Retaliation lawsuit filed by EEOC gives road map for employers on how not to respond to complaints

October 7, 2023

The Equal Employment Opportunity Commission recently sued Third Bench Holdings LLC on behalf of three employees, contending that they were retaliated against in violation of Title VII of the Civil Rights Act. Title VII prohibits employment discrimination based on race, color, religion, sex and national origin.

According to the federal lawsuit filed in the U.S. District Court for the District of New Mexico, Third Bench owns several millwork, cabinet installation and property renovation companies.

The lawsuit alleges that in August 2021, managers Gabriel Dominguez and Yasmin Saenz (a husband and wife), who worked at the subsidiary companies, thought they were being discriminated against due to their national origin, Hispanic, and believed the Third Bench controller, Melissa Johnson, was providing disproportionate oversight to them versus non-Hispanic employees. Saenz expressed these concerns in an open meeting, and then contended she was excluded from future meetings.

Later that month, Saenz complained to Third Bench’s COO. According to the lawsuit, the COO told Saenz “‘not to go to HR’” and that “‘(he and Saenz) could fix it between themselves.’” The EEOC alleges that “despite the redirection and assurance by the COO, Saenz was given no reason to believe that (the COO) exercised his responsibility to take further preventative, corrective or remedial action at that time.”

Things then quickly unraveled.

In mid-September, Saenz complained about the alleged discrimination to HR manager Lori Nawman, who had begun working for the holding company four months earlier. Upon receiving Saenz’s complaint, Nawman forwarded the information she received to the CEO.

A few days later, Saenz complained again to Nawman, this time stating that Johnson was condescending and withholding work-related assistance from Saenz and Dominguez. Saenez feared retaliation.

Nawman informed the CEO that she thought Johnson was harassing her (the HR manager) for expressing concern of Saenz’s complaints. The CEO did not take further corrective or remedial action at that time.

Saenz complained again to Nawman, stating that her situation was “getting worse” and that she thought she was being retaliated against by Johnson and the COO for her complaints.

Nawman opened an internal HR investigation into Saenz’s complaints. She conducted an investigation and then sent an email to the CEO with interview notes, including those from Dominguez’s interview.

The next day, Nawman sent an email titled: “Yazmin Saenz Title VII Complaint” to the CEO as part of her investigation. Later that same day, Dominguez was terminated and Saenz demoted from general manager to salesperson, all allegedly at the instruction of the COO and CEO.

Nawman thought that Johnson continued to subject her the HR manager) to harassment.

Nawman informed the CEO that she (the HR manager) intended to file a charge of discrimination with EEOC because of Johnson’s continued harassment of her.

The company hired a third-party human resources contractor to investigate Nawman’s concerns. Nawman was interviewed by the investigator, who, according to the lawsuit, advised the HR manager that she did not have standing to make a claim under Title VII and the investigator allegedly attempted to persuade Nawman not to file a charge of discrimination with the EEOC.

Three days after her interview with the investigator, the investigator terminated Nawman allegedly at the order of the CEO.

The EEOC alleges that the “defendants’ decisions to terminate Dominguez, demote Saenz and terminate Nawman were in retaliation for engaging in statutorily protected activities in violation of Title VII.”

So much went wrong here.

To prove retaliation, an employee needs to demonstrate that he/she:

1) engaged in protected activity (the employee complains of harassment or discrimination, opposes harassment or discrimination or participates in an investigation into harassment or discrimination);

2) the employer took materially adverse action against the employee; and

3) there is a causal connection between the #1 and #2.

Here, we know that all three engaged in protected activity: Dominguez participated in an investigation, and this was known to the CEO, and the other two lodged complaints. Further, the Supreme Court has held that terminating the fiancé of someone who engaged in protected activity could be retaliation, which is relevant because Dominguez is Saenz’s spouse. The two terminations and one demotion all are materially adverse actions, and a reasonable person could conclude there is a causal connection between the complaints and the actions by the employer.

Most important, employers cannot ignore complaints – ever.

Investigators need to be free to conduct objective investigations without management interference. And, of course, investigators should not be telling witnesses they have no case. COO’s should not tell employees not to go to HR.

Once a complaint is made, the employer must take active steps to prevent retaliation.