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What Is “Retaliation” at Work?

The term “retaliation” has a limited definition in employment law.  To have a claim for retaliation, an employee must (1) make a report of discrimination to the company, (2) suffer an “material adverse action” by the employer, such as termination, and (3) prove that but for the report of discrimination, the employee would not have been terminated.

Employees have the right to be free from discrimination and free from retaliation for reporting discrimination.  If an employee has a good faith belief that discrimination or harassment is occurring, the employee should make a report of the discrimination/harassment in writing to Human Resources or to management.  The company’s handbook usually will state the name of the person to whom a report should be addressed.  If the company terminates the employee or takes other material adverse action against the employee reasonably soon after the report and gives a pretextual reason for the adverse action, a reason that is not credible, then the employee may have a claim of retaliation.  As with all cases, each claim is based on the specific facts of what happened.  You should contact an attorney who knows employment law to determine whether you have a valid claim.

Employers should take reports of discrimination seriously.  Obviously, discrimination is illegal. The preferred practice is to first talk with the employee about the problem and then investigate the facts.  If the matter involves harassment based on a protected class, the employer must take “prompt remedial measures” to end the harassment.  If other illegal actions are occurring, such as discrimination, the employer must put a stop to those actions as well.  Employees have a right to make reports based on their good faith belief that harassment or discrimination is occurring, even if no harassment or discrimination is discovered after investigation.  In fact, taking an adverse action against an employee who makes a report of harassment or discrimination can be illegal by itself.

You Don’t Have a “Right to Work” in Texas.

Clients sometimes ask, “Isn’t Texas a ‘right-to-work’ state, and, if so, how can my employer just terminate me?”  The term “right-to-work” refers to labor law that applies to a union/non-union situation.  In Texas and several other states, “right-to-work” means only that labor unions and employers cannot require employees’ membership, payment of union dues, or union fees as a condition of employment, either before or after hiring. Right-to-work laws do not aim to provide any general guarantee of employment, but rather are a government regulation of the contractual agreements between employers and labor unions that prevents them from excluding non-union workers, or requiring employees to pay a fee to unions that have negotiated the labor contract all the employees work under.

The principle that generally governs employment in Texas is called “employment at-will.”  This means that an employer can terminate a person’s employment for any reason, no reason, or a stupid reason – so long as it is not a discriminatory reason. Additionally, “discriminatory” in this context means that the employee or applicant must be a member of a “protected class.”  The primary protected classes in the law are (1) race, (2) gender or sex, (3) religion, (4) national origin, (5) disability, and (6) age.  If the reason for your termination was, for example, your age, then you may have a claim, depending upon your evidence.  There are a few other specialized classes, such as serving on a jury. But the six listed are the ones that most often arise in employment situations.

So you don’t have a “right to work” in Texas.  In fact, an employer can legally fire you at will for any non-discriminatory reason.

 

Employee or Contractor: Who Cares?

Employers, you certainly care.  If you misclassify a worker as a “contractor” when he/she is an employee, you can be subject to substantial penalties, taxes, or overtime pay.  You may prefer having contractors do the work because it can save money.  But you give up control of the details of how the contractors perform their duties.

Employees, you care, too.  On one hand, an employee has employment benefits that contractors do not have, such as workers compensation coverage, social security contributions by your employer, and most times health insurance.  On the other hand, as a contractor you can come and go as you please and run your business as you want, without having to heed specific instructions by any boss.

The key difference between “employees” and “contractors”:  An employer has control over the details of an employee’s daily work duties.  The contractor must give only periodic reports of the status of his/her work and ultimately deliver a final result requested by the employer.  There are a number of other factors in the legal definition of “employee,” although this is the primary difference.

Both employers and employees should be aware of the difference between an “employee” and a “contractor.”

Executives May Need Help.

Executives are “employees,” even at the level of CEO and In-House Counsel.  Their problems at times are similar to those experienced by employees at any level.  But executives have greater challenges.

One challenge occurs when an executive considers a new position and negotiates the terms and conditions.  Executives carry much responsibility and can be liable in lawsuits more readily than lower level employees.  A well drafted employment contract is a necessity.  I have presented papers at conferences on the myriad of issues involved in negotiating and drafting a good employment contract.  One general rule:  The executive needs specificity in the terms, while the company usually wants “wiggle room” with vague provisions.

Leaving the company can be equally challenging.  Even with a good employment contract, an employer can change its management, forcing the executive out.  Then the primary issue is how much does the employer owe, if anything, for failing to perform the contract to the end of the term.  Unless the contract is specific and quite clear, this question may not be easily answered.

There also are tax issues associated with an executive’s exit from a company or medical institution.  Lower level employees do not encounter these types of problems. Thus, much care is needed in this area as well.

While many employees would like to run the company, we should recognize that monumental challenges inevitably accompany an executive position.