The increasing threat of retaliation claims has become an unfortunate reality for small businesses in South Florida. While businesses are downsizing, employee retaliation claims have more than doubled since 2000. These retaliation claims have increased for various reasons, including greater information available to employees, the worsening economy resulting in increased layoffs, employees feeling unsure in their jobs, and fewer options for employees post-termination. Retaliation charges are so popular because employees who bring retaliation charges have a higher degree of success than those that bring a regular discrimination charge.
According to the U.S. Equal Employment Opportunity Commission (EEOC) statistics, retaliation charges accounted for 37.4 percent of all charges filed with the EEOC in FY2011, totaling 37,334 charges. Retaliation was also the leading charge in Florida, with 3,231 charges making up 39.9 percent of all Florida charges. Approximately 900 discrimination cases were filed in Florida’s federal courts in 2011, up nearly 6 percent from 2010.
The most common targets for federal discrimination claims are private employers with between 15 and 100 employees. Six out of 10 employers have faced an employee lawsuit within the last 5 years. Even if the claims wind up being unfounded, they can be a drain on time and monetary resources for small businesses. Beyond financial costs, are other costs associated with retaliation claims, including an employer’s loss of time, productivity, bad publicity and low employee morale.
Legal and financial costs may include attorney fees, fines and damages, including back pay and front pay and punitive damages. The costs to defend against retaliation claims can range anywhere from $10,000 to more than $150,000. Notably, from a sample of 30 retaliation claims resolved in Florida’s federal courts in 2011, 13 were resolved by verdict for the defense, 7 by verdict for the plaintiff, and 10 by settlement. Of the seven disclosed settlements, three settled for $200,000 and three others for amounts over $60,000. Verdicts for the plaintiff ranged from $5,000 to $200,000. Successful retaliation claimants are routinely awarded punitive damages at trial, in many cases exceeding $1 million.
The courts generally treat retaliation claims more favorable than other claims and take a hard line on offending employers accused of retaliation. Indeed, in a 2011 case, Thompson v. North American Stainless, LP, the Supreme Court held that an employee who never even complained of unlawful conduct but was terminated after his fiancée complained of discrimination was covered under the employment statutes for retaliation.
Small businesses can take many actions to prevent conduct likely to give rise to a retaliation claim and reduce the likelihood of a successful retaliation claim. With the increasing number of retaliation claims, and the broadening scope of such claims, employers must exercise greater care in reacting to claims of discrimination. In addition, employers must ensure that their legitimate reasons (non-discriminatory or non-retaliatory reasons) for adverse employment actions toward any employee are sufficiently and properly documented and that they maintain thorough and complete records.
It is essential that small businesses have a written employee handbook with clear policies and rules relating to hiring, work conditions, terminations and other forms of discipline and must apply those policies and rules consistently and fairly across employees. The handbook must contain strong anti-retaliation policies. Small business must also regularly review and increase training and education on retaliation under federal, state and local discrimination laws. Training of employees handling complaints are critical to avoiding and defending against retaliation claims. Best advice to small businesses: Before you terminate someone or take any significant disciplinary action against any employee, consult a lawyer.