Judicial Restraint Unbound: University of Texas Southwestern Medical Center v. Nassar

August 9, 2013

Employment Law BookIn business and employment matters, a sharp ideological divide has developed on the United States Supreme Court.

The five Justices appointed by Republican Administrations—Roberts, Scalia, Kennedy, Alito, and Thomas—are instinctively skeptical of the merits of suits seeking to vindicate consumer and employee rights. Their belief that such suits impose unfair and unnecessary costs on business and adversely affect economic growth naturally attracts them to rules that make it more difficult for consumers and employees to sue.

The four Justices appointed by Democratic Administrations—Ginsburg, Breyer, Kagan, and Sotomayor—are cognizant of the enormous economic power of large business enterprises and decades-old complaints by racial minorities and women about unfair discrimination in the workplace. They are inclined to adopt rules that allow such grievances to receive their day in court.

No case better illustrates this deep divide than the Court’s recent decision in University of Texas Southwestern Medical Center v. Nassar. In Nassar, the Court held that Title VII retaliation claims must meet a higher standard of causation than other types of discrimination claims. Specifically, the Court held that retaliation against an employee’s protected activity must be a “but for” cause of the employee’s job loss.

Legal Background

Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., prohibits employers from taking adverse employment action against an employee “because of” a protected characteristic such as race or sex—status-based discrimination—or “because” the employee has engaged in a protected activity such as complaining about unlawful employment practices—retaliation. A central issue in both status-based discrimination claims and retaliation claims is the causal relationship between the employer’s consideration of a protected characteristic or activity and the action taken by the employer.

While cross-branch deliberation between the Supreme Court and Congress has clarified the causation standard in status-based discrimination cases, the proper standard in retaliation cases remained unsettled until the Court’s decision in Nassar. For status-based discrimination cases involving mixed motives, the Supreme Court’s 1989 decision in Price Waterhouse v. Hopkins, introduced a burden-shifting proof framework that was later modified by Congress. In Price Waterhouse, the Court allowed plaintiffs to prove discrimination by showing that it was a substantial motivating factor in an adverse employment decision. But the Court’s ruling also permitted an employer to avoid liability altogether by proving that it would have taken the same action for legitimate reasons, despite letting a protected characteristic (like race or sex) influence its decision.

In 1991, Congress passed legislation to amend the Price Waterhouse approach to proving causation in mixed motive cases to make it easier for plaintiffs to prevail. Under the codified version of the Price Waterhouse mixed motive causation rule, proof that an improper motive is “a motivating factor” is enough to impose liability on the employer. But the employer can no longer avoid all liability by proving that it would have made the same decision in the absence of a discriminatory motive. The 1991 amendments allow the employer to avoid liability only for money damages upon such proof. The employer remains liable for the plaintiff’s attorney fees and injunctive relief. The codified version of the mixed-motive proof framework for status-based discrimination is contained in § 2000e-2(m). The question before the Court in Nassar was whether the same approach to proving causation applies in retaliation cases.

Retaliation Is Not a Form of Discrimination under Title VII

In ruling that a “but for” standard of causation applies to retaliation claims, the Court was faced with the task of explaining why a Congress that acted to ease the burden of proving causation in employment discrimination actions following the Court’s decision in Price Waterhouse would have intended a causation standard significantly less beneficial to plaintiffs than even that adopted by the Court in Price Waterhouse. The Court’s task was made particularly difficult by the language of § 2000e-2(m) and an unbroken line of the Supreme Court decisions holding that retaliation is a form of discrimination.

Congress added § 2000e-2(m) to Title VII as part of a package of amendments designed to provide “additional protections against unlawful discrimination in employment” and to “respon[d] to a number of … decisions by the United States Supreme Court that sharply cut back on the scope and effectiveness” of antidiscrimination laws. H.R.Rep. No. 102–40, pt. II, pp. 2–4 (1991). Section 2000e–2(m) provides that “an unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice.” (Emphasis added). Title VII, in § 2000e–3(a), explicitly denominates retaliation, like status-based discrimination, an “unlawful employment practice.” Because “any employment practice” necessarily encompasses practices prohibited under § 2000e–3(a), § 2000e–2(m), by its plain terms, would appear to cover retaliation.

Despite the language of § 2000e–2(m), the Court’s majority ascribes to Congress an intent to separate retaliation claims from status-based discrimination claims and to hold plaintiffs to an even more difficult causation standard for retaliation claims than the Court had previously adopted, and Congress later rejected, for status-based discrimination claims. Justice Kennedy,  writing for the majority, focuses on “design and structure” of Title VII.  He notes that Congress made § 2000e–2(m) a subsection of § 2000e-2, which contains Title VII’s ban on status-based discrimination. He further points to the fact that the text of § 2000e–2(m) says nothing about retaliation claims, while referring specifically to five prohibited categories of discrimination—race, color, religion, sex, and national origin. The fact that the substantive antidiscrimination provisions § 2000e-2 refer to the protected characteristics of the complaining party, while § 2000e–2(m) explicitly is not limited to situations in which the complainant’s race, color, religion, sex, or national origin motivates the employer’s action, plays no role in his analysis. Nor does that fact that § 2000e-2’s subsections address a variety of matters, some of which involve retaliation.

Justice Kennedy acknowledges that every Supreme Court decision decided prior to Nassar had recognized that a ban on discrimination encompasses retaliation for complaining about that discrimination. He does not, however, view his vision of retaliation as distinct from discrimination as inconsistent with these decisions. He distinguishes the statutes under which the Court has equated retaliation with discrimination as “both broad and brief,” in contrast to Title VII, which is “precise, complex, and exhaustive.” In short, statutes in which Congress expressly prohibits retaliation have less force than statutes that do not. As Justice Ginsburg put it in dissent, “this is strange logic indeed.” J. Ginsburg, dissenting.

Absent Statutory Language to the Contrary, “But For” Causation Is the Default Rule

Having narrowed § 2000e–2(m) to exclude retaliation claims, the majority “presume[s]” that Congress intended “textbook tort law” to provide the “default” rule in the absence of contrary guidance in the statute itself. Under the Court’s view of tort law, plaintiffs must prove that retaliation was a “but for” cause of their injury.

The Court makes this presumption without citing any evidence of Congress’s actual intent or explaining why Congress would choose as its “default” causation rule an approach that is particularly ill-suited for employment discrimination cases. “But for” causation was developed for harms brought about by physical actions set in motion by a defendant’s negligence, not intentional torts. In an employment discrimination case, the jury is asked to “consider not physical forces, but the mind-related characteristics that constitute motive.”  Gross v. FBL Financial Services, Inc., (J. Breyer, dissenting).  Under the Court’s “but for” causation rule, the trier of fact must “engage in a hypothetical inquiry about what would have happened if the employer’s thoughts and other circumstances had been different.” Gross v. FBL Financial Services, Inc., (J. Breyer, dissenting).

Moreover, as Justice Ginsburg points out in dissent, the Court oversimplifies modern tort law and its approach to causation. The Restatement (Third) of Torts § 27, Comment a, p. 385 (2005), explains that the but-for standard must yield to more nuanced approaches when multiple sufficient causes exist. In cases involving multiple causes, courts for many decades have imposed liability when a tortfeasor’s negligence is a “substantial factor in bringing about the harm.” Restatement of Torts § 9, Comment b, p. 18 (1934).

This is why both the Court in Price Waterhouse and Congress in the 1991 amendments to Title VII rejected Justice Kennedy’s attempts to impose a “but for” causation rule in Title VII cases. In Nassar, however, Justice Kennedy justifies a “but for” standard by reiterating the reasoning of his dissent in Price Waterhouse—showing that the fundamental difference between Nassar and Price Waterhouse is not status-based discrimination vs. retaliation, but the composition of the Court. In Price Waterhouse, Justice Kennedy was able to persuade only Chief Justice Rehnquist and Justice Scalia of the wisdom of his approach. In Nassar, he was able to persuade Justice Scalia and three Justices who were not on the Court in 1989.

In justifying a “but for” causation standard, Justice Kennedy relies not on the Court’s Title VII precedent, but on Gross v. FBL Financial Services, Inc. In Gross, the Court, finding that the ADEA does not authorize “mixed motive” claims, applied a “but for” causation standard to age discrimination claims. In so doing, the Court carefully distinguished Title VII cases in which the Court and Congress have applied a “motivating factor” test. In other words, the employer prevailed in Gross because, according to the Court, the ADEA’s antidiscrimination prescription is not like Title VII’s. Now in Nassar the Court holds that the employer must prevail because there is no “meaningful textual difference” between the ADEA and Title VII. As Justice Ginsburg says in dissent, “What sense can one make of this other than ‘heads the employer wins, tails the employee loses’?” J. Ginsburg, dissenting, 133 S.Ct. at 2545.

Public Policy Favors Curtailing Retaliation Litigation

Justice Kennedy makes no attempt to hide the majority’s policy goal of reducing the number of retaliation claims against employers. Ignoring Congress’s avowed purpose in adopting § 2000e-2(m), he laments the fact that the number of retaliation claims filed with the Equal Employment Opportunity Commission (EEOC) has nearly doubled in the past 15 year. He then declares without citing evidence that a “but for” causation standard is necessary to combat “frivolous” claims. Any other standard, he maintains, would impose unfair costs, “both financial and reputational, on an employer whose actions were not in fact the result of any discriminatory or retaliatory intent.” Why a lesser causation standard will result in liability for meritless, frivolous claims, and why the Court, rather than Congress, should make that determination, is left unsaid.

Conclusion: Judicial Restraint Unbound

The members of the conservative majority on the Supreme Court claim to adhere to former Justice Felix Frankfurter’s view of a restrained judiciary that “observe[s] a fastidious regard for the limitations on its own power” and avoids “giving effect to its own notions of wise or politic.” However, their willingness in Nassar to adopt strained interpretations of legislative enactments, and ignore evidence of contrary legislative intent, in order to advance their own public policy views casts doubt on the genuineness of that claim.