The question of whether a threat to reduce pay constitutes an adverse employment action is before the Fifth Circuit. Last week, a trucking school asked the Fifth Circuit to uphold a trial court decision dismissing the case on summary judgment, in part due to the fact that while the plaintiff alleged that she was threatened with a pay cut, she quit prior to receiving a cut in pay. A reversal of the trial court decision would lead to a significant expansion of the scope of actionable retaliation in the Fifth Circuit and likely beyond.

The Fifth Circuit’s review in Brandon v. Sage Corp., No. 14-51320, addresses whether the threat of a pay cut is sufficient to support a retaliation claim brought by an ex-employee, who said that she was threatened in retribution for her support of a transgender co-worker. Margie Brandon, the trucking school’s former director, initially brought claims for discrimination and retaliation pursuant to Title VII. However, she is only appealing the trial court’s decision with regard to dismissal of the retaliation claim. The Fifth Circuit’s review will focus on whether the threat of a pay cut is enough to constitute an adverse employment action — an action that is taken to prevent an employee from opposing discrimination or from participating in protected activity or activities involving discrimination proceedings.

Brandon is alleging that she witnessed discrimination against transgender worker Lorenzo Eure and that she was questioned as to why she supported the hiring of Eure based upon his being transgendered. Thereafter, Brandon alleges that her employer told her that they would “deal with you seriously for hiring that.” Sage is alleged to have subsequently cut Eure’s hours, therein prompting Brandon to complain about the treatment of Eure. Brandon alleges that as a result of her complaint regarding the reduction in hours, Sage threatened “to cut your pay in half.”

Brandon and Eure both left Sage and filed separate lawsuits. Sage won summary judgment in both cases and both plaintiffs are appealing the decisions. The EEOC filed an amicus brief supporting Brandon’s position that threat of reduction in pay is enough to constitute an adverse employment action. Peter Renn, a lawyer with Lambda Legal representing Brandon, told Law 360, “There should not be a per se rule, certainly, that says threats can never affect an employee’s likelihood to engage in protected activity.”  

The scope of what triggers liability for retaliation, and thereby constitutes an adverse employment action, is unclear. Anything from refusing a specific working location to termination has been recognized as an adverse employment action. Other examples of actionable adverse employment actions include asking an applicant to fill out an I-9 on a short deadline, delaying an employee’s return to work while on medical leave, and an employer’s failure to intercede in situations of co-worker shunning.

The Fifth Circuit’s decision here will impact the landscape and volume of future claims across the country. Retaliation is the most commonly filed employment claim nationwide and they are some of the most difficult claims to defend. Employers need to train those in decision-making capacities to consider the actions that are taken and the potential liability that may attach as a result of perceived slights.

For more information on the potential implications of this case, please contact:

• Caroline J. Berdzik (609.986.1314; cberdzik@goldbergsegalla.com)
• Or another member of the Goldberg Segalla Employment and Labor Practice Group.