No New Math Here: A Recent Illinois Supreme Court Decision Clarifies that “Causal Nexus” ≠ Causation in Retaliatory Discharge Actions

The Illinois Supreme Court recently reiterated its position that common law retaliatory discharge claims should be treated the same as any other tort claim when it comes to the issue of causation. In Michael v. Precision Alliance Group, LLC, 2014 IL 117376, the state’s high court reaffirmed its prior rulings on the elements of retaliatory discharge, and again declined to apply the burden-shifting framework used for other employment cases to a claim of retaliatory discharge. The Court also drew an important distinction between proving a “causal nexus” for purposes of establishing a prima facie case and proving causation for purposes of establishing liability.

Plaintiffs Wayne Michael, Alan Hohman, and Craig Kluemke sued their former employer, Precision Alliance Group, LLC (“Precision”), alleging that they were discharged in retaliation for their part in reporting violations of Illinois law to the Illinois Department of Agriculture, Bureau of Weights and Measures (“Department”). Precision is an agricultural supply company that sells soybean seeds and is required by law to fill their seed bags to a weight that matches the weight printed on the bag. According to Plaintiffs, they were terminated after reporting that Precision was selling underweight bags of seed.

According to the evidence presented at trial, Plaintiffs weighed bags of seed and passed on the lot numbers and locations of underweight bags to a disgruntled former employee, who then reported Precision to the Department. Inspectors arrived and issued stop sale orders, which led the company to stop production for 10 days in order to weigh and correct all underweight seed bags in the warehouse. According to Plaintiff Hohman, one member of management threatened to terminate employees that were involved with the issue being reported to the Department. A second member of management told Plaintiffs Kluemke and Michael that if the company determined that current employees had given information to the Department, it would be “very job threatening.”

A few weeks later, Plaintiff Hohman was terminated for engaging in horseplay with a forklift that nearly caused another forklift to flip over. Precision’s general manager testified that none of the management staff was aware that Hohman had disclosed information about underweight bags at the time that he was terminated for the forklift incident. The two other plaintiffs, Michael and Kluemke, were terminated several weeks later, along with two other employees at that particular location, due to a reduction in force. Members of Precision’s management team testified at trial that Michael and Kluemke were chosen for a number of reasons, including issues with motivation and attitude. As with Hohman, the managers at Precision testified that they were not aware that Michael or Kluemke were involved in reporting underweight bags at the time they were terminated.

After a bench trial, the circuit court entered judgment in favor of Precision, finding that the reasons given for terminating the three employees were legitimate and nondiscriminatory, and that the Plaintiff failed to prove that the reasons given were pretextual. This ruling resulted from the circuit court’s application of the three-part burden-shifting analysis announced by the United States Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), which initially requires a plaintiff to establish a “causal nexus” between the adverse employment action of which he complains and an activity protected by law. The circuit court found that a “causal nexus” existed due to the short period of time between Plaintiffs reporting the underweight bags and their respective terminations. Once a plaintiff has established a causal nexus, the burden shifts to the defendant to articulate a legitimate and nondiscriminatory reason for the employment decision. If the defendant is able to do so, the burden shifts back to the plaintiff to prove by a preponderance of the evidence that the defendant’s proffered reason for the adverse employment action is a pretext. Thus, the burden shifts back and forth between plaintiff and defendant. See Maye v. Human Rights Comm’n, 224 Ill. App. 3d 353, 360 (1991), applying the McDonnell Douglas burden-shifting test.

This analysis is familiar to many employment law attorneys, particularly those who litigate in federal court. However, the Illinois Supreme Court explicitly rejected the application of this three-part test to retaliatory discharge claims in its 1998 decision, Clemons v. Mechanical Devices Co., 184 Ill. 2d 328, 338-39 (1998):

We do not believe there is anything unique about the tort of retaliatory discharge that requires a deviation from the traditional tort law approach to the allocation of proof. Cases brought for retaliatory discharge based on an employee’s filing of a workers’ compensation claim should be reviewed using traditional tort analysis. We believe that a contrary holding would, in essence, expand the tort of retaliatory discharge by reducing plaintiff’s burden of proving the elements of the tort. Because we refuse to expand the tort of retaliatory discharge, we decline plaintiff’s invitation to adopt the three-tier allocation of proof method in retaliatory discharge cases. (Internal citations omitted).

In light of this Supreme Court ruling, it is unclear why the circuit court in Michael applied the McDonnell Douglas burden-shifting test to the retaliatory discharge claims against Precision. Unfortunately, the decision was further complicated on appeal by the appellate court’s focus on the lower court’s finding that a “causal nexus” existed between Plaintiffs’ reporting underweight seed bags and their subsequent terminations. According to the appellate court, this finding amounted to a finding of causation, which meant that the circuit court, in its role as the trier of fact, had concluded that Plaintiffs had been discharged for reporting the underweight bags. See Michael v. Precision Alliance Group, LLC, 2014 IL App (5th) 120517 – U. This conclusion was the result of the appellate court’s concern that requiring Plaintiffs to prove a “causal nexus” initially, and then prove pretext after Defendant offered a legitimate, nondiscriminatory reason, was an improper increase of the plaintiff’s burden. “In other words, instead of requiring Precision to prove its defense, the trial court required plaintiffs to prove causation and disprove Precision’s defense, thereby enhancing plaintiffs’ burden of proof.” Id. at ¶ 13. The circuit court’s decision in favor of Precision was reversed and remanded for further proceedings on Plaintiffs’ damages.

The Supreme Court weighed in with its decision on December 4, 2014. The Court began its analysis by noting the history of common law retaliatory discharge and the fact that it runs counter to the general rule in Illinois that at-will employees may be discharged at any time for any reason. Michael, 2014 IL 117376, ¶¶ 28-30. The Court went on to enumerate the necessary elements for sustaining a cause of action for retaliatory discharge: (1) the employer discharged the employee; (2) the discharge was in retaliation for the employee’s activities (causation); and (3) the discharge violates a clear mandate of public policy. Id. at ¶31, citing Turner v. Memorial Medical Center, 233 Ill. 2d 494, 500 (2009). The Court also discussed the fact that a retaliatory discharge defendant is not required to come forward with an explanation for the discharge, unlike the burden-shifting test. However, if an employer does come forward “and the trier of fact believes it, the causation element required to be proven is not met.” Id. at ¶ 32, citing Clemons, 184 Ill. 2d at 336.

It is this final point that led the Court to ultimately agree with the circuit court’s decision in favor of Precision, even where the circuit court applied the wrong standard. Noting the appellate court’s emphasis on the “causal nexus” between the plaintiffs' report of underweight bags and their discharge, the Court held that a finding of a “causal nexus” under the burden-shifting standard “is not the equivalent of a finding of actual causation under Clemons.” Id. at ¶36. While the circuit court may have applied the wrong standard, in its role as the trier of fact it determined that Precision’s reasons for discharging Plaintiffs were valid and nonpretextual. This means that the circuit court ultimately held that Plaintiffs did not prove causation because they failed to prove the second element of their prima facie case for retaliatory discharge: that the discharge was in retaliation for their protected activities. Thus, judgment in favor of Precision was proper.

The significance of this decision lies not only in the clarification of the standard for retaliatory discharge, but in the clear statement from the Illinois Supreme Court that establishing a “causal nexus” under the McDonnell Douglas burden-shifting analysis is not the same as proving causation. Were that the case, plaintiffs could recover for retaliatory discharge every time there is a temporal relationship between protected conduct and discharge, even where a finder of fact believes that the employer’s reason for discharge was unrelated to the protected conduct. This case reinforces the Court’s earlier decree that retaliatory discharge should be treated the same as any other tort and requires a factual finding of causation. While the lesser burden of proving a “causal nexus” is sufficient for establishing a prima facie case, the heavier burden of proving causation is required for imposing liability on an employer for retaliatory discharge.

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Kerri Forsythe

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