Stoel Rives Law Firm : Stoel Rives World of Employment : Disabilities, FMLA, Military Leave, NLRA : Western United States

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.

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Today the U.S. Supreme Court issued another employee-friendly opinion in Kasten v. St. Gobain Performance Plastics Corp., holding by a 6-2 margin that the Fair Labor Standards Act ("FLSA") anti-retaliation provisions protect an employee’s oral complaints to supervisors about wage and hour violations. This is the latest of three opinions this term that have expanded the reach of various anti-retaliation provisions in employment discrimination statutes. (See World of Employment's analysis of the other two cases, Thompson v. North American Stainless, LP and Staub v. Proctor Hospital).

In Kasten, the plaintiff complained orally to his supervisors on several occasions that the location of time clocks in the workplace violated the FLSA, because it prevented employees from punching in and out while they were donning and doffing protective clothing and equipment.  Shortly afterwards, his employment was terminated for, ironically, multiple failures to properly punch in and out.  Plaintiff sued, claiming that his termination was in retaliation for his having complained that the Company was violating the FLSA.  The District Court dismissed his case, and the 7th Circuit affirmed, holding that the FLSA anti-retaliation provision, which prohibits employers from taking adverse action against employees because they “file any complaint or instituted or caused to be instituted any proceeding” complaining about wage and hour violations, protects only written complaints, not oral ones. 

The Supreme Court reversed, holding that oral complaints are also protected under the FLSA. The Court held first that the phrase “file any complaint” in the statute was ambiguous; the term “file” generally indicated a writing (although not always), while “any” indicated Congress intended to cover many different types of complaints.  The Court went on to look at the legislative history and purpose, Department of Labor interpretations, and numerous lower court opinions to ultimately decide that Congress must have intended the FLSA to protect oral complaints. 

At the end of the day, this opinion may change little for west coast employers. While the Kasten decision resolves a split among the Circuit courts, the law in the Ninth Circuit (which includes, amongst others, Oregon, Washington and California), has recognized for over a decade that oral complaints are protected under the FLSA. Further, the anti-retaliation provisions of other state and federal anti-discrimination statutes—most notably Title VII—also protect employees who make oral complaints of discrimination. Finally, the opinion merely holds that Mr. Kasten can go ahead with his lawsuit—he still needs to prove his case that his employer fired him because of his protected activity.

Still, Kasten and other recent U.S. Supreme Court decisions in Thompson and Staub provide useful reminders that courts--including the Supreme Court--read anti-retaliation protections broadly.  Employers must be careful to ensure and adequately document that any adverse employment actions against employees who have made any complaints about alleged unlawful activity in the past are for legitimate business reasons only. Retaliation claims are already the most common type of employment claims filed against employers.  This opinion isn’t going to change that. 

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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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On Thursday, in Herbert v. Altimeter, the Oregon Court of Appeals held that an employee does not need to actually be disabled in order to be protected from retaliation for requesting an accommodation under Oregon’s disability anti-discrimination law.  The case serves as a useful reminder that anti-retaliation protections, like those in the Oregon disability law, can be very broadly applied and protect many types of employee requests or complaints. Employers should be careful when disciplining or terminating any employee who has recently made some kind of arguably protected request or complaint.

Sherrie Herbert was terminated from her truck-driving job with Altimeter shortly after she became ill, allegedly from exhaust fumes in the cab of her truck, and she reported those problems to her boss. She sued under various retaliation theories, including that she was terminated in retaliation for her having requested an accommodation for a disability (i.e., requesting to be reassigned to a different truck). The trial court granted a directed verdict for Altimeter at the close of Herbert’s case at trial and dismissed all claims.

The Court of Appeals reversed.  Altimeter argued that it couldn’t have retaliated against plaintiff for requesting an accommodation as a matter of law, because she was not disabled and therefore not protected under the Oregon disability law's anti-retaliation provisions.  The court rejected that argument, noting that while the law requires Oregon employers to provide a reasonable accommodation to a “person with a disability,” the anti-retaliation provision, ORS 659A.109, protects any “worker” who requests an accommodation.  So, the court reasoned, by its plain terms the statute protects a broader class of employees (all of them) who make protected requests for accommodations, even though those employees may not be entitled to an actual accommodation. 

The opinion also contained an illustrative reminder about the importance of well-drafted written responses filed with the Equal Employment Opportunity Commission (“EEOC”), the Oregon Bureau of Labor and Industries (“BOLI”), and similar agencies. Those written position statements are admissible later; if they’re not carefully drafted they could come back to bite the complainant. In Herbert, Altimeter’s BOLI position statement included several damaging admissions, the worst of which essentially stated that she was terminated because she insisted she be reassigned to another truck, i.e., requested an accommodation.  Despite a general lack of other evidence of retaliation presented by Herbert at trial, the Court held that Altimeter's admission in the BOLI statement alone was enough to allow that claim to go to a jury. 

Oops!  While there are no easy, hard-and-fast rules about how to draft effective BOLI or EEOC position statements, generally you want to say as little as possible while still making your case, and above all, you don't want to provide the only evidence a plaintiff will need to take his or her case all the way to a jury!!  Those kinds of careless statements early on can make litigating employment discrimination lawsuits very expensive for employers, because they become much harder to get dismissed before trial.

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