Supreme Court Rules Oral Complaints Of Wage Violations Are Protected Under FLSA
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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.
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.
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.
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.
Supreme Court To Decide Scope of Cat's Paw in Employment Cases
Yesterday, the Supreme Court granted certiorari in Staub v. Proctor Hospital to address the question of when an employer may be held liable in “cat’s paw” situations, where an employee with unlawful intent influences a decisionmaker but is not involved in making the ultimate employment decision.
In this case the employee, Vincent Staub, was a member of the Army Reserves. He was required to attend occasional weekend training as well as a two-week training program during the summer. Reservists, of course, are protected from discrimination by the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). The department’s second in command, Janice Mulally, resented the fact that Staub was in the Reserves. She made numerous anti-Reserves comments and purposely scheduled him on weekends when he had training. In the weeks leading up to his termination, Staub was disciplined for allegedly insubordinate behavior. The veracity of the allegations against him were suspect, coming largely from Mulally, who was known to dislike Staub. Staub was terminated by the Vice President of Human Resources after he allegedly engaged again in similar insubordinate behavior. The parties agree that the decisionmaker had no unlawful animus whatsoever. She testified that her decision was based on both the more recent allegations of insubordination, as well as Staub’s well-documented history of being difficult to work with.
At trial, Staub sought to attribute Mulally’s animus to the decisionmaker, arguing that the decision would not have been made but for Mulally’s unlawful animus. The jury returned a verdict in Staub’s favor. On appeal, the Seventh Circuit reversed that decision, noting that in order to successfully assert a cat’s paw theory, the discriminatory animus of the non-decisionmaker can only be attributed to the decisionmaker where the non-decisionmaker had “singular influence” over the decisionmaker. The Court held that while the decisionmaker was clearly influenced by Mulally, there was no evidence of “blind reliance,” and the cat’s paw theory should never have gone before the jury. The Court pointed to undisputed evidence that the decisionmaker took into account other aspects of Staub’s employment unrelated to the alleged acts reported by Mulally, including his reputation for being difficult to work with, and his history of employment issues dating back to the beginning of his employment--before Mulally became second in command of the department.
While not completely eviscerating the cat’s paw doctrine, the Seventh Circuit in Staub enunciated a very narrow, pro-employer, interpretation of the “singular influence” requirement. What the Supreme Court may do is anybody’s guess, but it seems likely that given the Court’s current makeup it will affirm the Seventh Circuit’s narrow interpretation of the cat’s paw doctrine. A copy of the Seventh Circuit opinion can be found here.
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.
Ricci v. DeStefano -- Supreme Court Holds City Violated Title VII By Rejecting Racially Disparate Test Results
To end its term, the Supreme Court today issued its long awaited opinion in Ricci v. DeStefano--a case that has received extra media attention because Supreme Court nominee Sonia Sotomayor was on the Second Circuit Court of Appeals panel that decided the case below. The conservative justices on the Court reversed the Second Circuit (and by extension, Judge Sotomayor) in a 5-4 decision, ruling that the city of New Haven violated Title VII by discarding the results of a firefighter promotion test where white applicants fared disproportionately better than other applicants. As one might expect, Justice Kennedy provided the swing vote and authored the majority opinion.
New Haven used the test in question to identify firefighters best qualified for promotion. Despite being objectively administered, the test's racially disproportionate results led the city to question whether it should validate the results. The city, of course, found itself in a "damned if you do, damned if you don't" position: certify the test results, and face Title VII disparate impact litigation from minority applicants; fail to certify them, and face Title VII reverse discrimination litigation from the white officers who passed but were denied a promotion. The city opted for the latter course, and, as expected, the white firefighters filed a reverse discrimination lawsuit. The city prevailed on summary judgment at the district court level, and the Second Circuit affirmed.
The Supreme Court found that discarding the tests violated Title VII , while certifying the test would not have been a violation of law because there was no "strong basis in evidence" for believing that the black firefighters would prevail on a disparate impact claim. The court noted that despite what otherwise would have constituted a "prima facie" showing of disparate impact race discrimination, several defenses were available to the city--namely that the exam at issue was job related, consistent with business necessity, and there existed no equally valid, less discriminatory alternative that suited the city's needs but was not adopted. The four dissenting justices disagreed, arguing that the majority's analysis was flawed because "New Haven had ample cause to believe its selection process was flawed and not justified by business necessity."
Ultimately, the Ricci decision will have little to no impact on most employers, but represents a small victory for employers (despite the positioning here that held against the city/employer). Employers can now take a somewhat more confident stand in backing test results that may demonstrate some disparate impact, so long as the test was objective and no other less discriminatory alternative exists. The Ricci decision may not last for long, however. Political condemnation by Democrats has been swift, with Senator Patrick Leahy (D-VT) saying that "it is less likely now that employers will conscientiously try to fulfill their obligations under this time-honored civil rights law. This is a cramped decision that threatens to erode these protections and to harm the efforts of state and local governments that want to build the most qualified workforces." Don't be surprised if Congress passes legislation down the road aimed at upending the Ricci decision.
