Nolo’s Employment Law Blog

In a recent case, a California trial court denied an employer's motion to compel a former employee to arbitrate his racial discrimination and harassment claims, even though he'd signed a form agreeing to arbitrate. The denial was affirmed by an appellate court.

The plaintiff, Sam Metters, complained of the discrimination and harassment to his employer, Ralphs Grocery Company. On two occasions, Ralphs sent Metters a letter and "Notice of Dispute & Request for Resolution" form. The form included a voluntary mediation and mandatory arbitration clause, and left a blank for the employee to sign.

According to Metters, the employee relations manager at Ralphs instructed him to sign and return the form. He understood that he had to do so to have his claims investigated, and he signed. When he later sued the company, Ralphs tried to enforce the agreement.

But the court wasn't buying it. Even though the employee had signed, the document didn't look like a contract, so he hadn't really consented. The appellate court noted other problems with the process too -- the employee said he wasn't given a copy of the company's "Mediation & Binding Arbitration Policy," which was referred to in the arbitration clause.

Perhaps most importantly, the employer's actions suggested that the employee had to fill out the form to have his complaint investigated. The employee said he'd tried to contact the company on several occasions, and it hadn't produced results. Between this inaction, the letters he received, and the conversation he had with the employee relations manager, the plaintiff believed he didn't have another choice.

Alayna Schroeder

Last week, the Supreme Court agreed to hear a really interesting investigation case, making this one of the busiest dockets for employment cases in recent years. The case is called Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee, and it raises this question: Is an employee who answers questions as a witness in an internal investigation of sexual harassment protected from retaliation? It amazed me to learn that the Sixth Circuit Court of Appeals said no. The court found that an employer can fire an employee because she participated in an internal investigation. (Click here for links to the briefs and other information about the case, from the excellent resource SCOTUSblog.)

Crawford was a long-term employee who was fired after she was questioned as a witness in an internal investigation of a sexual harassment complaint. After several employees voiced concerns about inappropriate behavior by Dr. Gene Hughes, the employee relations director for the Metro School District, the District investigated. The investigator contacted employees who worked with Hughes, including Crawford, and asked them to answer questions. Crawford told the investigator that Hughes had sexually harassed her and other employees by, among other things, grabbing his crotch, asking to see her breasts, and pulling her head to his crotch.

When the investigation was complete, Hughes was not disciplined. However, three employees who told the investigator that Hughes had acted inappropriately were fired, as was Crawford several months later. (All of these facts are based on Crawford's version of events. Because Metro won on summary judgment, the Court is obligated to view the facts in Crawford's favor.) Crawford filed an EEOC charge and a lawsuit accusing Metro of retaliation.

Crawford lost in federal district court and again at the Court of Appeals.  Both courts found that Crawford couldn't prove illegal retaliation, even if she really was fired for being a witness in the investigation. The reason? Title VII prohibits retaliation only against employees who "oppose" discrimination or harassment, or who "participate" in an investigation, proceeding, or hearing regarding discrimination or harassment. Because Crawford didn't file the original harassment complaint, the courts found that she hadn't opposed sexual harassment. The courts also found that Crawford's statements during the internal investigation didn't count as "participation" because no EEOC charge or lawsuit had been filed at the time.

The federal courts of appeal have reached different conclusions on this last issue: Some have held that the "participation" clause doesn't apply unless there is a pending EEOC charge or lawsuit - in other words, unless the official machinery of Title VII is in play. Others have held otherwise, and have protected witnesses in internal investigations from retaliation.

I am, of course, interested to see how the Supreme Court will resolve this dispute, should it take the case. But to me, there's a more compelling issue at play, and it involves the Farragher/Ellerth affirmative defense to harassment claims. Under those cases, an employer can avoid liability or limit damages in certain harassment cases if it can show that it had an effective complaint policy in place, that it promptly investigated claims and took appropriate disciplinary action, and that the employee failed to use this complaint procedure. Arguably, an employer that fires employees for participating in such an investigation would utterly undermine the effectiveness of its complaint procedures by discouraging witnesses from coming forward - and would have to wave goodbye to that affirmative defense.

But wait - there's more. The Farragher/Ellerth cases essentially make filing an internal complaint of harassment a necessary first step in the process of bringing a lawsuit. An employee who doesn't use the employer's internal procedures to complain may never have her day in court. So arguably, an internal investigation has become part of the official machinery of Title VII, much like filing an EEOC charge or a lawsuit. Under this logic, participating in an internal investigation should be protected just as much as participating in an official investigation.

No matter what the Supreme Court decides, smart employers won't fire or discipline employees for participating in an internal investigation. What purpose would it serve? An employer that retaliates against witnesses ties its own hands: If employees fear for their jobs, they won't volunteer information and might not answer questions honestly. The employer then might not know what's actually going on in the workplace and won't have an opportunity to stop it. Even if witnesses can't sue for retaliation, the employee whose complaint started the investigation in the first place can still sue - and the employer's actions in intimidating witnesses could well be Exhibit 1 in a claim for big dollar damages.

There's trouble in the garden -- Madison Square Garden, that is. The coach of the New York Knicks, former Detroit Pistons star Isiah Thomas, is accused of sexually harassing Anucha Browne Sanders, a former team vice president. Browne Sanders claims that Thomas called her crude names and made unwanted sexual advances towards her. And that's not all: Browne Sanders also claims that she was fired in retaliation for complaining about the harassment. (For a nice summary of the details of the complaint, see the New York Times article, "Sexual Harassment Case Against Thomas Is Set to Open," by Richard Sandomir.")

Retaliation claims can be especially dangerous - and expensive - for employers. An employee can win a retaliation case even if she can't ultimately convince a jury that she was sexually harassed. If the employee can prove that she was fired or otherwise faced negative consequences for complaining of harassment, that's a separate violation of the antidiscrimination laws.

One of the interesting things about this case (aside from a witness list that includes the team's star point guard, Stephon Marbury) is that the Chairman of the Garden admitted (in a deposition) that Browne Sanders could have kept her job had she not asked other employees to remember incidents that would have supported her claims during the Garden's investigation of her sexual harassment complaint. (The defendants also claim that Browne Sanders had performance problems.) Browne Sanders claims that this was protected activity under the antidiscrimination laws; the defendants claim that she was tampering with the investigation. Ultimately, a jury will decide whose interpretation is correct.

The lesson here for employers? Tread very carefully when you're considering discipline against an employee who has made a complaint -- especially a complaint that alleges sordid details against a well-known figure and is sure to make the newspapers. Particularly if your reason for discipline has anything to do with the complaint or the underlying incidents, you can expect a plaintiff's lawyer to be very interested.

Lisa Guerin

Update: On October 2, 2007, the jury awarded $11.6 million in punitive damages to Browne Sanders. The breakdown: $6 million for the hostile environment sexual harassment claim and $5.6 million for the retaliation claim (the jury has yet to decide how much Browne Sanders should receive for lost wages and other economic damages). These damages are to be paid by Madison Square Garden and James Dolan, chairman of the parent company to the Knicks and the Garden. The jury couldn't reach a decision on whether Thomas should also pay punitive damages. The defendants have vowed to appeal.

Also, for managers who want to learn more about investigating complaints about employees, check out my book The Essential Guide to Workplace Investigations: How to Handle Employee Complaints & Problems (Nolo).