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Company Wins in Harassment Claim, Loses on Retaliation

Posted on March 21, 2022

A recent decision by the federal Court of Appeals for the First Circuit (which includes Massachusetts) reversed a lower court’s decision favoring an employer on the issue of retaliation.

The Appeals Court found that the District Court was justified in its ruling with respect to the underlying claim of harassment but ruled that the employee’s termination may have been a retaliatory adverse action.

The employee, a senior manager, began working for a large online furniture retailer in January of 2017. In August of 2019, she sent an email to her manager describing a series of interactions with a male coworker.  In three instances beginning in January of 2019, she alleged, he had touched her inappropriately, putting a hand on her leg, sitting so closely in a meeting that his leg touched hers, and touching the buttons on her shirt and running his hands down her torso.  He had also inquired about her dating life and sent her aggressive, critical emails.

Four or five days after the message was sent, the manager forwarded the email to the company’s human resources department (HR).  An HR manager undertook an investigation.  There were no eyewitnesses to the harassment and on September 16 the HR manager shared with the employee that he was unable to substantiate her claims.

The following day, September 17, the employee called the HR manager to report that her own manager, now a different person than the one to whom she had first reported the harassment, threatened to “get her off his team.”  The employee believed this comment to be in retaliation for her report of harassment.

In a September 19 call to the HR manager, which the employee recorded, the employee said that a compelling severance agreement might be her best path forward.  When asked what a satisfactory agreement would be, she said that her lawyer would look at any proposal the company presented to her.

It is unusual to have a recording of such a pivotal conversation, as two-party consent is required in Massachusetts for admissibility of a recording.  The court’s opinion did not discuss this issue, so it is unclear whether the employee sought the HR manager’s permission to record.

Over the next three days, a Friday on which the employee used paid time off and then the weekend, the employee continued to check emails and make plans for an upcoming business trip.  When she returned to the office on Monday, she received an email from the HR manager indicating that the company accepted her resignation, with a proposed severance agreement attached. Her final day of employment was either that day or the next day.

Following her separation from employment, she sued claiming discriminatory harassment and retaliation under both federal and Massachusetts law. The District Court had ruled that the company had no liability for the alleged harassment, and the Appeals Court concurred. There was no evidence in the record showing that the company had been negligent with respect to the offensive behavior or the ensuing investigation, so there was no basis for employer liability for harassment by a coworker.  Although the investigation was inconclusive, it was adequate under the law.

But the circumstances surrounding her termination were found to be in question. Had she in fact resigned during the phone call, or was her termination involuntary and in retaliation for her reports of harassment and retaliation?

The court found that even with a transcript of the telephone call, each party’s interpretation of the other’s meaning was a question for a factfinder in court, and it reversed the District Court’s award of summary judgment to the employer. A final claim, a parallel gender-based state law discriminatory termination claim, was reversed in the employer’s favor.

This case demonstrates some important points for employers:

  • A thorough investigation is critical and will help to defend against even the most difficult “he said/she said” harassment claims.
  • Even a well-handled claim of discrimination can lead to a successful retaliation claim, particularly when the employer takes an adverse action against the employee.

Retaliation remains a significant challenge for employers in Massachusetts and throughout the country. The Massachusetts Commission Against Discrimination’s annual report for FY 21 recognizes retaliation is the second most common claim filed against employers.

As more laws contain anti-retaliation provisions, employers need to ensure that they do not take steps that would lead to potential retaliation claims. One strategy for addressing that is training supervisors and managers to understand what retaliation is and how to manage a post litigation environment to minimize the risk of retaliation.

Members of AIM looking to discuss HR issues may call the Employer Hotline at 800-470-6277.