Litigation Management

SPECIFICALLY SPEAKING | PROFESSIONAL LIABILITY

Extending Title VII

Unanimous Supreme Court Decision Announces Liability to Third Parties

By Rufus A. Jennings, John P. Morgenstern and Joe DePaul

The Supreme Court’s decision in Thompson v. North American Stainless, LP, held, for the first time, that an individual who has not engaged in any activity that would ordinarily be considered “protected” under Title VII still may maintain a claim under Title VII’s anti-retaliation provision as an “aggrieved person.” This case has the potential to change the face of employment litigation dramatically.

As background, Miriam Regalado and her fiancé, plaintiff Eric Thompson, both were employees of North American Stainless (NAS). In February 2003, the EEOC notified NAS that Regalado had filed a charge of gender discrimination. Three weeks later, her fiancé was fired. Subsequently, the plaintiff filed his own Charge of Discrimination with the EEOC, alleging that his termination was retaliation for Regalado’s complaint of discrimination.

The district court granted summary judgment, holding that Title VII does not permit third-party claims. After initially reversing, the Sixth Circuit affirmed this ruling. However, a unanimous Supreme Court reversed, holding that third parties can have standing to maintain claims for retaliation, even in the absence of their own protected activity.

First, the Court found that the plaintiff’s termination would be
considered retaliatory under the standard set forth in Burlington
Northern v. White. Specifically, the Court held that “a reasonable
worker might be dissuaded from engaging in protected activity
if she knew that her fiancé would be fired.” However, the Court
failed to set any bright-line standard as to the relationship be-
tween the parties and the level of reprisal required in order to
implicate the Burlington Northern standard. The Court said, “We
expect that firing a close family member will almost always meet
the Burlington standard, and inflicting a milder reprisal on a mere
acquaintance will almost never do so, but beyond that we are re-
luctant to generalize.”
The Court based its decision on the language of §2000e- 5(f)(1),
which states that “a civil action may be brought against the re-
spondent named in the charge … by the person claiming to be ag-
grieved.” According to Justice Antonin Scalia, this section grants
standing to a class of individuals far beyond those who have
claimed to be victims of discrimination or harassment, or who
have engaged in protected activity. Justice Scalia held that the text
of Title VII did not limit the definition of “person to be aggrieved”
to individuals who had, themselves, been the target of unlawful
discrimination or harassment. Instead, the Court then held that,
since plaintiff was an employee, and Title VII was enacted to pro-
tect employees, he was within the “zone of interests” of the stat-
ute. Such a concept does not appear anywhere within the text of
Title VII, and was not specifically defined by the Court.

In broadening the scope of Title VII to allow claims by individuals other than those whose claims are expressly permitted by the statute itself, the Court has opened the doors to a whole new class of lawsuits from friends and family members claiming to have been “aggrieved” by an employer’s actions. In order to protect themselves from this new class of claims, employers may be forced to take Draconian steps, including the strict enforcement of non-fraternization policies. By prohibiting any and all personal, intimate relationships between co-workers, the result in Thompson could be avoided.

The Court also did not identify how this ruling would apply to other statutes. The Americans with Disabilities Act incorporates the enforcement procedures of Title VII, but seemingly limits such procedures to “any person alleging discrimination on the basis of disability in violation of any provision of this chapter.” The Family and Medical Leave Act permits only an “eligible employee” to maintain an action. The Fair Labor Standards Act limits recovery to “the employee or employees affected.” On the other hand, the Age Discrimination in Employment Act allows “any person aggrieved” to bring a civil action.

While this decision is likely to generate additional litigation under Employment Practices Liability Insurance policies, the message that must be taken by employers is the same. When an employee has made a good-faith claim of harassment or discrimination, regardless of the underlying merits, it is important to use additional care before engaging in any significant employment action. Make sure that supervisors have been trained to watch out for potential retaliation claims and that all employment decisions are properly supported by facts that will stand up if the decision is challenged. While this is good practice under all circumstances, it is especially important when the spectre of litigation looms. LM

Rufus A. Jennings, Esq. and John P. Morgenstern, Esq., are with the Philadelphia-based firm of Deasey, Mahoney, Valentini & North, Ltd. Joe DePaul is the Area Senior Vice President of Management and Professional Liability for Arthur J. Gallagher Risk Management Services, Inc.