Employment Law Update
September 10, 2015
Title VII of the Civil Rights Act of 1964 not only prohibits discrimination based on race, color, sex, religion, and national origin, but also prohibits retaliation against individuals who oppose unlawful discrimination or participate in an employment discrimination proceeding. In many jurisdictions, however, the so-called “manager rule” is an exception to Title VII’s anti-retaliation protections.
Under the manager rule, a manager’s disagreement with an employer’s policies, expressed in the course of his or her duties, is not a protected activity under Title VII. In the recent case of DeMasters v. Carilion Clinic, 15 WL 471787313-2278, the Fourth Circuit Court of Appeals1, which governs North and South Carolina, rejected the rule, choosing not to follow those circuits that have carved out an exception for managers to Title VII’s anti-retaliation provision.
Policy Behind Exception for Manager
The manager rule originated under the Fair Labor Standards Act (FLSA) and has migrated into Title VII litigation. It is intended to address the concern that, if counseling and communicating complaints are part of a manager’s regular duties, then “nearly every activity in the normal course of a manager’s job would potentially be protected activity,” thus potentially providing a vehicle by which “an otherwise typical at-will employment relationship could quickly degrade into a litigation minefield.” Hagan v. Echostar Satellite, L.L.C., 529 F3d 617, 628 (5th Cir. 2008). However, in DeMasters v. Carilion Clinic, the Fourth Circuit disagreed with this theory, finding that nothing in Title VII indicates the protection given an employee’s oppositional conduct is determined by the employee’s job description.
Facts of Case
J. Neil DeMasters was employed as a consultant with an employee assistance program (EAP) in Carilion Clinic’s behavioral health unit. In October 2008, “John Doe,” a Carilion employee, revealed to DeMasters that his department manager had been sexually harassing him for several months. As a result, DeMasters opined that Doe was a victim of sexual harassment in violation of Carilion’s policies and formulated a plan to assist him in reporting the harassment to the human resources department and initiating an investigation into the charges. Following the investigation, Doe’s department manager was terminated.
Doe met with DeMasters again, reporting increasing hostility from co-workers who were “aligned” with the department manager. After a meeting of his EAP co-workers, DeMasters contacted Carilion’s HR department again and offered suggestions as to how it might more effectively handle the situation. HR confirmed that it was aware Doe was being subjected to harassing behavior from co-workers; however, Doe reported to DeMasters that the behavior was worsening and he was fearful. DeMasters again reached out to the HR manager to advise that he felt Carilion was not handling the matter properly.
Thereafter, DeMasters apparently had no further contact with Doe. In 2010, a Carilion manager advised DeMasters that Doe had filed a Title VII complaint with the Equal Employment Opportunity Commission (EEOC) and was pursuing a sexual harassment lawsuit against Carilion. DeMasters was fired shortly thereafter on the basis that 1) he made statements that could have led Doe to believe he should file a lawsuit against Carilion, and 2) that he had failed to perform in a manner consistent with the best interests of Carilion.
DeMasters sued Carilion, alleging he was terminated in violation of Title VII’s anti-retaliation provisions, including the “opposition clause” forbidding retaliation against an employee who opposes any employment practice that had been made unlawful by Title VII. The trial court granted Carilion’s motion to dismiss, concluding in part that under the manager rule, even if the activity were otherwise protected, DeMasters could not avail himself of Title VII’s protection because he was acting within the scope of his duties as an EAP consultant in counseling Doe and communicating with Carilion.
The Fourth Circuit disagreed. It held that the manager rule would prove counter to the broad approach used when considering a retaliation claim under the opposition clause, as well as the spirit and purpose of Title VII as a broad remedial measure. According to the court, application of the rule would “discourage…employees from voicing concerns about workplace discrimination and put in motion a downward spiral of Title VII enforcement.” The court concluded that the manager rule has no place in Title VII enforcement, finding there is nothing in Title VII to indicate that Congress intended to excise such a large category of workers from VII’s anti-retaliation provisions.
Impact of Case
The Fourth Circuit is only the second circuit court of appeals to issue a reported decision regarding whether the manager rule exception should apply to Title VII/EEOC cases. Notably, the DeMasters court did not extend its finding to FLSA retaliation cases, suggesting that the rule would still serve as an exception to retaliation claims under the FLSA. Nevertheless, the decision may encourage management personnel to advocate more aggressively for employees that report discrimination, whom, according to the court, they are “duty-bound to protect.”
1 One of the judges on the Fourth Circuit is married to the CEO of Carilion Clinic and, therefore, all members of the Fourth Circuit of Appeals were recused in this case. The decision was handed down by a three judge panel from the Third Circuit Court of Appeals.
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