One afternoon, the head of your IT department stops by your office. Apparently, IT noticed something strange during a standard review of an employee’s online activity. The IT head tells you that the employee has been searching for, accessing, and copying confidential company documents. You call the employee into your office, and she confirms that she searched for and copied the documents. Consistent with your handbook, you terminate her for violating the company’s confidentiality policy. Case closed, right? Wrong! A recent Massachusetts case illustrates how a similar scenario can quickly turn into a retaliation lawsuit. 
Harassment claims
In 2004, Kamee Verdrager was hired by Mintz Levin as an employment attorney in its employment, labor, and benefits (ELB) group. Only a month after she was hired, Verdrager alleged that her supervisor, Bret Cohen, made sexually charged remarks to her. Specifically, she claimed that he told her he dreamed about her and he was interested in cheating on his wife.
In July 2004, Verdrager complained internally about Cohen’s comments. The internal investigation concluded that no harassment had occurred and dismissed Verdrager’s concerns as “management style” issues. Later that year, Verdrager learned that Cohen had been “badmouthing” her to colleagues behind her back.
In March 2005, Verdrager was given several mixed evaluations as part of her annual performance review. That same month, the firm received six complaints about Cohen’s behavior from other female associates, including additional allegations that he had made inappropriate comments to them. Another internal investigation was conducted, but the investigation again concluded that no harassment had occurred.
Mintz Levin then hired an external consulting firm to review the firm’s culture and investigate claims of discrimination. The consulting firm’s report revealed that female employees believed it was more difficult for women to succeed at the firm and that the firm had a “tolerance for poor behavior.”
The honeymoon is over . . .
In September 2005, Verdrager returned from her honeymoon and announced that she was pregnant with her first child. Robert Gault, the manager of the ELB group, responded to the news by blaming the pregnancy on Verdrager’s recent honeymoon. He then suggested that she move to part-time hours, a change that she had neither suggested nor requested.
Weeks later, Verdrager was placed on short-term disability because of medical complications with her pregnancy. E-mail correspondence between Gault and another attorney, Donald Schroeder, later revealed that they were “frustrated” with her need for leave and lack of availability.
In March 2006, Verdrager received her second annual performance review and was generally rated as meeting or exceeding expectations. She took maternity leave from May 2006 until November 2006. During her absence, David Barmack was named manager of the ELB group.
While she was on leave, Verdrager was told that her prior mixed reviews required that she undergo additional performance reviews 90 days after her return. The new reviews were mostly negative, including complaints that she wasn’t billing enough hours and didn’t seem committed to the firm.
In February 2007, several partners asked that Verdrager be terminated based on her mixed reviews. However, the managing partner felt that it would be more appropriate to demote her, lower her salary, and delay any decisions about partnership. On February 23, Verdrager was informed that she would be “stepped-back” two years in her associate progression.
Verdrager retained an attorney soon after she was demoted. Later that month, she filed a second internal complaint, but the firm’s investigation again concluded that no discrimination had occurred. Verdrager received several positive performance reviews in the year following her demotion.
Accidental discovery leads to litigation
In May 2007, Verdrager incidentally discovered a document about a gender discrimination lawsuit filed against Mintz Levin by another female attorney. On the advice of her attorney, she conducted six targeted document searches between May 2007 and November 2008. Her searches turned up “talking points” about her complaint, records of complaints by other female employees, and a transcript of a voice mail indicating that the firm could no longer ignore employees’ discrimination complaints. She also discovered that in October 2007, the firm received associate feedback describing concerns about Cohen’s and others’ behavior toward women.
In December 2007, Verdrager filed a complaint with the Massachusetts Commission Against Discrimination (MCAD) alleging that her “demotion” was based on gender discrimination. She then took another maternity leave from February 2008 until September 2008. Soon after she returned, she was one of several associates selected for layoff during the economic crisis. Mintz Levin offered to settle her MCAD complaint, but only if she accepted the layoff.
Verdrager refused the firm’s settlement offer the next day and showed the voicemail transcript she had found to a partner. Mintz Levin then had its technology department investigate her computer activity, learning that she had made several targeted searches for her own purposes. On November 25, 2008, she was terminated “for cause.”
On September 2, 2009, Verdrager filed a second complaint with MCAD, this time alleging that her termination was discriminatory and/or retaliatory. On November 3, 2009, she filed suit in the Massachusetts Superior Court, alleging discrimination, retaliation, and tortious (wrongful) interference with contractual relations.
In January 2013, the trial judge dismissed the entire complaint, finding Verdrager hadn’t produced sufficient evidence that discrimination was the real reason for her demotion and termination. She appealed, and the Supreme Judicial Court, the highest state court in Massachusetts, reversed, reinstating her claims for discrimination and retaliation.
Evidence of pretext
When direct evidence is lacking, courts analyze discrimination claims under the familiar three-pronged McDonnell Douglas burden-shifting paradigm. The employee must first produce evidence of a prima facie, or basic, case of discrimination by showing that (1) she is a member of a protected class, (2) she performed her job at an acceptable level, and (3) she suffered an adverse employment action. If the employee can establish a prima facie case, the burden shifts to the employer to present evidence of a legitimate nondiscriminatory reason for its decision. To prevail, the employee must then point to evidence that the employer’s reason isn’t the real reason for the decision, but instead is a pretext, or smokescreen, for discrimination.
Massachusetts is a “pretext only” jurisdiction, meaning an employee only needs to show that her employer’s proffered reason for taking an employment action is untrue, not that it’s also a cover for illegal discrimination. The court found that both Verdrager and the firm had met their burdens under steps one and two of the McDonnell Douglas framework, leaving only the issue of pretext.
The court found that there were at least four different types of evidence of pretext—that is, evidence suggesting that Verdrager had been demoted and terminated because of her gender rather than for legitimate reasons. The first was comparator evidence, or evidence that similar employees weren’t treated the same way. Specifically, Verdrager alleged that male associates were allowed to leave work to go to the gym and were sent home early to be with their families. By contrast, she was criticized for leaving “no later than 5:30″ to be home with her child.
Second, the court noted that there was evidence that Cohen had attempted to undermine Verdrager after she complained about his actions. The court noted that Cohen demanded that a client draft a written complaint about Verdrager, the first time that request had ever been made with regard to an associate. He also spoke badly about her behind her back, which may have “sabotaged” her and made her seem less competent than she truly was.
Third, the court found that some comments made by Verdrager’s superiors could indicate impermissible gender stereotyping. For example, Barmack made numerous comments questioning her dedication to her job, especially during her pregnancy-related disability and maternity leaves. Those comments, the court concluded, could be evidence that Barmack held the stereotypical view that Verdrager wasn’t committed to her job because of her family obligations.
Fourth, the court noted that there was evidence to suggest that women at the firm, and especially in the ELB group, were subjected to gender-based discrimination. The court relied heavily on the external consultant’s report, which indicated that female associates believed there was a firmwide bias against women. Moreover, feedback the firm solicited from associates indicated the same thing.
Finally, the court noted that temporal proximity also suggested that Mintz Levin’s explanations were pretext. Verdrager was terminated only a few weeks after she was selected for layoff, five days after she had been offered a settlement to accept the layoff, and one day after she refused the settlement.
Retaliation claims survive, too
The court also reinstated Verdrager’s retaliation claim. To establish a prima facie case of retaliation, the employee must show that (1) she undertook protected conduct, (2) she suffered an adverse employment action, and (3) the two were causally linked. The court concluded that Verdrager engaged in protected conduct when she reported the alleged discrimination both internally and to the MCAD.
The court noted that potentially retaliatory conduct began soon after Verdrager’s first internal report in 2004, then escalated to her demotion in 2007, and culminated in her termination in 2008. The court concluded that pattern of behavior could demonstrate a causal connection between her protected activity and the adverse employment actions.
Self-help discovery is protected activity
In evaluating whether Verdrager’s termination was retaliatory, the court had to consider whether her “self-help” discovery was “protected activity” under Massachusetts Gen. L. Chapter 151B, an issue that hadn’t previously been addressed by Massachusetts courts. “Self-help” discovery refers to an employee searching for and collecting documents to use in litigation against her employer. Relying on legal precedent from New Jersey, the court held that self-help discovery is protected activity under Chapter 151B, provided it is “reasonable.”
To evaluate whether an employee’s self-help discovery is reasonable, the court announced a flexible nonexhaustive seven-factor test:
- The level of authorization an employee had to view the document in question (This factor will favor the employee if she had authorization to view the document as opposed to “sneaking around” in private offices and filing cabinets.);
- Whether the disruption caused by the employee’s self-help activity was businesswide or limited to individual company representatives;
- The level of need the employee had to copy the document rather than describing and identifying it for use through the formal discovery process (i.e., the pretrial exchange of evidence);
- The level of dissemination by the employee (This factor favors an employee who disclosed the documents only to her attorney rather than disseminating the document broadly.);
- The content of the document and the employer’s interest in keeping it confidential;
- Whether any clearly identified company policy against taking documents was violated; and
- Whether the case fits under the broad remedial purpose of Chapter 151B. (In close cases, the court should resolve “ties” in favor of the employee.)
The court applied the analysis to Verdrager and concluded that it was appropriate for her to engage in self-help discovery under the circumstances. Verdrager v. Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. (S.J.C., 2016).
Employer takeaways
In addition to showing how not to respond to claims of sexual harassment, this case emphasizes how important it is to protect your confidential documents. Carefully evaluate which employees are authorized to view confidential documents, and authorize access only for employees who require it to perform their duties. By limiting authorization, you can increase the chance that an employee’s self-help activity isn’t considered reasonable.
Additionally, you should review your document confidentiality policies and limit the employees’ ability to access and copy confidential documents. Demonstrating that a clear company policy was violated will also increase the chance that an employee’s self-help activity isn’t considered reasonable.
As always, be sure to consult with a labor and employment attorney who can tailor procedures and policies to meet your business’s unique needs.
Stefanie M. Renaud is an associate at the firm of Skoler, Abbott & Presser, P.C. Stefanie can be reached at srenaud@skoler-abbott.com.
Need to learn more? Join us March 7 for the live webinar Tracking Employee Activity: The Legal Risks and Practical Benefits of Employee Monitoring Technology. Skoler, Abbott & Presser, P.C. attorney Stefanie M. Renaud and Armstrong Teasdale LLP attorney and certified ethical hacker Lucas Amodio will explain the legal limitations of employee tracking technology as well as employee morale issues. In addition to providing guidance, the program has been pre-approved for 1.5 hours of general recertification credit toward PHR and SPHR recertification. For more information, click here.