(The following article appeared in the October 2007 edition of)
By D. Jan Duffy, J.D., CCEP
Although the anti-retaliation provisions of the Sarbanes-Oxley Act have received the most significant publicity in recent years, retaliation, or taking adverse action against another as revenge or “payback” for something they have done, is also prohibited by more than 3,000 other state, federal, and even local statutes. Generally, such laws prevent discrimination or adverse action against employees because he or she has “blown the whistle” or otherwise complained about the employer’s alleged illegal or improper actions; has refused to engage in illegal or improper conduct; has exercised a legal right such as taking a protected leave of absence; or performed a civic duty such as voting or serving on a jury.
Anti-retaliation law and practice is already particularly developed in the field of employment harassment and discrimination. The federal Equal Employment Opportunity Commission (EEOC) reports that retaliation is the fastest growing claim within its jurisdiction. Multi-million dollar jury verdicts for individual claims of retaliation following the lodging of discrimination or harassment complaints are increasingly common; in fact, juries often impose liability for retaliation even when unpersuaded by the underlying discrimination claim. And, in its 2006 decision in Burlington Northern and Santa Fe R. Co. v. White, the U.S. Supreme Court dramatically expanded the scope of conduct that could be deemed actionable retaliation. Rejecting the strict “ultimate adverse action” standard, previously accepted by some courts, that only final and material adverse action such as refusal to hire or termination could support a cause of action for retaliation, the Court enunciated a new and much more inclusive “deterrence” standard. Rather, the Court held, any employer action that “likely would have dissuaded a reasonable worker” in the circumstances of the plaintiff from complaining about discrimination, could constitute illegal retaliation. The Court indicated that even such matters as adversely varying a single parent’s working hours, or even taking negative action against an employee outside the workplace, might reasonably be deemed retaliatory. Not surprisingly, such an expansive definition of actionable retaliation is already having repercussions for other forms of prohibited retaliation as well.
Internal investigations are also driven by the particular laws or circumstances that initiate them. For example, some internal inquiries are launched as an all-out response to a criminal investigation of serious violations of anti-fraud, money laundering, securities or anti-trust laws. Others are initiated as a matter of reasonable management practice in response to an employee complaint of possible harassment or discrimination, where avoidance of civil liability or damages reduction is of principal concern. Still others are driven by the organization’s business objective of establishing and maintaining best practice regarding observance of its own code of conduct or ethics rules. In view of the great number of laws and other specific circumstances that shape internal investigations, conducting an internal investigation within even one jurisdiction can be complicated. Given the enormous variance in, and even conflict between, the national and local laws and mores that will drive internal investigations in a global environment, mounting such internal inquiries presents even more serious difficulties for the multinational organization.
Even aside from the growing legal consequences, retaliation, and the effective prevention and correction of it, is of significant concern to all organizations and particularly to compliance and ethics professionals. First, retaliation is a sizeable problem because revenge-seeking, or, at least, the urge to retaliate, is an extremely common, if unfortunate, human tendency. “An eye for an eye, a tooth for a tooth” is a well-known concept worldwide. From early childhood, people in most cultures experience at least the urge to reciprocate for perceived wrongs against themselves or their allies. Certainly, early on, most learn the consequences of “tattling” on a sibling or “ratting out” a schoolmate. The methods and opportunities for achieving revenge, and the seriousness of the consequences to a complainant, only increase as people age and enter the workplace.
Moreover, retaliation, or the urge to retaliate, is also a particularly deep and widespread phenomenon in the workplace. Not only are there numerous responsibilities of employers and managers and broad protections of employee rights that are enforced by anti-retaliation legal provisions, but also, significant opportunities exist in work-related situations for employers, managers, and co-workers to engage in vengeful or retaliatory conduct for perceived wrongs. The potential to engage in retaliation in the workplace is also shared by more people than the specific person accused of misconduct or complained about. Managers of either the accused or the complainant, for example, may feel the urge to extract revenge against a complainant who has made them “look bad” for failing to supervise adequately. They may also decide to retaliate against an employee they suspect of being an all-purpose “troublemaker.” Friends of the accused may also retaliate against a complainant as either an act of solidarity or to “encourage” him or her to abandon the complaint. Even co-workers may engage in ostracism or sabotage against an employee deemed to threaten workplace peace, or as a matter of distancing themselves from trouble.
Finally, workplace retaliation is something of a covert activity that is difficult to spot from higher levels of the organization. Especially with the Supreme Court’s expanded definition of actionable retaliation as anything likely to deter a reasonable person from complaining, many employees, and particularly managers, have ample opportunity and means to extract revenge against a complainant for perceived wrongs, but few are likely to own up to it and it can be difficult to detect, much less root out. A negative performance evaluation or denial of a promotional opportunity, for example, may look like a reasonable exercise of managerial discretion but, in fact, later be alleged, or even prove to be, a cloak for retaliation.
For all these reasons, and also because of recent regulatory and judicial developments, organizations must now undertake or step up their efforts to prevent retaliation from occurring, to address it when it is alleged, and to discover and correct it when it does happen. Necessary measures will require the devotion of considerable resources for policy and procedure development or alteration, education, monitoring and enforcement activities. Ethics and compliance professionals have a particularly important role to play in establishing, implementing, and enforcing such measures because of the varied, interdisciplinary and cross-functional nature of retaliation prohibitions, as well as the wide variety of forms that retaliation can take in an organization and the multiple levels at which it can occur. Additionally, such personnel will likely have the expertise as well as the perceived neutrality to tackle such a multifaceted and complicated task.
Among the most import anti-retaliation measures that all organizations can and should undertake now are the following:
- Demonstrate a clear and unambiguous organizational commitment to an enterprise and workplace free of retaliatory conduct. As with any compliance program, active leadership from the top as well as commitment of adequate resources for personnel, education, and enforcement efforts will be critical to achieving success. Leaders must understand and firmly communicate their own awareness of, and intolerance for, retaliatory behavior anywhere in the organization against anyone who has engaged in conduct protected against retaliation by either law or the organization’s asserted policies and values.
- Take steps to establish and maintain a culture and environment that supports such efforts. Organizations must make clear to all employees and especially managers and supervisors that retaliation for engaging in protected activity such as complaining about misconduct is viewed with the same seriousness as the underlying misconduct. In fact, retaliation is often easier to prove and more likely to offend jurors and other outside reviewers than many forms of underlying misconduct. Organizations must accordingly include retaliation in other important policies, prohibitions, disciplinary action systems, and other enforcement mechanisms. They must also reference refraining from retaliation in their articulation of the organization’s codes of conduct or values statements.
- Establish and maintain comprehensive, understandable, written anti-retaliation policies and procedures, including effective complaint and remedial procedures. Most organizations already have some limited anti-retaliation provisions embedded in anti-harassment policies or Sarbanes-Oxley inspired codes of conduct and anti-fraud hot-line procedures. With the considerable rise of retaliation awareness and claims across a wide spectrum of conduct, organizations should undertake review of all such provisions, adding, clarifying, or conforming them to each other as necessary. Organizations should at least consider creating a comprehensive stand-alone anti-retaliation provision: this will defeat claims that an employer prioritizes and prohibits retaliation in certain circumstances but not in others, for example, with respect to shareholder fraud but not with respect to harassment or discrimination.
- Clearly and effectively communicate anti-retaliation policies and procedures to all employees. They should be disseminated along with, by the same means, and with the same frequency and urgency as other key policies and procedures; otherwise, the organization risks creating the impression that retaliation is a lesser offense than other or underlying misconduct.
- Educate all employees, particularly managers and supervisors, about their responsibilities to refrain from retaliation as well as their rights under the organization’s anti-retaliation programs. Just as with other compliance programs, successful anti-retaliation measures rely upon comprehensive, interactive, and repeated training as to the fact that retaliation is prohibited and will result in consequences as serious as those for other forms of misconduct. Additionally, because retaliation has only rather recently been understood as a significant organizational challenge, anti-retaliation education should also include substantial emphasis on how retaliation can manifest itself in the organization or work unit in question and what individuals are expected to do about it.
- Take appropriate action to investigate, evaluate, and address complaints of, as well as circumstances or occurrences suggesting, possible retaliation. Most organizations have begun to understand the need to conduct prompt, thorough, and fair fact-finding or internal investigations in the event of situations like sexual harassment or alleged shareholder fraud. They also understand that, consistent with the results of such investigative efforts, appropriate deterrence and remedial measures, including disciplinary action and/or make-whole remedies, must follow. Retaliation claims require the same careful response and action consistent with the results of the investigation.
- As with other compliance programs, organizations must maintain adequate documentation and record-keeping of complaints and retaliation-related remedial efforts to permit both effective deterrence and remediation. Insufficiently documented, preserved, or retrievable measures will create many of the same problems as failure to undertake any preventative or corrective efforts at all. They can also lead to increased liability from jurors or other after-the-fact reviewers who tend to view institutional forgetfulness as evidence of lack of concern for the problem in the first place.
- The extent of legal prohibitions, the unfortunate naturalness of the urge to retaliate, the multiplicity of means and opportunities, and the difficulty of distinguishing retaliation from legitimate behavior in the workplace, all argue for the devotion of substantial resources to ongoing auditing and monitoring for compliance with the anti-retaliation organization’s policies and procedures as well as applicable law. The complexity and multifaceted nature of the prohibitions on retaliation, as well as the huge variety of ways that it can manifest in any organization, suggest a multidisciplinary approach to such monitoring efforts. An organization’s legal department must obviously be involved in identifying and categorizing retaliation prohibitions, risks, and legal consequences. Human Resources is typically needed to identify the ways in which retaliation may manifest in a particular workplace and to monitor such sporadic efforts as promotion or reduction-in-force selections, as well as ongoing programs like performance management and evaluation, for evidence of improper retaliation. Risk management, internal audit, or security personnel may well be needed for investigation and analysis of retaliation claims or suspicious circumstances. Compliance and ethics professionals in particular also bring the multidisciplinary expertise and neutral perspective that is needed to address such complicated, multifaceted challenges.
Effective prevention and correction of retaliation also requires certain additional or enhanced actions in the aftermath of specific whistle-blowing or other protected conduct such as the lodging of internal complaints. These include:
- Both the complainant and the accused (as well as any managers and supervisors of either) must be explicitly reminded of the organization’s policies regarding retaliation. Special attention should be given to the responsibilities of supervisors and managers as well as the accused to refrain from retaliation and the appearance of retaliation. They may also need to be reminded as to the types of actions that could constitute retaliation or the appearance of retaliation in the context of the particular complaint.
- Complainants should be given clear assurances that the organization will not tolerate retaliation and will take active steps to address it. In fact, this should be provided in writing. They should be encouraged to raise any retaliation-related concerns that arise either during or subsequent to the original complaint handling process. They should also be assigned specific and knowledgeable persons to provide appropriate “avenues of complaint.” Such individuals should schedule repeated, specific follow-up sessions in which they must carefully probe the complainant’s experience. A casual “how’s it going?” contact is clearly insufficient.
- The contact person or persons should place “tickler” reminders in his or her calendar and prepare for the contact meetings carefully. This should include preparing an outline of questions to be asked and matters to be raised. The contact person should document when, where, and how long the meeting lasted, and what was discussed. Care should be exercised to ensure that the contact meetings are as confidential and comfortable for the complainant as possible. Best practice would be to schedule similar follow-up meetings with the accused as well.
- The complainant’s particular work environment should be monitored for some period following a complaint. Hostile or vengeful statements, acts, or conduct by any employee, including peers, subordinates, and others in or outside the parties’ chain of command, must be adequately addressed, stopped, and, if necessary, remedied. Additional education or counseling for individuals or a work unit should be considered even if the potentially retaliatory action does not appear to be extremely serious. Ostracism, anger, and teasing may be the tip of the iceberg for more serious retaliatory harassment or even threats or sabotage.
- Competent guidance for and oversight of decision-making concerning the complainant should be provided. It is also necessary to provide for effective review of important decisions for at least some time after the individual has complained. In some circumstances, such as important promotion, demotion and termination decision-making, it may even be necessary to substitute an uninvolved and impartial individual as decision-maker concerning the claimant.
- Complaints of, or circumstances possibly suggesting, retaliation must be investigated as promptly, thoroughly, accurately, fairly, and confidentially as any other complaint. Any such complaint investigations should be treated with considerable attention and expertise: they should be well-planned and resourced; results should be carefully acted upon; and actions consonant with the results of the investigation and sufficient to remedy any retaliatory misconduct should be undertaken.
- Document counseling and/or remedial action concerning retaliation and consider it in any subsequent action involving the complainant, the accused, or other retaliator. Make sure that your files and records have the capacity to alert decision-makers as to the existence of an ongoing or recent prior complaint by or against the subject of the decision-making.
- Never transfer or significantly change the complainant’s working conditions as a result of, or proximate in time to, a complainant’s serious or good faith complaint. If the complainant seeks and is granted a significant change, get the complainant’s assent in writing.
- Do not ever dismiss retaliation complaints out of hand. Although it is true that complaints are occasionally raised as a defense to an employee’s concern that he or she is about to be subjected to negative action, like a poor performance evaluation or discharge, or even as a sword to accomplish some unrelated end of the complainant’s, make any such conclusion very carefully and after thorough and careful consideration.
In sum, retaliation claims may well be one of the most prominent organizational challenges of the next decade. Organizations must undertake effective action now to prevent, correct and deter retaliation and the appearance of retaliation in their enterprises and workplaces.
Copyright © 2007 D. Jan Duffy. All rights reserved.
Reprinting or other publication without prior written permission prohibited.