Daily Developments in EEO Law
by Paul Mollica © 2006
Tuesday, October 31, 2006
Does proof of age discrimination under the ADEA require proof of an invidious motive? Although one would suppose the answer to be "no" after Smith v. City of Jackson, 544 U.S. 228 (2005) (recognizing a disparate impact theory under the ADEA), a crust of this argument apparently remains.
The en banc Sixth Circuit today (on a 9-4 vote) awarded the EEOC a belated win in an ADEA benefits case, reversing summary judgment. EEOC v. Jefferson County Sheriff's Dept., No. 03-6437 (10th Cir. Oct. 31, 2006) . This case began in 1995 with deputy sheriff who suffered a bad back. According to the opinion, the Kentucky Retirement Systems (KRS) imposed a 54-years-of-age ceiling to receive disability-retirement benefits; at age 55 or over, an employee may receive only normal retirement benefits. (There is a distinction also between hazardous and non-hazardous job classifications, essentially disregarded in the analysis.) Because employees retiring as disabled get unworked years attributed to them in calculating their benefit (i.e. the number of years they would have worked to normal retirement or to reach 20-years service), disability retirement payments are relatively richer for persons with the same tenure, job, disabling conditions and final compensation.
The panel found (cycling through the history of the ADE and the key Supreme Court cases) that the age-55 ceiling was facially discriminatory, and thus established a prima-facie beach hold for the claim:
"There is absolutely no dispute that under the KRS plan, when such an employee becomes disabled at age fifty-five or older, that older employee is adversely treated because of his or her age when compared to a disabled coworker who is similarly situated in all relevant aspects other than age. On its face, this age-eligibility aspect of the KRS plan mandates disparate treatment of disabled employees on the basis of age. . . .
"[Moreover], KRS employees who become disabled when they are still "young enough" to be eligible for disability-retirement benefits receive reduced benefits compared to otherwise-similar but even younger disabled employees for no reason other than their age. KRS does not dispute that its plan pays lower disability-retirement benefits to an older worker who, apart from age, is similarly situated to a younger worker in all relevant respects."
The panel also rejected defendant's argument that the employer's age classification, to violate ADEA, had to be motivated by animus or stereotype against older workers. "Once a plaintiff has established that a policy is facially discriminatory in that it classifies or disadvantages an employee 'because of' the employee's protected status, additional proof of discriminatory intent is not needed, as it is directly evidenced by the facially discriminatory nature of the policy itself.." In so ruling, the court overruled portions of Lyon v. Ohio Education Association and Professional Staff Union, 53 F.3d 135 (6th Cir. 1995), that required proof of an invidious motive.
Judge Rogers separate opinion joins the result, yet expresses the view that this judge would have written a leaner and narrower opinion. She finds "unnecessary" the discussion of the prior (now overruled) circuit case law and would have reserved ADEA early retirement defense (29 U.S.C. § 623(f)(2)(B)(ii)).
A dissent of four judges (including the two judges in the majority in EEOC v. SunDance last week,EEOC v. SunDance Rehabilitation Corp., No. 04-4178 (6th Cir. Oct. 24, 2006) ),) opines that the ADEA concerns itself only with invidious discrimination based on age stereotypes, and that here the difference in treatment is purely a function of the average service life expectancy of younger versus older employees. "The majority argues that because older employees with, e.g., 10 years of service and final pay of $50,000 receive fewer benefits than younger employees with the same years of service and final pay, the KRS plan is facially discriminatory. Yet the majority misses the point that a 53-year-old employee who becomes disabled is not similarly situated to a 33-year-old employee who becomes disabled, even if they have the same service years and final pay at the time of disability. All else being equal, the non-disabled 33-year-old of course has more years to work and live than does a non-disabled 55-year-old. . . . Here, the number of years of additional work credit lost is a factor related to, but not determined by, age."
The dissent adds, to boot, that -- by altering the age and service variables -- it is possible to find scenarios where relatively older employees match or do better than their younger colleagues. "All employees who are considered disabled under the KRS plan are equally unable to do their jobs-because of disability. The only factor resembling consideration of the nature of aging that counsel for appellants could adduce at oral argument was that some older employees might wish to work beyond normal retirement age (55 for hazardous employees, 65 for nonhazardous employees). But that does not differentiate between workers who are now more advanced in years and those younger. All such workers may wish to (and, had they not become disabled, might have been able to) work beyond that normal retirement age. But any retirement plan must have criteria for qualification, and using age as one of the criteria has never been thought to violate the ADEA. "
Friday, October 27, 2006
Two days after a staggering setback in the Sixth Circuit (reported below), the EEOC Appellate Division gets off the ropes in an ADA case -- EEOC v. Heartway Corp., No. 05-7011 (10th Cir. Oct. 26, 2006) -- saving not only a verdict in its favor (for an employee suffering hepatitis C), but winning a new trial on punitive damages improvidently snatched away in the district court.
The complainant Jane Edwards worked as a nursing-home cook, in the same facility with her sister. Though Edwards was under treatment at the time, she answered "no" in her job application to the question of whether she was under a doctor's care. When Edwards cut herself while on duty, the sister at once told the director of nursing (Townsend) that Edwards had hepatitis. This led to Edwards being removed immediately from duty until she got medical clearance to return, which she obtained at once. Nevertheless, Edwards was fired, ostensibly for misrepresenting her medical treatment on her application.
A jury hearing the case awarded Edwards $20,000 in compensatory damages for "regarded as" discrimination. The judge denied judgment as a matter of law on liability after the Commission's case-in-chief and after trial, but it granted judgment as a matter of law on punitive damages.
Two issues arose on cross-appeals. The first was the sufficiency of evidence on liability, in particular the issue of whether the nursing home regarded Edwards as substantially limited in the major life activity of working: "the EEOC was required to prove by a preponderance of the evidence that Heartway treated Edwards's hepatitis as 'significantly restrict[ing]' her 'ability to perform either a class of jobs or a broad range of jobs' as compared to similarly trained persons." Though finding the inquiry into the employer's motive "strongly subjective," it also found that "the question of what constitutes a "class of jobs" or "broad range of jobs in various classes" is an objective question." The court found the following evidence turned the case in favor of the complainant:
"1. When Edwards asked Townsend for her job back, he told her: 'you having Hepatitis C, you will not work in our kitchen.'
"2. Townsend asked the EEOC investigator: 'How would you like to eat food containing her blood, if she ever cut her finger?'
"3. Townsend stated to the EEOC investigator 'that if this got out to their clients they would have a mass exodus from their nursing home.'
"4. An EEOC economist, Elvira Sisolak, testified that the tasks, education, and experience relevant to the job of dietary aide correspond to two job groups that, in her opinion, 'account for about 55 percent of all jobs in the service worker category' in the relevant geographic area."
As the panel concluded, "a jury could reasonably view the testimony as showing that Townsend believed Edwards was restricted in her ability to do any kitchen job ('you have Hepatitis C, you will not work in our kitchen') and any other job where there is a chance of bleeding and thereby transmitting hepatitis." The panel also affirmed that the discriminatory motive was established by Townsend's comment that Edwards would not return to work because of "having Hepatitis C."
Most importantly (I think) for the future was the panel's conclusion (citing Reeves) that the jury was entitled to reject the "resume fraud" explanation originally offered for Edwards' termination: "Although this testimony certainly could lead a jury to agree with Heartway's version of the facts, the jury was also entitled to conclude that Townsend was not entirely truthful at trial and that he misled Edwards when he told her that she was being fired for lying on her application." Um, why isn't this standard enforced more vigorously at the summary judgment stage?
The second issue, on the EEOC's cross appeal, was the employer's liability for punitive damages. While the district court judge took the issue from the jury, the Tenth Circuit found enough grist in the following testimony to potentially support a punitive award:
"Q. In some prior jobs that you've had, you have received training about the [ADA]; right?
"A. Some training.
"Q. And you were aware, based on your training that you received, that it was against the law to fire someone because they had a disability; is that right?
"A. That's right.
"Q. And you knew, based on your training about the [ADA], in April of 2002, that it was against the law simply because someone had been diagnosed with Hepatitis C; right?
So the case heads back for trial anew on punitives! Way to fight on, EEOC!
Wednesday, October 25, 2006
Things have been quiet the past week, then this case popped out of the Sixth Circuit -- EEOC v. SunDance Rehabilitation Corp., No. 04-4178 (6th Cir. Oct. 24, 2006). It presents a rarified question of EEO-related retaliation law: Whether an employer offering a "separation agreement constitutes facial retaliation under the anti retaliation statutory provisions to the extent that it conditions severance pay on a promise not to file a charge with the EEOC." The district court held that it did, but the Sixth Circuit panel (two to one) reversed that judgment. In so holding, the Sixth Circuit rejected an EEOC guidance (EEOC Notice No. 915.002 issued April 10, 1997, "Enforcement Guidance on Non-Waivable Employee Rights Under Equal Employment Opportunity Enforcement Statutes") that supported the claimant's position that such offers constitute per se retaliation.
The claimant declined a severance package that would have required her to return the consideration ("one lump sum an amount equal to 80 hours of pay at the base rate") if she violated any provision, including the filing of any "charge, or grievance against Company or any other released parties in any administrative, judicial or other forum whatsoever with respect to any acts or events. . . ." (Emphasis original in opinion.) Taking this language seriously, the employee was concerned that signing the release would be tantmount to abandoning her right to notify the EEOC of unlawful practices.
The majority opinion, while acknowledging the commonplace that private agreements not to file charges are void (as against public policy), focused on the complainant's apparent free-will to decline or accept the release, finding no intent on the employer's part to retaliate: "SunDance's refusal to pay Salsbury severance pay that she was otherwise not due or promised when she did not sign the Separation Agreement left her in the same position that she had been in before the offer of the free-standing Separation Agreement. This was not a benefit given or owed to all employees, that was then withdrawn because of some protected conduct. As such, Salsbury was not adversely affected, and on these facts the denial of severance pay was not an adverse action for the purposes of the retaliation analysis." In the course of the discussion, it cited and distinguished a host of case law that casted legal doubt on such releases.
The dissent (by a sitting district court judge) got to the heart of the matter, finding the agreement faintly farcical: "The majority in effect says that an employee who believes he or she has an EEOC enforceable claim or at a minimum is willing to testify in an EEOC enforcement action should sign the agreement, take the money and then go forward with the EEOC. If SunDance sues for a return of the severance pay, then the defense of retaliation should be raised and may carry the day."
While I recognize that affirmance of the district court in this case would have placed untold thousands of settlement agreements in jeopardy, the analysis laid out by the majority is dissatisfying. It endorses ad terrorem clauses, known by the employer's counsel (but not employees) to be pure legal malarkey. I sense that we have not heard the last of this issue.
Tuesday, October 17, 2006
A popular misconception (certainly among employees who call me for advice) is that the Americans with Disabilities Act protects employees with any kind of injury or illness. But as professionals in the area know, establishing a "disability" under the ADA can be half the battle: the employee typically walks the razor's edge between being impaired (i.e. suffering a substantial limitation in one of more major life activities) and being unqualified (i.e. unable to perform one or more essential functions of the job).
An employee in Didier v. Schwan Food Co., No. 05-3911 (8th Cir. Oct. 16, 2006) failed to prove his claim, unable to establish a substantial limitation caused by his injured right arm. Although the employee was offered a switch from driving trucks to working as route sales manager, he turned down the latter position because he operate the truck doors. Eventually he was terminated.
The Eighth Circuit affirmed summary judgment for the employer. While allowing that the plaintiff had "the fortitude to adapt to the effects of an unfortunate on-the-job injury," it found (citing Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184, 198 (2002)) that he failed to demonstrate that the injury substantially affected the major life activity of taking care of one's self:
"Didier argues that he is substantially limited in the life activity of caring for himself because he has difficulty shaving, brushing his teeth, grooming, cleaning himself, wiping after going to the bathroom, feeding himself with a spoon, and dressing himself. He admits that he has learned to do most of these things with his left hand, but argues that because it takes him longer to do these things, he is substantially limited in this life activity. The district court noted that the medical evidence, including the FCE, indicated that while daily living activities were painful for Didier to do with his right hand, he could accomplish them with his left hand. Accordingly, the district court concluded that while Didier did have some medically imposed restrictions, he could not establish that his limitations were 'substantial.'"
Friday, October 13, 2006
A former high school coach fouled out in Brown v. Unified school Dist., No. 05-3378 (10th Cir. Oct. 12, 2006), then the clock ran out on his claim. His prior seasons in the district had been rocky and culminated in an unsuccessful race discrimination lawsuit. After leaving and then returning to the district, he applied to return to his old job in 2000. He did not make the cut:
"The [rejection] letter concluded with this clarifying admonition: 'This letter should end any uncertainty regarding your status with the [school district].' Id. While plaintiff questioned the basis for the decision, he admitted that 'after receiving this [letter]' he 'knew that they were saying they w[ould] not hire [him].'"
He filed a charge of discrimination alleging failure to hire, received a right-to-sue letter, and allowed the statutory 90-day period expire without taking any action. Then, in 2002, he began corresponding regularly with the district trying to reverse its decision, but it repeatedly refused to reconsider. Finally in 2003 he filed another charge alleging race discrimination, and in 2004 brought a new suit under Title VII and section 1981.
Affirming summary judgment for the district, the court held that the coach had been around the track a few too many times. The original failure to hire was final and all subsequent attempts were held, as a matter of law, to be mere iterations of the original (now time-barred) claim:
"[Plaintiff] contends that his copious correspondence with the school district over the broad decision it made in 2001 should be deemed a series of discrete job applications and that the school district's reaffirmations of that decision should be deemed a series of discrete (and independently discriminatory or retaliatory) decisions denying each application, the last of which, the letter of May 23, 2003, would not be time-barred. But that is simply not the charge he pursued administratively and the claim he pled in the district court, which fix the scope of the case properly before us. Those remedial efforts were directed at the school district's broad decision in August 2001 as reaffirmed, in equally broad terms, in May 2003, not at any particular, independently discriminatory hiring decision." [Emphasis original]
The section 1981 claim, meanwhile, flamed out on grounds that only a two-year period applied to such so-called "pre-formation claims."
Tuesday, October 10, 2006
The curtain opens on the next act of the epic legal battle between deaf truck drivers and UPS, one of the rare class disability cases, and one (even rarer still) to actually proceed to trial. The Ninth Circuit in Bates v. UPS, No. 04-17295 (9th Cir. Oct. 10, 2006) substantially affirms the liability finding against UPS (and entry of injunctive relief), finding that the defendant failed in its burden to demonstrate that its categorical disqualification of deaf drivers was job-related and a business necessity under the ADA.
The district court found that UPS failed to prove that it could not modify its existing training and assessment program to determine which deaf drivers are safe. The flaw in UPS's argument was that it did not show that it examined hearing drivers with the same rigor it applied to the deaf. Under the UPS policy:
"UPS would be allowed to exclude - contrary to the ADA - deaf drivers who are no more dangerous than some hearing drivers UPS employs and who can be identified by UPS as presenting an acceptable risk of danger. The concept of risk, in other words, is an individual, not an aggregate, one, albeit one calculated by averaging out overall risk: How likely is it that the individual driver will get into an accident? If there is, for example, a one percent chance that hearing drivers who have had two prior accidents will get into an accident, yet UPS hires them, and a one percent chance that deaf drivers generally will get into an accident, then excluding deaf drivers generally is excluding a subgroup no less safe than another subgroup not excluded, and is therefore discriminatory."
The court noted that although the original burden of demonstrating standing -- that employees are "qualified individuals" -- rests with the plaintiffs, the burden shifted to the employer to establish a "direct threat" to health or safety:
"when a safety-related qualification standard that excludes a class of individuals with disabilities is at issue, the employer satisfies its burden under the business necessity defense if it can show that either (1) 'substantially all [excluded individuals with disabilities] present a higher risk' than individuals not excluded, or (2) 'there are no practical criteria for determining which [excluded individuals with disabilities] present a heightened risk and which do not.'"
And here's a snippet from the opinion unlikely to appear on the defense firm's webpage:
"We underscore that our holding turns entirely on UPS's failure to adduce any persuasive proof suggesting that its standard is justified as job-related and consistent with business necessity. UPS contends that in the face of uncertainty regarding whether deaf drivers are more dangerous than hearing drivers, it must be given the benefit of the doubt. The second prong of the business necessity defense in Morton does give employers the benefit of the doubt in cases of uncertainty, but only when the employers introduce persuasive evidence supporting the conclusion that the answers to the questions at hand truly are uncertain. Here, UPS made no such showing."
Another plaintiff's victory, tinier but no less sweet-smelling, blossomed in O'Donnell v. Vencor Inc, No. 05-15687 (9th Cir. Oct. 10, 2006) (per curiam), where two law students from the University of Arizona (Nicholle Harris and Aeryn Heidermann) persuaded the panel to reverse summary judgment in part on the employee's Equal Pay Act claim. The district court dismissed the employee's ADE and Title VII claims for failure to prosecute (while the employee was subject to a bankruptcy automatic stay). Some two years, after she refiled her dismissed case, plaintiff also included the Equal Pay Act claim. The Ninth Circuit affirmed the dismissal of the ADE and Title VII claims on limitations grounds, but remanded the EPA claim, holding that "the period of time commencing upon the issuance of the automatic stay and ending thirty days after notice of termination of the stay, see 11 U.S.C. § 108(c)(2), must be excluded from the applicable EPA limitations period, which is two years for a general violation and three years for a "willful" violation, 29 U.S.C. § 255(a)." And because the same core facts applied to both the discrimination and EPA claims, the belated amendment "related back" by operation of Fed. R.Civ. P. 15(c)(2).
Monday, October 9, 2006
"What does your button say? 'Union Yes!'? Boy, now I really feel demoralized!!"
Thirteen judges of the Fifth Circuit affirmed the policy of a public hospital, over a First Amendment challenge, to ban employees from wearing a pro-union button in "the interest of the Hospital . . . promoting the efficiency of the public service it performs by means of its uniform non-adornment policy." CWA v. Ector Co. Hospital Dist., No. 03-50230 (5th Cir. Oct. 5, 2006). Four dissenters, meanwhile, found the policy malarkey.
The issue presents the Pickering v. Board of Educ., 391 U.S. 563 (1968), stretched out to its utmost. The district court granted judgment as a matter of law to the union, holding that application of an anti-adornment dress code to squelch the above-captioned button -- here, worn by a carpenter while working in an unoccupied room -- flunked the Pickering balance test. The evidence showed that except for professional pins (i.e. demonstrating the credentials of the wearer), no other pins were allowed. Well, except for the "Great American Smoke Out" day pins. Oh, and the "I'm A Donor" pins on blood drive day. And except for employees cheering the annual Odessa High school-Permian High school gridiron match-up; they got to wear buttons, too. No exceptions to the policy, except for these several.
The carpenter in question removed, then restored, the disputed button to his uniform while he worked in vacant room. He was suspended briefly for the infraction. (As a curious sidelight, according to the opinion Texas law bans public hospitals from recognizing unions, so no organizing campaign was ongoing.)
On appeal, the court first affirmed the judgment, but the en banc court reversed. The majority found a weak interest in plaintiff's promoting union membership, while holding that even in a civilian, non-law enforcement employment setting, morale may benefit from enforcement of uniform requirements:
"There is no reason to believe that a uniform requirement will not have somewhat similar efficiency enhancing effects in the non-law enforcement context, as is clearly attested by the presence of uniforms in so many non-law enforcement occupations, e.g., postal employees, bus drivers, flight attendants, United Parcel Service personnel and a host of others. Uniforms also serve to provide a neat and professional appearance to members of the public served by the employer, here Hospital patients and visitors, and to allow patients and visitors to identify the employees as being such. Obviously, when a Hospital plumber, electrician, or housekeeper comes into a patient occupied room, or when a Hospital carpenter is observed by a patient or visitor in the hall, it is also highly desirable that the employee be easily identifiable as such by, as well as present an appropriate appearance to, that patient or visitor."
The dissent found dubious the majority's weighing of relative interests: "Herrera's pro-union speech, therefore -- irrespective of an inevitable bit of personal motivation -- much more directly and substantially addressed a 'matter of public concern' than the majority is willing to acknowledge. Yet, courts that have considered the question have uniformly held that speech regarding union activities is almost always speech on a matter of public concern." Meanwhile, "The ineluctable fact is that (1) uniforms bearing only the employer prescribed insignia central and paramount to the core interests of military and law enforcement agencies; but (2) having Herrer and his subset of workers wear no adornments on their work clothes would contribute minimally, if at all, to such clearly secondary or tertiary interests of civilian institutions like hospitals."
Also on Friday night, the Tenth Circuit in Hardin vs. First Cash Financial, No. 05-6090 (10th Cir. Oct. 6, 2006) reversed a district court decision denying arbitration in an employment discrimination case, holding (under Oklahoma law) that a pawn shop manager accepted the arbitration policy (DRP) by continuing to work. The record revealed that the employee rejected the policy when it was proposed to her. Oklahoma law was unsettled about whether, under such circumstances, the rejection ought to be treated as a "counteroffer" that became effective when the employer allowed the manager to remain employed. But the panel found that the employer responded to the counteroffer by reiterating its demand that all employees who reported to work on Mach 1 agreed to be bound: "the Agreement as well as the posting manifested First Cash's contrary intention not to permit a counteroffer to terminate the employee's power of acceptance. Indeed, March 1 came and went and Hardin never renewed her objection. In the face of these facts, Hardin came to work. We, therefore, construe Hardin's continued employment after March 1 as acceptance of the terms of the DRP."
Thursday, October 5, 2006
There is a split in the circuits about whether an employee who succeeds on a discrimination claim before a state agency, and upon review in state court, may then file a second suit in federal court to obtain relief not available in the state forum. The Second Circuit in Nester v. Pratt & Whitney, No. 05-1754 (2d Cir. Oct. 4, 2006) (available at the Second Circuit website) joins the courts allowing a second case, and rejecting claim preclusion, but arrives at the decision by two rationales, each joined by different panelists.
Chief Judge Jacobs, writing for the panel, held that the same result attended no matter whether state or federal claim preclusion law applied. Judge Winter joined only the portion applying federal law. In that section, the court held that under New York Gaslight Club, Inc. v. Carey, 447 U.S. 54 (1980), claim preclusion did not prevent an employee from seeking federal remedies (in that case, attorneys fees) after a successful state court case. The panel majority rejected the employer's argument that a superseding decision, Kremer v. Chem. Constr. Corp. , 456 U.S. 461 (1982) (barring frustrated state plaintiff from refiling losing Title VII claims in federal court.
Judge Walker, meanwhile, joined Chief Judge Jacobs on the alternate ruling that Connecticut state law does not preclude refiling by the plaintiff in this case because she sought remedies (compensatory and punitive damages, and attorneys' fees) unavailable in the state proceeding and thus was prevented from fully litigating those claims in that forum.
Monday, October 2, 2006
The Supreme Court, in the first day of its new term, denied certiorari in a number of employment cases, including:
Hardage v. CBS Broadcasting Inc., 436 F.3d 1050 (9th Cir. 2006) (granting summary judgment on Ellerth/Faragher defense, where employer maintained an anti-harassment policy, employee did complain and harassment ceased; any delay was caused by employee twice requesting that he about allowed to handle situation personally, and where prior complaints ere vague about sexual nature of manager's advances)
EEOC v. Sidley Austin LLP, 437 F.3d 695, 97 FEP 743 (7th Cir. 2006) (EEOC has standing to obtain ADEA relief for partners who did not file charges with agency)
Johal v. Little Lady Foods, Inc., 434 F.3d 943, 97 FEP 376 (7th Cir. 2006) (elimination of job not a pretextual explanation where the plaintiff's duties were split with three incumbent employees)
Keeton v. Flying J, Inc., 429 F.3d 259, 96 FEP 1654 (6th Cir. 2005) (affirming jury verdict for plaintiff; jury could have found that a transfer of an employee to a remote location 120 miles away was materially adverse)
Also today, the Seventh Circuit considers the grey area between national origin and national citizenship discrimination in Nair v. Principi, No. 05-3673 (7th Cir. Oct. 2, 2006), though ultimately deciding the Title VII case on other grounds (lack of evidence of discriminatory motive by the supervisor).