Can you terminate an employee for participating in an internal investigation at your company that is not connected with a formal EEOC proceeding?

Recently, in Townsend v. Benjamin Enterprises, Inc., the Second Circuit joined five other federal appellate courts in answering this question with a “yes.”  The Court held that participation in an internal employer investigation not connected with a formal EEOC proceeding is not protected activity under the participation clause contained in Title VII.  So, an employee participating in an internal investigation is not protected from being terminated in retaliation for such participation.  However, even if such a termination is not unlawful, it is still not a wise or productive decision for any company.

In the case, Martha Townsend alleged that she was sexually harassed by Hugh Benjamin, a Vice President and shareholder of Benjamin Enterprises.  Mr. Benjamin was also the husband of Michelle Benjamin, the president of Benjamin Enterprises.  Karlean Grey-Allen was the former human resources director of the company.  When Townsend raised her allegations of sexual harassment, Grey-Allen conducted an investigation.  The investigation included some smart steps, such as obtaining written and oral statements from Townsend and interviewing Mr. Benjamin and requesting that he work from home during the course of the investigation.  But Grey-Allen also spoke about the investigation with a management consultant who had been retained by Benjamin Enterprises and who she viewed as a mentor.

Once Michelle Benjamin found out that Grey-Allen had discussed the sexual harassment complaint with the management consultant, Ms. Benjamin terminated Grey-Allen for breaching confidentiality.  Grey-Allen brought claims that her termination was a violation of Title VII because she was retaliated against for investigating Townsend’s complaint.

The Court looked to Section 704(a) of Title VII, which makes it unlawful for an employer to retaliate against an individual “because he has…participated in any manner in an investigation, proceeding, or hearing under this subchapter.”  Because the subchapter was largely “devoted to describing the enforcement powers of the EEOC and the procedures by which the EEOC carries out its investigations and hearings,” the Court found that Section 704(a) “plainly refers to an investigation that ‘occur[s] in conjunction with or after the filing of a formal charge with the EEOC; it does not include participation in an employer’s internal, in-house investigation, conducted apart from a formal charge with the EEOC.'”  Based on this interpretation of Title VII, the Court ruled that Grey-Allen’s investigation was not protected activity, and so Title VII did not protect her from being terminated for her investigation.

While this ruling means you can (at least under federal law in five Circuits) terminate an employee for participating in an internal investigation that is not in conjunction with an EEOC proceeding, it doesn’t mean that you should.  In fact, not only is such retaliation wrong, it is bound to backfire.

First, state and local laws may provide greater protections than Title VII.  So, just because this retaliation might not be prohibited under Title VII, it might still be prohibited under state and local law.

Second, to protect against discrimination and harassment claims, your company must have in place a consistently-applied system where employees feel comfortable reporting harassment and discrimination, and trust that the company will take their complaint seriously and thoroughly investigate it.  Without such a system, an important affirmative defense will be unavailable to the company.

Third, a jury is less likely to award large damages to an employee when it feels the employer acted responsibly in investigating and responding to the employee’s complaints.

Terminating employees for participating in internal investigations is a sure-fire way to make sure that employees’ complaints about harassment and other forms of discrimination are not brought forward to management and not properly investigated.  Likewise, jury members don’t like and wouldn’t want to work for a company that retaliates against employees for investigating complaints, and juries are willing to punish such companies with large verdicts against them.

While implementing a consistently applied internal investigations program is hard work, it’s work worth doing.  And it’s the right thing to do.  Firing employees who participate undermines the process and system.  So just remember—as we’ve advised before, retaliation is wrong, and it’s also expensive.  Just don’t do it.