Part 2 of 2: Supreme Court Rules That "Supervisors" Under Title VII Must Have Power to Take Tangible Employment Actions

On Monday, we blogged about the first of two recent U.S. Supreme Court decisions interpreting Title VII of the Civil Rights Act of 1964 (“Title VII”), University of Texas Southwestern Medical Center v. Nassar.  Today, we’ll discuss the second decision, Vance v. Ball State University, which addressed who is a “supervisor” for vicarious liability purposes under Title VII.  The decision provides clarity in a previously muddled area of law, and has important implications for employer liability for workplace harassment under Title VII.

As you probably know, Title VII prohibits discrimination in employment based on an individual’s race, color, religion, sex, or national origin, and similarly prohibits harassment resulting in a hostile work environment based on these characteristics.  The plaintiff in Vance was a catering assistant who filed a lawsuit claiming that she had been subjected to a racially hostile work environment at the hands of a catering specialist in her department.  Although the parties disagreed about whether the specialist was a supervisor, they did agree that she lacked authority to hire, fire, demote, promote, transfer or discipline the plaintiff.  The district (trial) court found that without this authority, the specialist was not a supervisor for whose actions the employer could be vicariously liable under Title VII.

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Part 1 of 2: The U.S. Supreme Court Issues Two Employer-Friendly Opinions On Title VII In Vance v. Ball State Univ. and Univ. of Tex. Southwestern Medical Center v. Nassar

On one day recently, the U.S. Supreme Court issued employer-friendly opinions in two separate and long-awaited cases interpreting Title VII of the Civil Rights Act of 1964 (known simply as “Title VII”), the primary federal employment discrimination statute.  While both cases change little about what employers should be doing day-to-day to prevent unlawful discrimination in the workplace, both may have profound effects on the ability of employers to successfully defend against Title VII claims.  In fact, this was such a big day at the Supreme Court for labor and employment law that we’re going to blog about it twice!  Today, we blog about one of those cases, University of Texas Southwestern Medical Center v. Nassar, in which the Court increased the burden of plaintiff’s asserting retaliation claims under Title VII by requiring that they show their protected conduct was the “but for” cause of the adverse employment action.  

Later in the week, we’ll blog about the other case, Vance v. Ball State University, in which the Court narrowed the definition of “supervisor” to only those with actual authority to hire and fire employees, limiting the situations where employers can be liable for the discriminatory acts of lower-level employees. 

Nassar Requires “But For” Causation In Title VII Retaliation Cases Based On That Statute’s Structure

Title VII, as any reader of this blog probably knows, is the granddaddy of all federal anti-discrimination statutes. First enacted in 1964, its primary provision, 42 USC § 2000e-2, prohibits employers from taking employment action against employees “because of such individual’s race, color, religion, sex, or national origin.”  In 1991, Congress amended Title VII to, among other things, lessen the burden of proof on causation; plaintiffs bringing discrimination claims under Title VII need only show that a discriminatory motive was “a motivating factor...even though other factors also motivated the practice.” 42 USC § 2000e-2(m).  In other words, plaintiffs need not show that a discriminatory animus on the part of a manager was the only or even primary motive behind the employment action—if the employee’s race, gender, etc. was considered at all, the company could be liable for discrimination.  (Section 2(m) did create affirmative defenses that allow the employer to avoid money damages in these so called “mixed motive” cases if it can show that it would have taken the adverse action anyway regardless of the discriminatory motivation).

 

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Fifth Circuit Sides With EEOC In Finding Lactation Discrimination Constitutes Title VII Violation

Last year, we posted about a decision from the Southern District of Texas in which the court ruled that firing a woman because she was lactating or breast-pumping did not amount to sex discrimination under Title VII or the Pregnancy Discrimination Act (PDA).  The Fifth Circuit Court of Appeals recently reversed the district court’s decision.  In a none-too-surprising opinion, the Fifth Circuit ruled that taking an adverse employment action against a woman because she is lactating or expressing breast milk is a cognizable sex discrimination claim because (1) it imposes upon women a burden that male employees do not suffer, and (2) lactation is a medical condition of pregnancy under the PDA. 

Is this earth-shattering news?  Probably not.  To most of us, it probably seems like common sense.  But the opinion likely does represent a significant victory for the EEOC, which now has another tool in its belt to pursue pregnancy discrimination claims.  Employers should be wise to know that pregnancy discrimination claims may now be viable for a longer period of time after childbirth than was the case prior to this ruling.  The district court essentially took the position that a woman does not fall within the protections of the PDA after she gives birth to her child.  Now, under the Fifth Circuit’s ruling, mothers could fall under the protections of PDA for as long as they are breastfeeding. 

The Fifth Circuit was careful to note, however, the Title VII and the PDA do not require employers to provide special accommodations for nursing mothers to pump breast milk.  Title VII and the PDA only prohibit an employer from taking an adverse employment action against a mother for lactating.  Although the Fifth Circuit was careful to note this distinction, employers should remember that under the recent amendments to the FLSA imposed by the Affordable Care Act, employers must provide breaks and a room for nursing mothers to pump.  Nursing mothers who are exempt under the FLSA are not afforded rights to pump in the workplace under either federal statute, but may be covered under applicable state statutes, which are summarized here

Legal Update: Transgender Employees Protected Under Title VII

On Friday, April 20, 2012, the EEOC issued a landmark ruling that intentional discrimination against a transgender individual is discrimination “based on … sex” and thus violates Title VII. Prior to this ruling, the EEOC generally declined to pursue discrimination claims that arose from transgender status or gender identity issues.

What does this mean for employers? In California, Oregon and Washington, state laws have protected transgender employees by prohibiting discrimination based on gender identity and gender expression. For employers in those states, this ruling raises the stakes: transgender employees with discrimination claims can now bring both state and federal claims, instead of being limited to a state court action. For employers in all states, the EEOC ruling provides new protections and is an important reminder of the evolving law of sex-based discrimination.

Read the entire alert here.

Are Remedies Available to Working Moms Who Experience "Lactation Discrimination"?

For many new moms returning to work after the birth of a child, pumping breast-milk is considered to be a necessary evil.  Necessary because pumping ensures that these mothers’ babies can continue to experience the many benefits of breast-milk, and helps the mothers to maintain their milk supplies, relieves painful engorgement, and prevents potentially serious medical conditions like mastitis.  Evil because, well, it is not exactly fun to do, especially if the workplace is not supportive.  The U.S. Centers for Disease Control reports that full-time work for new mothers is “significantly associated with lower rates of breastfeeding initiation and shorter duration,” due primarily to workplace barriers such as “a lack of flexibility for milk expression in the work schedule, lack of accommodations to pump or store breast-milk, concerns about support from employers and colleagues, and real or perceived low milk supply.”  Click here to view CDC's report.

One mother recently faced with this predicament is Donnicia Venters, who alleged in a federal lawsuit that her employer fired her while she was on maternity leave when she inquired about using a back room in the office to pump milk upon her return from leave.  The EEOC brought suit on Ms. Venters’ behalf in the United States District Court for the Southern District of Texas, asserting sex discrimination claims against the employer under Title VII.  See EEOC v. Houston Funding II, Ltd., Case No. 4:11-cv-02442 (S.D. Tex.).  Title VII makes it “an unlawful employment practice for an employer . . . to discharge any individual . . . because of such individual’s . . . sex.” 42 U.S.C. § 2000e-2(a)(1).  The Pregnancy Discrimination Act amended Title VII to state that “‘because of sex’ … include[s] … because of … pregnancy, childbirth, or related medical conditions ….” 42 U.S.C. §2000e(k).

United States District Judge Lynn N. Hughes (who is a male, for the record) recently granted summary judgment in favor of the employer, ruling that “[f]iring someone because of lactation or breast-pumping is not sex discrimination.”  In a rather conclusory fashion, the court reasoned that “lactation is not pregnancy, childbirth, or a related medical condition” and that any “pregnancy-related conditions” experienced by Ms. Venters ended on the day she gave birth to her daughter.  To see the full opinion click here.

In the few short days since it has been issued, this ruling has garnered much critical attention.  As many commentators have pointed out—and this seems quite obvious—only women can lactate, and lactation does not usually happen in the absence of childbirth.  The ruling therefore strikes many as illogical—how can firing someone for lactation or breast-pumping not be because of sex or a childbirth-related medical condition?  The EEOC has stated that it is considering whether to appeal the ruling.  The issue therefore remains far from settled. It remains to be seen whether the appellate court, or other judges who might be faced with this issue, will come to a different conclusion than Judge Hughes did.

Pumping mothers also have a new legal protection that Ms. Venters did not have when she gave birth to her baby in 2008.  Effective March 23, 2010, the Patient Protection and Affordable Care Act (also known as the Healthcare Reform Act) amended the Fair Labor Standards Act (FLSA) to require employers to provide a nursing mother break time to pump.  Specifically, covered employers must provide reasonable break time for an employee to express breast-milk for her nursing child for one year after the child’s birth, each time the employee has need to express milk.  See 29 U.S.C. § 207(r).  Employers must also provide a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast-milk.  Id.

There are, of course, several limitations to this protection.  The FLSA amendment does not require employers to pay employees for such break time.  Id.  The requirements also do not apply to employers with less than 50 employees, if such requirements would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.  Id.

Under this amendment, nursing mothers who experience “lactation discrimination” in the workplace might now have a remedy—albeit a limited one—under the FLSA.  The FLSA makes it illegal for an employer to “discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to [the FLSA].”  29 U.S.C. § 215.  In most jurisdictions, this provision applies to any employee who complains about an FLSA violation, either formally to an administrative agency, or informally to the employer.  A nursing mother who complains about her employer’s failure to provide reasonable break time for her to pump would therefore be protected by this anti-retaliation provision in the FLSA.  As the language of this anti-retaliation provision makes clear, however, the employee must actually complain to the employer in order to be protected.  Thus, if Judge Hughes’ opinion turns out to be the prevailing view and lactation is not protected under the Pregnancy Discrimination Act or Title VII, there is still a gap in protection, even with the FLSA amendment.  Nursing mothers who are simply fired for pumping at work before ever complaining about an employer’s FLSA violation would have no remedy.  In this scenario, a legislative amendment to Title VII, or legislation at the state level, might be the only potential source of protection.

In fact, many states have attempted to fill the gaps in protection for nursing mothers by passing their own legislation. A complete list of state laws enacted to protect breastfeeding can be found hereOf the states where Stoel Rives has offices, California, Oregon, and Minnesota each have laws that require employers to provide breaks for women to breastfeed or pump. To the extent these state laws are more robust than the FLSA amendment, they are not preempted.  see 29 U.S.C. § 207(r)(4).

Obama Jobs Bill Proposes To Ban Discrimination Against Unemployed

As almost everyone knows, last week President Obama presented a $447 billion jobs bill, called the American Jobs Act, to a joint session of Congress full of proposals designed to stimulate the lagging U.S. economy.  What many people probably don't know is that, tucked into the bill, is a provision that would make it unlawful for employers to refuse to hire someone because that person is unemployed.  This small part of the stimulus bill would create an entirely new protected class under federal discrimination law—the unemployed person.  If enacted it could expose employers to a raft of new employment discrimination lawsuits.

What The Bill Says

Section 375 of the proposed bill  actually has several anti-discrimination provisions.  First, it prohibits employers and employment agencies from refusing to hire an individual “because of the individual’s status as unemployed,” including prohibiting employers from directing employment agencies to do so. It also contains a broad anti-retaliation provision prohibiting employers from interfering or refusing to hire someone because the person reports a violation of the Act.  The Act will provide many of the same remedies available under Title VII of the Civil Rights Act—the same federal law that prohibits discrimination based on race, religion, or sex—including the right to file a charge with the Equal Employment Opportunity Commission (“EEOC”), or file a lawsuit to recover money damages and attorney fees.

The bill would also prohibit employers and employment agencies from expressly advertising in written job posts that unemployed persons are automatically disqualified from applying.

The Rub:  Full Employment...For Employment Lawyers

While the bill expressly states that it is not intended to preclude employers from considering an individual’s employment history or even from “examining the reasons underlying an individual’s status as unemployed,” that subtle distinction will be a small comfort to employers.  Employers routinely scrutinize employment history, and employment “gaps” on a resume have always been a red flag to hiring managers.  Under this new law, however, employers would need to walk a very fine line between scrutinizing only the “reasons underlying” unemployment, while avoiding letting the fact the person is unemployed to begin with affect a hiring decision. 

Those types of mental gymnastics are not only difficult for hiring managers to keep straight while reviewing job applicants, the distinction will be even harder to prove in court if the employer is later sued.  As a practical matter, any unemployed person rejected from a job could demonstrate a prima facie claim for discrimination simply by showing he or she was unemployed and then didn’t get the job.  Further, the cases will invariably turn on "yes you did, no I didn't" factual disputes about the hiring decision: did the employer make the decision because of reasons underlying the person's unemployment (lawful) or simply because the person was unemployed (unlawful)?  Because of those subtle factual nuances, and procedural rules that presume the truth of a plaintiff's allegations until trial, it could be virtually impossible to get even baseless claims dismissed before trial, such as at summary judgment.  That makes defending those cases much more difficult and expensive.

While much remains unsettled about the state of the U.S. economy, including whether Congress will even pass the American Jobs Act, one thing is very certain.  If the current anti-discrimination provision in the American Jobs Act passes, employers will be seeing a lot more discrimination claims from a whole new protected class of protected people--the unhired unemployed.

 

Idaho Supreme Court Rejects Lawsuit over Intra-Office Romance

On June 29, 2011, the Idaho Supreme Court unanimously upheld a district court ruling that a state worker could not maintain an action against her employer for wrongful discharge based on allegations that her supervisor’s intra-office romance and consequent favoritism toward his paramour created a hostile work environment. See Patterson v. State of Idaho Dep’t of Health & Welfare. In the first Idaho case of its kind, the Court found that paramour favoritism did not violate Title VII and therefore opposition to such activity is not “protected activity” under the Idaho Human Rights Act (“IHRA”).

The longtime Idaho Health & Welfare employee who initiated the action, Lynette Patterson, asserted that her boss’s affair with another worker resulted in favoritism toward the other worker and created a hostile work environment for her and others in her unit. Following Patterson’s initial complaints of her supervisor’s misconduct, the department launched an investigation into her allegations and found that although Patterson’s supervisor did in fact have an inappropriate relationship with another employee in violation of the department’s internal policy, there was no evidence to support preferential treatment. Thereafter, Patterson claims she was the victim of retaliation. Upon receiving a performance evaluation stating that she had failed to achieve performance standards, she quit her job, alleging that she was constructively discharged.  

Patterson’s complaint against the department asserted constructive discharge under the IHRA and violation of the Idaho Protection of Public Employees Act. Following an unfavorable summary judgment ruling, she appealed both issues to the Supreme Court.

 

In its analysis of Patterson’s retaliation claim under the IHRA, the Court used the Ninth Circuit’s three-prong test for a retaliation claim, which requires a plaintiff to demonstrate: 1) that she engaged in protected activity; 2) that she suffered an adverse employment action; and 3) there was a causal link between her activity and the adverse employment action. See EEOC v. Luce, Forward, Hamilton & Scripps. Courts have found the first prong satisfied when an employee demonstrates he or she subjectively and reasonably believed that he or she was opposing activity that violates Title VII. See Little v. United Technologies, Carrier Transicold Division.

 

The Court found that Patterson subjectively believed she engaged in protected activity when she opposed the paramour relationship allegedly resulting in favoritism, but it concluded that such a belief was not objectively reasonable. The Court noted that a critical element of the inquiry regarding objective reasonableness of an employee’s belief that he or she is engaging in protected activity is the existing case law at the time of the incident. The case law at the time of Patterson’s resignation did not support her position. Moreover, the Court found that the favoritism, even if true, affected all concerned on a gender-neutral basis.

 

This decision aligns Idaho with other jurisdictions that have confronted the specific issue of paramour favoritism and ruled that paramour favoritism does not constitute gender discrimination because it affects both men and women equally. The Court’s ruling is useful to Idaho employers to the extent that it requires employees to demonstrate the reasonableness of their belief that they are engaging in protected activity under the IHRA. Notwithstanding these holdings, employers must continue to be careful about the prospect of retaliation claims, which constituted 25% of all complaints filed with the Idaho Human Rights Commission in 2010.

Why Employers Should Exercise Restraint and Objectivity

Retaliation claims are increasing at an alarming pace. Not only have these claims tripled in number within the last two decades, they now exceed race discrimination as the leading claim filed with the U.S. Equal Employment Opportunity Commission.  Click here to see EEOC statistics.

Why the startling trend? First, Congress has gone to great lengths to protect employees’ rights to speak out against unlawful employment practices. Protections are regularly included in new laws, such as the American Recovery and Reinvestment Act of 2009, the Patient Protection and Affordable Health Care Act of 2010, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Second, courts have adopted a broad definition of what constitutes retaliation and who should be protected. An employee must prove she engaged in a protected activity (like reporting harassment) and suffered an adverse employment action as a result (like being passed over for a promotion). An employer may ultimately defeat the harassment claim, but still face liability for retaliation. Third parties also may be protected from retaliation. For instance, in a recent United States Supreme Court decision the court found that the fiance of an employee who files a discrimination complaint is protected from retaliation under Title VII.

Third, jurors understand retaliation claims because they involve natural reactions to being accused of something awful, like sexual harassment. Jurors know how natural it is for the accused to have negative feelings after such an accusation, and at the same time jurors will sympathize with an employee who allegedly suffers for rocking the boat by making a complaint.

So what’s an employer to do?

  • Start with a clear anti-retaliation policy and train employees on it. Include an outlet for employees to raise retaliation concerns.
  • Counsel supervisors to be vigilant in their efforts to be objective, to exercise restraint, and to avoid knee-jerk reactions, and educate supervisors on how to spot situations where retaliation among co-workers is a risk.
  • Limit retaliatory behavior between employees by limiting the number of people who know about employee complaints.
  • Establish consistent processes that will catch subtle or unintended retaliation, so that employment decisions are based on legitimate business-related factors.
  • Timely investigate and address any appearance or allegation of retaliation.

Ninth Circuit Holds Shareholder Hire Preference Not Facially Discriminatory

Meghan M. Kelly also contributed to this post.

In an unpublished opinion in Conitz v. Teck Alaska Inc. the Ninth Circuit held that an Alaska Native corporation’s shareholder employment preference was not facially discriminatory because it was based on shareholder status, not racial status.

 

Teck employee Gregg Conitz works at the Red Dog Mine, which Teck operates and NANA Regional Corporation, an Alaska Native corporation, owns. Conitz alleged that he was passed over for promotions as a result of Teck’s policy favoring NANA shareholders in hiring – a preference Conitz argued was racially discriminatory because the majority of NANA shareholders are Alaska Native. The district court found that Teck’s employment preference for NANA shareholders was not a racial distinction and therefore did not violate either the Civil Rights Act or any other provisions of federal or state law. Given this, the district court declined to address Teck’s argument that as a joint venture between NANA and Teck, the Red Dog Mine is exempt from Title VII under a provision of the Alaska Native Claims Settlement Act. The district court also found that Conitz failed to show he was qualified for the promotion, and therefore failed to make out a case of discrimination under Title VII.

 

The Ninth Circuit affirmed, holding that a shareholder preference is not facially discriminatory because it favors candidates based on shareholder status, not race. The court also found that Conitz failed to show the elements of a prima facie case of discrimination under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Conitz did not demonstrate he was qualified for the supervisory position and was, in fact, not promoted because he was not qualified. The court declined to decide whether the shareholder preference policy constitutes racial discrimination since the policy did not affect Conitz.

Supreme Court Upholds "Cat's Paw" Theory In Employment Discrimination Cases

Today the Supreme Court issued its opinion in Staub v. Proctor Hospital, upholding the "cat's paw" theory of employer liability, under which employers are liable for discrimination where lower-level supervisors with discriminatory motives influence, but do not make, adverse employment decisions made by higher-level managers.  The near unanimous opinion, authored by Justice Scalia, is likely to greatly increase employer accountability for the actions and recommendations of lower-level supervisors.

Vincent Staub worked for Procter Hospital as an angiography technician; he was also a member of the Army Reserves.  His immediate supervisors resented his absences, which required coworkers to “bend over backwards” to pick up the slack. In January 2004 Staub was placed on Corrective Action for failing to be at his desk as required, and in April 2004 his supervisor informed HR that Staub was again away from his desk without notifying a supervisor as required.  Staub disputed the original Corrective Action, and also said he left a voice mail for his supervisor before leaving his desk in April.  The HR Manager largely relied on the supervisor’s accusation, reviewed Staub’s personnel file, consulted with another HR employee, and decided to terminate Staub’s employment. 

Staub sued under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), which prohibits discrimination based on military service.  Under the so-called “cat’s paw” theory, Staub claimed that Procter Hospital was liable for discrimination, because the neutral decision-maker (the HR Manager) relied on information provided by lower-level supervisors who had discriminatory motives and were out to get him fired.  After winning in a jury trial, the district court granted Proctor Hospital’s motion to dismiss.  In affirming, the 7th Circuit had held that the employer should not be liable under the cat’s paw theory, because the lower-level supervisors’ input was not the “singular influence” on the decision, and because the HR Manager conducted “her own investigation into the facts relevant to the decision” and therefore was not “wholly dependent” on the discriminatory input.

Staub begins with an analysis of the text of USERRA, which expressly defines causation to include situations where discriminatory animus is "a motivating factor" in an adverse employment decision.  Drawing also on tort and agency principles, Justice Scalia concluded that the cat’s paw theory applies in cases where 1) a supervisor acts with discriminatory motive, 2) the discriminatory supervisor intends to cause the adverse action, and 3) the discriminatory act is a “proximate cause” of the adverse action.  Scalia rejected the argument that the decision-maker’s independent investigation should purge the decision of discriminatory motive, noting that the hostile supervisors’ recommendations remained a motivating factor in the decision.  He also noted, in contrast to the 7th Circuit, that the HR Manager largely relied on the supervisors’ account of the facts underlying the termination, and did not independently determine whether the supervisors’ recommendations were justified. 

 

What Employers Can Do:  Don’t Be A Cat’s Paw

While Staub opens the door wider to discrimination cases under the cat’s paw theory, the case offers some guidance on what employers can do to minimize exposure from these claims.  Most obviously, ultimate decision makers cannot simply rely on recommendations from subordinates, but should conduct a thorough and independent investigation into the facts underlying the employment action.  The subtext of Staub suggests the HR Manager’s investigation was far from adequate—she merely reviewed the personnel file and consulted another HR employee, but largely relied on the (hostile) supervisor’s accusation that Staub had, in fact, violated a workplace rule.  The better the independent investigation, especially into the underlying facts, the more likely it is to break the “proximate cause” nexus between coworkers’ discriminatory motive and the employer’s ultimate decision. 

In addition, and perhaps just as obvious, employers should do everything possible to detect and immediately end discriminatory animus brewing among lower level employees. The plaintiff inStaub easily satisfied the other two prongs of the Court’s test—that the supervisor acted with a discriminatory motive and intended to cause Staub’s firing—because the trial record was full of choice remarks by coworkers disparaging his military duty and complaining about his absences. His supervisors described his Reserve military duty as a “bunch of smoking and joking and a waste of taxpayers’ money,” and scheduled him additional shifts “to pay back the department for everyone else having to bend over backwards to cover his schedule for the Reserves.”

The Reach of the Cat’s Paw

Staub makes clear that its reasoning applies to more than just USERRA cases.  The opinion expressly noted that Title VII also uses the “a motivating factor” causation standard.  What is less clear is whether it applies to just discriminatory supervisors, or also to non-supervisory coworkers. For the moment, however, the Supreme Court has given a green light to cat’s paw cases, and employers should assume it could apply broadly and to any discrimination claim.

 

Supreme Court Holds Title VII Can Cover Third Party Retaliation Claims

The United States Supreme Court issued a unanimous opinion today in Thompson v. North American Stainless, LP., 562 U.S. ___ (2011), that confirms the expansive scope of persons protected by Title VII. The Court held that it is unlawful for an employer to intentionally harm one employee in order to retaliate against another employee who engaged in protected activity.

Plaintiff Thompson and his fiancée Regalado were engaged to be married and both worked for North American Stainless (NAS). The EEOC notified NAS that Regalado had filed a charge of sex discrimination. Thompson was fired three weeks later. The issue was whether Thompson could state a claim for retaliation, even though he had not engaged in any protected activity. The Court confirmed that “Title VII’s antiretaliation provision must be construed to cover a broad range of employer conduct.” It “prohibits any employer action that well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The Court found that it was “obvious” that Regalado would have been dissuaded from making her complaint if she knew that Thompson would lose his job as a result. 

The employer argued that to permit a third party retaliation claim in this case would lead to a dangerous slippery slope – would firing an employee’s boyfriend count? How about just a friend? Anytime the employer fired a person who happened to have a connection to someone else who had filed an EEOC charge, the employer would have potential liability. The Court responded: “Although we acknowledge the force of this point, we do not think it justifies a categorical rule that third-party reprisals do not violate Title VII. . . . Given the broad statutory test and the variety of workplace contexts in which retaliation may occur, Title VII’s antiretaliation provision is simply not reducible to a comprehensive set of clear rules.” In other words, there is no bright line test for who is protected from retaliation. 

After concluding that the antiretaliation provision of Title VII was broad enough to encompass the activity in this case, the Court tackled the question of whether Thompson could sue NAS. Here the Court took a more narrow approach. It declined to follow the Court’s prior view that, to be “an aggrieved person” under Title VII, all that was required was that the person have “minimal Article III standing, which consists of injury in fact caused by the defendant and remediable by the court.” That minimalist approach would lead to “absurd consequences.” For example, if the minimalist approach was applied, a shareholder who could show that his stock value declined because of the company’s unlawful termination of a valuable employee could sue under Title VII. Instead, the test, the Court said, is as follows: “[A] plaintiff may not sue unless he falls within the zone of interests sought to be protected by the statutory provision whose violation forms the legal basis for his complaint.” Thompson, it said, fell within the “zone of interests” protected by Title VII because he was a NAS employee and NAS intended to injure him in order to punish Regalado. 

What This Case Means for Employers

Employers probably didn’t need another reminder that the potential claims they face are only limited by the imagination of plaintiffs’ attorneys. Before an employer takes any disciplinary action against anyone, it must ensure that it has legitimate business reasons for doing so and that an improper reason – such as a desire to exact revenge on another employee – hasn’t infected the decision. 

Supreme Court: Disparate Impact Plaintiffs Can Sue Based on the Application of the Discriminatory Practice

The Supreme Court today issued a judicial smackdown to the Seventh Circuit Court of Appeals, unanimously reversing its decision in Lewis v. City of Chicago (as we suggested it should when we reviewed the details of this case back in October!). Briefly put, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their application test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The Seventh Circuit held that the “discrimination was complete when the tests were scored...and the applicants learned the results.”

Justice Scalia, writing for the entire Court, stated that because there is no dispute that the claim was filed within 300 days of the hiring of the new class, the issue in this case is not “whether a claim predicated on the [on the hiring of the new firefighter class] is timely, but whether the practice thus defined can be the basis for a disparate-impact claim at all.” (Emphasis in original.) In other words, while the parties agreed that the adoption of a practice had a disparate impact, the real question was whether a cause of action can arise from the application of that same practice. The Court held that it could. Citing its recent opinion in another firefighter test case—Ricci v. DeStefano, the court noted that “a plaintiff establishes a prima facie disparate-impact claim by showing that the employer ‘uses a particular employment practice that causes a disparate impact’ on one of the prohibited bases.”

Per the Court, the City believes that this decision “will result in a host of practical problems for employers and employees alike,” in that it may subject employers to an increased number of disparate-impact lawsuits based on long-stranding practices. That may, in fact, be true. Following this decision, any employer engaging in a practice whose application may result in a disparate impact on some protected classification of employees should take the time to reevaluate that practice. While there may be a legitimate business defense for the practice (as remains to be seen in the Lewis case on remand), it’s going to be easier for employees to get their foot in the door and state a claim.

Despite Assertions to Contrary, Employment Laws Do Exist

On my way in to work this morning, I was listening to NPR’s Morning Edition, and caught an interview with Lewis Maltby, president of the National Workrights Institute. The interview was ostensibly to promote Mr. Maltby’s new book, “ Can They Do That?” in which he discusses employment termination cases that were deemed legal, but seem, in his opinion, to be disproportionately severe or unjust.

What Mr. Maltby appeared to decry (without using the proper terminology) is the American presumption of “at will” employment—the notion that an employer may terminate an at will employee’s employment for any reason or no reason, so long as it’s not otherwise illegal. A couple of Mr. Maltby’s examples demonstrate that concept well. For example, he mentioned instances where it was permissible for an employer to terminate an employee based on the political bumper sticker on the employee’s car, and for a school to terminate an overweight teacher’s employment because the teacher did not project the correct image. As there are no laws that specifically protect individuals from discrimination based on political affiliation or weight, these terminations were in fact permissible. (I would caution, of course, that terminating an overweight employee does carry risk to the extent the employee might be considered to have a disability under state or federal law.)

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9th Circuit: No Compensatory or Punitive Damages in ADA Retaliation Cases

The Ninth Circuit Court of Appeals recently limited the remedies available to employees who sue for retaliation under the Americans with Disabilities Act (ADA), ruling that the statute does not provide for punitive damages, compensatory damages or a jury trial in ADA retaliation cases.  Click here to read the decision in Alvarado v. Cajun Operating Co. 

Mr. Alvarado worked as a cook in defendant’s restaurant. He complained after his supervisor made allegedly discriminatory remarks related to his age and disability, and shortly afterward he received several disciplinary write-ups for poor performance.  After Mr. Alvarado was ultimately terminated, he sued his former employer for, among other things, retaliation under the ADA.  Prior to trial, the federal district court granted defendant’s motion in limine, barring plaintiff from seeking punitive and compensatory damages, and a jury trial, on his ADA retaliation claim on the grounds that the statute provided only equitable relief for such claims.

The Ninth Circuit affirmed the district court’s ruling by holding that the plain, unambiguous language of the ADA remedy provisions specifically enumerate only those sections of the act for which compensatory and punitive damages (and a jury trial) are available, and that the ADA anti-retaliation provision is not included in that list.  Somewhat surprisingly considering the laws at issue have been on the books since 1991, the Ninth Circuit appears to be only the third Circuit Court of Appeals to have been presented with the issue, after the Seventh and Fourth Circuits (which reached similar conclusions).  The court also noted that several district courts in other circuits had reached the opposite conclusion (perhaps most surprising of all), by ignoring the text of the remedy provision and instead emphasizing the overall structure of the ADA and the “expansive” intent of the 1991 amendments. 

For now, the law in the Ninth Circuit on this question is clear:  while still entitled to compensatory or punitive damages in disability discrimination or failure to accommodate claims under the ADA, employees may not receive those damages for ADA retaliation claims.

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Supreme Court Lets Stand Ruling Allowing EEOC to Issue Subpoenas After Right-To-Sue

Yesterday the U.S. Supreme Court declined to review a Ninth Circuit Court of Appeals decision that allows the Equal Employment Opportunity Commission (EEOC) to continue investigating allegations of employment discrimination, and even to issue subpoenas to employers, after issuing a right-to-sue letter to the employee who filed the initial complaint.  Click here to read the Ninth Circuit decision in Federal Express Corp. v. EEOC

In order to file a lawsuit under Title VII of the Civil Rights Act of 1964, an employee must first file a complaint of discrimination with either the EEOC or an analogous state agency, a process known as "exhausting administrative remedies."  Only after the EEOC issues a "right-to-sue letter" may the employee then file a lawsuit.  It is not uncommon for an employee to file a complaint with the EEOC and withdraw it almost immediately, obtain the right-to-use letter and file a lawsuit, all before the EEOC has had a chance to investigate.  In Federal Express, the employee did just that in order to join a pending class action lawsuit.  The employer expected the EEOC to drop its investigation, but instead EEOC continued to investigate and issued a subpoena to the employer. 

The Ninth Circuit enforced the subpoena, writing:  "By continuing to investigate a charge of systemic discrimination even after the charging party has filed suit, the EEOC is pursuing its obligation to serve the public interest."  The Ninth Circuit's decision is in line with a decision from the Third Circuit, but contrary to decisions from the Fifth, Seventh and Tenth Circuits.  The Supreme Court will often take a case like Federal Express to resolve such splits between the circuit courts, but declined to do so in this case.  As a result, the EEOC's investigatory powers will continue to vary depending on where a complaint is made. 

Given the Supreme Court's ruling in Federal Express, employers can no longer safely assume that the EEOC will drop its investigation once it issues a right-to-sue letter.  The EEOC may choose to continue investigating charges of discrimination, especially in cases involving allegations of systemic or widespread violations of anti-discrimination law.  Employers (at least those in the Ninth and Third Circuits) should be prepared to comply with EEOC investigations even after the right-to-sue letter has issued. 

Supreme Court to Decide Title VII Statute of Limitations Question

The U.S. Supreme Court agreed yesterday to hear a challenge to a Seventh Circuit Court of Appeals decision in a case with similar factual overtones to the Ricci case decided earlier this year. Like Ricci, this case involves a firefighter qualification test that had a disparate impact on black applicants; unlike Ricci, at issue here is the statute of limitations on a Title VII claim.

In this case, Lewis v. City of Chicago, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The trial court held that the hiring of each new firefighter was a new violation of Title VII, so the EEOC charges were timely filed. On appeal, the Seventh Circuit reversed, holding that the “discrimination was complete when the tests were scored...and the applicants learned the results.” At issue for the Supreme Court is whether the limitations period for a Title VII claim begins to run when an employer announces the results of a test that could violate Title VII’s disparate impact provision, or if the right to sue begins only once the employer has acted on that policy.

At face value, it seems that the trial court probably got this one right and the Supreme Court should reverse the Seventh Circuit. How can an employee know what the actual disparate impact will be until the employer’s hiring decisions are actually made? If, for example, the employer’s business needs ultimately dictate that it need hire nobody, there has been no harm done regardless of the results of the test. An actual harm needs to occur before the right to sue accrues. Notwithstanding that analysis, and given the current makeup of the court, however, it is unclear which way the Court will go on this one. The Stoel Rives World of Employment will let you know when a decision is reached and how that decision may impact your workplace.

2009 Mid-Term Federal Legislative Update

We expected many changes in federal labor and employment law in 2009 - for the first time in years, Democrats control the White House and both houses of Congress and have the political ability to make significant reforms.  However, not much has happened in 2009: we have only significant labor and employment bill signed into law.  To be fair, President Obama and the Congress have had other things to worry about:  a war or two, a lousy economy, health care and selecting a new White House dog to name a few.

But, the 2009-2010 legislative session is still not over, and Congress may yet pass some of the many labor and employment-related bills still pending.  Employers may want to take note, as some of these may become law before the end of the session in 2010.  Click on "continue reading" for a complete list.

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Employer Did Not Violate Title VII By Firing Employee For Wearing a Nose Ring

A Federal court in Florida has ruled that a Subway restaurant did not violate Title VII by firing an employee because she wore a nose ring, rejecting a claim by the Equal Employment Opportunity Commission (EEOC) for injunctive relief and punitive damages.  Click here to read the court's decision in EEOC v. Papin Enters. Inc

Subway has a policy prohibiting employees from wearing facial jewelry, but this particular employee refused to remove her nose ring on the grounds that wearing it was part of her Nuwaubian religion.  In April this year, a jury found that Subway did not have to accommodate the employee's nose ring, as she did not have a sincerely held religious belief requiring her to wear it.  Last week, the court declined the EEOC's request for injunctive relief and punitive damages (notwithstanding the jury verdict) as there was no basis for such relief absent any discrimination. 

The Papin case demonstrates an important legal principle:  although employers are required to reasonably accommodate employees' religious practices (which may include allowing employees to deviate from a dress code), employers are only required to accommodate sincerely held religious beliefs.  (So much for my idea of converting to Pastafarianism so I could claim a religious right to wear jeans on Friday).  For more information on what constitutes a "religion" for Title VII purposes, check out these Frequently Asked Questions on Religious Discrimination from the EEOC.