability. If an employer receives a complaint of discrimination or harassment from an employee, it should fully investigate the matter regardless of whether that employee files a charge with the EEOC or with a state agency. In addition to avoiding a basis for a potential retaliation claim, the completion of the internal investigation after the filing of a charge of discrimination may lead to a speedy resolution of the matter and the withdrawal of the discrimination charge by the employee.