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Employer's Good Faith Belief--though Incorrect--Leads to Termination: No Title VII Retaliation Found

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In Villa v. Cavamezze Grill, LLC, the plaintiff--a restaurant manager--reported to the Director of Operations that two employees claimed that a third employee offered them raises in exchange for sex. The DOO notified the CEO who instructed him to investigate. 

The investigation was undertaken by the DOO himself. He interviewed the alleged victims both of whom were, by then, former employees. One of the interviews took place over the phone, and the other was conducted in a restaurant with an area manager acting as interpreter due to a language barrier. The former employees both denied having disclosed sexual harassment to Villa. The DOO concluded that Villa had fabricated the claims and made a false report so he fired her. Villa filed a retaliation complaint with the EEOC and, after no resolution could be reached, Villa sued her former employer alleging Title VII retaliation.

During a deposition, one of the accusers acknowledged that Villa had, in fact, accurately reported her disclosure of sexual harassment, and explained that she lied to the investigating DOO when she denied ever having disclosed sexual harassment to Villa. Villa's termination was based upon the DOO's sincere belief that she had concocted the sexual harassment allegations. The Fourth Circuit affirmed the lower court's decision in favor of the employer.

Cavamezze Grill argued that even though it had incorrectly concluded Villa had made a false report of harassment, her termination did not constitute Title VII retaliation. Villa did not dispute that, at the time of her termination, her employer believed she was lying based on the former employees' denials. Villa conceded that her employer's true reason for terminating her was its conclusion that she had fabricated the report. Despite this, Villa argued that her employer's honest belief was irrelevant because she had acted in good faith when she reported the sexual harassment. In the alternative, Villa argued that there was a factual dispute whether Cavamezze Grill's investigation had been adequately thorough. The court rejected these arguments. Furthermore, the court concluded that neither Villa's actual truthfulness, nor any lack of thoroughness in the employer's investigation could be the basis for Title VII liability in this case.

Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the employer's action. Here, Villa conceded that her termination would have occurred regardless of any retaliatory motivation on the part of her employer. The Fourth Circuit, citing Thompson v. North American Stainless, noted that because "the statute's focus is the employer's subjective motivation for the action, the facts the decision maker actually perceived matter. If an employer, due to a genuine factual error, never realized that its employee engaged in protected conduct, it stands to reason that the employer did not act out of a desire to retaliate for conduct of which the employer was not aware."

In conclusion: (1) An employee who fabricates a claim and knowingly makes a false report is not engaging in protected activity and (2) an employer concluding, in good faith, that an employee has fabricated a claim and made a false report may discipline or fire that employee even if its conclusion is incorrect.

When an employer is faced with a "he said, she said" set of facts involving employees and the employer disbelieves one of them, it can discipline or fire that employee as long as its choice is an honest choice. The employer is not liable as long as its action was taken in the good faith belief that an employee engaged in misconduct. However, the Villa court's decision did warn employers against undertaking an "obviously inadequate investigation" that could tend to show that the alleged employee misconduct was actually a pretext for a prohibited retaliatory motive.

Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the employer's action. Here, Villa conceded that her termination would have occurred regardless of any retaliatory motivation on the part of her employer. The Fourth Circuit, citing Thompson v. North American Stainless, noted that because "the statute's focus is the employer's subjective motivation for the action, the facts the decision maker actually perceived matter. If an employer, due to a genuine factual error, never realized that its employee engaged in protected conduct, it stands to reason that the employer did not act out of a desire to retaliate for conduct of which the employer was not aware."

In conclusion: (1) An employee who fabricates a claim and knowingly makes a false report is not engaging in protected activity and (2) an employer concluding, in good faith, that an employee has fabricated a claim and made a false report may discipline or fire that employee even if its conclusion is incorrect.

When an employer is faced with a "he said, she said" set of facts involving employees and the employer disbelieves one of them, it can discipline or fire that employee as long as its choice is an honest choice. The employer is not liable as long as its action was taken in the good faith belief that an employee engaged in misconduct. However, the Villa court's decision did warn employers against undertaking an "obviously inadequate investigation" that could tend to show that the alleged employee misconduct was actually a pretext for a prohibited retaliatory motive.

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