Employees Can Proceed with Claim Employer Sued Them for Alleging Discrimination

A recent decision by the United States District Court for the District of New Jersey recognizes that an employer filing a lawsuit against an employee because he asserted a discrimination claim against it can be an act of unlawful retaliation in violation of the New Jersey Law Against Discrimination (“LAD”) and Title VII of the Civil Rights Act of 1964 (“Title VII”).

Employer's lawsuit can be act of discrimination against employeeThe retaliation claim was asserted by Jean-Claude Franchitti and Vartan Piroumian, two former employees of Cognizant Technology Solutions Corporation and Cognizant Technology Solutions U.S. Corporation.  Mr. Franchitti was Cognizant’s Chief Architect and Assistant Vice President, and Mr. Piroumian was its Principal Architect and Enterprise Architect.

Mr. Franchitti and Mr. Piroumian each previously asserted discrimination and retaliation claims against Cognizant.  Mr. Franchitti filed a Charge of Discrimination with the United States Equal Opportunity Commission (“EEOC”) asserting age discrimination, national origin discrimination and retaliation, as well as a subsequent lawsuit in California asserting the same claims, a claim under the False Claims Act alleging the company was engaging in visa fraud, and a lawsuit in New York alleging retaliation.  Mr. Piroumian has filed two Charges of Discrimination against Cognizant with the EEOC alleging unlawful discrimination and retaliation.

Cognizant subsequently filed a lawsuit against Mr. Franchitti and Mr. Piroumian in the District of New Jersey, claiming they violated the non­disclosure agreements (“NDAs”) they signed when they worked for the company, and related provisions in the Company’s  Employee Handbook and Code of Conduct.  In particular, in the lawsuit in California, Mr. Franchitti and Mr. Piroumian produced files containing every email they sent or received while they worked for Cognizant.  Cognizant claimed they violated the NDAs, Employee Handbook and Code of Conduct by keeping those emails after the company fired them.  Cognizant did so even though Mr. Piroumian received a notice instructing him to preserve all evidence relating to his claims against the company while he still was employed by it.

In response to Cognizant’s lawsuit, Mr. Franchitti and Mr. Piroumian filed counterclaims alleging the company violated the LAD and Title VII by bringing its lawsuit against them in retaliation for asserting their discrimination and retaliation claims against it.  They claim Cognizant’s lawsuit is seeking to require them to pay back the millions of dollars of compensation they earned when they worked for it, and to coerce them to settle or withdraw their pending discrimination and retaliation claims.  They also claim Cognizant has not taken similar actions against other employees who kept proprietary information and confidential documents after their employment with it ended.

Cognizant filed a motion to dismiss Mr. Franchitti and Mr. Piroumian’s counterclaims. However, on November 2, 2023, in Cognizant Technology Solutions Corp.  v. Franchitti, the court denied its motion.

The Court explained that Mr. Franchitti and Mr. Piroumian engaged in activities protected from retaliation by the LAD and Title VII, including filing their discrimination and retaliation claims with the EEOC, and Mr. Franchitti filing lawsuits in California and New York.

The District Court concluded that filing a lawsuit against an employee can be actionable under the LAD and Title VII.  Relying on prior precedent, it recognized a “‘lawsuit no doubt may be used by an employer as a powerful instrument of coercion or retaliation’” that “can have a ‘chilling effect . . . upon an employee’s willingness to engage in protected activity.’”  The Court further ruled that an employee who claims his employer’s lawsuit is retaliatory does not have to prove the employer’s lawsuit is baseless to prove it is retaliatory.  Rather, to survive a motion to dismiss the employee merely must show a “causal link between the protected activity” and the filing of the lawsuit.  The Court concluded that Mr. Franchitti and Mr. Piroumian have done so.

Accordingly, the Court denied Cognizant’s motion to dismiss Mr. Piroumian and Mr. Franchitti’s counterclaims, thereby giving them an opportunity to try to prove that Cognizant’s lawsuit against them is retaliatory.

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