COUNTERCLAIMS BASED ON MCAD/EEOC COMPLAINTS:

A PER SE RETALIATORY LITIGATION STRATEGY

 

 

Robert S. Mantell

 

 

            In some employment discrimination suits, the employer files defamation or abuse of process counterclaims, attacking the allegations made by the employee in her administrative charge.  May an employer initiate a counterclaim based on what it regards as a fabricated MCAD or EEOC charge?  The answer to this question must balance the competing interests of an employer that seeks to defend itself from frivolous litigation, and an employee’s right to initiate a charge of discrimination without fear of reprisal. 

            While recognizing an employer’s right to aggressively defend itself on the merits of a discrimination charge, this article will argue that counterclaims based on the contents of an MCAD/EEOC charge are per se retaliatory and subject to dismissal.  Moreover, the employee should be awarded her attorneys fees and costs incurred in defending against a retaliatory counterclaim.

 

1.         Retaliation Against Employees for Filing MCAD/EEOC Charges is Prohibited, Even if the Allegations in the Charge are Without Merit

 

 

            Under Chapter 151B, Title VII, the ADEA and the ADA, an employer may not retaliate against an employee for complaining of discrimination.  An employee filing an MCAD/EEOC complaint has unquestionably engaged in protected conduct.  The anti-retaliation provision of Chapter 151B provides in part:  "It shall be an unlawful practice: . . . 4.  For any . . . employer . . . to . . . discriminate against any person because he has opposed any practices forbidden under this chapter or because he has filed a complaint . . ." (emphasis added).  G.L. ch. 151B, § 4(4); see 42 U.S.C. § 2000e-3(a).

            Submission of a charge of discrimination is protected conduct, even if the employee's belief that discrimination has occurred is mistaken.  Franchere & Baillargeon v. Power Test Gas Co., 8 MDLR 1219, 1246 (1986); Brunson v. Belcherton State School, 9 MDLR 1295, 1325 (1987); Galotti v. Belmont, 6 MDLR 1669 (1984).  The filing of the charge constitutes protected conduct, even if the charge is neither valid nor reasonable.  Wyatt v. City of Boston, 35 F.3d 13, 15 (1st Cir. 1994). 

            The obvious purpose behind the retaliation provisions is to permit those filing charges to act without fear of retribution and unnecessary financial hardship.  The legislatures intended a full airing of suspicions of discrimination, to permit the administrative agencies to fully investigate potentially unlawful employment practices.

 

2.         A Counterclaim Severely Disadvantages an MCAD Complainant as to Constitute a Retaliatory Action

 

 

            The employer may not initiate an adverse job action against an employee based on the filing of the complaint.  In addition, actionable retaliation includes reprisals that take place outside the work context.  Retaliation occurs when an employer reacts by “disadvantaging . . . persons engaged in protected activities.”  Hazel v. U.S. Postmaster General, 7 F.3d 1, 3 (1st Cir. 1993).  Retaliation may occur even after the employee has been fired and is no longer in the employer’s workforce.  Robinson v. Shell Oil Co., 117 S. Ct. 843 (1997).

            When an employer initiates an abuse of process or defamation counterclaim against an employee, the employee is coerced into hiring a lawyer and expending large sums to protect herself.  Moreover, the employee becomes fearful that a large monetary judgment may be awarded against her.  The drudgery and expense of a counterclaim clearly disadvantages the complaining (ex-)employee as to constitute retaliation.

 

3.         Counterclaims Impair the Full and Effective Functioning of the Legislative Scheme that Encourages Agency Review of Employment Decisions that are Felt to be Discriminatory

 

            Protected conduct, such as filing a charge, loses its protected character if employers are permitted to second guess the merits of the charge and issue reprisals.  Resort to statutory remedies should not take on the character of a calculated risk, with litigants fearing inevitable and expensive legal attacks when they seek to vindicate their rights.  Mitchell v. Robert De Mario Jewelry, Inc., 80 S. Ct. 332, 336 (1960) (were retaliation against those complaining of discrimination permitted, resort to statutory remedies would take on the character of a calculated risk).  The possibility of counterclaims should not be permitted to distract an employee considering the filing of a charge. 

            The implementation of policies expressed in anti-discrimination statutes depends on the filing of charges by individuals who perceive themselves as victims of discrimination.  E.E.O.C. v. Astra USA, Inc., 94 F.3d 738, 746 (1st Cir. 1996); N.L.R.B v. Scrivener, 92 S. Ct. 798, 801 (1972); E.E.O.C. v. Associated Dry Goods, Inc., 101 S. Ct. 817, 824 (1981) (policies encouraging employment discrimination litigation are consistent with the intent of Title VII). 

            Legislative policy also favors open and public litigation of such controversies, for its deterrence value as well as to provide information to other victims of discrimination:

The disclosure through litigation of incidents or practices which violate national policies respecting nondiscrimination in the work force is itself important, for the occurrence of violations may disclose patters of noncompliance resulting from a misappreciation of the Act's operation or entrenched resistance to its commands, either of which can be of industry-wide significance. 

 

McKennon v. Nashville Banner Pub. Co., 115 S. Ct. 879, 885 (1995).

            Employees filing administrative charges do so in conformity with these well-established policies.  As such, they should be immunized from suit based on the contents of the administrative charge.  The disruption generated by counterclaims extends not only to individual complainants, but to the statutory schemes addressing discrimination.  Therefore, counterclaims should be considered unlawful retaliation.

 

4.         Precedent Supports the Dismissal of Counterclaims Based on Discrimination Charges

 

 

            Precedent supports the proposition that there exists an absolute privilege against counterclaims of defamation or other torts resulting from the exercise of the right to file a charge of discrimination, even if the charge is considered false and malicious.  A countersuit based solely on the fact that a complaint alleging discrimination has been filed has been held to be "unquestionably retaliatory" as a matter of law.  E.E.O.C. v. Virginia Carolina Veneer Corp., 495 F. Supp. 775, 778 (W.D. Va. 1980), appeal dismissed sub nom Cassidy v. Virginia Carolina Veneer Corp., 652 F.2d 380 (4th Cir. 1981) (defamation suit based on filing of sex discrimination charge dismissed); see also Cooper v. Pic-Walsh Freight Co., 27 FEP 344, 19 E.P.D. 8994 (E.D. Mo. 1976) ("To entertain claims in the nature of malicious prosecution for the filing of a single Title VII complaint would seriously undermine the clear policy of Section 2000e-3(a) to protect an employee who utilizes the procedures provided by Congress for the vindication of his right to be free from unlawful discrimination in employment"); Moran v. Simpson, 80 Misc. 2d 437, 362 N.Y.S.2d 666 (1974) (defamation claim based on the filing of a discrimination complaint dismissed); EEOC Decision 74-77, 8 FEP 558 (January 18, 1974) (defamation count based on administrative charge is per se retaliatory).

            “An employer may not counterclaim or defend [a Title VII action] based on tort claims.”  EEOC v. First Nat. Bank of Jackson, 614 F.2d 1004, 1006 (5th Cir. 1980), cert. denied 101 S. Ct. 1361 (1981); see also EEOC v. Sears Roebuck & Co., 504 F. Supp. 241, 275 n. 66 (N.D. Ill. 1980) (dismissing civil conspiracy counterclaim); Giles v. Roadway Exp., Inc., 529 F. Supp. 37, 39 (S.D. Miss. 1981) (dismissing civil conspiracy and malicious prosecution counterclaims).

            In order to claim the privilege protecting those filing discrimination complaints, the employee need not allege that the employer has filed its counterclaim with a malicious motive.  The filing of the complaint should be privileged, even if the employer has proffered its counterclaim in good faith.  "A protected activity acquires a precarious status if innocent employees can be [retaliated against for] engaging in it, even though the employer acts in good faith."  NLRB v. Burnup and Sims, Inc., 379 U.S. 21, 23 (1964) (applying NLRA).

            The privilege against abuse of process counterclaims is especially strong, because abuse of process claims are generally disfavored as chilling potentially meretricious resort to the courts.  See Cohen v. Hurley, 20 Mass. App. 439, 443 (1985).  Moreover, an MCAD/EEOC charge is not “process” as defined pursuant to that tort.  See Jones v. Brockton Public Markets, Inc., 369 Mass. 387 (1975); Chemawa Country Golf, Inc. v. Wnuk, 9 Mass. App. 506 (1980); 14 Mass. Practice, § 1721 (Supp.).  Beyond the protections afforded by the retaliation clauses, testimony provided in connection with administrative proceedings are absolutely privileged.  See Cignetti v. Healy, 967 F. Supp. 10, 14 (D. Mass. 1997) (testimony at administrative hearing is absolutely privileged); Stepanischen v. Merchants Despatch Transp. Corp., 722 F.2d 922, 932 (1st Cir. 1983) (same).  As such, a variety of protections and immunities combine to protect those filing administrative charges.

 

5.         Employees Should be Awarded Attorneys Fees and Costs When Employers Initiate Retaliatory Counterclaims

 

 

            The prohibition against retaliatory counterclaims is so strong that Courts have awarded plaintiffs attorneys fees and costs when dismissing retaliatory counterclaims.  E.g., EEOC v. Virginia Carolina Veneer Corp., 495 F. Supp. 775 (W.D. VA. 1980).  The award of attorneys fees and costs is similarly dictated under G.L. c. 231, § 59H, the Massachusetts SLAPP statute.

            The purpose of Section 59H is to "protect citizens from lawsuits designed to chill their right to petition a matter of public concern."  Andover Liquors, Inc. v. Den Rock Liquors, Inc., 5 Mass. L. Rptr. No. 11, 239, 240 (June 17, 1996).  The right to petition protects a citizen every time he or she speaks out on matters of public interest, or participates in governmental proceedings implicating matters of public concern.  Zoppo v. Foster, 6 Mass. L. Rptr. No. 25, 543, 543 (May 19, 1997).

            In Commonwealth of Massachusetts v. Chatham Development Corp., 6 Mass. L. Rptr. No. 4, 76 (December 16, 1996), an individual named Shui filed an MCAD claim alleging that a number of Respondents discriminated against him in their refusal to rent housing to Shui.  After the case was removed to Superior Court, the Respondents filed a counterclaim against Shui for abuse of process.  The Court dismissed the counterclaim under the SLAPP statute and awarded Shui attorneys fees.  Chapter 151B also provides for the award of attorneys fees for complainants opposing retaliatory conduct.  G.L. c. 151B, § 9.

 

6.         Counterclaims are Unnecessary and Abusive

 

 

            While there may exist a policy to protect employers from wrongful suits alleging discrimination, there are greater, countervailing policies involved.  Persons filing discrimination charges should be immunized from counterclaims, or else their voices in opposition to unlawful practices will be stifled in the long run.  Successful discrimination suits routinely turn on seemingly tenuous strands of evidence.  In the vast majority of cases, in which an abundance of direct evidence of discrimination is not present, the specter of an abuse of process counterclaim will have an enormous chilling effect.  The Legislature has explicitly stated its preference to allow employees to freely assert claims for discrimination, by making the filing of a complaint protected conduct.

            Counterclaims belie their retaliatory nature, because they are somewhat pointless and wasteful.  Even in the absence of the counterclaims, the truth of the allegations in the charge may be fully investigated and controverted when the merits of the charge are litigated.  To the extent that the charge is proven frivolous, employers may have remedies under Rule 11, G.L. c. 231, § 6F, or the attorneys fees provisions of the various statutes.  Since avenues of redress may be available to the employer, the initiation of counterclaims represent little more than a strategy to bludgeon MCAD claimants into submission.  They may also be used to silence other possible claimants or witnesses.  Such per se retaliatory litigation strategies should be firmly, and quickly opposed.

 

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