Evaluating Mistakes of Law: Objective Reasonableness Under Title VII

Introduction

Title VII’s anti-retaliation provision is clear: if an employee complains about employment discrimination, it is illegal for an employer to retaliate against them. The anti-retaliation provision does not require the behavior underlying the complaint to be an actual violation under Title VII. Instead, the provision prohibits retaliation if the employee had an objectively reasonable belief that the behavior was unlawful. When the belief was based on a mistake of law,1 however, circuit courts split on whether employees can claim Title VII unlawful retaliation.

For instance, imagine a scenario in which a U.S.-based employee hears about racial harassment of her coworkers in the Philippines. A manager has been telling her Filipino team members they are “monkeys” and “not human.” The employee knows that Title VII applies to national-origin discrimination. The employee files a Title VII complaint about the harassment and is subsequently fired because of her complaint. The employee had not realized, however, that her Filipino team members are technically not covered by Title VII, which does not apply to the “employment of aliens outside of any state.” Thus, the employee’s complaint was based on a mistake of law. Does the existence of a mistake of law as to the illegality of the employer’s conduct change whether the employee has a Title VII claim for the retaliation?

While circuit courts agree on how to analyze this question, they differ on the answer. Every circuit asks whether an employee had an objectively reasonable belief they were opposing an employment practice made unlawful by Title VII. An objectively reasonable belief requires that (1) the employee subjectively believed they were opposing an employment practice made unlawful by Title VII and (2) the belief was objectively reasonable. Circuits have split on how to evaluate the objective reasonableness of an employee’s belief based on a mistake of law.

A Tenth Circuit panel recently decided a case involving retaliation for a mistake of law exactly like the one described above. There was previously no Tenth Circuit precedent regarding when mistakes of law can be objectively reasonable. The panel’s test for objective reasonableness considers whether a reasonable employee would believe there was unlawful discrimination. While the court explicitly stated that an objectively reasonable belief from the employee’s perspective would not necessarily be what a “reasonable labor and employment attorney would believe,” it did note that the substantive law should be considered. The court also considered the circumstances surrounding the discrimination and the pervasiveness and severity of the conduct, acknowledging that the employee in the situation described above would not have had specialized legal knowledge.

I argue that the objective reasonableness standard in mistake-of-law cases should more clearly require an evaluation of whether an employee’s belief was objectively reasonable by comparing the complaining employee to a hypothetical employee who is similarly situated in terms of training and experience. A training-based standard puts the onus to teach the proper state of Title VII law on the employer, a repeat player—the party with the most resources and the one likely to have experience litigating employment claims. This standard should incentivize training on Title VII causes of action and lead to (1) a workforce more informed about its Title VII rights and (2) a reduction in the chilling effect that a purely objective standard has on employee claims. These developments, in turn, should help vindicate the purpose of the Title VII retaliation provision.

I. Defining Objective Reasonableness

Title VII prohibits retaliation against an employee who has “opposed any practice made an unlawful employment practice” by Title VII. To prevail on a Title VII retaliation claim, a plaintiff must make a prima facie case of retaliation by showing that (1) they engaged in statutorily protected activity, (2) they suffered an adverse employment action, and (3) the adverse employment action was causally related to the protected activity. To show statutorily-protected activity, the plaintiff must demonstrate a “good faith, reasonable belief” that the complained-of behavior was an unlawful employment practice. The employee is not required to show that the employment practice was actually unlawful.

All the circuit courts apply the “good faith, reasonable belief” standard, which encompasses both a subjective (“good faith”) and an objective (“reasonable”) inquiry. Circuits differ on the standard used to evaluate the objective question—whether a belief was reasonable.

Some circuits measure the objective reasonableness of the employee’s belief against the substantive law. The substantive-law standard does not limit mistakes of law to clearly textual mistakes—Title VII case law precedents are also considered. For example, in one case, an employee complained because her boss exhibited preferential behavior to an employee he was sleeping with. Because case law showed that “paramour preference” was not illegal, the employee’s belief was deemed unreasonable. Another case involved a grooming policy that allowed women, but not men, to grow long hair. The EEOC initially opposed similar policies as illegal, but it backed down after all the circuits found no Title VII violation. The Eleventh Circuit said that based on circuit case law, the employees could not have reasonably believed that the policy was unlawful. For behavior that is not unlawful unless severe and pervasive, such as sexually harassing conduct, these circuits have required that the behavior be “close enough” to unlawful behavior for the belief to be reasonable.

Some circuits make concessions for the average employee when evaluating reasonableness. The Ninth Circuit evaluates an employee’s belief in light of “the limited knowledge possessed by most Title VII plaintiffs about the factual and legal bases of their claims.” The Sixth Circuit puts a finer point on the standard by telling courts (and litigants) what to consider. It requires consideration of the totality of the circumstances known “by the employee at the time of the complaint, analyzed in light of the employee’s training and experience” (emphasis added).

II. Analysis

The Supreme Court has stated that the purpose of Title VII’s anti-retaliation provision is to provide “unfettered access” to the statute’s remedies. To that end, the Court has explained that courts should broadly interpret the anti-retaliation provision because Title VII depends on employees “who are willing to file complaints and act as witnesses.” As the Court has noted, the statute cannot be effectively enforced unless individuals feel “free to approach officials with their grievances” without fear of reprisal.

This Part first evaluates whether the substantive-law standard really achieves the purpose and promise of the anti-retaliation provision by protecting workers’ rights. Next, it considers whether a standard that allows all mistakes of law to be cognizable under Title VII appropriately balances all of the interests implicated in a Title VII discrimination claim. Finally, it concludes by arguing that the best standard for determining whether an employee’s belief is objectively reasonable is a training-based standard—one that analyzes an employee’s belief compared to that of a reasonable employee similarly situated in terms of training and experience.

A. The Substantive-Law Standard

The substantive-law standard is not the best rule on the table for vindicating the purpose of the Title VII anti-retaliation provision. In mistake-of-law cases, many commentators have noted the standard narrows the protection provided to the employee. Many commentators have noted that the standard requires employees to become employment law experts before filing their claim, which may result in underenforcement of the law. The concern is that employees will avoid filing complaints in areas that are not clearly illegal under Title VII. In a labor monopsony, this risk grows: employees may learn that an employer retaliates for any gray-area complaints, and since there are few alternative employers, they refrain from filing complaints. Additionally, employers may not have a strong incentive to curtail gray-area behavior in a monopsony because they’re aware of rules that make it difficult for plaintiffs to win on retaliation claims. With the substantive-law standard, Title VII would provide no incentive to eliminate the gray-area practice as opposed to getting rid of the complaining employee because an employee is unlikely to prevail in court. There may be outside factors (employee morale, for example) that would encourage an employer to clamp down on gray-area behavior. Still, in a monopsony, those factors may be less pronounced.

The evolution of the substantive-law standard makes sense when you consider that employers are the classic repeat players and employees the “one-shotters” contemplated by Professor Marc Galanter in his landmark article, “Why the Haves Come out Ahead.” Employers have much less relative risk than employees in most employment disputes. The litigation loss from a single employment dispute for an employer is likely to be a small amount compared to annual revenue, in contrast with the employee, who has likely lost their sole source of income. In addition, employers can take strategic losses in the short term to gain favorable rules in the long term. Not only are repeat players able to secure more favorable rules, but when a one-shotter (a litigant who rarely participates in litigation) sues a repeat player, the repeat player’s chances of winning are significantly higher due to the disparity in resources.

There are real-world consequences to an anti-retaliation provision that doesn’t protect employees (or even one that employees believe doesn’t protect them). A recent study found that 63% of workers who filed a workplace discrimination complaint eventually lost their job, and other studies have shown that fear of retaliation can lead to a decrease in claims. Conversely, reducing employee fear of retaliation increases employee willingness to complain, and protection against retaliation increases rates of whistleblowing.

B. The “All-In” Standard

To make court evaluations of mistakes of law hew closer to the original purpose of Title VII, the rule must change to decrease the advantage for the repeat player—the employer. One option would be an “all-in” rule that allows all mistakes of law to be protected by Title VII’s anti-retaliation provision. However, this rule raises fairness concerns: is it fair to punish an employer who has not violated Title VII? Not only has an employer accused under a mistake of law not violated Title VII in the first instance, but by responding to a frivolous complaint, it may not have “retaliated” at all.

Business concerns that arise as part of Title VII discrimination claims may not be properly addressed if an all-in standard is adopted. The Supreme Court has urged that employer interests in “efficient and trustworthy workmanship” should be protected while evaluating discrimination claims. Indeed, the original motivation for the objective reasonableness rule was to ensure employers are protected against “malicious accusations and frivolous claims.” We might be worried that a rule outlawing all retaliation based on mistakes of law would lead employees to increase filings of nonmeritorious complaints and may over-deter employers who would otherwise fire maliciously complaining employees.

C. The Training-Based Standard

The best standard to vindicate the purpose of the anti-retaliation provision, while still balancing employer interests, is the Sixth Circuit’s standard. With this standard, courts compare the belief of the complaining employee to a reasonable, similarly situated employee with the same amount of training when evaluating whether the mistake was objectively reasonable. As part of this analysis, courts would look at the training the employee received about Title VII and evaluate the claim based on this training: Should the post-training employee have known that their complaint was not covered? In the above example of an employee who complains about the treatment of their Filipino coworkers, the court would look to the training the employee received and determine whether the mistake was reasonable based on this training. An employer who skimps on training, therefore, would open itself up to more potential liability than an employer who gave a very thorough training when that employer retaliates against a complaining employee that makes a mistake of law. This standard should lead to (1) increased Title VII training for employees and (2) a better-informed employee class, resulting in less chill of employee complaints due to uncertainty.

Importantly, a training-based standard should raise fewer fairness concerns than an “all-in” rule. Because employers will be administering the training, they will be able to use the training documents to demonstrate when a retaliation claim based on a mistake of law is nonmeritorious or frivolous. At first, employees at the same company may have different litigation results based on the same underlying employment practice because they have different levels of training. Eventually, the employer would train all of its employees to decrease its exposure to liability in the event of litigation, and disparate outcomes will decrease. The training-based standard puts the onus on the repeat player, the employer, to respond to the issue.

Repeat players have the resources and knowledge to collect information on Title VII compliance. The training-based standard is thus more likely to ensure long-term change to the pool of employees, instead of each employee self-educating as they begin litigation. Expecting individual employees to determine the state of Title VII law is much less efficient than incentivizing employers to train all employees. Even smaller employers who may not have their own in-house employment law counsel would be able to purchase and utilize trainings from other employers. Repeat players are better able to develop strategies to deal with anticipated repeat litigation, which in this case would mean increasing training for all employees.

A training-based standard should diminish the chilling effect that the substantive-law standard has on filing Title VII claims. Under the substantive-law standard, employees may be afraid that if they report conduct that they suspect to be illegal and make a mistake of law, they could be fired, demoted, or have their hours reduced with no legal recourse. Under the training-based standard, employees would be protected for reasonable beliefs formed from their training, and, because of the training, they’d be more likely to know about the standard for good-faith, reasonable beliefs. As noted above, studies have shown that increasing legal protections can increase willingness to lodge complaints. The training-based standard is more protective because it considers the employee’s situation, rather than applying a blanket rule that requires employees to be employment-law experts.

This standard may have the effect of more meritorious complaints being filed because employees will be more aware of the types of conduct covered by the statute. A 2014 study showed significant gaps in legal knowledge among employees on what claims they are permitted to bring. In addition, employees would know more about what’s not covered by Title VII and could refrain from filing nonmeritorious cases (for example, when a single harassing comment is made that doesn’t rise to the level of severity and pervasiveness needed to state a discrimination claim).

Conclusion

As Galanter notes, courts should be aware of rules that may unduly burden one-shotters. The substantive-law standard forces employees to become employment law experts before filing a complaint, lest they experience retaliation and have no recourse to object. Conversely, a training-based standard would transfer the onus to the repeat players, who already have the resources and the incentive to become employment law experts. Because they know the court will evaluate reasonable belief based on the training the employer provides, the employer would be incentivized to train the employee to decrease its own liability in the event of litigation. And this training, in turn, can lead to higher employee confidence in their complaints and decrease the substantive-law standard’s chill on complaints.

• 1B. Schlei & P. Grossman, Employment Discrimination Law 543 n. 38 (2d ed. 1983), does a nice job explaining the differences between a mistake of fact and a mistake of law in the Title VII context: “The practice opposed may not constitute a violation of Title VII through two types of mistakes: a mistake of fact or a mistake of law. As an example of a mistake of fact, the person opposing the practice may claim racial discrimination in the discharge of a black co-worker. If in fact the coworker was discharged for a legitimate reason, and race played no part, the person in question would have made a mistake of fact. . . . An example of a mistake of law would be where the plaintiff fully understood the facts, but the facts simply did not constitute a violation of Title VII.”