HR Directors Thrown Under the Bus by Yet Another Federal Appeals Court

On May 9, 2012, in a truly wretched decision for HR Directors, the federal appeals court for the Second Circuit held that when an HR Director does his/her job and runs an internal investigation of sexual harassment, and is then fired for doing so, he/she is not protected by the anti-retaliation provision of Title VII of the Civil Rights Act of 1964 unless the investigation was in response to an EEOC complaint.  The case is called Townsend v. Benjamin Enters. Inc., 2d Cir., No. CV-09-197.  The Second Circuit covers New York, Connecticut, and Vermont.   This decision is consistent with the holdings of the 7th, 9th, and 11th Circuit Courts of Appeals.  See Hatmaker v. Memorial Med. Ctr., 619 F.3d 741, 746-47 (7th Cir. 2010); EEOC v. Total Sys. Servs, 221 F.3d 1171, 1174 (11th Cir. 2000); Vasconcelos v. Meese, 907 F.2d 111, 113 (9th Cir. 1990).


For the purpose of this post, the relevant facts are as follows:  Martha Townsend was employed as an office manager and receptionist by BEI, which trains disadvantaged or low-skilled workers. Michelle Benjamin served as president of BEI, and her husband, Hugh Benjamin, was the corporation’s only vice president.  Karlean Victoria Grey-Allen was BEI’s human resources director.

Townsend, who was hired in 2002, alleged that from 2003 to 2005, Hugh Benjamin sexually harassed her by making suggestive comments and touching her. On March 9, 2005, Townsend reported the conduct to Michelle Benjamin.  On March 17, 2005, Townsend reported the conduct to Grey-Allen.  Acting on advice she obtained from a New York State Division of Human Rights official, Grey-Allen interviewed Hugh Benjamin and asked him to work at home, away from Townsend.

However, Grey-Allen also discussed the sexual harassment allegations with a management consultant. When she learned of Grey-Allen’s disclosure to the consultant, Michelle Benjamin fired her, the HR director, for violating the confidentiality of the investigation.  It is worth noting that the consultant had been retained by BEI to train Grey-Allen when she was hired, and she considered him to be a mentor. After firing the HR Director that was investigating her husband, Ms. Benjamin permitted her husband to return to the office, and then retained an outside HR firm to conduct the investigation. That firm concluded that same day that “nothing happened.”  Townsend then resigned.  Townsend and Grey-Allen then filed suit.

The HR Director’s Legal Argument

Grey-Allen argued that she was fired in retaliation for her participating in the sexual harassment investigation, and her firing was thus in violation of the anti-retaliation provision of Title VII of the Civil Rights Act of 1964.  In order to establish a prima facie case of retaliation, she had to show: “(1) that she engaged in protected participation or opposition under Title VII . . ., (2) that the employer was aware of this activity, (3) that the employer took adverse action against the plaintiff, and (4) that a causal connection exists between the protected activity and the adverse action, i.e. that a retaliatory motive played a part in the adverse employment action.” See Kessler v. Westchester Co. Dep’t of Soc. Servs., 461 F.3d 199, 205-06 (2d Cir. 2006) (quotation and citation omitted). As to the first prong, section 704(a) of Title VII makes it unlawful to retaliate against an employee “because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.” 42 U.S.C. § 2000e-3(a). Thus, a plaintiff may establish that she engaged in protected activity either under the “opposition” clause or under the “participation” clause.  Given her facts, Grey-Allen argued that she was engaged in protected activity under the “participation” clause.

The Court Turns its Back on HR Directors

The Court rejected Grey-Allen’s argument based on a textual analysis.  It did so by focusing on the final sentence in 42 U.S.C. § 2000e-3(a), namely where it says the employee participated in an investigation conducted “under this chapter”.  The Court basically said that the chapter in question is devoted to describing the enforcement powers of the EEOC, and how it carries out its investigations and hearings.  To make a long story short, the Court opined that “under this chapter” means that in Grey-Allen’s case, the investigation had to be as a result of the filing of an EEOC charge of discrimination.  Since Grey-Allen was involved in an internal employer investigation, not done in response to an EEOC charge, the investigation was therefore not conducted “under this chapter” and thus was not protected conduct.  In essence, the court found that the text of Title VII is unambiguous in that it does not specifically include employer investigations as it does EEOC investigations.  The net effect of the court’s holding is that the court said that Grey-Allen, and all similarly situated HR Directors are on their own!

The Court took the Easy Way Out

To be clear, what the court did was technically correct, in the sense that it can point to legal precedent and doctrines of statutory construction to support its decision.  However, as the concurring opinion by Circuit Judge Lohier points out, there is also ample precedent for the court to have taken a more just course, if it had so chosen.   Under longstanding principles of statutory construction, courts have long held that Title VII should “be given a liberal interpretation . . . [and] exemptions from its sweep should be narrowed and limited to effect the remedy intended.” Piedmont & Northern R. Co. v. ICC, 286 U. S. 299, 311-312 (1932); see also Spokane & Inland R. Co. v. United States, 241 U. S. 344, 350 (1916); United States v. Dickson, 15 Pet. 141, 165 (1841) (Story, J.).  Consistent with this, Circuit Judge Lohier opined that the phrase “investigation . . . under this subchapter” should be interpreted broadly and does not unambiguously exclude internal employer investigations.

Circuit Judge Lohier’s Concurrence Almost Gets it Right

Let me start by saying that I like Circuit Judge Lohier’s concurring opinion.  I think it is far more instructive than the majority opinion.  However, I disagree with his ultimate conclusion that Congress did not intend to include employer investigations under the participation clause.  Starting with a textual analysis, Circuit Judge Lohier disagreed with the majority opinion by showing that certain provisions of Title VII, when viewed together, make the phrase “investigation . . . under this subchapter” ambiguous.  Having found the text ambiguous, Circuit Judge Lohier then proceeds to analyze the legislative history of Title VII for an indication of what Congress intended when drafting Title VII, and he ultimately concludes that Congress simply did not have employer investigations in mind when it crafted Title VII, and thus “employer investigations” cannot be protected “under this subchapter” as it is currently written.  This is the very basis of his concurring opinion.  However, he then correctly goes on to point out that given the developments in the enforcement and interpretation of Title VII over the past decade, the distinction between government investigations and employer internal investigations seems “antiquated and arbitrary.”

Circuit Judge Lohier essentially acknowledges that employer investigations have grown to become prominent features in Title VII enforcement and interpretation since the 1998 dual Supreme Court decisions gave rise to the Ellerth-Faragher defense, and that Congress could hardly have been expected to anticipate such developments back in 1964.  So it should come as no surprise that the “participation” clause focuses almost exclusively on EEOC investigations, and does not mention employer investigations.  However, where I differ from Judge Lohier is that I would not therefore conclude that Congress did not intend to cover employer investigations.  We simply do not know that, because employer investigations were not a part of the discussion back in 1964.  Indeed, as the EEOC stated at oral argument, employer sexual harassment investigations did not really exist prior to 1964, so we do not know whether Congress would have included employer investigations within the participation clause had the topic been debated during the drafting of Title VII.  However, we do know that Congress intended for Title VII to eradicate employment discrimination.  We also know that Title VII is a remedial statute that must be construed liberally in order to effectuate its stated goal.  As such, the court should have held that the “participation” clause must protect those involved in employer investigations.  It is an interpretation that is consistent with the developments under Title VII case law, and well within the spirit of the law.

Stated another way, instead of requiring Congress to amend Title VII to expressly include employer investigations, the court should have held that they are included, and require Congress to expressly exclude employer investigations in the event that Congress thought the court got it wrong.  That would have produced the correct result in this case, not the arbitrary result the court reached.  It would have also produced justice for Grey-Allen.  After all, her case was not just an academic exercise in statutory construction.  She is a real person that was fired for doing a competent sexual harassment investigation of her boss’s husband.  If ever there was an employee that needed the protection of the “participation” clause of Title VII, it was Grey-Allen.

Who will Lobby Congress on Behalf of HR Directors?

Finally, with this decision, the court is basically saying that Congress is the appropriate body to correct this absurd result.  However, the very nature of an HR Director’s role means that they are not likely to garner the sympathy and support of rank and file employees or labor organizations.  Similarly, the major HR organizations, in pursuit of the ever illusive “seat at the table,” are not likely to want to be seen lobbying for “protection” from the executives that they seem so keen to get closer to.  Indeed, we are a full two weeks after the court’s decision, and yet the case is not mentioned on the website of the leading HR association.   In short, it is not clear why the court thinks Congress will be pressured by anyone to amend Title VII on behalf of HR Directors.

What Now?

Sadly, I expect that many HR Directors that find themselves in situations similar to that which Grey-Allen found herself will now be driven primarily by thoughts of self-preservation when investigating top company officials, instead of doing a competent unbiased investigation designed to discover the truth and take measures to protect the victim and the Company where appropriate.   This is clearly not good for anyone and will likely lead to an increase in litigation such as occurred in this case, where Townsend was forced to litigate her sexual harassment case because the employer abruptly ended the investigation that Grey-Allen was conducting and imposed its own sham investigation.  Without the threat of a retaliation claim from the HR Director, unscrupulous employers wishing to shape the results of an investigation can fire HR Directors with impunity in the same manner that happened to Grey-Allen.  Clearly, the court’s interpretation of the “participation” clause not only fails to effectuate Title VII’s stated purpose, but it may also undermine it in a significant way.

However, for those HR Directors working within the 2nd, 7th, 9th, and 11th Circuits, this is the law of the land.  Those working in the 5th and 6th Circuits should be concerned too, because those courts have suggested that they would apply the same reasoning.  See Abbott v. Crown Motor Co. Inc., 348 F.3d 537, 543 (6th Cir. 2003); Byers v. Dall. Morning News, Inc., 209 F.3d 419, 428 (5th Cir. 2000).  Given the trend, and with no sign that Congress will soon be moved to act, all I can advise HR Directors that get thrust into a situation like the one Grey-Allen faced is to get your resume ready if you suspect that your boss is not interested in you doing a competent investigation.  Because, as these courts have made clear, you are on your own!

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