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Blasphemy or Common Sense: Should Employers Encourage Employee Complaints?

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Blasphemy or Common Sense: Should Employers Encourage Employee Complaints?

Employers implicitly understand that their company should have a formal procedure for employees to lodge internal complaints about matters such as sexual harassment, unethical business practices, unsafe conditions, or suspected violations of securities laws.  Such employee conduct, whether taken internally or externally, often is protected by various state and federal statutes such as Michigan’s Whistleblower’s Protection Act, Title VII of the Civil Rights Act, Sarbanes-Oxley Act, and the National Labor Relations Act.  Not all employers understand, however, that there are good reasons not only to adopt a formal complaint procedure, but to encourage employees to actually use it.

Recent statistics are undisputed that so-called retaliation lawsuits, alleging that an employee has been disciplined or terminated for filing an internal complaint, or an external complaint with a state or federal agency, are on the rise, even though the overwhelming number of such claims are meritless.  Both plaintiffs’ and government attorneys recognize that if they can establish that: (1) an employee filed a complaint with a state or federal agency; (2) the employer had knowledge of the complaint; and, (3) the employee was subsequently disciplined or terminated, it will be difficult for an employer to get the claim dismissed without spending a great deal of time and expense defending its actions.  This is true even if the employee’s complaint was ill conceived or just wrong.  In this context, there are at least three (3) significant reasons why employers should encourage their employees to file internal complaints.

First, consider the situation where an employee believes that the company is discharging toxic fluids into the public sewer system.  If the employee is incorrect in his or her belief, but nonetheless encouraged to make an internal complaint without fear of reprisal, the company stands a real chance of correcting a significant misunderstanding before the employee contacts the EPA, OSHA, or, even worse, the local media.  If the complaint has merit, the company can correct the problem before incurring fines or penalties.

Second, the underlying theory of any retaliation plaintiff’s case is that the employer took adverse action against an employee who had the courage to raise an internal or external complaint.  One of the most persuasive arguments an employer can make to a governmental agency, judge, or jury is that the company’s employees routinely lodge complaints that are investigated and then resolved.  More importantly, those same complaining employees remain employed by the company and over time have enjoyed raises and promotions.  An employer who discourages complaints, “brushes them under the rug,” or fails to make a record of complaints, will be unable to take advantage of this very persuasive argument.

Third, in many circumstances courts recognize an affirmative defense raised by an employer that a claim should be barred because the employee failed to utilize the company’s complaint procedure.  For example, in the context of a sexual harassment complaint, this affirmative defense is referred to as the “Faragher/Ellerth” defense, so named after a pair of 1998 U.S. Supreme Court cases.  Under this defense, an employer may avoid liability for harassment that does not rise to the level of an adverse employment action (such as, a termination or demotion), if it can establish that:  (1) when employee complaints are received, the company takes reasonable steps to prevent and correct sexual harassment in the workplace; and, (2) in this specific case, the employee/complainant failed to take advantage of the complaint procedure.  Often times, in response to this defense, an employee will attempt to argue that she did not utilize the complaint procedure because she was sure that if she lodged a complaint, the company would have failed to take remedial action.  Encouraging aggrieved employees to file internal complaints that are promptly resolved and documented serves to correct problems that inevitably arise in the workplace, provides the employer with an affirmative defense for the future, and blunts the employee’s argument that filing a complaint would be futile.  It’s just good common sense.