$3.2M Retaliation Verdict After HR Flags Pay Issues

What does a textbook case of unlawful retaliation look like? If the allegations in this case are true – as a jury believed to the tune of more than $3 million – then a recent lawsuit out of Tennessee is a good example.

The jury sided with an HR professional who claimed her law firm employer let her go because she raised concerns about gender-based pay inequities and the firm’s compliance with the Fair Labor Standards Act.

Retaliation Allegations: What Happened at Tennessee Law Firm?

Andrea Jaye Mosby, an attorney with more than two decades of experience in labor and employment law, was hired by the Reaves Law Firm in May 2022 to serve as its Chief People Officer.

Mosby’s job was to emphasize culture and “do everything related to the people” who worked at the firm. She was responsible for all matters relating to HR, including compliance with applicable laws.

HR Exec Flags Pay Disparity, Misclassification Risk

When Mosby asked the firm’s founder and CEO why he offered a male applicant much more than a similarly situated female employee was making, the CEO allegedly told her that he didn’t care about the pay differential and that Mosby was being disloyal to him.

After that incident, Mosby told the CEO that he was not paying his executive assistant what she was supposed to be making and questioned whether she was properly classified under the Fair Labor Standards Act.

Again, the CEO allegedly responded by accusing Mosby of being disloyal.

Demotion and Termination Follow Compliance Pushback

A short time later, the firm demoted Mosby to a position as an intake specialist and told her she needed to participate in a “rotation plan” that was designed to show her how the firm operates.

The CEO also allegedly told other employees not to talk to Mosby about HR-related matters.

This all happened within Mosby’s first month on the job. Still in that month, the CEO allegedly told Mosby to put together a “transition document” that showed everything she was working on.

Funeral services for Mosby’s grandmother were held a day before Mosby was scheduled to report for the rotational program. She returned to work a few days later.

Just a few days after that, the firm terminated Mosby’s employment, saying the decision was based on her poor job performance and insubordination.

How the Court Evaluated the Retaliation Claims

Mosby sued, accusing the firm of illegal retaliation. She said it violated Title VII, the Fair Labor Standards Act and the Equal Pay Act by terminating her employment because she raised concerns about the gender-based pay disparity and the classification of the executive assistant.

Judge Allows Case to Proceed, Rejecting Firm’s Defense

A major development in the case occurred in mid-April, when the judge hearing the case rejected the firm’s bid for summary judgment.

The judge rejected the firm’s argument that Mosby did not have a reasonable, good-faith belief that the firm was violating the law. He also rejected the firm’s argument that there was no question Mosby was let go because she refused to perform her job duties.

Jury Finds Violations of Title VII, the FLSA and Equal Pay Act

That ruling cleared a path to get the case to a jury. The jury proceeded to find for Mosby on all her claims, finding that the firm violated Title VII, the Fair Labor Standards Act and the Equal Pay Act.

It awarded her about $258,000 in back pay and about $516,000 in compensatory damages.

But the real stinger for the firm came when the jury entered its amount to be paid in punitive damages: $2.5 million.

Understanding Unlawful Retaliation in HR Settings

The case is a stark reminder that it is a big mistake for employers to retaliate against employees who raise legitimate concerns about possible legal violations.

To win on a claim of unlawful retaliation, claimants must show:

• They engaged in a protected activity
• Their employer then took an adverse action against them
• There was a causal connection between the protected activity and the adverse action.

Plain-English translation: You did something to hurt me because I raised a legitimate concern about something at work.

Protected Activity, Adverse Action and Causation in Retaliation Claims

Generally speaking, “protected activity” is opposition to unlawful conduct or participation in an EEO process, such as serving as a witness in a workplace investigation.

An “adverse action” is a negative action taken against an employee, such as a termination or demotion.

Many retaliation cases turn on the question of whether there is a true causal connection between the protected activity and the adverse action.

Employers will typically assert that the true reason for the adverse action was something other than retaliation, such as poor job performance or misconduct.

Practical Steps to Reduce Retaliation Risk

Here are a few specific tips to keep in mind to avoid liability for illegal retaliation:

• Do not dismiss employee concerns about potential legal violations out of hand. Instead, carefully investigate to determine whether those concerns have merit.
• Remember that a close temporal connection between the protected activity and the adverse action strongly supports a claim of retaliation. If an employee reports legitimate concerns and is terminated the next day, the employer has a lot of explaining to do.
• Protected activity can take many forms, and it does not require the involvement of any formal process or proceeding.
• If adverse action is precipitated by poor job performance or misconduct, make sure to create and maintain solid documentation of the shortcomings that led to the adverse action.
• In addition to current employees, job applicants and former employees are also protected from illegal retaliation.