In a 5-4 ruling that will make it more difficult for employees to prove civil rights retaliation claims, the U.S. Supreme Court found that courts should apply a heightened "but for" causation standard to cases in which plaintiffs allege an employer took adverse action against them for reporting workplace discrimination.

The June 24 decision in University of Texas Southwestern Medical Center v. Nassar was also a reversal for a team of Texas plaintiffs lawyers, who won nearly $500,000 in attorney fees from a U.S. District Court in Dallas after they prevailed in a $3.4 million jury verdict for their client three years ago [See "Fees for All: Judge Approves Nearly $500,000 for Counsel Who Won Title VII Suit" Texas Lawyer, Aug. 16, 2010, page 1.]

Brian Lauten, a partner in Dallas' Sawicki & Lauten who represents Dr. Nassar, is disappointed in the ruling.

"The decision by the majority of five justices is a tremendous victory for corporations and a giant step backwards for victims of retaliation and employees who are witnesses to discriminatory conduct and want to come forward," Lauten says.

King & Spalding partner Daryl Joseffer of Washington, D.C., who represents the university on appeal, is pleased with the decision and says the ruling ensures that retaliation laws will be applied equally.

"The importance of it is that, under the plaintiff's argument, a plaintiff could prevail, even if he had treated another employee the exact same way. The point of the antidiscrimination laws are that everyone should be treated equally," Joseffer says.

The background to high court's ruling in University of Texas Southwestern Medical Center v. Nassar, according to the majority opinion, is as follows.

Nassar is a medical doctor of Middle Eastern descent who worked as both a member of the faculty at the University of Texas Southwestern Medical Center and as a physician at Dallas' Parkland Hospital, which is affiliated with the university.

In 2004, Nassar alleged that his immediate supervisor at the university, Dr. Beth Levine, was biased against him because of his religion and ethnic heritage, because she allegedly made comments about Nassar, such as "Middle Easterners are lazy."

Nassar later reported the alleged harassment to Levine's supervisor, Dr. Gregory Fitz. Nassar also tried to continue working at the hospital without being on the university's faculty. Nassar later resigned his position at the university and sent a letter to Fitz alleging his departure was because of Levine's alleged harassment which he asserted "stems from . . . religious, racial and cultural bias against Arabs and Muslims."

Fitz later expressed consternation at Nassar's accusations, saying that Levine had been "publicly humiliated by th[e] letter" and that it was "very important that she be publicly exonerated."

The hospital offered a job to Nassar as a staff physician, but Fitz protested, asserting that the offer was inconsistent with an affiliation agreement that all staff physicians at the hospital also be members of the university's faculty. The hospital later withdrew its offer to Nassar.

Nassar filed a complaint against the university in a federal district court in Dallas, alleging two violations of Title VII of the Civil Rights Act of 1964: Levine's alleged racially and religiously motivated harassment resulted in his constructive discharge, and Fitz's effortsto prevent the hospital from hiring him were in retaliation for complaining about Levine's harassment.

A jury found for Nassar on both his claims, awarding him $400,000 in back pay and $3 million in compensatory damages. The trial court reduced the latter to $300,000.

On appeal, the 5th U.S. Circuit Court of Appeals reversed the constructive-discharge finding, concluding that there was insufficient evidence to prove the claim. But the 5th Circuit affirmed the jury's retaliation finding.

The 5th Circuit declined to rehear the case en banc, prompting 5th Circuit Judge Jerry Smith to dissent to the denial for review, arguing that the retaliation finding was "an erroneous interpretation of [Title VII] and controlling case law" and should be overruled.The university later appealed to the Supreme Court.

Two Standards

To arrive at its conclusion, the Supreme Court had to choose which of two different causation standards courts should apply to Title VII retaliation claims.

The first is a mixed-motive causation standard, which allows a plaintiff to recover if race, color, religion, sex or national origin was a cause for the employer's decision — the standard Nassar argued should be applied in the case.

The second is a but-for standard, meaning that an employer could escape liability if it could prove that it would have taken the same action absent discriminatory animus: "In other words, the employer had to show that a discriminatory motive was not the but-for cause of the adverse employment action." The university argued that the "but for" standard should be applied in the case.

For the majority, Justice Anthony Kennedy wrote that the but-for causation standard should apply to Title VII retaliation claims. He noted that retaliation claims filed with the Equal Employment Opportunity Commission have nearly doubled in the last 15 years, outstripping every status-based discrimination claim except race — something he attributed to a lessened causation standard applied by lower courts.

"Consider in this regard the case of an employee who knows that he or she is about to be fired for poor performance, given a lower pay grade, or even just transferred to a different assignment or location. To forestall that lawful action, he or she might be tempted to make an unfounded charge of racial, sexual, or religious discrimination; then, when the unrelated employment action comes, the employee could allege that is retaliation," Kennedy wrote, remanding the case to the 5th Circuit. "If [Nassar] were to prevail in his argument here, that claim could be established by a lessened causation standard, all in order to prevent the undesired change in employment circumstances."

Justice Ruth Bader Ginsburg dissented, writing that the majority misapprehends what previous high court rulings have taught: Retaliation for complaining about discrimination is tightly bonded to the core prohibitions under Title VII and cannot be disassociated from it. She also predicts the new causation standard will lead to confusion in the trial courts.

"The Court shows little regard for the trial judges who will be obliged to charge discrete causation standards when a claim of discrimination 'because of' e.g., race is coupled with a claim of discrimination 'because' the individual has complained of race discrimination. And jurors will puzzle over the rhyme or reason for the dual standards," Ginsburg wrote. "Of graver concern, the Court has seized on a provision, §2000e-2(m) [which proscribes retaliation claims], adopted by Congress as part of endeavor to strengthen Title VII, and turned it into a measure reducing the force of the ban on retaliation."

Courtroom Application

Lauten had argued to the Supreme Court that the mixed-motive standard should be applied to retaliation claims, just as it is to employment discrimination claims. He believes applying a different standard for proving retaliation claims will make it harder for plaintiffs to prove their cases in trial courts.

"It's going to be unbelievably confusing for judges and juries to be instructed, because discrimination and retaliation is all rolled into the same set of facts," Lauten says of the decision. "For judges to now have to instruct judges on two different causation standards — one for discrimination and one for retaliation, when both claims are part of the same soup — it's going to create chaos for judges and juries."

But Joseffer argues that the goal of antidiscrimination law is equal treatment for all people.

"And here the medical school did that, because it treated the plaintiff pursuant to a longstanding, written policy that provided: For the job that he wanted at the teaching hospital, he had to also be a member of the medical school faculty. And the fact that he complained of alleged discrimination, it does not under the court's ruling exempt him from the generally applicable policy," he says.

Lauten, who represented Nassar at trial with Charla Aldous of Dallas' Aldous Law Firm, says he believes the case will have to be retried in the trial court.

"The way I read this opinion, we're going to have to retry the entire case," Lauten says. "I think now we're back to a clean slate, as if the lawsuit was filed today."

Joseffer says he believes the case will not be retried: "We think we're entitled to a judgment as a matter of law" from the 5th Circuit, which would dismiss the case.