The Fourth Circuit Court of Appeals Rules that the “Manager Rule” Is Not Applicable In Title VII Cases

Nicholas Fortuna, August 18, 2015

The Fourth Circuit Court of Appeals ruled last week that managers are not excluded from protection against retaliation under Title VII of the Civil Rights Act of 1964. J. Neil DeMasters, an employee assistance consultant at Carilion Clinic, was fired for not taking the “pro-employer side” in a sexual harassment dispute involving another employee.

Carilion terminated DeMasters because the company was angry that it had to settle a sexual harassment suit filed by an employee and told DeMasters that he failed to act in the company’s best interests regarding the matter. The dispute arose after an employee allegedly told DeMasters that his department manager masturbated in front of him twice on hospital grounds, asked him for oral sex, and asked him to show his genitals. DeMasters helped the employee file an internal complaint and urged HR to take action on the complaint. De Masters also criticized Carilion’s handling of the investigation.

After he was fired, DeMasters sued Carilion under Title VII claiming his termination amounted to retaliation. Title VII forbids retaliation against any employee who “oppose[s]” an employment practice that is unlawful under Title VII. The district court dismissed the action adopting Carilion’s position that “the manager rule” should apply and in such a case the anti-retaliation provisions of Title VII do not apply to De Masters. “The manager rule” purports to address a concern that if counseling and communicating complaints are part of a manager’s duties, then “nearly every activity in the normal course of a manager’s job would potentially be protected activity,” and “[a]n otherwise typical at-will employment relationship could quickly degrade into a litigation minefield.” Therefore, the argument goes, managers should not be afforded protection under the anti-retaliation provision of Title VII. The “manager rule” has been applied by some circuits in the context of retaliation claims under the Fair Labor Standards Act (“FLSA”). In those cases, the manager is required to step outside his role of representing the company (beyond his duties as a manager) to avail himself of protection from the anti-retaliation provisions of the FSLA.

A number of district courts have imported this categorical exception into the context of Title VII’s anti-retaliation provision. The Fourth Circuit reversed the lower court and found that DeMasters engaged in protected activity under Title VII’s opposition clause. The court found that there is nothing in the language of Title VII that would exclude a category of employees from its anti-retaliation protections. Title VII makes it unlawful for an employer to discriminate against an employee “because he has opposed any practice made an unlawful employment practice by this subchapter (Title VII), or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.” The FLSA does not contain such broad anti-retaliation language.

The Sixth Circuit Court of Appeals is the only other Court of Appeals to address this issue in a precedential opinion. The Sixth Circuit also held that the “manager rule” did not apply in the Title VII context. Other circuits will have to address this issue given that there are a number districts courts that apply the “manager rule” to Title VII cases.

Employers should not try to justify the firing of a manager because that manager was not pro-employer enough in handling Title VII complaints. Even though all the circuits have not ruled on this issue, the broad anti-retaliation provisions of Title VII will protect managers when they are opposing employment practices that violate Title VII.