Does a Pay Cut Threat Count as Retaliation?


legal consultation feeTo successfully sue for retaliation under Title VII of the Civil Rights Act of 1964, a plaintiff must establish three elements, one of the elements being that the plaintiff suffered an adverse employment action. Examples of adverse employment actions include losing one’s job, being demoted, or being passed over for a promotion.

The decision of whether something is an adverse employment action is very fact specific, and courts can sometimes be inconsistent, as evidenced by Wolters Kluwer’s February 16, 2015 article. We have also recently blogged about whether a denial of a transfer request constituted an adverse employment action.

However, does the threat of having one’s pay cut in half constitute an adverse employment action? The United States District Court for the Western District of Texas has ruled that it does not. However, this decision has been appealed and is currently under consideration by the Fifth Circuit Court of Appeals.

Brandon v. The Sage Corporation

In this case, the plaintiff, Margie Brandon, sued her former employer, the Sage Corporation. Sage is in the business of operating truck driving schools, and Brandon was a school director at Sage’s San Antonio office. After working for Sage for almost a year, Carmela Campanian arrived at Sage’s San Antonio office to conduct specialized training.

During Campanian’s visit to the San Antonio office, she interacted with Brandon over the course of a few days. Almost immediately after these encounters, Brandon resigned from her job and sued Sage for several causes of action, including retaliation under Title VII.

Brandon alleged the following facts for the basis of her retaliation claim:

  • When Campanian first saw Lorette Eure, who is a transgender employee of Sage, Campanian said to Brandon, “What is that and who hired that?” She also remarked, “Please don’t tell me that is a Sage instructor,” and said that Sage doesn’t hire “cross genders.”
  • After Brandon informed Campanian that she had hired Eure because Eure was well qualified for the position, Campanian told Brandon that Sage would “deal with [Brandon] seriously for hiring that” and that Campanian would speak with Sage’s president to discuss an appropriate punishment for Brandon’s decision to hire Eure.
  • Brandon later learned from Campanian that her pay was to be cut by 50% as punishment for hiring Eure.
  • In response to Brandon’s statement that San Antonio did not consist of migrant workers, Campanian replied “Hello! There are Mexicans here, and that’s what Mexicans do. They work as migrant workers. You give them room and board, pay them $500 per month, and they are happy.”
  • Upon Brandon bringing it to Campanian’s attention that Eure was not placed on the work schedule, Campanian asked Brandon if she “understood the severity of the impending consequences for hir[ing] a cross gender.”

The day after these conversations took place, Brandon resigned from her job at Sage.

Can Brandon Establish an Adverse Employment Action?

We began this blog by discussing the concept of the adverse employment action, which is one of the three elements needed to prove retaliation under Title VII. The other two elements are that the plaintiff engaged in a protected activity and that a causal relationship exists between the protected activity and the adverse employment action.

A protected activity includes opposing an employer action that is believed to be unlawful discrimination, participating in an employment discrimination proceeding, or requesting a reasonable accommodation at work based on religion or disability. For more information about the elements of a retaliation cause of action, check out the US Equal Employment Opportunity Commission’s website on “Facts About Retaliation.

The district court concluded that Brandon’s defense of Eure may have constituted a protected activity but found that Campanian’s threat of Brandon’s pay being cut in half was not an adverse employment action.

The courts define an adverse employment action as something that a reasonable employee would find serious enough to prevent that employee from making a charge of discrimination. The district court recognized that the Fifth Circuit had not yet ruled on whether the threat of a pay cut could be considered an adverse employment action but decided that a threat of a pay reduction was not an adverse employment action since other federal courts outside the Fifth Circuit had reached that conclusion.

Finding that the threat of a 50% pay cut did not result in an adverse employment action, the district court did not address the causal relationship element. The Fifth Circuit will soon decide whether the 50% pay cut threat is or is not an adverse employment action.

Other Takeaways from the Brandon v. The Sage Corporation Decision

While not being addressed on appeal, the district court confirmed some key points that employees should keep in mind when facing potential retaliation at work:

  • By themselves, racist and/or politically incorrect comments about Mexicans will not constitute direct evidence of unlawful employment practices.
  • Brandon’s resignation one day after receiving a series of inappropriate comments from Campanian was not a constructive discharge.

The bottom line is that employees who believe they have suffered retaliation under Title VII must have a strong case with solid evidence. Even if the district court is reversed by the Fifth Circuit, its initial decision to find that the threat of a having one’s salary cut in half was not an adverse employment action makes it clear that plaintiffs have a substantial burden in proving retaliation.

Summing It Up

  • The threat of a pay cut, even one as significant as 50%, may not be enough to qualify as an adverse employment action.
  • Racist comments alone are not direct evidence of unlawful employment practices.
  • One day of racist comments from a supervisor may not be enough to result in a constructive discharge.
  • For plaintiffs to succeed in court in proving retaliation, they must have a well-founded case.

If you think you have experienced an adverse employment action as a result of retaliation for participating in a protected activity, please contact our office to discuss your case and legal options.