The Law @ Work

First Circuit Says CEO’s Retaliatory Animus Could Have Infected Entire Organization

by Erica E. Flores

Last March, a Massachusetts federal judge granted summary judgment for the employer in a retaliation case, reasoning in part that there was not enough evidence to support a finding that the CEO’s resentment against the employee for bringing a wage class action against the company played any role in the employee’s manager’s decision to terminate him. In a recent opinion, however, the First Circuit Court of Appeals reversed that decision, concluding that a jury could infer that the CEO’s retaliatory animus infected the entire organization, even without additional evidence. The fact that the CEO did not participate in the termination decision was of no consequence. The ruling stands to open up an entirely new source of proof to employees in discrimination and retaliation cases, potentially allowing even the lowest-level employees to access and rely upon communications at the highest rungs of the corporate ladder in an effort to establish that an adverse employment decision was the product of a forbidden motive.

Joseph Travers was employed as a skycap by Flight Services & Systems, Inc. (“FSS”). In April 2008, Travers filed a class action lawsuit against FSS, claiming violations of the Fair Labor Standards Act for failure to pay the federal minimum wage. According to Travers’ former supervisor, Robert Nichols, the company’s Chief Executive Officer, Robert Weitzel, Sr., was very angry about the lawsuit and its mounting costs and repeatedly yelled at him to “get rid” of Travers and to talk Travers into “dropping the lawsuit.” Weitzel allegedly made these statements on conference calls on which the President of FSS also participated.

On September 3, 2010, a customer complained that Travers solicited a tip from her. FSS policy expressly forbids employees from soliciting tips from customers and states that an employee who is found to have solicited a tip will be terminated immediately. Travers was immediately suspended and asked to provide a statement. He said he remembered the passenger, but denied soliciting a tip from her – he said he merely mentioned that her fee did not include a tip, consistent with signs posted at the skycap stand. Nonetheless, Travers was terminated for violating the no-solicitation policy.

In January 2011, Travers filed a retaliation lawsuit, claiming that he was terminated in retaliation for filing the FLSA class action. After discovery, the district court granted summary judgment to FSS. The court concluded that Travers had not shown he was treated differently than similarly-situated skycaps, had not shown that FSS’ investigation into the passenger’s complaint was inadequate, and had not provided any evidence that would support an inference that the CEO’s retaliatory animus against him was the real cause for his termination.

In a December 2013 ruling, however, the First Circuit reversed that decision. The court acknowledged that the record did not contain any testimony or evidence that showed that Weitzel or Nichols had communicated with those individuals who made the decision to fire Travers. The court further recognized that the lack of this type of direct evidence — linking the person who had expressed antagonism towards the employee to the allegedly retaliatory decision — usually created a “a fatal gap in proof.” According to the court, however, this case was different because the “retaliatory animus” existed at the highest level of management, specifically the CEO himself. Since a CEO generally sets the tone and mission for his subordinates, it’s not a stretch to conclude that these subordinates would consider it an important part of their jobs to figure out and deliver what the CEO wants. Additionally, the CEO’s remarks here specifically targeted Travers and indicated that he should be fired. Under these circumstances, the court concluded that a jury could have believed that “strongly held and repeatedly voiced wishes of the king,” so to speak, could have become well known to the individuals who were charged with deciding Travers’ fate. In other words, a jury could find that when the company was trying to decide whether Travers had violated company policy, “the pre-existing retaliatory motive tipped the scales.”

Generally, in order to be successful at a charge of retaliation, an employee needs to produce some evidence that the retaliatory motive played a role in the termination decision. However, in this case, even though there was no such direct evidence, the First Circuit took pains to highlight the importance of the CEO’s involvement and the nature of his role within the company. On the surface, therefore, the case appears to articulate a narrow exception to the general rule, one that is unlikely to apply in the vast majority of cases. Nonetheless, the result here should give all employers some pause: to some degree, every senior member of management “sets the tone and mission for his subordinates,” and every subordinate desires to do his or her bidding. So if a CEO’s comments about an employee or a lawsuit may influence a lower-level manager and may alone be enough to prove that the manager had a forbidden motive, why couldn’t the same be said for other executives and supervisors? Indeed, the fewer the degrees of separation between the executive and the decision-maker, the stronger the argument becomes. Accordingly, employers should make sure that all employees with any degree of supervisory authority, including all senior executives, understand the weight their remarks may carry for the company and the danger that might result from an angry expression of opinion.

 

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