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Recent retaliation rulings reach rival results

“­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­[M]y retaliation will be your undoing.”

Gail McHugh, Collide (2013)

Retaliation is the single largest and fastest growing type of employment-related claim.

Statistics from the Equal Employment Opportunity Commission (EEOC), which oversees federal discrimination and harassment laws, reflect that retaliation claims, in whole or in part, now comprise nearly 45 percent of all charges. That constitutes nearly double the portion a decade ago.

The total number of retaliation claims last year was 38,000, nearly 7,000 more than the second closest category, racial discrimination, followed by gender and pregnancy claims, 26,000; disability matters, 25,000; and age charges, about 20,000. Even more retaliation claims arise under state laws covering discrimination, harassment and whistleblowers.

A trio of recent rulings of the federal and state appellate courts in Minnesota addressed retaliation in different contexts and reached rival results in doing so.

Leave lawsuits

An undocumented alien employee who was placed on indefinite leave of absence, without pay or benefits, after filing a workers’ compensation claim was entitled to pursue her retaliation claim in Sanchez v. Dalke Trailer Systems, Inc., 2016 Minn. App. LEXIS 555 (Minn. App. June 6, 2016)(unpublished). The Anoka County District Court dismissed the lawsuit on grounds that the claimant failed to establish a prima faciecase because the indefinite, unpaid leave of absence did not constitute “adverse action” necessary to constitute retaliation.

But the Minnesota Court of Appeals disagreed, holding that by being involuntarily placed on an unpaid leave of absence, the employee lost salary and benefits, which constituted actionable “adverse action.” The adversity satisfied the second prong of a prima facie case for retaliation under the workers’ compensation statute, Minn. Stat. § 176.82, which requires showing that the employee engaged in statutorily protected conduct, coupled with adverse action by the employer and the “causal connection” between the two.

Although the trial court did not specifically address the other elements of a prima facie case, the appellate court did, determining that there was sufficient evidence to proceed with the lawsuit. Filing the workers’ compensation claim constituted protected activity and there was enough evidence to establish a genuine issue of material fact regarding the causal connection between the protected conduct and the adverse employment action.

The key issue was whether the employer was aware of the claimant’s undocumented immigration status prior to disclosure of it in a deposition taken in the workers’ compensation case. Because the sequence of events and the timing of the adverse employment action created an issue of material fact regarding a causal connection, summary judgment was improper.

The remaining two prongs of the McDonnell-Douglas test for retaliation, McDonnell-Douglas Corp. v. Green,411 U.S. 792 (1973), also were not addressed by the trial court, but they caught the attention of the appellate tribunal. Although commenting on the strength of the employee’s claim, the court noted the existence of fact issues that must be “further developed” upon remand.

Unlike the Sanchez case, the 8th Circuit rejected a retaliation claim based upon a medical leave of adverse issue in Jones v. City of St. Louis, 2016 Minn. App. LEXIS 10419 (Minn. App. June 9, 2016)(unpublished).

The employee, an African-American electrician for a municipality, was forced to take a medical leave for stress after a reprimand for work-related behavior. As a result, he depleted his accrued medical leave. When the leave expired, the employee sued for racial discrimination and retaliation. The court affirmed a lower court ruling dismissing the lawsuit on two grounds.

The depletion of the medical leave account did not constitute “adverse employment action” to establish a prima facie case. Moreover, there was insufficient evidence that Caucasian employees he compared himself to were treated more favorably.

Additionally, this retaliation claim was defective because he did not file a complaint with the Equal Employment Opportunity Commission (EEOC) regarding the city’s requirement for a fitness-for-duty exam.

Sarbanes suit

An employee who claimed he was wrongfully terminated for complaining about inflated sales projections by his boss of a publicly-traded company also lost his retaliation claim in Beacom v. Oracle America, Inc., 2016 U.S. App. LEXIS 10183 (June 6, 2016 )(unpublished). The claimant, who worked for a company in northeast Minneapolis, sued under a pair of federal laws, the Sarbanes-Oxley Act and the Dodd Frank Wall Street Reform and Consumer Protection Act, which provide protection against retaliation for employees of publicly traded companies.

The employee, who worked for a computer software and hardware company, challenged the increase by his general manager of sales projections, which the employee asserted constituted “intentionally forecasting false revenue commitments,” a matter he brought to the attention of the company’s human resources representative, after telling the boss. His firing two months later was based on poor performance and insubordination, which the employee claimed was a pretext for retaliation.

U.S. District Court Judge Donovan Frank dismissed the lawsuit on summary judgment on grounds that the claimant did not show that a “reasonable person … would have believed that the employer was committing a securities violation,” which is necessary to establish protected conduct under those statutes.

The 8th Circuit agreed, holding that the employer could not reasonably believe that fraud was being committed against shareholders, a touchstone for a claim under those two measures. The two statutes, as interpreted by case law in the 8th Circuit and a number of other jurisdictions, look to whether a “reasonable person in [the same] position, with the same training and experience would have believed [the company] was committing a securities violation.” In this case, the company was close to reaching its projections, and the employee, who was both a sales person and a shareholder, would “understand the predictive nature of revenue projections.”

He also should have reasonably understood that missing a projection by merely $10 million was only a “minor discrepancy” to a company that annually generates billions of dollars. Consequently, the employee’s belief that the company was defrauding investors was objectively unreasonable and, therefore, did not qualify for protection under the inter-related federal laws.

Despite its prevalence, retaliation claims can be difficult to prove. This is true in conventional employment discharge situations or, as these cases reflects, in matters arising under other statutes as well.


Number of EEOC claims filed in most recent year

  • Retaliation: 37,955
  • Race: 31,073
  • Gender (including pregnancy): 26,027
  • Disability: 25,369
  • Age: 20,588

As Published in Minnesota Lawyer