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Prior to the U.S. Supreme Court’s watershed decision in Burlington Northern & Sante Fe Railway Co. v. White, 126 S. Ct. 2405 (2006), it seemed clear in certain jurisdictions that an employer’s filing of a counterclaim against an employment-discrimination plaintiff could not be considered retaliatory. This was because only adverse actions that were employment-related, or the ultimate employment decision in an even narrower interpretation, could be retaliatory in these jurisdictions. Burlington categorically rejected such limitations, declaring that the anti-retaliation provision of Title VII of the Civil Rights Act of 1964 “does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace.” Id. at 2409. This anti-retaliation provision “forbids an employer from ‘discriminat[ing] against’ an employee or job applicant because that individual ‘opposed any practice’ made unlawful by Title VII or ‘made a charge, testified, assisted, or participated in’ a Title VII proceeding or investigation.” Id. at 2408 (quoting 42 U.S.C. 20003-3(a)). Thus, although counterclaims were not directly at issue in Burlington, Burlington increased significantly the risks to employers of filing such claims in the 3d, 4th and 6th U.S. circuit courts of appeals, which had limited retaliation to adverse employment actions, and in the 5th and 8th circuits, which had espoused the even more restrictive limitation to ultimate employment decisions. The Supreme Court highlighted this impact on counterclaims through its reliance on its decision 23 years earlier holding that the anti-retaliation provision of the National Labor Relations Act (NLRA) “prohibit[ed] . . . the retaliatory filing of a lawsuit against an employee.” Id. at 2414 (citing Bill Johnson’s Restaurants Inc. v. NLRB, 461 U.S. 731, 740 (1983). The high court also relied on the 10th Circuit’s finding 10 years earlier of actionable retaliation under Title VII when the employer filed false criminal charges against a former employee who complained about discrimination. Id. at 2412 (citing Berry v. Stevinson Chevrolet, 74 F.3d 980, 984, 986 (10th Cir. 1996)). Although Title VII was the statute directly at issue in Burlington, the Supreme Court emphasized that it has drawn analogies between the anti-retaliation provisions of Title VII and the NLRA in Bill Johnson’s and other decisions; also, “Congress has provided similar kinds of protection from retaliation in comparable statutes.” Id. at 2414. Thus, Burlington left little doubt that its reasoning applied to all or virtually all of the anti-retaliation provisions in employment-discrimination statutes across the country. Approximately a year after Burlington, it is becoming apparent that Burlington not only reintroduced uncertainty into the 3d, 4th, 5th, 6th and 8th circuits regarding whether a counterclaim could be retaliatory, but also did little to curb the continued inconsistencies in decisions confronting the issue in the absence of the bright-line employment-related limitation. This relative uncertainty matters greatly to employers that believe they have viable claims against employment-discrimination plaintiffs. In almost every other type of litigation, defendants risk little to nothing by asserting non-frivolous counterclaims. Such counterclaims put plaintiffs on the defensive and leave each side with potential loss. Often the resulting rebalancing of risk increases the likelihood of early settlement. After Burlington removed the employment-related limitation to retaliation claims, the following three issues seem particularly relevant to the continuing uncertainty regarding whether a counterclaim is retaliatory: Did Burlington create a requirement that an employee must prove tangible injury or harm to establish retaliation? What is the likely impact of the Supreme Court’s other two precedents � Bill Johnson’s and BE&K Construction Co. v. NLRB, 536 U.S. 516 (2002) � that are potentially relevant to whether a counterclaim is retaliatory? To what extent is an employer’s good-faith belief in the reasonableness of a counterclaim a defense to a retaliation claim? Proving tangible injury or harm Not surprisingly, some employers are focusing on Burlington‘s statement that “[t]he anti-retaliation provision protects an individual not from all retaliation, but from retaliation that produces an injury or harm.” 126 S. Ct. at 2414. According to them, this statement establishes a requirement that a plaintiff must show a tangible injury or harm flowed from the purportedly adverse action in order to state a retaliation claim. The 3d Circuit seems to have given this argument weight in Morrison v. Carpenter Tech. Corp., 193 Fed. Appx. 148, 154 (3d Cir. 2006). In Morrison, the 3d Circuit literally italicized “injury or harm” for emphasis in its quotation of the above statement from Burlington and concluded that the pro se plaintiff did “not identify, much less establish, any harm or injury produced by the corrective performance review.” Id. at 154. The 3d Circuit added that this review “did not result in any economic loss to [the plaintiff] or any change to the terms of his employment.” Id. Accordingly, the 3d Circuit affirmed summary judgment dismissing the plaintiff’s Title VII and state-equivalent retaliation claims. In contrast, just a week before Morrison, a district court in the 3d Circuit rejected an employer’s argument that Burlington established a requirement of tangible injury or harm after analyzing this argument more directly and expansively than was done in Morrison. Walsh v. Irvin Stern’s Costumes, No. 05-2515, 2006 U.S. Dist. Lexis 57398, at *8-*9 (E.D. Pa. Aug. 15, 2006). Based on Burlington, Walsh reinstated a retaliation claim stemming from the employer’s threat to file criminal charges against the plaintiff unless she withdrew her employment-discrimination claims. Walsh noted that, “in sentences directly following the ‘injury or harm’ language, the [ Burlington] Court explained that such harm is any action that causes material adversity, which it specifically defined as acts that might ‘dissuade a reasonable worker from making or supporting a charge of discrimination.’ ” See id. at *7. Further, Walsh pointed out that the numerous references to the material-adversity standard throughout Burlington “mak[e] it clear that it � and not ‘injury or harm’ � is the defining standard of the Supreme Court’s new test.” See id. Varying effect of NLRA cases Bill Johnson’s is frequently cited, as it was in Burlington, for its recognition that a lawsuit may be used by an employer as a powerful instrument of retaliation and create a chilling effect on the pursuit of discrimination claims. See, e.g., Rosania v. Taco Bell of America Inc., 303 F. Supp. 2d 878, 885 (N.D. Ohio 2004); Gliatta v. Tectum Inc., 211 F. Supp. 2d 992, 1008 (S.D. Ohio 2002); EEOC v. Outback Steakhouse, 75 F. Supp. 2d 756, 760 (N.D. Ohio 1999). Bill Johnson’s held that First Amendment and federalism concerns prevented the National Labor Relations Board (NLRB) from enjoining a well-founded lawsuit from proceeding on the basis that the lawsuit was an unfair labor practice, while leaving open whether liability might be assessed if the lawsuit had been filed in retaliation for employees filing unfair-labor-practice charges. Probably as telling as the Supreme Court’s reliance in Burlington on Bill Johnson’s was its avoidance of any reference to its much more recent examination of the NLRA in BE&K Construction Co. v. NLRB, 536 U.S. 516 (2002). BE&K invalidated a standard of the NLRB that penalized employers for unsuccessful suits filed with a retaliatory purpose even if those suits were reasonably based. The court based this holding on the First Amendment right to petition and this right’s underlying rationales that “the ability to lawfully prosecute even unsuccessful suits adds legitimacy to the court system as a designated alternative to force” and “promote[s] the evolution of the law by supporting the development of legal theories that may not gain acceptance the first time around.” Id. at 532. Despite the potential sweep of such pronouncements, BE&K‘s holding was expressly limited. “We do not decide whether the Board may declare unlawful any unsuccessful but reasonably based suits that would not have been filed but for a motive to impose the costs of the litigation process, regardless of the outcome, in retaliation for NLRA protected activity, since the Board’s [standard reversed in BE&K] does not confine itself to such suits.” Id. at 536-37. This limitation, coupled with the rather fractured and obtuse nature of the decision, likely have contributed to why BE&K was not cited in Burlington and many of the post- BE&K decisions considering whether counterclaims may be retaliatory. Even recognizing these factors, BE&K seems to be an authority for limiting when a counterclaim may be found retaliatory that is strangely undercited. This is especially true given that Burlington seems to have brushed aside the potential distinction between the anti-retaliation provisions of the NLRA and Title VII by relying on the “analogies” between the two. 126 S. Ct. at 2414. One area in which it seems especially likely that BE&K could exert more influence is the impact of the First Amendment right to petition and the corresponding importance of the reasonableness of the employer’s counterclaim. The emphasis Justice Sandra Day O’Connor’s majority opinion in BE&K placed on the First Amendment right to petition and precedents in the Sherman Act suggest, as Justice Antonin Scalia noted approvingly in his concurrence, the likelihood that the court will, “in a future appropriate case,” limit the potential NLRA liability for the filing of a lawsuit in the same way as under the Sherman Act � namely “only [for] lawsuits that are both objectively baseless and subjectively intended to abuse process.” 536 U.S. at 537. While it appears that few or no lower courts have adopted this precise standard, some seem to be basing their decisions on whether counterclaims are retaliatory in no small part on whether they were asserted by the employer in good faith. Good faith behind counterclaim The post- Burlington decision that seemingly delves into the most detail regarding whether an employer’s counterclaim is retaliatory is EEOC v. Seelye-Wright of South Haven Inc., No. 1:05-CV-677, 2006 U.S. Dist. Lexis 73529, at *13 (W.D. Mich. Oct. 10, 2006). The plaintiff and the Equal Employment Opportunity Commission alleged that the employer retaliated by countering the discrimination claim with a separate defamation suit. On one hand, the filing of the countersuit was alone not enough to establish retaliation. The plaintiff and the EEOC were required to show that the countersuit was filed for a retaliatory purpose rather than as a good-faith attempt to rehabilitate the employer’s reputation. On the other hand, finding that the countersuit might be retaliatory “is consistent with [ Burlington's] recent pronouncement that . . . adverse actions for purposes of the anti-retaliation provision of Title VII are ‘not limited to discriminatory actions that affect the terms and conditions of employment.’ ” Id. at *13. Accordingly, Seelye-Wright denied the EEOC’s motion for summary judgment and left it to a jury to decide the ultimate question of whether the employer’s motivation for the defamation countersuit was retaliatory under Title VII. A retaliation claim under the Family and Medical Leave Act based upon counterclaims that the employer subsequently dropped was similarly permitted to go to a jury in McLaughlin v. Innovative Logistics Group Inc., No. 05-72305, 2007 U.S. Dist. Lexis 22756, at *10 (E.D. Mich. March 29, 2007). The court held that “there is case law supporting [the plaintiff's] claim that the filing of a frivolous or bad faith counter-claim, in itself constitutes retaliation under the FMLA.” Id. at *3. Although the court did not cite to Burlington, it relied on the Rosania, Outback Steakhouse and Gliatta decisions cited above. With even less discussion, Stanerson v. Colo. Blvd. Motors Inc., No. 06-CV-00856, 2006 U.S. Dist. Lexis 80124, at *8-*9 (D. Colo. Nov. 2, 2006), granted leave to add an Americans With Disabilities Act retaliation claim based in part on the employer’s filing of a counterclaim. No mention was made of whether the employer had a good-faith basis for the counterclaim. Instead, the court simply agreed with the plaintiff that Burlington‘s conclusion about adverse actions not needing to be employment-related supplied the authority for the amendment. Despite the variations, the pre- and post- Burlington cases discussed above suggest a few conclusions. First, a counterclaim asserted without any good-faith basis will likely be found retaliatory. Second, the question of whether the counterclaim would have been asserted but for the discrimination claim will often be outcome-determinative and left to a jury. Finally, there appears to be no such thing as a counterclaim that can be asserted against a discrimination plaintiff free from risk that the resulting retaliation claim will not be easily dismissed.

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