By Michael A. Kornbluth and Joseph E. Hjelt

On June 7, 2017, Judges Traxler, Motz and Agee on the U.S. 4th Circuit Court of Appeals issued a decision which could make employees think twice before they report other individuals’ complaints of sexual harassment in the workplace. The facts of the case, Villa v. CavaMezze Grill, LLC, No. 15-2543, 2017 WL 2453254 (4th Cir. Jun. 7, 2017), are alleged as follows:

In October of 2013, Judy Bonilla, a former employee at Cava Mezze Grill in Merrifield, Va., told Patricia Villa, a low-level manager at Cava Mezze, that the restaurant’s General Manager had offered her a raise in exchange for sex. Villa then approached Rob Gresham, the restaurant chain’s Director of Operations, to report the conversation with Bonilla and convey her suspicions that the same quid pro quo offer had been made to another former employee. Gresham is close friends with the General Manager who was accused of sexual harassment. In investigating Villa’s report, Gresham interviewed Bonilla and the other individual Villa suspected had been offered a raise in exchange for sex. Sergio Valdiva, Area Manager, accompanied Gresham in the interview with Bonilla to serve as a translator. In their interviews with Gresham and Valdiva, both employees denied the allegations and denied having ever said anything to Villa. At the close of the investigation, Gresham fired Villa, telling her that he concluded that she fabricated the story.

Villa subsequently filed suit, alleging that she was terminated in retaliation for reporting suspected sexual harassment. Discovery confirmed that Villa had not fabricated the story. In her deposition, Bonilla admitted that she lied to Gresham, and established that Villa was truthful in reporting the contents of their conversation. However, Bonilla continued to deny that the restaurant’s General Manager had in fact offered her a raise in exchange for sex.

On June 7, 2017, the 4th Circuit issued an opinion affirming the District Court’s grant of summary judgment in favor of the employer. The primary issue was whether Cava’s termination of Villa for its incorrect conclusion that she fabricated the sexual harassment allegations could satisfy the but-for causation threshold for retaliation under Title VII. Villa argued that the now-established fact that her complaint was made in good-faith meant her termination was retaliatory, and that Cava’s admission that it terminated her for reporting the later unsubstantiated allegations was direct evidence of retaliatory animus.

In affirming the lower court’s ruling, the Villa Court focused almost exclusively on the opposition clause—which punishes employers for discriminating against employees because the employee has opposed a practice made unlawful by Title VII—rather than the participation clause, which protects employees who have “made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing” under Title VII. The Court made it clear, however, that Gresham’s belief that Villa made up the allegations severed the causal chain under either clause, stating that “the desire to retaliate was [not] the but-for cause of the challenged employment action.”

The cursory treatment given to the participation clause in this case is perplexing given the low standards imposed by the district court on the employer to investigate claims of this nature. The lower court determined that “any lack of thoroughness by Cava in investigating Villa’s misconduct” could not give rise to Title VII liability. In other words, query whether an employer is free to conduct a half-hearted investigation into sexual harassment allegations, determine there is no factual basis for these allegations, and fire the employee for reporting allegations which were not substantiated by that same half-hearted investigation. This then begs the question: When an employee reports harassment, how much of an investigation must a supervisor personally engage in before relaying the allegations to the supervisor in order to be protected under Title VII?

Often times rumors—especially those of a sexual nature—can create harms Title VII should, and was intended to, protect against. Although this is an unusual fact pattern, with a recanting witness that subsequently confirmed the Plaintiff’s version of the facts, Villa v. CavaMezze Grill, LLC leaves open the question of whether a supervisor should report harassment without being certain of the veracity of the complainant.

Michael Kornbluth is the Managing Partner of Taibi Kornbluth Law Group, P.A. and the incoming Vice-Chair of the NCBA Labor & Employment Law Section.  Joseph Hjelt is a third year law student at the University of North Carolina School of Law.