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In a recent decision, the Second Circuit Court of Appeals, the federal appellate court that hears cases from New York, Connecticut, and Vermont, held notice of termination itself constitutes an adverse employment action even when the employer later rescinds the termination.  An adverse employment action occurs when the plaintiff sustains a materially adverse change in the terms and conditions of employment.  A common example is termination of employment.  Without an adverse consequence, no violation of Title VII will normally be found.  

In Shultz v. Congregation Shearith Israel, the plaintiff had worked at Congregation Shearith Israel, a synagogue, for over ten years.  Prior to departing on her honeymoon, she informed the synagogue’s executive director, she was pregnant.  When she returned from her honeymoon, the plaintiff was visibly pregnant. The day after she returned to work, she was informed her employment was terminated in approximately two weeks due to the departure of a rabbi and a company restructuring. 

While Plaintiff was still reporting to work at the synagogue during her two weeks, she retained counsel and sent a letter informing the synagogue she planned to pursue claims relating to the termination.  A few days later, the synagogue reinstated Plaintiff’s position and sent her a letter confirming this.  Plaintiff quit reporting to work on the original date she was told would be her last.  She brought various claims against the synagogue, including one on the basis of her sex in violation of Title VII of the Civil Rights Act of 1964, as amended.

The lower court dismissed Plaintiff’s claim, holding a rescinded termination does not constitute an adverse employment action for purposes of Title VII.  The Second Circuit disagreed based on Supreme Court precedent analyzing the time a statute of limitations begins to run.  The Supreme Court has held in Delaware State College v. Ricks, the proper focus is upon the time of the discriminatory acts, not upon the time at which the consequences of the acts become most painful.  Using this logic, the Second Circuit found a notice of termination constitutes an adverse employment action even if it is rescinded and thus Plaintiff could maintain a cause of action pursuant to Title VII.  The Second Circuit reversed and remanded the claim back to the lower court. 

For employers in the Second Circuit, this case should serve as a cautionary tale.  Although the synagogue revoked the termination decision, the Court found the damage was already done.  While you find this hard to accept, it is the state of the law.  Therefore, employers should analyze all of the risks of termination decisions before informing the employee his or her services will no longer be needed.  In the Second Circuit, while revoking the termination may potentially have an impact on reducing recoverable damages, it will not prevent the plaintiff from being able to assert a claim against the company.  In essence, as the kids sometimes say, there are no “take backs” in the Second Circuit.

Brody and Associates regularly provides counsel on civil rights issues and employment laws in general.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203-454-0560.