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The Employer Handbook Blog
Can Refusing a Settlement Meeting Support a Retaliation Claim?
A boss wanted to discuss settling an employee’s harassment claims without lawyers present. That invitation came with more baggage than the calendar entry suggested.
TL;DR: The Second Circuit revived an employee’s retaliation claims after finding that her refusal to discuss settlement plausibly communicated continued opposition to discrimination. She still has to prove her case.
A settlement meeting with the employee’s boss
An attorney for a luxury-goods company alleged she was sexually harassed and assaulted at work. She reported the conduct internally and sued in 2019. Her claims were sent to arbitration, and she continued publicly opposing the alleged mistreatment, including through congressional testimony.
In August 2022, her new supervisor requested a one-on-one meeting to discuss settling her pending claims. She declined the invitation or did not respond, according to different passages in the complaint.
She alleged that afterward, he required advance approval for outside speaking engagements, interfered with her work communications, and ignored her in weekly one-on-one meetings except to criticize her. She also alleged exclusion from a colleague’s farewell dinner and an employee sale.
The termination allegedly departed from company practice
On December 1, 2022, she was told her employment would end effective January 1, 2023. According to the complaint, the supervisor said the decision was unrelated to her performance and required her to leave the office within an hour.
She alleged that executives ordinarily were terminated early Friday morning to avoid an audience. Instead, a mandatory Thursday team meeting allegedly ensured colleagues would see her packing while staff counted down her remaining time.
She sued for retaliation, but a lower court dismissed her claims. On appeal, a key question took the Second Circuit back to the settlement invitation: Could her refusal to discuss settlement qualify as protected activity?
Protected activity includes more than filing the original complaint
Title VII protects employees from retaliation for opposing discrimination. That’s called protected activity. Filing a discrimination lawsuit qualifies, as can reporting harassment to management. Here, the question was whether declining a settlement meeting could also communicate opposition to discrimination.
Filing a discrimination claim tells an employer that the employee believes she was unlawfully mistreated and wants a remedy. Her original discrimination claims were still pending in arbitration when her supervisor requested the settlement meeting. The court explained that refusing to discuss settling those claims could, in context, communicate that she was continuing to oppose the alleged discrimination.
The key question was what the employer understood, or reasonably could have understood, from her refusal. She had spent more than three years pursuing her claims and publicly challenging the alleged mistreatment, through litigation, arbitration, and congressional testimony. Against that backdrop, the supervisor reasonably could have understood her refusal as communicating that she still believed she had suffered discrimination and wanted a remedy.
The employer argued that she never explained that she was declining the meeting to continue objecting to discrimination. But opposition can come through in conduct without an express explanation. Whether she declined the invitation or simply did not respond, either version could plausibly communicate continued opposition here.
That history distinguished cases involving employees who refused to sign releases before indicating that they believed they had experienced discrimination. Those employers lacked the context to interpret the refusal as opposition to discrimination. Here, the employer knew what she had been challenging for years.
The court expressly declined to make every refusal to settle protected activity. Context controls. At this stage, the court had to accept her allegations as true and draw reasonable inferences in her favor. Later evidence could produce a different result.
She also had to plausibly connect the refusal to her termination. The court considered the three-to-four-month gap alongside the alleged criticism, interference, exclusion, and departure from usual termination practices. Together, those allegations were enough to revive her retaliation claims under Title VII and New York state and city law.
Employers should review what the manager knew about the discrimination complaints, subsequent supervision changes, and termination procedures after an unsuccessful settlement overture.
Three risks when settlement discussions involve a current employee
1. Protected activity can extend beyond a formal complaint
The Second Circuit recognizes informal complaints and conduct that implicitly communicates opposition to discrimination as potentially protected activity. Employers should consult counsel about whether the employee’s conduct was protected under the applicable law.
2. Everyday supervision can help connect the dots
Alleged criticism, communication restrictions, and exclusion helped connect the refusal to the termination. HR should review intervening treatment alongside timing.
3. Termination logistics can become evidence
Departures from usual termination practices helped support the claim. HR should scrutinize unexplained changes in timing, audience, and exit procedures.
A settlement overture can become another event in the retaliation timeline, even years after the original complaint.