The Massachusetts Supreme Judicial Court has ruled for the first time that employers may be held liable for retaliating against ex-employees, even if the wrongful conduct occurs years after the parties go their separate ways.

The decision clears the legal haze that has clouded the applicability of the state’s anti-retaliation provisions of G.L.c. 151B in cases involving former employees and expands the scope of the statute.

The employer had argued that “adverse employment action,” such as demotion or firing, is a necessary element of a retaliation claim.

Thus, two former employees could not bring a retaliation claim against it for suing them after they left the business.

The SJC disagreed, ruling that Chapter 151B protects former employees from retaliation. Otherwise, employers could threaten former employees with litigation or other retaliatory actions to deter them from complaining about being discriminated against while they were employed.

The decision notes that while the courts have used “adverse employment action” as shorthand for complex statutory language when considering whether an employer’s actions constitute retaliation, the term does not appear in the statute or limit the law’s protections for current employees.

“Perhaps because of the term ‘adverse employment action,’ confusion has arisen as to whether conduct challenged as retaliatory must target a current employee in order to fall afoul of § (4) and (4A),” Justice Margot G. Botsford wrote for the unanimous court.

“We conclude under the plain meaning of these sections, it need not.”

Ending the confusion

The two former employees had markedly different experiences while pursuing their retaliation claims against the employer in Superior Court, which illustrates the confusion that has surrounded 151B, said Dahlia C. Rudavsky of Messing, Rudavsky & Weliky in Boston.

Rudavsky represented defendant Kimberly Schive, who succeeded on her claim following a bench trial in Superior Court. But the ruling was handed down after an investigating commissioner for the Massachusetts Commission Against Discrimination ruled that Schive’s retaliation claim lacked probable cause because she was not a current employee.

“Understanding of the law was in flux,” Rudavsky said.

Simone Liebman, counsel for MCAD, stressed that the investigator’s finding was not reviewed by the full commission and reflected a departure from MCAD’s longstanding decisions that 151B protects former employees.

As for the second defendant, Dr. Stanley Klein, his retaliation claim did not survive summary judgment. A motion judge in Massachusetts Superior Court dismissed his claim based on the absence of an employer-employee relationship.

“The clarity of this decision is a benefit to both employers and employees,” said Klein’s attorney, George P. Field of Boston’s Burns & Levinson. “It will be helpful to practitioners because, as our case illustrates, different results have been reached on this issue.”

Plaintiffs’ attorney Jeffrey S. Robbins of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo in Boston argued that the employer’s suit against Schive could not be retaliatory because it was filed more than three years after she left the company.

“There had been, up until this point, some Massachusetts authority tending to suggest that there had to be some material impact on the terms of employment to support a retaliation claim,” he said. “This decision changes the landscape.”

Robbins also contended that Schive filed a discrimination claim with MCAD against the employer long before the employer’s suit — the retaliation claim followed the suit — and the time gap should have prevented Schive from establishing a causal link between her protected activity and the alleged retaliation.

But the SJC found that a complaint’s initial filing does not have to be the event that triggers retaliation. In Psy-Ed, the triggering conduct was a series of events that occurred shortly before the employer sued, most notably MCAD’s finding of probable cause in Schive’s discrimination complaint.

In an amicus brief supporting the employer, Springfield, Mass. lawyer John F. St. Clair warned that an expansion of 151B’s protections would spur employers to avoid hiring the disabled, “rather than open the pandora’s box of unbridled retaliation lawsuits.”

St. Clair filed the brief on behalf of the International Committee Against Mental Illness and several other entities. He did not return a message seeking comment.

“I don’t think hiring will be affected by this decision or the proper application of the statute,” Field said. “It’s clear that retaliatory conduct is improper. … Prudent employers should already abide by those principles in general.”

Lengthy litigation

The tangled and bitter litigation in the case stretches back for more than a decade.

In 1997, Schive, who is deaf, filed a claim with MCAD alleging that Psy-Ed, a publishing company, had discriminated against her by failing to provide her with an interpreter during meetings and phasing out her job.

Klein, one of the company’s co-founders, signed an affidavit supporting Psy-Ed’s position in the MCAD matter. But later, after learning that his contract with Psy-Ed was set to expire and would not be renewed, he signed a second affidavit that favored Schive’s position.

Psy-Ed learned about the second affidavit in 1999 and decided to end mediation on the MCAD complaint and sue Klein and Schive in Superior Court for defamation, civil conspiracy, and interference with contractual and business relations.

In response, Klein and Schive filed counterclaims against Psy-Ed, alleging retaliation, among other things. Psy-Ed unsuccessfully moved to file a counterclaim against Klein for fraudulent inducement of contract.

When the case finally went to a jury-waived trial in 2006, the only claim that remained in Psy-Ed’s initial lawsuit was the defamation allegation against Klein, which the judge rejected.

Deterring retaliation

In affirming the trial judge’s decision that the employer retaliated against Schive, the SJC considered MCAD’s finding of probable cause in her initial discrimination complaint. The finding was issued two weeks before Psy-Ed sued.

The SJC reasoned that an employer might perceive such a finding “as an indicator that a discrimination claim was not going to go away, and that an employer at that point may be tempted to retaliate against the employee’s continued pursuit of a protected activity.”

In the SJCs view, “§4 (4) and 4(A) forbid such a response,” Botsford added.

The employer argued that Schive was required to show that her protected conduct, the MCAD discrimination claim, was a “determinative factor” in the employer’s decision to sue her. The trial judge erred in requiring that Schive raise only an “inference of a causal connection,” the employer said.

But Botsford wrote that “timing and sequencing of events may, depending on the facts of a case, be sufficient to raise an inference of causation, and although that inference may be overcome by the [employer’s] contrary evidence … it also may become the basis of the [employee’s] proof that retaliation was in fact determinative.”

After upholding Schive’s claim, the SJC vacated the summary judgment against Klein’s retaliation claim under the expanded scope of 151B, which brings state law in line with federal law. The latter recognizes that an “employer can effectively retaliate against an employee by taking actions not directly related to his employment or by causing him harm outside the workplace.”

CASE: Psy-Ed Corp., et al. v. Klein, et al. v. Hirsch,
et al. (and a companion case)

COURT: Supreme Judicial Court

ISSUE: Can an employer be held liable for retaliating against a former employee?

DECISION: Yes