OK to place employee on paid leave pending investigation

Ever since the U.S. Supreme Court’s landmark Burlington Northern retaliation decision in 2006, employers have been struggling with exactly what to do while investigating wrongdoings. One vexing issue has been whether it could be retaliation to place an employee on paid administrative leave pending an investigation. Under Burlington, it’s retaliation if an employer’s “adverse action” would dissuade an employee from complaining about discrimination in the first place.

Now the 7th Circuit Court of Appeals, which covers Indiana employers, has ruled that placing an employee on paid leave pending an investigation isn’t an adverse action.

Recent case: Derrick Nichols, who is black, filed a complaint along with several other black Southern Illinois University police officers. They alleged that they had been unfairly denied promotions and been assigned to a predominantly black campus because of their race. The university investigated and found their allegations baseless, and both the trial court and the 7th Circuit Court of Appeals agreed.

But Nichols also had a retaliation claim. Nichols had been placed on paid administrative leave after he tackled an unstable woman as she tried to run into a busy street during commencement. He was allowed back after passing a fitness-for-duty test. But he sued, alleging that by placing him on leave, the university was retaliating against him for his earlier discrimination complaints.

The 7th Circuit Court of Appeals dismissed his claim. It said a short, paid administrative leave was not retaliation.  (Nichols, et al., v. Southern Illinois University, No. 06-2688, 7th Cir., 2007)

Final note: Of course, a lengthy, paid administrative leave with no end in sight might be a different case. If you do use paid leave, make sure you move the process forward. Paid leave isn’t a substitute for final action.