On Friday, the Second Circuit held that a company’s failure to investigate an in-house race discrimination complaint is not an "adverse employment action" that can subject.  (H/T Wait a Second).

The case, Fincher v. Depository Trust (download here), provides some much needed guidance on what rises to the level of an action that an employee can claim retaliation for.  As the court is quick to note:

We have said that "there are no bright-line rules" with respect to what constitutes an adverse employment action for purposes of a retaliation claim, and therefore "courts must pore over each case to determine whether the challenged employment action reaches the level of ‘adverse.’" Wanamaker v. Columbian Rope Co., 108 F.3d 462, 466 (2d Cir. 1997). We are of the view nonetheless that, at least in a run-of-the-mine case such as this one, an employer’s failure to investigate a complaint of discrimination cannot be considered an adverse employment action taken in retaliation for the filing of the same discrimination complaint.

So what does rise to the level of an adverse employment action? Again, the court provides some guide posts but leaves the door open to the idea that there might be cases that would rise to the level that it hasn’t yet seen:

"Affirmative efforts to punish a complaining employee are at the heart of any retaliation claim." [citation omitted] An employee whose complaint is not investigated cannot be said to have thereby suffered a punishment for bringing that same complaint: Her situation in the wake of her having made the complaint is the same as it would have been had she not brought the complaint or had the complaint been investigated but denied for good reason or for none at all. Put another way, an employee’s knowledge that her employer has declined to investigate her complaint will not ordinarily constitute a threat of further harm, recognizing, of course, that it would hardly provide a positive incentive to lodge such a further challenge.

Indeed, it suggests that a failure to investigate could be an adverse employment action in some set of circumstances — just not here.

Notably, the court states that its rule would prevent frivolous cases from being brought:

A contrary rule could have odd consequences. A person not in fact discriminated against could complain of discrimination nonetheless. If the miffed accused employer were, because of his or her anger, to decline to investigate what was in fact a false claim, the employee might have a viable suit for retaliatory failure to investigate. We do not think that to be the law.

The case discusses other aspects of discrimination law including a hostile work environment.

For employers, the case is a tricky one because of the advice typically given to investigate claims of discrimination. What this means, however, is that a retaliation claim isn’t an automatic claim that will follow if the investigation isn’t done to the employee’s satisfaction.