Landmark Ruling Expands Scope of Anti-Retaliation Provision

In the Press · May 31, 2011

Employers can be liable for retaliatory
conduct directed toward ex-employees. That was the pronouncement of the
Massachusetts Supreme Judicial Court (SJC) in the recently-decided case of Psy-Ed
Corp. v. Klein
. In the typical retaliation scenario, an employee claims
that something bad happened at work after filing or supporting a discrimination
claim. In a variation on this scenario, the plaintiff in Psy-Ed Corp.
challenged actions that the company took two years after he stopped working there. The SJC
found that he had a viable claim.

This ruling in Psy-Ed Corp. v Klein
greatly expands the scope of the Massachusetts
anti-retaliation statute, which protects those who complain of workplace
discrimination and also those who provide assistance with a discrimination
claim. Before the SJC clarified this issue, many Massachusetts practitioners and judges had
viewed retaliation as limited to an employer’s conduct toward current employees. 

The History 
Psy-Ed Corp. v Klein began when a former associate editor filed a
discrimination claim with the Massachusetts Commission Against Discrimination
(MCAD) against Psy-Ed Corp., a magazine publisher. At the time, Stanley Klein,
the editor-in-chief and co-founder of Psy-Ed, provided an affidavit where he
supported the company’s position in its response to the employee’s MCAD
complaint.

Subsequently, Klein waged and lost a battle for control of the company, and
entered into a separation agreement with the company that provided him with a
six-figure separation pay agreement. During the negotiation of this agreement,
Klein submitted a second affidavit, this time supporting the employee’s
discrimination claim. (MCAD eventually dismissed the employee’s discrimination
claim for lack of probable cause.)

Two years later, when the company learned about Klein’s second affidavit, it
sued him for defamation and refused to make additional payments that were due
under the separation agreement. Klein countersued, claiming that the company’s
suit was illegal retaliation for his support of the employee’s discrimination
claims. The trial court judge tossed out Klein’s retaliation claim because
Klein was not an employee of Psy-Ed at the time of the alleged retaliation.

The Appeal
On appeal, the SJC grappled head-on with
whether the anti-retaliation law applies to conduct directed at former employees.
The court noted that the long-standing, common interpretation of the
anti-retaliation statute was that it only governed employers’ treatment of
existing employees. Indeed, the commonly stated test for retaliation claims
included the requirement that there be an "adverse job action."

However, the SJC debunked the common interpretation, finding
that    

1)       the anti-retaliation
statute (Mass. Gen L. c. 151B) does not limit retaliation claims to those in an
employer-employee relationship

2)       the oft-cited
"adverse job action" standard was also not part of the statute, but
was just a "shorthand" adopted by the courts.    

Instead, the SJC held that the literal language, and "broad
remedial purpose" of the Massachusetts
anti-retaliation statute required that it protect not just current employees
but also former employees who had filed or assisted with a discrimination
claim. The United States Supreme Court had reached a similar conclusion in
analyzing the coverage of the retaliation protections under Title VII of the
Civil Rights Act of 1964.

What This Means to Employers
The Klein case is noteworthy because it
provides a reminder that filing a lawsuit – an activity typically protected
under the Constitution – can sometimes trigger liability for unlawful
retaliation. The defamation claims against Klein were stripped of the
protection normally accorded "petitioning activity" because the trial
court found that the company’s claims were "baseless" and intended to
harm Klein. As a result, the SJC reinstated Klein’s retaliation claims against
his former employer.   

The ruling also has broad implications for how employers treat
former employees who have either filed or assisted in the filing or prosecution
of a discrimination claim. The lesson of Klein is that employers need to
treat these ex-employees in an even-handed manner. In fact, a company could
expose itself to a retaliation claim if it refuses to provide these employees
with a reference or offer them severance, when it is normal company practice to
do so.

For more information about anti-discrimination and retaliation claims, or for
any employment law concern, please contact the author of this alert, Daniel S. Tarlow,
chair of the Employment Law
Practice Group
. He can be reached at 617 456 8013 or dtarlow@princelobel.com.