Daily Developments in EEO Law
by Paul Mollica (c) 2005
Wednesday, December 21, 2005
With readership and judicial activity winding down at year's end, I too will take a break for the holidays and returned refreshed in the New Year. Thank you to my readers for checking in regularly over 2005, which made this project all the more gratifying.
In the 1980s, the threat of mass layoffs sometimes lead to litigation over whether a proposed early retirement plan -- coupled with a threat of possible termination -- might constitute a constructive discharge (take our pittance now, or suffer the consequences). Individuals who accepted what they saw as shotgun deals filed suits challenging the voluntariness of the retirement. The Eleventh Circuit just revisited this line of cases in a 2-1 decision, Rowell v. BellSouth Corp., No. 04-10753 (11th Cir. Dec. 20, 2005). The court stated that:
"This court has not addressed constructive discharge in any sort of systematic way in the context of a reduction in force to be accomplished in part by offering economic incentives to any covered employee who resigns. As noted, the doctrine of constructive discharge enables an employee who has resigned to demonstrate that he suffered an adverse employment action by showing that the resignation was an involuntary response that was the product of intolerable working conditions - that is that he had only a choice between retirement and discharge."
Upon surveying the legal landscape, the panel majority court held:
"In order to show constructive discharge, however, the plaintiff must show that the situation was so 'intolerable' that he had 'no choice' but to take early retirement. The fact that one of the possible outcomes is that he would lose his job alone is not sufficient to establish the intolerable conditions sufficient to justify a finding of constructive discharge because the possibility that a plaintiff may not remain employed is not by itself enough to place a reasonable person in the position of 'quit or be fired.'"
In this case, the court held that no such choice was imposed on the age-40-and-over employee:
"Rowell was never at the point where his only choices are between termination and resignation. In the beginning his options were:
"1. Keep his present job or seek other openings within BellSouth, or
"2. Resign with a severance package of 150% of his salary and his pension in lump sum.
"After his conversation with [his manager], a reasonable person would feel less sure of keeping his present position, but it was still a possibility that one member of the [group of terminees] might take the severance package, obviating altogether the need to move Rowell out of his present position. There was also the opportunity to seek any jobs that opened up, including some in Mississippi, the creation of which was not dependent on the success of the "buy-out" proposal. The choices for Rowell never get any more unpleasant; he is never in a position without an opportunity to continue his status quo employment with BellSouth."
Judge Carnes concurred in this opinion on the limited ground that the employee failed to make out prima facie proof of an ADEA volation, but specifically disaffirmed the constructive discharge ruling.
I find baffling the majority's omission of any citation to the controlling authority on "constructive discharge," Pennsylvania State Police v. Suders, 542 U.S. 129, 133 (2004), which defines the situation where "the abusive working environment became so intolerable that her resignation qualified as a fitting response " (emphasis added). The standard enunciated in Suders cries out for fact-finding by a jury, but in our summary judgment world will seldom reach their ears.
Tuesday, December 20, 2005
A third U.S. Court of Appeals this year holds that a federal employee who reaches the end of the agency's administrative process, prevails on liability, but obtains unsatisfactory relief, may either accept the final award as-is, or abandon the award and file a claim in federal district court for de novo proceedings: Ellis v. England, No. 05-10957 (11th Cir. Dec. 16, 2005). See also Morris v. Rumsfield, 420 F.3d 287, 294 (3rd Cir. 2005); Scott v. Johanns, 409 F.3d 466, 472 (D.C. Cir. 2005); Timmons v. White, 314 F.3d 1229, 1234 (10th Cir. 2003) (same). These courts reject the prior authority in the Ninth and Fourth Circuits that presently allow a federal employee to challenge only the relief awarded in a civil action. (Reportedly, also, the Fourth Circuit is reconsidering its position in a pending appeal.)
Monday, December 19, 2005
I supposed that when the Supreme Court narrowly declared -- in Circuit City Stores v. Adams, 532 U.S. 105 (2001) -- that Section 1 of the Federal Arbitration Act ("FAA") excludes only "transportation workers" from its scope, employees of all stripes would want to wear the mantle of "transportation worker" if it would possibly get them out of mandatory arbitration policies.
In Lenz v. Yellow Transportation, Inc., No. 05-1641 (8th Cir. Dec. 16, 2005) , we find the latest iteration of this dispute. The panel reverses the district court's decision in favor of the employee, finding that merely work in the transportation industry -- a Customer Service Representative for a courier service -- does not count. The Eighth Circuit "synthesiz[es]" the "non-exclusive" factors that it finds relevant in determining this question:
"first, whether the employee works in the transportation industry; second, whether the employee is directly responsible for transporting the goods in interstate commerce; third, whether the employee handles goods that travel interstate; fourth, whether the employee supervises employees who are themselves transportation workers, such as truck drivers; fifth, whether, like seamen or railroad employees, the employee is within a class of employees for which special arbitration already existed when Congress enacted the FAA; sixth, whether the vehicle itself is vital to the commercial enterprise of the employer; seventh, whether a strike by the employee would disrupt interstate commerce; and eighth, the nexus that exists between the employee's job duties and the vehicle the employee uses in carrying out his duties (i.e., a truck driver whose only job is to deliver goods cannot perform his job without a truck)."
Based on these factors, the plaintiff -- who did not personally move packages, and mostly just handled customer questions -- fell outside the Section 1 exemption.
Friday, December 16, 2005
Whena state university confers (1) disability leave upon birth mothers (counted against accrued sick leave), and (2) one-week's leave for adoptive parents (likewise, charged as sick leave), whither biological fathers who get no leave at all? Have they a claim under state, federal or U.S. Constitutional law?
No, says the Eighth Circuit in Johnson v. Univ. of Iowa, No. 05-1184 (8th Cir. Dec. 15, 2005) . The court reasons that there is no gender discrimination between biological parents, where leave for mothers is justified by disability-based reasons not faced by fathers. Meanwhile, the Court held that the state articulated a rational basis (however slim) for allowing adoptive fathers -- but not biological fathers -- that additional time off of work (i.e. a gross assumption that adoptive parents face administrative inconvenience and expenses in the adoption process, not faced by birth fathers).
So biological Hawkeye dads will just have to suck it up and enjoy their babies on weekends.
Thursday, December 15, 2005
A modest appeal with a foreordained outcome gets published in the Ninth Circuit, Rivera v. Baker West, Inc., No 03-17261 (9th Cir. Dec. 13, 2005) . The employee settled his race discrimination cases for the "sum of forty thousand ($40,000) less all lawfully required withholdings." When the settlement check arrived, it was "in the amount of $25,140, retaining $14,860 as a 'lawfully required withholding.' The amount withheld included $10,000 in federal income tax, $3,060 in Federal Insurance Contributions Act ('FICA') tax, and $1,800 in state income tax." The chagrined plaintiff cashed the check, but refused to dismiss his case, contending that the withholding was excessive and not required by law. The district court granted the employer's motion to dismiss with prejudice, and the Ninth Circuit affirmed.
The panel dispatched (without oral argument) the employee's two principal arguments. First, it agreed with the district court that the settlement was "income" to River and did not fall within the Internal Revenue Code (26 U.S.C. § 104(a)(2)) exclusion for "the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness" (emphasis added). There was neither an express designation of settlement amounts apportioned to physical injury, nor any evidence that this purpose was intended by the payor. Second, the panel held that "back pay and lost wages constitute 'wages' for taxable withholding purposes, and the district court properly held that these settlement payments were subject to withholding. See 26 U.S.C. § 3121(a)."
The panel pointed the employee to "seek a refund for wrongfully withheld taxes via direct claim to the Internal Revenue Service," although the opinion ultimately offers little hope that such a challenge might be sustained (indeed, its stare decisis effect would be determinative). I do find myself puzzled, as a practitioner, that a counselled client would have been surprised at such witholding or think it worthy of major litigation, but that would be an interesting story that we'll never hear.
Wednesday, December 14, 2005
So often,lazy errors creep into judicial opinions by the sheer force of repetition. Too often, one sees the protected class of employees under the ADEA described as "over 40" (40 and over is correct), or the jurisdictional amount for diversity listed as "$75,000" (rather than in excess of $75,000). Such marginal errors rarely matter to the outcome of a case, and evade the editor's pen.
Another common misstatement, "severe and pervasive" harassment (rather than "severe or pervasive," Meritor Sav. Bank, FSB v. Vinson , 477 U.S. 57, 67 (1986)), enjoys a thorough vetting in Harvill v. Westward Communications, No. 04-40418 (5th Cir. Dec. 13, 2005). The employee alleged that her boss, named Rogers, over seven months "grabbed her and kissed her on the cheek, popped rubber bands at her breasts, fondled her breasts 'numerous times,' patted her on her buttocks 'numerous times,' and came behind her and rubbed his body against her. At one point, Harvill estimated that Rogers touched her breasts or her buttocks perhaps as often as once a week-although she later stated that it may not have been as often as once a week."
The district court found that the alleged harassment was not severe and pervasive. The panel corrected this locution by restoring the proper, disjunctive expression. "In requiring Harvill to establish that the conduct was both severe and pervasive, the district court applied the wrong legal standard. As quoted above, the Supreme Court has stated that Title VII provides a legal remedy to victims who establish that the abusive conduct was severe or pervasive." The panel noted that Fifth Circuit self had not been entirely consistent, sometimes being guilty of using the "and" phrase itself, but observing that "subsequent incorrect statements of the test are not binding."
Moreover, "[c]ontrary to being an irrelevant distinction, as Westward's counsel asserts, the requirement that a plaintiff establish that reported abusive conduct be both severe and pervasive in order to be actionable imposes a more stringent burden on the plaintiff than required by law. The Supreme Court has stated [in Faragher v. Boca Raton, 524 U.S. 775, 786 (1998)] that isolated incidents, if egregious, can alter the terms and conditions of employment." So the court found that the alleged harassment presented a genuine issue of material fact under the harassment standard thus properly stated. The panel also refused to fault the plaintiff's lack of precision about dates of harassing events: "Harvill's assertions that she was touched 'numerous times' instead of providing exact dates or the exact number of instances do not render her allegations so conclusory that they fail to create a genuine issue of material fact."
(Unfortunately for the plaintiff's claim, the panel ultimately affirmed summary judgment on the ground that the employer proved the Faragher affirmative defense as a matter of law.)
Thursday, December 8, 2005
I c annot do justice, in a mere summary, to the perfidy alleged by the employee in Brown v. Dillard's, Inc. No. 03-56719 (9th Cir. Dec. 6, 2005), whose $710 (in actual damages) claim turned into a three and one-half year slog through the employer's "Fairness in Action" arbitration program and three state and federal courts.
Brown alleges that once she invoked the arbitration process (alleging wrongful termination) -- by filing a notice of intent to arbitrate and paying her fee to the AAA -- the employer refused to pay its own filing fee and flatly refused to arbitrate. The employee then filed a state court action alleging the same claim, which was removed to federal district court by the employer. Dillard's there moved to compel arbitration. The district court denied the motion, and the Ninth Circuit affirmed.
The courts assumed that the "Fairness in Action" policy was enforceable under the Federal Arbitration Act, but found that the employer's original breach of the agreement abrogated its terms. Standard contract law, which applies no less to FAA contracts, excuses performance when the other side breaches first. The employer admitted that it refused to arbitrate, even though the plaintiff's claim (wrongful termination) was within the terms of the policy. It cut no ice with the court of appeals that Dillard's thought the plaintiff's claim meritless, as "its proper course of action was to make that argument in arbitration."
The court observed that:
"If we took Dillard's view and allowed it to compel arbitration notwithstanding its breach of the arbitration agreement, we would set up a perverse incentive scheme. Employers like Dillard's would have an incentive to refuse to arbitrate claims brought by employees in the hope that the frustrated employees would simply abandon them. This tactic would be costless to employers if they were allowed to compel arbitration whenever a frustrated but persistent employee eventually initiated litigation."
It further observed:
"On the assumption that Brown's narrative is true, this case displays a dark side of our nation's policy in favor of arbitration. When a defendant in a judicial forum refuses to respond to a complaint that is properly filed and served, the court has the power to enter and enforce a default judgment. Arbitration works differently. The American Arbitration Association could not compel Dillard's to pay its share of the filing fee, and in the absence of the fee it could not proceed. Brown had no choice but to come to court. Many people in Brown's position would simply have given up. Because she did not, we have the occasion to make clear that when an employer enters into an agreement requiring its employees to arbitrate, it must participate in the process or lose its right to arbitrate."
Nowhere addressed in the opinion, but worth pondering: did the plaintiff suffer any contract damages from the employer's breach of the arbitration policy? If so, that in itself ought to make a dandy contract claim, and (if Brown's complaint is correct) Dillard's would get more than it bargained for.
Wednesday, December 7, 2005
Difficult to grasp the precise significance of Smith v. District of Columbia, No. 04-7082 (D.C. Cir. Dec. 7, 2005), where the employer -- on its third motion for summary judgment, filed ten days before trial -- finally prevailed on its argument that an employee failed to file her ADA discrimination case within the 90 days allowed her after she received the right-to-sue letter from the EEOC terminating its investigation. (Apparently, she waited 16 months to finally file.)
The court of appeals reversed (as to this count -- it affirmed, on the merits, dismissal of a companion retaliation claim), but on the razor-sharp ground that the district court abused its discretion in accepting (and ruling upon) a dispositive motion after the scheduling order deadline expired. Like the plaintiff, the employer coincidentally waited 16 months past the deadline to file its third dispositive motion. The district court was required (per Fed. R. Civ. P. 6(b)) to find "excusable neglect" to allow the late filing, but the defendant apparently never botherd to offer a mea culpa (or, indeed, even to move for leave to file a belated motion).
While granting the summary judgment, the district court took umbrage at the trial's-eve filing, and awarded the plaintiff fees and costs for the entire proceeding. "'All of the fees and costs generated since the District's filing of its answer were completely unnecessary," the district court reasoned, as the District could have moved to dismiss the complaint at that early point; hence, the district court ordered the District to pay all costs and attorney's fees incurred by Smith since that point, except those incurred in response to this final motion. Id."
In the end, the court of appeals "reverse[d] the grant of summary judgment on the discrimination claim and remand[ed] for trial on that claim only." This decision definitely vindicates plaintiff on the employer's abuse of the scheduling order, but what happens next? Does plaintiff get to keep the fees and costs? (Presumably yes, because the employer apparently didn't appeal the order, but the predicate of the sanction has now been knocked out.) Does the District immediately move for judgment as a matter of law under Rule 50 on the limitations issue, or has it forfeited the defense by raising it too late in the proceedings? These nice, though vital, questions go unanswered.
Tuesday, December 6, 2005
The Supreme Court granted cert yesterday in a Title VII case, White v. Burlington Northern & Santa Fe Railway Co., 364 F.3d 789, 93 FEP 1011 (6th Cir. 2004) (en banc), on what degree of injury an employer's action must inflict to pass the threshold of "adverse employment action" in a retaliation case. The claim presented: an employee who complained of harassment suspended without pay for 37 days, and transferred from forklift to standard truck laborer job (more arduous, dirtier work that was viewed as a demotion). The former injury would generally pose no issue under any circuit's standard for "adverse employment actions," as all circuits would likely agree that suspension without pay is adverse, even (as in this case) where the employee eventually grieves the claim successfully and obtains back pay. As the majority held, "Taking away an employee's paycheck for over a month is not trivial, and if motivated by discriminatory intent, it violates Title VII."
The transfer of duties is what presents the difficult question: circuits require varying degrees of objective proof that the transfer was sufficient inimical to a plaintiff's employment interests (in terms of pay or advancement opportunities) to form the basis of a retaliation claim. Some circuits (notably the Seventh And Ninth) have even found that adverse "non-employment" actions by an employer may constitute retaliation (such as filing a bogus police complaint). Now the Supreme Court will presumably tell us precisely where the line shall be drawn.
The Sixth Circuit also held that the same standard -- "a materially adverse change in the terms of her employment" -- applies to both section 703(a) discrimination and 704(a) retaliation, turning back the EEOC's argument as amicus in that proceeding that a lesser-standard ought to apply to retaliation cases. Because the circuits are also divided over whether the threshold for "adversity" (?!) in retaliation cases is higher than, lower than or equivalent to discrimination cases, that issue may also be decided here
Meanwhile, the Court yesterday denied cert (in Wheeler v. BL Development Corp., 415 F.3d 399 (5th Cir. 2005)) on another festering proof issue under Title VII: how closely-related must a plaintiff be to her comparators to be "similarly-situated" for purposes of the McDonnell Douglas test? As with the above-issues, the courts are badly split on this point, but -- with White and another Title VII case (Arbaugh v. Y & H Corp., 380 F.3d 219, 94 FEP 360 (5th Cir. 2004)) already on the docket -- the dance-card appears full for this term.
Thursday, December 1, 2005
There is a sham argument, seemingly endorsed by some courts of appeals, that in an ADEA case at the prima facie stage, there must be at least a ten-year age spread between plaintiff and comparable employees to qualify as "substantially younger" under the rubric of O'Connor v. Consolidated Coin Caterers Corp., 517 US 308 (1996). Never mind that the rule does not emanate from O'Connor (let alone the ADEA itself), nor even that the courts that purport to apply this standard (the 6th, 7th and 8th Circuits) treat it only as a rebuttable presumption. Employers have exploited these decisions to demand strict compliance with a supposed ten-year rule. One day less than ten years condemns plaintiff's case to summary judgment hell.
The Tenth Circuit cut through this in Wittington v. The Nordam Group, No. 04-5097 (10th Cir. Nov. 29, 2005) , in reviewing a judgment entered in favor of an employee after a jury trial. Among the employer's numerous assignments of error (all rejected), it complained that it was entitled to judgment as a matter of law solely on the grounds that the employee's comparable was just five years younger than he. Wrote the Tenth Circuit, "Nordam urges us to establish a bright-line rule that a five-year age difference is insignificant as a matter of law in age-discrimination cases, and therefore it is entitled to a JMOL."
The panel noted that it could have stopped with the factual assumption of a five-year spread, because the record supported a finding (contrary to the employer's characterization) that plaintiff's comparables might have been as young as age 28. But it launched a withering attack on the root argument as well:
"In our view, a definitive five-year rule is unjustified. We are not convinced that all five-year age differences are the same. The replacement of a 45-year-old by a 40-year-old would be less suspicious than the replacement of a 62-year-old by a 57-year-old. Comparing a 62-year-old worker with one who is 57, an employer may think it better to retain someone who will stay with the company another eight years (until age 65) rather than one who would be retiring in three years, less than half the time. Or a company may simply wish to rid itself of its older workers, beginning with the oldest.
"To the extent that other circuits establish a direct-evidence requirement when the age difference is less than five years, we choose not to follow them." (Emphasis supplied)
Good common sense by the Tenth Circuit. May it, before long, reach the other circuits and bring an end to the madness.