From the November 2006 issue of Entrepreneur

Courts around the country have argued for years over what constitutes retaliation in the workplace. Does an employee have to suffer drastic measures, such as a demotion or getting fired, before action can be called retaliation? Or can something that a "reasonable person" would see as unpleasant-say, transferring an employee to an undesirable location--constitute retaliation? Many courts have fallen somewhere in the middle.

"The law in that area was all over the place, from state to state and the federal courts," says Gregory Keating, an employment attorney in the Boston office of Littler Mendelson.

In June, the U.S. Supreme Court widened the definition of work-place retaliation to include any "materially adverse" action that might keep a "reasonable" employee from complaining. For employers, this could include something as simple as giving a negative job review. But there's more: Even off-the-job instances, like not favorably recommending an employee for membership in your country club, could now be considered employer retaliation. "The Supreme Court has basically said [retaliation is] any type of adverse action," Keating says. "It doesn't have to be employment [related]. It doesn't have to be 'I changed your job, cut your pay, moved your office or changed your responsibilities.' It can be anything."

Management tasks, such as scheduling that involves an employee who has previously filed a claim and now has even greater protection, will be tougher for employers. But there's a silver lining. "Employees still have to show that it was the fact they engaged in protected activity that caused you to inflict that injury on them," says Gregg Lemley, a labor and employment partner at the St. Louis office of Bryan Cave.

Still, Keating predicts corporate legal expenses will climb as more cases reach juries. While the courts wrangle with this decision, the best thing you can do is document everything and be extremely consistent with your HR decisions and the rationale behind them. "As soon as you get arbitrary," Lemley says, "you open the door for an employee to make the claim of retaliation more successfully."