Supreme Court’s “Retaliation” Decisions Raise New Obstacles for Employers
  by Thomas Bowden (6/2/08)

Irvine, CA--In two recent decisions, the Supreme Court has determined that blacks and over-40 workers may sue for “retaliation” under federal employment discrimination laws.

In the case of CBOCS West, Inc. v. Humphries, a Cracker Barrel restaurant manager was fired for leaving the store safe open overnight. He sued for retaliation, alleging he was really being punished for having previously complained about racial discrimination against a fellow employee. The Supreme Court decided that the Civil Rights Act of 1866 allows such a retaliation claim. In the other case, Gomez-Perez v. Potter, the Court held that the Age Discrimination in Employment Act grants older workers a similar right to sue.

“These decisions erect new obstacles to rational employers whose goal is to market good products and services,” said Thomas Bowden, an analyst at the Ayn Rand Institute. “Most Americans think discrimination laws simply stop irrational employers from making decisions based on race, age, or sex when those factors are irrelevant to performance. In fact, however, such laws burden all employers by jacking up the costs and risks of hiring the so-called protected classes, such as minorities, women, and disabled or older workers.

“Any employer who disciplines, demotes, or fires a protected worker must be prepared to prove, to the government’s satisfaction in a court of law, that the decision stemmed entirely from legitimate business reasons. Given the huge number of employment decisions made every day, the costs associated with maintaining evidence of those decisions’ validity are staggering.

“A protected employee can file a charge of discrimination with little or no evidence. Then the burden of proof--along with attorneys’ fees, lost employee work time, and the risk of large monetary awards, including punitive damages--falls on the employer. Predictably, therefore, employers end up giving preferential treatment to members of the protected classes.

“Outlawing retaliation clothes the protected classes in yet another layer of legal insulation. An employee whose bad performance puts him in danger of discipline or discharge need only make a complaint of discrimination as a ‘pre-emptive strike.’ Now if his employer fires him, he can cry ‘retaliation’ and drag his boss into court, without further evidence of wrongdoing.

“The ever-present threat of discrimination and retaliation suits prevents rational employers from acting on their own best thinking about who is most fit for a job. Congress should address the continuing injustice of laws that encourage irrational discrimination in the name of preventing irrational discrimination.

“The best weapon against irrational discrimination is a free market, in which those who act on their stupid prejudices are shunned and lose out on talented minority, female, or older employees. The solution is not to make hiring such employees a nightmare.”

Thomas Bowden is an analyst at the Ayn Rand Institute.

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