Retaliation in the Workplace
- Aug 11
- 4 min read
Workplace retaliation can create serious legal and financial risks for businesses of any size. It can happen when an employee is treated negatively after reporting workplace misconduct, participating in an investigation, filing a complaint, or exercising another legally protected right.
For employers, understanding what workplace retaliation looks like and how to reduce the risk of retaliation claims is an important part of protecting both employees and the business.
What Is Retaliation in the Workplace?
Workplace retaliation can occur when an employee is treated negatively because they reported a workplace issue or exercised a legally protected right.
For example, an employee may report discrimination or harassment, participate in a workplace investigation, file a complaint, request a legally protected accommodation, or raise concerns about potentially unlawful workplace practices.
If that employee is later fired, demoted, given fewer hours, denied opportunities, or treated unfairly because of their actions, they may claim that the employer retaliated against them.
Importantly, an employee may still raise a retaliation claim even if their original complaint does not ultimately result in a finding against the employer.
What Are Examples of Workplace Retaliation?
Retaliation is not limited to firing an employee. Depending on the circumstances, examples may include:
Terminating an employee
Demoting an employee
Reducing their hours or compensation
Removing responsibilities
Denying a promotion
Giving an unfair negative performance review
Reassigning an employee to less desirable duties or shifts
Excluding an employee from professional opportunities
Harassing or intimidating an employee after a complaint
Treating an employee differently after they report a workplace concern
Not every negative employment decision is retaliation. Employers can still make legitimate decisions based on performance, conduct, restructuring, or other lawful business reasons.
However, clear and consistent documentation can be especially important when an employment decision is made after an employee has filed a complaint or raised a workplace concern.
What Is a Protected Activity?
A protected activity is an action an employee can legally take without being punished for doing so.
Depending on the circumstances and applicable laws, examples may include:
Reporting workplace discrimination
Reporting sexual or other unlawful harassment
Participating in a workplace investigation
Filing a discrimination complaint
Requesting a legally protected accommodation
Raising concerns about employment practices the employee believes may be unlawful
Employee protections can vary depending on federal, state, and local laws.
Why Are Retaliation Claims a Risk for Employers?
Retaliation claims can be costly and time-consuming for businesses to manage.
Even when an employer believes an employment decision was justified, questions may arise if the decision happens shortly after an employee reports a problem or participates in an investigation.
A retaliation claim may lead to:
Legal defense costs
Settlements or judgments
Time spent by management responding to the dispute
Workplace disruption
Damage to employee trust
Reputational damage
This is why businesses should have clear procedures for handling complaints, documenting employment decisions, and training managers on how to respond appropriately when employees raise concerns.
How Can Employers Reduce the Risk of Workplace Retaliation?
Businesses can take practical steps to strengthen their employment practices and reduce the risk of retaliation claims.
1. Establish Clear Anti-Retaliation Policies
Employee handbooks and workplace policies should clearly state that retaliation is prohibited and explain how employees can safely report workplace concerns.
2. Train Managers and Supervisors
Managers should understand how to respond when an employee makes a complaint and recognize that their behavior following the complaint can create additional risk for the business.
3. Document Employment Decisions
Performance issues, disciplinary actions, promotions, demotions, and terminations should be documented consistently.
Clear records can help demonstrate the legitimate business reasons behind employment decisions.
4. Investigate Complaints Promptly
Employee concerns should be taken seriously and handled through a clear and consistent investigation process.
5. Monitor the Workplace After a Complaint
Employers should pay attention to how an employee is treated after raising a concern, particularly by managers or coworkers involved in the original complaint.
Does EPLI Cover Workplace Retaliation Claims?
Employment Practices Liability Insurance (EPLI) may help protect businesses against certain workplace retaliation claims, depending on the terms, conditions, exclusions, and limits of the policy.
EPLI is designed to address a range of employment-related risks and may include claims involving retaliation, discrimination, harassment, wrongful termination, and other workplace issues.
For businesses with employees, EPLI can be an important part of a broader strategy for managing employment-related risks.
Frequently Asked Questions About Workplace Retaliation
Can an employee be fired after making a workplace complaint?
Making a workplace complaint does not automatically prevent an employee from being terminated for legitimate and lawful reasons. However, employers should make sure the decision is not connected to the complaint and that the legitimate reasons for the termination are properly documented.
Is retaliation always termination?
No. Retaliation can take many forms. Depending on the circumstances, it may include demotion, reduced hours, denial of a promotion, undesirable assignments, harassment, or other negative treatment.
Can retaliation happen after a harassment complaint?
Yes. An employee may claim retaliation if they believe they were treated negatively because they reported harassment or participated in an investigation.
Can small businesses face retaliation claims?
Yes. Workplace retaliation claims are not limited to large corporations. Small and growing businesses should also establish clear workplace policies, documentation procedures, and processes for handling employee complaints.
Protect Your Business Against Employment-Related Risks
Strong workplace policies, documentation, and management practices can help reduce employment-related risks, but disputes can still happen.
CCIS helps businesses understand their risks and find insurance solutions that fit their operations, workforce, and coverage needs.
