An Unrealistic Threat Of A Pay Cut To A High-Level Employee Is Not An Adverse Action, So Says The Fifth Circuit

To prove retaliation a plaintiff must show that he or she suffered an "adverse employment action" – an issue that is often conceded by employers defending against such claims. However, the Fifth Circuit's recent decision in Brandon v. The Sage Corp. is a great reminder as to why employers should not overlook this issue.

In Brandon, plaintiff, a senior level employee, was allegedly threatened with a salary reduction by an even more senior level employee after she questioned certain potentially discriminatory actions. Although the plaintiff did not report to that employee, she resigned anyway citing, in part, the threat. The next day the President of the company apologized for the employee's behavior and made it clear that he had no authority to reduce her pay. She sued anyway. The company won, but the plaintiff appealed.

On appeal, the 5^th Circuit affirmed and focused on the second element of a prima facie case of retaliation – whether a threat of a pay cut was an adverse employment action. In doing so, the court applied the Supreme Court's Burlington standard: "a plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which . . . means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination."

The court ultimately held that a reasonable person in the plaintiff's high-level position "would not have been dissuaded from engaging in protected activity as a result of threats or actions by someone outside her chain of command and who she knew had no final decision-making authority." The court considered the plaintiff's familiarity with the company's chain of command, grievance process, and decisional hierarchy in assessing what was reasonable.

Takeaways

It is not always a given that an adverse employment action has taken place. The reasonable person standard is not a general one. When faced with a retaliation claim, employers should analyze what a reasonable person in the aggrieved employee's position would feel, taking into consideration, at a minimum, the employee's level of seniority, chain of command, and knowledge of human resources policies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.