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08.13.2015 Fourth Circuit Rejects “Manager Rule” in Title VII Cases By: Edward S. Schenk III & Elizabeth Connolly Stone

In an important recent decision, DeMasters v. Carilion Clinic, the Fourth Circuit determined that the so-called “manager rule” exception to federal anti-retaliation laws does not apply to employment cases filed under Title VII.  In doing so, the Court ruled that J. Neil DeMasters, an EAP consultant, qualified for protection under the anti-retaliation provisions of Title VII.  DeMasters had allegedly been fired by the Carilion Clinic for not taking a “pro-employer side” after he raised serious concerns about the company’s handling of a sexual harassment complaint.

Among other things, Title VII makes it unlawful for an employer to discriminate or retaliate against employees who have opposed any practice prohibited by Title VII (i.e., race, gender or religious discrimination).  In other words, courts generally recognize that employees who oppose employment actions that are proscribed by Title VII have engaged in legally “protected activity.” Therefore, those employees are protected from retaliation by their employers.  Previously, however, other courts applied the “manager rule” to determine that any management employees who, in the course of their normal job performance, disagreed with or opposed their employer’s actions, had not engaged in “protected activity.”  Therefore, by applying the “manager rule,” those employees were denied the benefit of anti-retaliation protection.  The “manager rule” was commonly accepted and applied in FLSA retaliation cases.

In the case at hand, an unidentified employee of the Carilion Clinic approached DeMasters through the company’s EAP program.  The employee reported serious allegations of physical and verbal sexual harassment. DeMasters helped the employee initiate an internal complaint and reportedly advocated for the human resource department to take more aggressive action in the investigation. DeMasters was later terminated.  He was allegedly told by a supervisor that the company was frustrated at having to settle a separate sexual harassment lawsuit filed by the employee whom DeMasters had helped.  The EAP department director also supposedly spoke out against DeMasters for not siding with the company during the entire process.

The district court originally dismissed the lawsuit.  In doing so, it determined that, because DeMasters himself had not complained of  workplace harassment or discrimination, he had not engaged in “protected activity.”  Rather, he was merely performing his job duties in the management role of an EAP counselor.  In the absence of “protected activity,” the lower court reasoned that DeMasters was not shielded by the anti-retaliation provisions of Title VII.

The Fourth Circuit disagreed, holding that the “manager rule” exception “has no place in Title VII jurisprudence.”  According to the Court, application of the rule would “discourage…employees from voicing concerns about workplace discrimination and put in motion a downward spiral of Title VII enforcement.”  Thus, DeMasters, whose job duties included reporting discrimination claims, was not required to step outside his role representing the company in order to engage in protected activity.  The Court held that nothing in the text of Title VII indicates “that the statutory protection accorded an employee’s oppositional conduct turns on the employee’s job description or that Congress intended to excise a large category of workers from its anti-retaliation protections.”  Notably, according to the Court, nothing in this case changes the application of the “manager rule” analysis in FLSA retaliation cases.

Under the DeMasters decision, EAP, HR and other management personnel may be more inclined to aggressively advocate for employees that report discrimination whom, according to the Court, “they are duty-bound to protect.”