the situation
Your employee brings a claim of discrimination against your company
which you believe is completely meritless. If you pursue a malicious
prosecution charge against her, could you face a claim of retaliation?
the ruling
Just last week, a federal court entered a consent judgment against an
employer under similar circumstances. EEOC v. Hobson Bearing Int’l,
Inc., Case No. 3:16-cv-5034 (August 25, 2016). Tera Lopez was an
employee of Hobson Bearing International, a ball bearings supply company
in Missouri. Last August, Lopez filed a charge with the EEOC,
asserting discriminatory actions by Hobson Bearing and specifically,
violations of the Equal Protection Act. The EEOC ended up issuing her a
dismissal and right to sue notice. Shortly thereafter, Hobson Bearing
filed a malicious prosecution lawsuit in state court. Hobson Bearing
claimed that Lopez had maliciously filed the charge to harass the
company and to receive financial gain and that the company was forced to
defend the charge at great expense.
After Hobson Bearing filed its lawsuit, the EEOC notified it that it
was investigating the lawsuit as a retaliatory act. But Hobson Bearing
continued to litigate the case (and apparently believed it was not
acting in a retaliatory manner based on the advice of its counsel). It
was only after the EEOC filed a lawsuit in federal court that Hobson
Bearing dismissed the lawsuit without prejudice.
The EEOC and Hobson entered into a consent order resolving the case.
According to the order, Lopez suffered damages, including the attorneys’
fees she had to pay to defend against the lawsuit and emotional
distress. The parties stipulated that Lopez’s damages were $37,500.
In the order, the federal court explained that although it had not
yet ruled on the question of whether employers are barred from suing
employees who they believe file false charges of discrimination, other
courts had recognized a “statutory bar” against employers suing
employees for filing a claim of discrimination. Thus, the parties
agreed that the company’s filing of the lawsuit constituted retaliation.
the point
Employers are frequently frustrated by baseless lawsuits filed by
employees asserting discrimination on a number of protected grounds. As
this case illustrates, despite this frustration and the expense of
defending against these suits, employers should carefully consider
taking any direct action against any employee because of such a claim.
Originally posted to Virginia Employer Law Blog, by Elaine Inman Hogan on August 31, 2016.