THE TWO FACES OF RETALIATION

In Burlington Northern and Santa Fe Railway Co. v. White, 126 S.Ct. 2405 (2006) , the U.S. Supreme Court held that the anti-retaliation provision of Title VII (42 U.S.C. § 2000e(3)(a)) "does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace." Rather, the court found that for retaliation to be cognizable under Title VII, the employer's actions need only be "harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination." In so doing, the court resolved a split among the circuits on whether retaliatory conduct under Title VII is measured by the same yardstick as other forms of discrimination.

Some circuits had interpreted Title VII to require that the retaliatory conduct — as with any other prohibited discrimination under Title VII — constitute a "material change in the terms and conditions of employment." Indeed, some circuits went so far as to hold that cognizable retaliation must involve "ultimate employment decisions" such as termination. However, other circuits (including the Ninth) held that the proper test for a retaliation claim is whether the employer's action was reasonably likely to deter employees from engaging in protected activities.

The court granted certiorari in Burlington to resolve this dispute, and found that the deterrence model correctly applies Title VII's prohibition against retaliation. The court rejected arguments that in establishing this standard de minimis behavior could be used to state a retaliation claim. As the court explained, "[b]y focusing on the materiality of the challenged action and the perspective of a reasonable person in the plaintiff's position, we believe this standard will screen out trivial conduct while effectively capturing those acts that are likely to dissuade employees from complaining or assisting in complaint about discrimination."

The particular conduct at issue in Burlington demonstrates the impact of this dual standard. At trial plaintiff showed, among other things, that after complaining about sexual harassment by co-workers, she was transferred from her job as a forklift operator to the less desirable position of "track laborer." Although plaintiff did not suffer any change in pay or benefits, the evidence showed that track laborer duties were "more arduous and dirtier" than the forklift position; that the forklift position required more qualifications and therefore carried more "prestige"; and that the forklift operator position was objectively considered a better job, and the male employees resented plaintiff for having it. Although these changes in plaintiff's work environment arguably did not rise to the level of a material change, the court held that the allegations did support a retaliation claim because they were sufficiently "material" to deter a reasonable person from engaging in protected activities.

The court based its holding on both the statutory language and what it described as the "purpose" of the prohibition against retaliation. First, the court noted that the statutory language treats "discrimination" and "retaliation" differently. The "substantive anti-discrimination" provision of Title VII prohibits employment discrimination against "any individual with respect to his compensation, terms, conditions, or privileges of employment." A separate provision, however, prohibits an employer from "discriminat[ing] against" an employee or job applicant because that individual "opposed any practice" made unlawful by Title VII or "made a charge, testified, assisted, or participated in" a Title VII proceeding or investigation." According to the court, the specification of what exactly is meant by "discriminate" in the "substantive" provision justifies the different standard for retaliation claims where no such limiting language exists.

Second, the court held that the different purposes of each provision warranted different standards. The "substantive anti-discrimination" provision "seeks a workplace where individuals are not discriminated against because of their racial, ethnic, religious, or gender-based status." The anti-retaliation provision, however, "seeks to secure that primary objective by preventing an employer from interfering (through retaliation) with an employee's efforts to secure or advance enforcement of the act's basic guarantees." Given these different purposes, the objective of the anti-retaliation provision would not be achieved "by focusing only upon employee actions that concern employment and the workplace" because "[a]n employer can effectively retaliate by taking actions not directly related to his employment or by causing him harm outside the workplace." A more limited standard that requires a nexus between the employer's action and the terms or conditions of employment, therefore, would not achieve the anti-retaliation provision's primary objective of "[m]aintaining unfettered access to statutory remedial mechanism."

In reaching this conclusion, the court adopted a standard recently — and explicitly— rejected by the California Supreme Court in Yanowitz v. L'Oreal, 36 Cal.4th 1028 (2005). Interestingly, although the California Supreme Court was interpreting the retaliation provisions of California's Fair Employment and Housing Act, it spent little time parsing FEHA, reviewing instead the various interpretations of Title VII among the federal circuits. Thus, the California Supreme Court reviewed precisely the same split in the appellate circuits that the U.S. Supreme Court was to review in Burlington a few months later. However, the California Supreme Court reached the opposite conclusion, squarely rejecting the "deterrence model" adopted by the Ninth Circuit — and now the U.S. Supreme Court. As the California Supreme Court reasoned, "[a]lthough the federal courts' interpretation of the comparable provisions of Title VII is not determinative ... , we note ... that the overwhelming majority of federal courts that have addressed the issue similarly have concluded that in order to maintain an action under the anti-retaliation provision of Title VII, an employee must demonstrate that he or she has been subjected to an adverse employment action that materially affects the terms, conditions, or privileges of employment, rather than simply that the employee has been subjected to an adverse action or treatment that reasonably would deter an employee from engaging in the protected activity."

Superimposing this analysis on FEHA, the California Supreme Court held that under FEHA, all forms of cognizable discrimination — including retaliation — must "materially affect the terms, conditions, or privileges of employment." As under Title VII, FEHA's substantive discrimination provision (§ 12940(a)) is specific and its anti-retaliation provision (§ 12940(h)) is general. Thus, Yanowitz argued (in terms remarkably similar to the U.S. Supreme Court's analysis of Title VII in Burlington) that because "the 'otherwise discriminate' language in FEHA § 12940(h) does not contain the descriptive or limiting language that appears in § 12940(a) referring specifically to discrimination 'in the terms, conditions, or privileges of employment,' § 12940(h) properly should be interpreted to protect employees against a range of adverse employment actions broader than those that fall within the reach of § 12940(a)." However, the California Supreme Court rejected this argument, holding instead that the language "or otherwise discriminate" refers to the more specific description of cognizable discriminatory conduct set out in § 12940(a) — precisely the opposite analysis applied by the U.S. Supreme Court to Title VII.

Most interesting, however, is that after establishing what appeared to be the more stringent standard for stating a retaliation claim, the court went on to find that the specific conduct at issue in Yanowitz satisfied the test. The alleged retaliatory actions in Yanowitz consisted of negative performance evaluations, criticism before fellow employees, the solicitation of negative feedback from fellow employees and the use of the negative information obtained to justify new, restrictive directives regarding Yanowitz's future performance, and to impair her effectiveness with her staff. Ironically, while such conduct could easily meet the "deterrence" standard that the California Supreme Court rejected, it is a significant stretch to find that it meets the more stringent test that the court erected for itself. Indeed, it is fair to say that a review of the body of federal and state jurisprudence exploring the meaning of "adverse employment action" will unearth little to support a finding that such conduct meets this stringent standard.

So, how did the California Supreme Court make the leap from insisting that cognizable retaliation must materially effect the terms and conditions of employment, to finding that Yanowitz's allegations were sufficient to state a claim? The court did so by asserting that "the determination of whether a particular action or course of conduct rises to the level of actionable conduct should take into account the unique circumstances of the affected employee as well as the workplace context of the claim." Interestingly, the U.S. Supreme Court used a similar contextual approach in applying the deterrence model. As the U.S. Supreme Court explained, it framed, "the [deterrence] standard in general terms because the significance of any given act of retaliation will often depend upon the particular circumstances. Context matters." Thus, although applying different standards, for both courts, the materiality of the conduct will depend upon the totality of the circumstances.

However, while the California and U.S. supreme courts appear to agree that "context matters," the California approach invites two outcomes that are less likely to occur under the federal standard: inconsistency in results, and a general broadening of the definition of "adverse employment action" for all discrimination claims — not just retaliation. By insisting that all discrimination claims must meet the same standard, and then holding that the conduct in Yanowitz meets that standard, the California Supreme Court has effectively lowered the bar for all discrimination claims. Had it, instead, upheld Yanowitz's claim on the basis that it met the less stringent "deterrence" test, it would not have implicated the standard for other sorts of discrimination. This impact is best illustrated by the court's own words: "Although Yanowitz argues that our adoption of the foregoing conclusion — that is, interpreting § 12940(h) as affording those employees who engage in protected activities protection against only the same range of adverse employment actions that are prohibited by § 12940(a) — will leave such employees with an inadequate degree of protection and vulnerable to a broad range of retaliatory measures, we believe this argument rests, at least in part, on an unduly narrow view of the type of adverse employment actions that are forbidden by § 12940(a)."

Thus, in the wake of Yanowitz and Burlington, FEHA and the state courts appear to remain the friendlier forum for discrimination plaintiffs — although, at first glance, the retaliation standard articulated by the California Supreme Court appears more stringent. We can therefore expect discrimination plaintiffs — retaliation and otherwise — to creatively explore the scope of § 12940(a) and (h). We can also expect FEHA defendants to suggest to the California Supreme Court that, because its analysis rested so heavily on the federal appellate court analysis flatly rejected by the U.S. Supreme Court in Burlington, that a revisiting of its analysis may be in order.

Laura Schulkind is a partner in Liebert Cassidy Whitmore's San Francisco office and Art Meneses is an associate in the Los Angeles office of the firm, which specializes in labor and employment law for public sector employers.

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