Threat of Pay Cut from Outside Plaintiff's Chain of Command is Not Adverse Action: Fifth Circuit | Practical Law

Threat of Pay Cut from Outside Plaintiff's Chain of Command is Not Adverse Action: Fifth Circuit | Practical Law

In Brandon v. The Sage Corporation, the US Court of Appeals for the Fifth Circuit held that an employee did not suffer an adverse employment action when threatened with a pay cut by a company director who was not in the employee's chain of command. The court affirmed the district court's dismissal of the Title VII retaliation claim.

Threat of Pay Cut from Outside Plaintiff's Chain of Command is Not Adverse Action: Fifth Circuit

by Practical Law Labor & Employment
Published on 15 Dec 2015 • USA (National/Federal)
In Brandon v. The Sage Corporation, the US Court of Appeals for the Fifth Circuit held that an employee did not suffer an adverse employment action when threatened with a pay cut by a company director who was not in the employee's chain of command. The court affirmed the district court's dismissal of the Title VII retaliation claim.
On December 10, 2015, in Brandon v. The Sage Corporation, the US Court of Appeals for the Fifth Circuit held that a high-level employee did not suffer an adverse employment action when threatened with a pay cut by a director who was outside the employee's chain of command. The court found that a reasonable high-level employee would not perceive the threat as materially adverse and that the director was not the employee's "employer" under agency principles. The court affirmed the district court's dismissal of the Title VII retaliation claim. ( (5th Cir. Dec. 10, 2015).)

Background

Margie Brandon worked as a director for Sage, a trucking school, at its San Antonio location. In 2011, Sage's National Project Director (and western Regional Director), Carmella Campanian, confronted Brandon about a female truck driver working at the school's San Antonio location who identified as male. Campanian criticized Brandon for hiring the truck driver. Later, after Brandon objected to Campanian reducing the truck driver's work hours, Campanian told Brandon that Brandon's pay would be reduced for hiring the truck driver.
Brandon, who reported to someone other than Campanian, submitted her resignation to Sage's President, stating that she was resigning because of Campanian's abusive conduct. After Brandon filed an administrative complaint with the EEOC against Sage in which the EEOC found reasonable cause that Sage engaged in discrimination and retaliation, Brandon sued Sage in US district court alleging, among other things, retaliation under Title VII. The district court granted summary judgment to Sage on all claims and Brandon appealed.

Outcome

The Fifth Circuit affirmed the district court's grant of summary judgment dismissing Brandon's retaliation claim, holding that Campanian's threat to cut Brandon's pay was not an adverse action because Campanian was outside Brandon's chain of command.
The Fifth Circuit noted that:
The Fifth Circuit found that:
  • A reasonable high-level employee like Brandon:
    • understands her chain of command, including who makes tangible employment decisions;
    • was aware of Sage's grievance process and would at least wait to receive confirmation that the threat was official;
    • would not think the threat to cut her pay was materially adverse because Campanian was outside her chain of command; and
    • would not stop engaging in protected activity because of Campanian's threat.
  • Sage was not liable for Campanian's conduct based on agency principles or "proxy" theory because:
    • Campanian did not speak for Sage or have control over employees' compensation or benefits to be an "employer" under Title VII; and
    • Sage did not give Campanian authority to hire or fire Brandon or to alter her employment terms and conditions.
  • Brandon could not show that Sage ultimately reduced Brandon's pay.

Practical Implications

The Fifth Circuit's decision in Brandon illustrates that threats from a high-level manager against an employee the manager does not supervise or control will likely not constitute an adverse action in this circuit.