Rescinding an Offer of Employment Because An Employee Engaged in Protected Activity is Probably NOT the Best Idea...

Linkletter v. Western & Southern Financial Group, Inc. - Sixth Circuit Court of Appeals

Facts:  Gayle Linkletter ("Linkletter") signed an online petition in support of a Cincinnati's women's shelter after having accepted a position with Western & Southern Financial Group ("Western").  (Note, Linkletter had worked for Western before from 1997 through 2006.  This would have been Linkletter's second "stint" at Western).  Before Linkletter began her second work relationship with Western, the company rescinded its employment agreement with Linkletter apparently because she had signed the petition while Western was engaged in a "lengthy" real estate dispute with the women's shelter over its location in the neighborhood.

Linkletter subsequently sued Western and claimed that in response to her support of the women's shelter and Western's decision to rescind her employment contract, the company had violated the Fair Housing Act and Ohio Civil Rights Act.  Western moved to dismiss the claim for failure to state a claim for relief.  The District Court granted Western's motion.  Linkletter appealed the dismissal. 

Holding:  The Court of Appeals pointed out that the Fair Housing Act prohibits discrimination against "any person because of race, color, religion, sex, familial status, or national origin" in the rental or sale of housing.  Federal law further protects plaintiffs who 'aided or encouraged" the housing right enumerated in the Fair Housing Act.  In essence, Federal law allows a plaintiff to step into the shoes of the victims of housing discrimination when the plaintiff faces retribution for providing encouragement to the victims.

In this case, Linkletter stated that by signing the petition in support of the women's shelter, she "encouraged" women to pursue their right to be free from sex discrimination in the rental or sale of housing and that Western unlawfully retaliated by "interfering" with her employment.  The Court of Appeals noted that the Ninth Circuit has previously held that rescission of an employment contract can qualify as "interference".  Based upon the facts alleged, Linkletter and Western reached an employment agreement.  After Linkletter accepted the position (and presumably once Western learned of Linkletter having signed the petition), the employment agreement was terminated.

The Court held that "interfere with" language should be broadly interpreted to reach all practices which have the effect of interfering with housing rights.  As a result, the scope of the Fair Housing Act can be read to extend to employers who cancel employment contracts in retaliation for Fair Housing Act advocacy.  In this case, the alleged facts appeared to show that Western interfered with Linkletter when it rescinded the employment agreement as a result of Linkletter having supported the women's shelter.

As for Linkletter's claim that Western violated the Ohio Civil Rights Act, the Court held that the statute specifically outlawed retaliation for opposition to unlawful discrimination.  In this instance, the Court held that sufficient facts had been plead to establish that Western unlawfully discriminated against Linkletter when it rescinded the employment agreement because of her support of the women's shelter, in violation of the Ohio Civil Rights Act.

Judgment:  The Sixth Circuit Court of Appeals reversed the lower court and held that Linkletter had plead sufficient facts to establish that Western had unlawfully rescinded its employment agreement with her in retaliation for Linkletter having had signed a petition in support of a women's shelter that Western was involved in a dispute with.

The Takeaway:  Employers, take note of this case.  While the Court did not go so far as to say that Linkletter had a case that she would prevail upon at trial, the Court certainly acknowledged that based upon the facts that had been plead, Linkletter had established the existence of potentially unlawful discrimination by Western.  Of course the fact that Linkletter had not yet started working for Western did not impact the Court's analysis.  (Something tells me that the Court's holding would not have changed even if Linkletter had already started her second stint of employment.)  

Based upon the facts plead, the Court acknowledged that there was, at minimum, the appearance of unlawful discrimination against Linkletter.  I seem to agree, without more at this stage of litigation, that Linkletter had established a claim upon which she could prevail at trial.  (Keep in mind, that is all the Court of Appeals considered at this time...whether Linkletter had plead sufficient facts to establish a valid claim.)  It appears that once Western became aware that Linkletter had signed the petition and supported the women's shelter, Western retaliated against her.  It goes without saying that based upon the statutes relied upon by Linkletter, Western had unlawfully retaliated against her for having engaged in protected activity.  While it is understandable that Western was likely quite upset when it learned that Linkletter had offered support to the women's shelter, it goes without saying that deciding to retaliate against her and rescind the offer of employment was not the proper way to go about things...

Majority Opinion Judge:  Judge Merritt

Date:  March 23, 2017

Opinion:  hr.cch.com/ELD/LinkletterWestern032317.pdf