For employers tempted to retaliate against employees who file discrimination claims, some expert advice: Don't!

The case of Michael Lang may never set legal precedent, but its evolution in Franklin County Common Pleas Court illustrates a growing trend in workplace litigation: Employees, in significant numbers, are accusing their employers of illegal retaliation after the workers complain about their treatment on the job.

Lang is an engineer in training in the Columbus Public Works Department. Last year, he sued the city, claiming gender discrimination because a female co-worker, hired 19 months after him and doing the same work, was getting paid more.

In a secondary claim, Lang alleges that after he notified his bosses about his concerns, they subjected him to a series of "phony disciplinary write-ups" and "trivial and baseless allegations including unauthorized overtime for clocking in 1 minute early." In other words, Lang contends, the bosses retaliated against him for making his initial gender discrimination complaint.

Retaliation claims have risen sharply in the last five years. In 2010, they made up more than a third of the nearly 100,000 claims registered with the Equal Employment Opportunity Commission (EEOC). In the Columbus region, EEOC stats show such claims rose 110 percent from 2006 through 2010 (see chart), reaching 141 cases filed last year. In 2008, there were 1,323 retaliation claims filed with the Ohio Civil Rights Commission, which enforces state laws prohibiting discrimination in the workplace.

What's driving the increase? That's far from clear, although legal experts cite the layoffs and increased workloads that have made offices and manufacturing floors more tenuous places for both employers and employees. "The very tight job market is making it harder for anyone to walk away from a job," says Dan Srsic, who practices labor and employment law with Littler Mendelson. "Employers and employees have been pretty wed to each other, and there is little movement. To some extent, the trust between the employer and employee has gone down."

It's no surprise that trust often goes out the door when an employee alleges discriminatory actions, regardless of how long the person has worked for a company or how well he or she has gotten along with supervisors in the past. It's difficult for any supervisor or CEO to maintain a good, trusting relationship with a worker who's suing the company.

Even when an employee's original complaint is ruled to be unfounded, a secondary retaliation claim may bite the employer. "I tell employers that when they do try to vindicate themselves, that is where they lose. They win on the original complaint but they lose on the retaliation claim," says Floyd Weatherspoon, a Capital University Law School professor who teaches employment and labor law and serves as a mediator in labor disputes.

For an employee, the downside of filing a retaliation claim may come in the form of ever-tightening enforcement of legitimate workplace rules. Attorney John Beggs, a principal in the Upper Arlington law firm Beggs Caudill, says workers often end up getting put through the wringer while the case goes on. "It's a death by a thousand cuts," says Beggs, who represents Lang against the city of Columbus. "Our guy gets written up for being six minutes late?"

Courtside

The vast majority of the 129,224 federal retaliation claims filed with the EEOC in fiscal years 2006 through 2010 were under Title VII of the Civil Rights Act of 1964, the federal law that governs workplace discrimination. Both that statute and the corresponding parts of the Ohio Revised Code basically say an employer may not retaliate against a person who has engaged in a "protected activity," such as making a complaint about discriminatory practices or participating in an investigation of such a claim.

On the federal side, an employee may allege retaliation only after making the employer aware that something else is occurring. In other words, an employee can't cry retaliation unless he or she has previously made a complaint about some other wrongful act.

Consider Lang's case. Hired by the city in February 2007, he told his bosses in January 2009 that he didn't think it was right that he was being paid less than a female co-worker and asserted their skills were the same. A month later, Lang received a negative performance review.

In February 2010, one month after the city notified him that he would be the subject of a disciplinary hearing, Lang filed his state suit, alleging he was being discriminated against because of his gender. Columbus officials deny Lang's allegations and say the pay disparity between him and his co-worker is the result of different responsibilities, a merit system and "other factors other than sex," according to court documents.

It is not unusual for such complaints to avoid trial--most are settled through mediation or summary judgment. "Very few actually end in a trial," Srsic says. In Lang's case, however, a May 2 mediation meeting did not bring a resolution, according to a report filed with the court.

Srsic and Beggs say courts increasingly have been willing to consider the merit of a retaliation claim without regard to the merit of the discrimination claim that preceded it. "In the past, I would have had to prove the underlying [discrimination] claim," Beggs says. "The courts are now saying, ‘Whoa, that doesn't make sense.' "

Who Can File

The law is clear that an employer may not retaliate against an employee who makes a protected complaint of discrimination. But what if the retaliation is against an employee who's only tangentially involved? The U.S. Supreme Court ruled in January that Eric Thompson, an employee of North American Stainless, could file a Title VII complaint because of actions the company took against him after his fiancée, also an employee, complained about gender discrimination.

Thompson was terminated for performance-based reasons three weeks after his fiancée made her allegation. Both filed EEOC complaints, and Thompson later filed a lawsuit. The court ruled Thompson was within a "zone of interest," in that he was closely related to the fiancée, whose protected activity-filing the discrimination complaint-might have been impeded had she known that he would be fired because of her action.

"This case is huge," says Srsic, and muddies the water for employers about who potentially can make a Title VII retaliation claim. The alleged retaliation by North American Stainless was against the aggrieved employee's fiancé, but Srsic wonders if the protection against retaliation will eventually extend to those who are only casually dating.

One consequence of the Thompson decision may be that companies take another look at their no-nepotism and workplace relationship rules. "In recent years, there has been a bit of a trend to tolerate workplace relationships and move away from anti-nepotism policies," Srsic says. "Fifteen years ago those policies were strict, but there's been some backsliding on it." Will employers, fearing retaliation claims from "significant others," crack down on workplace dating?

Attorney Jonathan Downes says the courts overall have been expanding who can file retaliation claims and under what parts of the law. Although Title VII remains the most utilized section of the law, the field has widened and includes, for instance, the Americans with Disabilities Act and the Fair Labor Standards Act. If you're fired after you complain that the company restrooms don't accommodate your wheelchair, you may have a retaliation claim.

"What we are seeing now is the application for the retaliation is going from Title VII to all aspects of employment law," says Downes, founding partner of Downes Fishel Hass Kim, whose office provides training on the issue.

Downes also says the burden of proof in retaliation cases has been shifting from the complaining employee to the defending employer: "It is easier for the employee to shift the burden over to the employer."

Be Prepared

Employers can't predict when they will be accused of discriminating against an employee, says attorney Bill Nolan, managing partner for the Columbus office of Barnes & Thornburg. "It's part of business that you are going to get sued at some time, but the companies that are best managed, their decisions are so well-defined that everyone knows what they are going to do," he says.

Nolan says training and education are the keys to avoiding retaliation claims. "What an employer should be doing is doing a better job about what we've been telling them to do for decades: Document performance issues and manage [employees] well."

Beggs says from what he's observed during 23 years of practice, it's not the human resource departments or C-suite offices where retaliation claims are born, but further down the management chain. "Business HR departments are excellent," he says. "Some of that stuff is happening way before it gets to them."

Employers get in trouble when managers--wherever they fall on the corporate ladder--start taking discrimination claims personally. At that point, Weatherspoon says, the issue often leaves the just-business arena and leads to deliberate retaliatory actions by management. "And then it gets ugly," he says. "Once you start acting ugly, then the employee files the retaliation claim. The employee gets demoted or transferred. The first mistake can be unintentional, but after that person files the first complaint, I see that the retaliation is intentional."

Retaliation may be even nastier in a small business, especially a family business. "It is really an issue there, because oftentimes it's the son or the daughter of the business owner who has engaged in the [retaliatory] action," Weatherspoon says.

Supervisors at all levels must get comfortable with the "complaint processing system" and learn what is protected activity when an employee does complain, Weatherspoon says. He recommends never ignoring a complaint or taking action unilaterally. "At least get a second opinion from the next step up," Weatherspoon says. "You act on behalf of the organization, so you can't say, ‘I'm too busy here.' "

Littler's Srsic says employers need to develop anti-retaliation policies that include teaching supervisors to recognize the complaints that are considered protected activities under the law and watching what they say once a complaint has been lodged: "They have to be careful not to say they are upset or angry about being accused of something."

Beggs agrees. "If the employer takes appropriate action, then [the employee] doesn't have a [retaliation] claim, and that is what we want," he says.

Retaliation claims are often settled, in part because they are difficult to defend against at trial, Nolan says. Well-publicized instances of egregious corporate retaliation against whistle-blowers--think Enron--have fostered a public perception that employers will do what they can to stomp the individual who speaks up. "Enron definitely created an awareness," Nolan says.

A juror may think a discrimination suit is meritless, but note that the employee was fired a few months after making the complaint. In such cases, a retaliation claim has "a certain gut appeal to it," Nolan says. "The retaliation claim is hard to defend, harder to knock out."

Beggs concurs and says it is easier to humanize for a jury the impact of retaliatory actions by the company. "When I file my [client's] lawsuit and stand before the jury, I can say, ‘Ed was making $16 an hour, x-amount of dollars per year, meaning he would make x-amount over 10 years.' That's a real number."

Although the number of retaliation claims has increased and employers face an uphill battle in defending against them, Downes, whose office represents primarily nonunionized employers, says it's not all bad. Labor-management battles over the last 80 years have led to improvements in how workers are treated, he says, and nobody--neither employer nor employee--wants to get embroiled in lengthy, costly litigation.

"There is an upside to this," Downes says. "The more cognizant an employer is about these laws, the better HR [rules] they have. And the HR departments that embrace these programs do just fine."

Craig Lovelace is a freelance writer.

Reprinted from the July 2011 issue of Columbus C.E.O. Copyright © Columbus C.E.O.