Drawing the Line: Niswander's Balance Between Employer Confidentiality Interests and Employee Title VII Anti-Retaliation Rights

AuthorNicholas M. Strohmayer
PositionJ.D. Candidate, The University of Iowa College of Law, 2010
Pages03

J.D. Candidate, The University of Iowa College of Law, 2010; B.S., Northern Illinois University, 2007. Thanks to all those involved in publishing this work including: the Iowa Law Review Editorial Board and Student Writers for their hard work and excellent editorial suggestions; my family and friends for their support; and especially my brother, Jeremy, for his time and effort helping me polish this Note.

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I Introduction

Recently, employers have confronted issues of employee loyalty by developing confidentiality policies.1 The need to do so surged after the 1991 amendments to Title VII of the Civil Rights Act of 1964 ("Title VII"), which encouraged employees to bring employment-discrimination claims.2 By 1994, the courts tended to withhold Title VII anti-retaliation protection from employees who opposed an employer's discriminatory actions and, in doing so, breached employer confidentiality policies.3 During this time period, courts valued employers' rights over those of employees. However, courts have since found it necessary to protect some employee breaches of confidentiality.4 This new trend created uncertainty in the law and caused difficulty in understanding what circumstances would justify an employee's breach.

Some hypotheticals help demonstrate this uncertainty. In the first situation, an employer has a confidentiality policy to promote its interests and business plan. An employee joins the company and promises to uphold the employer's confidentiality policy. Later, the employee discovers discriminatory policies and brings suit against the employer. Hoping to obtain a more-lucrative settlement, the employee takes confidential information. In this example, the employer could justifiably discharge the employee for violating the confidentiality policy.

While this first hypothetical appears black and white, the next example illustrates the uncertainty that the Sixth Circuit's recent decision created.5 A supervisor, from an unrelated department, inadvertently copies an employee Page 1040 on an e-mail intended only for supervisors. The e-mail clearly states that it contains confidential information related to the company's diversity policies and contains a disclaimer that it is for management personnel only. The employee then informs her supervisor that she mistakenly received the email, that she read the e-mail, and that she thought some of the policies were discriminatory. Her supervisor then angrily tells her that she breached company policy by reading it and said, "It's best that she forget about it." While walking back to her office, the employee decides that she should keep a copy of the e-mail and send it to her attorney to preserve evidence in case her employer fires her for reading and opposing the e-mail.

In this hypothetical, both sides may suffer harm-the employee may suffer from retaliatory action and the employer may suffer from the breach of confidentiality. To fairly resolve the problem, courts attempt to strike a balance between these competing interests. In Niswander v. Cincinnati Insurance Co., the Sixth Circuit developed a six-factor test to strike that balance.6 The court found these factors by briefly looking at various other cases and loosely stitching them together to create a totality-of-the-circumstances scenario.7 As such, the balancing test creates unpredictable and inconsistent results because it balances unlike terms to which judges give weight based on personal discretion rather than legal principles. To create more reliable and reasonable results, courts need to use an objective test to determine when an employee, who has breached an employer's confidentiality policy, deserves Title vII protection. The proposed reasonably-perceived-threat test would implicitly balance the competing interests by protecting an employee when a reasonable person in the same position as the employee would perceive a threat to his or her Title vII rights.

II Developing NISWANDER'S Test Under Title VII of the Civil Rights Act of 1964

Title VII of the Civil Rights Act of 1964 protects applicants and employees from discrimination based on "race, color, religion, sex, or national origin" in the workplace.8 Title Vll's Anti-Retaliation Clause further protects employees and applicants from retaliation by an employer where an employee opposes a discriminatory policy or participates in a discrimination suit.9 More specifically, the Opposition Clause within the Anti-Retaliation Clause protects applicants and employees from employer retaliation when the employees oppose an employer's discriminatory act or policy.10 Page 1041

In Niswander, the Sixth Circuit analyzed the Opposition Clause and determined that it did not protect an employee who was fired for taking confidential information and giving it to her lawyers.11 The majority developed a six-factor balancing test to determine whether the Opposition Clause protects an employee-who took and distributed confidential information in violation of an employer's policy-from retaliation.12

A Title VII's Opposition Clause

The Opposition Clause makes it "an unlawful employment practice for an employer to discriminate against any of his employees . . . because he has opposed any practice made an unlawful employment practice by this subchapter."13 The Clause protects both employees and applicants for employment who have opposed an unlawful practice under Title VII from retaliatory actions taken by an employer, employment agency, joint labor-management committee, or labor organization.14 To avoid the chilling effect of retaliation, courts have held that where an employee shows that his or her activity was in opposition to a practice that the employee reasonably believed at the time to be unlawful under Title VII, the employee's action may constitute an oppositional activity deserving of protection.15

Courts have interpreted this Clause as protecting a wide array of conduct,16 so long as the conduct is reasonable.17 Under the Opposition Page 1042 Clause, conduct is reasonable when the need to protect the employee's action outweighs the employer's need for free reign in managing the company.18 To determine when one need outweighs the other, courts must make a factual determination.19 When an employee appropriates and uses confidential information in violation of an employer's confidentiality policy, balancing becomes complicated.20 Further difficulties arise when an employee disseminates that information.21 Courts, in the latter situation, must also determine whether the dissemination of confidential information was reasonable under the circumstances.22 The sixth Circuit recently developed a balancing test to determine whether the opposition Clause protects an employee who takes and disseminates confidential information.23 Page 1043

B Niswander v. Cincinnati Insurance Co

In Niswander v. Cincinnati Insurance Co., the Sixth Circuit developed a new six-factor balancing test to determine whether an employee, in violation of the employer's confidentiality policy, reasonably took information from an employer and, therefore, qualifies for protection under Title Vll's opposition Clause.24 In this case, Niswander, a claims adjuster for Cincinnati Insurance Co., was sorting through documents to fulfill a discovery request in an Equal Pay Act claim.25 While doing so, she collected unrelated insurance-claims files containing confidential policyholder information.26She did so despite the fact that these files contained no specific evidence of retaliation27 because the files jogged her memory about instances of possible retaliation.28 Applying its balancing test, the court held that her actions were not oppositional activities.29

To deterimne what activities are reasonable, the court analyzed similar cases involving retaliation claims by employees who violated employer confidentiality policies.30 Although the court found no similar Sixth Circuit cases under the Title VII Opposition Clause,31 it did find that both the Eighth and Ninth Circuits previously applied balancing tests to determine whether the Age Discrimination in Employment Act's ("ADEA") Opposition Clause protected employees who violated employer confidentiality policies.32

In Kempcke v. Monsanto Co., the Eighth Circuit balanced an employee's innocent acquisition of confidential documents relating to discrimination33with the employer's right to have an undisrupted work environment.34 In this case, the employee inadvertently found the documents because they were left on a computer that the employer assigned to him.35 Relying heavily on the employee's innocent conduct, the court determined that Page 1044 reasonableness depended on a question of fact as to whether the employee, after appropriating the information, misused it and thus would not be protected by the ADEA's Opposition Clause.36

In O'Day v. McDonnell Douglas Helicopter Co., the Ninth Circuit balanced "an employer's interest in maintaining a 'harmonious and efficient' workplace with the protections of the anti-discrimination laws."37 The court held that the ADEA did not protect "stealing sensitive personnel documents,"...

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