I cut my employment law teeth by defending against retaliation claims so I have a special affinity for those that raise unusual issues. A recent First Circuit decision (a court that rules on decisions from New England and Puerto Rico) caught my eye and gives me an opportunity to talk about two important points employers should heed. (This court does not set precedent for Tennessee cases so employers, as always, should not blindly assume the decision will protect them.)
Employers are often surprised by the number of federal retaliation statutes. I don’t have an exact count but can safely say there are over 30 different statutes which prohibit retaliation by certain employers for certain conduct engaged in by employees. These days, employees can engage in “protected activity” in a variety of ways. Some ways are familiar (making complaints of unlawful discrimination) others are new (complaints by airline employees about airline safety) others are industry specific (complaints about corporate misconduct for publicly traded companies or nuclear energy safety) or conduct specific (complaints about unlawful environmental pollution). Thanks to CBOCS West v. Humphries (which I discussed here), we know that one of the oldest statutes which prohibits retaliation was passed after the civil war. The oldest that expressly prohibits retaliation is, of course, the National Labor Relations Act, where the protected conduct involves unionizing.
One of the less familiar retaliation provisions appears in the Employee Retirement Income Security Act (ERISA). This statute, as most know, governs benefits and the theory behind this retaliation provision is that, what good would it be for an employee to seek or obtain a benefit if an employer could turn around and make life difficult on the employee as a result. So, ERISA includes a retaliation statute that prohibits employers from retaliating against an employee because the employee sought or obtained benefits. It also prohibits an employer from “interfering” with an employee’s right to a benefit.
To keep things from getting completely out of hand, however, courts uniformly interpret the ERISA retaliation statute to require more than simply a termination following an application for or an award of ERISA benefits. The employee must, as in almost any retaliation claim, show the employer intended to harm (in the employment sense) an employee because the employee had or requested ERISA governed benefits. The classic example would be where an employer terminates an employee because the employee has caused or about to cause an increase in the company’s health care expenses. See Dewitt v. Proctor Hospital, 517 F.3d 944 (7th Cir. 2008) (this may also violate the Americans with Disabilities Act if the employee has a disability).
Despite its age, ERISA retaliation claims are still just unusual enough that some employers will still act without thinking about the consequences. A recent decision, however, provides employers with something of an encouragement to think through the consequences of their actions.
Parametric Technology notified a number of employees that they were going to be laid off. One, a software engineer, shortly before the termination date, notified the PT that he wanted to take short term disability benefits. HR, thinking the claim “odd” (their words) consulted with in-house counsel before forwarding the claim to the insurer who ultimately approved the disability benefit. The employee then looked for work, getting hired by a consulting company that was to provide employees to PT. Thus, PT saw the software engineer back working at its facility (though now a subcontractor employee) when it thought he was still receiving disability benefits and fired him for double-dipping.
The software engineer argued the double-dipping motive wasn’t the real reason for his persona non-grata status pointing to the fact that HR treated his request for benefits with skepticism and to their consulting with counsel before processing the claim paperwork. The court didn’t buy it: employer skepticism (alone) is ordinarily not unlawful because “ERISA does not impose upon an employer a duty to buy a pig in a poke, and caution is a far cry from discriminatory animus.”
And consulting with counsel before proceeding, the court said, was anything but discriminatory. “A personnel officer faced with a novel situation hardly can be faulted for opting to secure the advice of counsel concerning that situation.” And, "the prudent step of seeking a lawyer's advice is not the stuff on which a finding of discriminatory intent can be premised."
At the risk of sounding self serving, there is a lesson here for employers who are faced with an employee who complains or requests any contractually agreed upon or statutorily mandated right. It is better to review the situation carefully, consult with counsel if doubts remain, before proceeding precipitously.
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