Daily Developments in EEO Law
by Paul Mollica ©2007
Thursday, August 30, 2007
The U.S. Courts of Appeal haven’t gifted us with any published EEO cases in over a week (excepting one unremarkable Seventh Circuit case, affirming summary judgment in a race discrimination case).
Here, though, are two employment-related cases headed into the holiday weekend that are worth a look.
In Coppola v. Bear Sterns, No. 05-6440 (2d Cir. Aug. 30, 2007), the Second Circuit faced the question of when the creditor of a company may be liable as an “employer” under the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101-09. In brief:
“Appellants claim that Bear Stearns closed the principal offices of National Finance Corporation (‘NFC’), their employer and a debtor of Bear Stearns, and terminated their employment without the advance written notice required by WARN. Judge Scullin granted appellees’ motion for summary judgment, holding that appellees had no liability under WARN because Bear was not appellants’ “employer” within the meaning of the statute.”
The court faced a split between two circuits (the Eighth and Ninth) that impose lender liability “at the time of the plant closing, [where] the creditor was in fact ‘responsible for operating the business as a going concern’ rather than acting only to ‘protect [its] security interest’ and ‘preserve the business asset for liquidation or sale'” (citation omitted), and another circuit (the Third) that applies a multi-faceted, joint-employer test cadged from the NLR and advocated by the Department of Labor.
The Second Circuit throws in with the Eighth and Ninth, finding (in addition to supporting langauge in the statute) that liberal secondary liability against lenders would harm floundering businesses trying to remain aloft:
“Moreover, the policy of the statute would be turned on its head by a test that imposed WARN liability based on the exercise of control by creditors during a workout. WARN is intended to cushion the blow to workers of mass layoffs or plant closures by requiring 60 days’ notice by the employer. If creditors cannot undertake a short-term workout that, as in the present circumstances, requires an exercise of control without risking WARN liability, there will be fewer workouts and more business closures, many without WARN notice. Such control is essential to inducing creditors to forbear and to attempt a workout. However, the leverage that creditors have over businesses that can’t pay their debts exists because everyone in such a business — particularly its employees — is better off with creditor forbearance and support, even with stringent conditions, than with the creditors deciding not ‘to throw good money after bad.'”
Meanwhile, in Brotherhood of Locomotive Engineers v. Union Pacific R.R. Co., No. 06-3282 (7th Cir. Aug. 30, 2007), the court (per Judge Posner) calls out the railroad for confecting an ambiguity in an arbitration award in order to challenge it in district court under the RLA. The judge has lots of fun with the idea:
“Suppose Union Pacific Railroad had changed its name to Union Atlantic Railway and contended that since that name does not appear in the arbitration award, the continued applicability of the award was uncertain. The name change would not create a doubt that the arbitrators, had they known of the change, would still have issued the award. Or suppose the award had stated that Union Pacific was forbidden to fire workers Smith, Jones, and Carter, and after the award was entered the railroad fired Smith and argued that since it had not fired Jones and Carter, it was unclear whether the award had been violated. That argument would be laughed out of court.”
Happy Labor Day to you.
Wednesday, August 22, 2007
Another case proving that special interrogatories are the devil’s playground: Burger v. Int’l Union of Elevator Constructors, Local No. 2, No. 06-3061 (7th Cir. Aug 22, 2007).
Burger claimed retaliation under the ADE and LMRA for complaining (to the EEOC and NLRB respectively) about getting canned from an apprenticeship program, and about the union’s misuse of dues. The union stopped accepting a reduced fee from Burger, contrary to the union’s practice of dispensing reduced-fee cards to out-of-work members. The jury returned a verdict in favor of the employee, awarded damages and found willfulness (supporting double damages).
On appeal, the Seventh Circuit has no problem upholding the verdict on liability, the award of fees and costs and even the overall range of damages. (Worth noting: last year in Maalik v. Int’l Union of Elevator Constructors, Local No. 2, 437 F.3d 650, 97 FEP 646 (7th Cir. 2006), the Seventh Circuit reversed a bench-trial judgment for the same union, then accused of denying a minority female trainee a mechanic’s permit.)
But, oops, the jury mismarked the special interrogatories, and so the case must go back for a new trial (on damages only):
“The parties both agreed at oral argument that they will never again use the same verdict form that they came up with for this case. The form provided the jury the opportunity to indicate whether they found for the plaintiff or defendant on both of the counts, and it provided a place under each count for the jury to make an award of damages. Each count had lines for damages in compensation for back pay, for lost future earnings, and for mental and emotional pain and suffering.”
This allowed the jury to award back pay under two different counts, possibly allowing it to split the award arbitrarily between the two counts: “in all likelihood it seems that the jury either awarded $75,000 in back pay, split disproportionately in favor of count two, or the jury awarded $50,000 divided equally. Both results contradicted theory of damages that Burger attempted to convey to the jury. And more significantly, both awards would be inconsistent with the fact that all back wages in this case had to have stemmed from the same injury, regardless of the legal theory under which the damages were sought.”
And just to drive the point home, the judges attached copies of the original, offending jury verdict forms. Lesson: general verdict forms are the only way to fly.
Monday, August 20, 2007
Last year, in Hulteen v. AT&T Corp., 441 F.3d 653, 97 FEP 1025 (9th Cir. 2006), a panel of the Ninth Circuit (Judges Plager and Trott, with Judge Rymer dissenting), declared as overruled a rule established in Pallas v. Pacific Bell, 940 F.2d 1324 (9th Cir. 1991), cert. denied, 502 U.S. 1050 (1992): that awarding pension benefits calculated upon service dates that awarded pre-1979 pregnancy leave timeless credit than comparable disability leave violated the Pregnancy Discrimination Act of 1978, 42 U.S.C. § 2000e(k). The panel majority consigned that rule to the category of discredited “present effect of past discrimination” cases (United Air Lines, Inc. v. Evans, 431 U.S. 553 (1977)), and also held that Pallas had been superceded by Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (declaring portions of 1991 Civil Rights Act retroactive), which the majority held tightened the standard of legislative retroactivity. Judge Rymer dissented on the narrow ground that a single panel of the court lacked authority to up-end another panel’s precedent, and that the intervening Supreme Court authority did not control.
On rehearing “en banc” (which before the Ninth Circuit means a randomly-selected bench of 15 judges), the court reaffirms Pallas and overrules the panel majority: Hulteen v. AT&T Corp., No. 04-16087 (9th Cir. Aug. 17, 2007). Ten judges voted to affirm a judgment of liability for a class of some 15,000 female AT&T retirees. The class charged that AT&T paid them discriminatorily-reduced pension benefits: while the company credited leave associated with temporary disability for retirement benefits, it excluded pregnancy leave from those calculations. The policy fell directly under the Pallas rule. Four judges dissented, including Judge Rymer (the only member of the original panel slotted en banc, and now apparently satisfied that the en banc court had authority to ash-can Pallas), although without elaboration she also joined one section of the majority opinion (the section that quoted her panel dissent).
The dissenters believed that they had the tide of Landgraf; National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002); and Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct. 2162 (2007), rising behind them. But the majority parsed some odd and little-noticed language in the PDA to hold that each application of AT&T’s policy constituted the continuation of a facially-discriminatory policy, thus governed by Bazemore v. Friday, 478 U.S. 385 (1986), which the Ledbetter court reaffirmed.
First, the majority found that the class members were “affected by pregnancy,” under the express terms of the statute:
“Applying the ordinary meaning of the term ‘affected’ here leads to the conclusion that although Hulteen was affected by pregnancy when she took pregnancy leave, she was again ‘affected by pregnancy’ when AT&T calculated her retirement benefits in 1994, deliberately choosing to use an NCS date that would deprive her of benefits received by those who were not ‘affected by pregnancy’ by excluding her earlier pregnancy leave from the later calculation of benefits. It was well within AT&T’s ability and control to calculate Hulteen’s benefits in 1994 giving her service credit for the time she spent on pregnancy leave, and to thus avoid violating the PDA. AT&T simply chose to continue its systematic discrimination against women, based on pregnancy, even after Congress made it illegal.”
Because of the facial violation, the majority held that this case was not like Evans, Morgan or Ledbetter, nor did it require retroactive application of the PDA to pre-1978 discrimination.
Second, the majority contrasted the broad exemption of seniority systems from Title VII liability, under 42 U.S.C. § 2000e-2(h), with the specific and later-enacted language in the PDA that narrowed its application:
“By beginning § 2000e-2(h) with the phrase ‘[n]otwithstanding any other provision of this subchapter,’ Congress broadly exempted bona fide seniority systems from Title VII’s coverage. However, in enacting the PDA in 1978, Congress could not have been more clear in expressing its intent to limit the scope of the bona fide seniority system exemption, when it stated that ‘nothing in section 2000e-2(h) of this title shall be interpreted to permit otherwise.’ 42 U.S.C. § 2000e(k). A later-enacted specific amendment, like the PDA, alters an earlier broad provision of the statute when the amendment states that it should control.”
Thus seniority systems that unfairly penalize women taking pregnancy leave fall into their own tenuous category, unshielded by 2000e-2(h). The court confessed that its decision conflicted with decisions of the Sixth and Seventh Circuits — with the Seventh Circuit case, in particular, concerning a policy of Ameritech, now AT&T. This leaves an opening for AT&T to obtain certiorari on the U.S. Supreme Court.
Friday, August 17, 2007
One day after the Fifth Circuit upholds a district court’s exclusion of an EEOC determination on the ground that it would prejudice the jury (see Guerra v. North East Indp’t school Dist., No. 06-50488 (5th Cir. Aug. 14, 2007), and entry below), here comes a different panel of the same court affirming admission of an EEOC determination over the same objection: Decorte v. Jordan, No. 05-31042 (5th Cir. Aug. 15, 2007).
Eddie Jordan, the first-ever African-American District Attorney of Orleans Parish, cleaned house of the office’s non-attorney staff shortly after being elected to office, requiring incumbents to re-interview for their jobs. The terminees were nearly all white (53 white, one Latino who was described as “white” in the office files, and two blacks). Their replacements were substantially all black. Unsurprisingly, a jury entered a verdict for 35 plaintiffs, to the tune of $2.4 million.
Defendant Jordan sought to exclude an EEOC determination in the plaintiffs’ favor at trial, and renewed the argument on appeal:
“Jordan claims the court abused its discretion in admitting into evidence EEOC determinations stating the evidence it had reviewed supported Plaintiffs’ race-discrimination claims. He relies on Federal Rule of Evidence 403, claiming their relevance was far outweighed by the danger of unfair prejudice. Jordan contends the jury could have given the determinations greater-than appropriate weight because they had the imprimatur of Government approval.”
The Fifth Circuit, affirming the verdict and judgment, held simply that:
“As a general rule, “EEOC determinations and findings of fact, although not binding on the trier of fact, are admissible as evidence in civil proceedings as probative of a claim of employment discrimination”. McClure v. Mexia Indep. Sch. Dist., 750 F.2d 396, 400 (5th Cir. 1985). Jordan has not shown, pursuant to Rule 403, how the EEOC determinations at issue were unduly prejudicial. Accordingly, there was no abuse of discretion.”
Perhaps one way to square these decisions (technically, anyway) is that, reviewed for abuse of discretion, the district court had the latitude to admit or exclude the determinations. Moreover, given the records described in the respective cases, any error would have likely been deemed harmless. But the absence of any analyses in these two polar-opposite decisions would mean, as a practical matter, that there is no standard at all in the Fifth Circuit today.
Thursday, August 16, 2007
The Fifth Circuit has for decades been on the record as favoring the admissibility of EEOC determinations at Title VII jury trials (McClure v. Mexia Indep. Sch. Dist., 750 F.2d 396, 399 (5th Cir. 1985)), and — long before that — at bench trials (Smith v. Universal Services, Inc., 454 F.2d 154 (5th Cir. 1972)). But now, without so much as a “pop,” that standard has disappeared. In Guerra v. North East Indp’t school Dist., No. 06-50488 (5th Cir. Aug. 14, 2007), the panel held that it was not error to exclude an EEOC determination in favor of the employee on Fed. R. Evid. 403 grounds. The circumstances were, admittedly, a bit dodgy:
“[T]he EEOC letter was created under questionable conditions-the EEOC investigators initially determined that NEISD had not discriminated against Guerra but later, following complaints by Guerra to a member of Congress, reopened the file and reversed their decision without any new evidence. The district judge did not allow NEISD to subpoena the EEOC investigators to explain this matter.”
Nevertheless, the panel went on to hold that “the EEOC evidence spoke directly to the ultimate issue in the case. It would likely have prejudiced the jury since the EEOC made its own factual determination that age discrimination occurred.” And that two-line ruling runs contrary to the decades of case law finding such EEOC determinations probative. The silver lining for employees is that this decision would also counsel against the admission of determinations against charging parties as well.
Wednesday, August 15, 2007
The Supreme Court is poised to decide next term if and when the filing of an Intake Questionnaire with the EEOC may constitute a “charge” under 29 U.S.C. § 626(d) of the ADEA. Fed. Express Corp. v. Holowecki, 127 S. Ct. 2914 (2007). But for one group of former housekeepers in a medical clinic operating room, challenging an English-only workplace rule, no decision in Holowecki will come to their rescue.
In Montes v. Servicemaster Mgt. Services Ltd. Partnership, No. 05-1385 (10th Cir. Aug. 14, 2007), five employees argued that they met the charge-filing requirements under Title VII when “they contacted the Colorado Civil Rights Division (‘CCRD’) — first by letter from their counsel on August 17, 1999, and then, shortly thereafter, by completing ‘intake forms’ with the division.” But their counsel, for reasons unexplained in the opinion, did not file the intake forms in the record. Though they later filed formal charges with the EEOC, by then it was more than 300 days since they were terminated.
The court holds that the plaintiffs’ contention that they filed “intake forms” was insufficient to stave off summary judgment:
“The viability of plaintiffs’ argument can be assessed only with a review of the content of their submissions to the CCRD; without counsel’s letter or the intake forms (all materials that are uniquely within plaintiffs’ control), we are unable to do more than speculate whether they qualified as ‘charges’ or whether they were ‘filed’ within the time period prescribed by law. And speculate we may not do.”
The plaintiffs then tried a daring gambit: arguing that because limitations challenges are affirmative defenses, that the employer must disprove the existence of the charges. But the Tenth Circuit holds that “compliance with Title VII’s filing deadline [is] a condition precedent rather than an affirmative defense.”
For three plaintiffs not time-barred, the panel went on to affirm summary judgment on the merits. It held that an English-only room tailored only to the operating-room would not violate Title VII. “The English-only rule complained of here prohibited Ms. Escobedo and other housekeepers from speaking Spanish solely while working in the operating room department, and apparently only for job-related discussions, and carried with it a conceded business necessity. The policy bore no apparent effect in any other place within the Clinic or during Ms. Escobedo’s breaks or to discussions unrelated to her job, and thus, according to the EEOC, is a policy applicable only at ‘certain times’ or places justifiable on a showing of business necessity.” Hostile work environment and job-assignment claims also fell to the wayside.
Tuesday, August 14, 2007
National origin harassment is actionable even when the harassers get the employee’s nationality wrong. So the Fifth Circuit holds in EEOC v. WC&M Enterprises, No. 5-21090 (5th Cir. Aug. 10, 2007), where a native of India (named Rafiq) was harassed around the time of 9/11 for supposedly coming from a Moslem country. The Fifth Circuit reversed summary judgment on a Title VII hostile work environment claim, finding among other things that the district court erred in holding that none of the harassment was based on national origin because the harassers did not refer to the employee’s actual national origin. Citing 29 C.F.R. § 1606.1, an EEOC guideline and several district court opinions, the panel concludes: “In this case, the evidence that the EEOC presented supports its claim that Rafiq was harassed based on his national origin. Indeed, several of the challenged statements refer to national origin generally (even though they do not accurately describe Rafiq’s actual country of origin): (1) Kiene’s comment to Rafiq, ‘Why don’t you just go back where you came from since you believe what you believe?’; (2) Swigart’s statement, ‘This is America. That’s the way things work over here. This is not the Islamic country where you come from.’; and (3) Kiene’s and Argabrite’s practice of referring to Rafiq as ‘Taliban’ and calling him an ‘Arab.'”
Monday, August 13, 2007
I cannot say how many articles I have read (mostly by advocates for employees) calling for an end to the 34-year old McDonnell Douglas standard for screening employment discrimination cases. Courts increasingly seem to agree, but not because they want employees to get more trials. Instead, they have forgotten or lost faith in the presumption underlying the test: that an unexplained or false rationale for an adverse employment decision raises an inference of discrimination, and that it is up to the finder-of-fact to sort out the motivation. Instead, courts have become ever more indulgent of employers’ explanations, preventing juries from carrying out the role assigned to them by Congress in the 1991 Act.
Jackson v. Gonzales, No. 06-5053 (D.C. Cir. Aug. 10, 2007) strikes me as just such a case. This was a 2-1 panel decision affirming summary judgment in a civil service promotion case originating in the U.S. Bureau of Prisons. As in many such cases, a minority employee (an African-American male) was outpointed in a promotion process by a non-minority (a white female named Batchelder). Only the non-minority employee was allowed to advance in the process and was promoted. Under the McDonnell Douglas test it was accepted that the employee met the prima facie requirements. The agency contended that the successful candidate had greater experience in one particular skill area: “board members sought to hire an applicant who had experience with the Bureau’s main data management tool, known as the Key Indicators Strategic System, although the job description documents did not expressly refer to Key Indicators experience as a specific qualification (the documents listed more general qualifications).”
The panel majority found that this explanation met the employer’s burden of production and that the employee had not presented a genuine issue of material fact to rebut it: “But it is undisputed that Batchelder had been an outstanding employee at the Bureau; that her experience with the Key Indicators system was substantially superior to Jackson’s; that the Key Indicators system was important to the Bureau’s operations; and that Batchelder received by far the highest KSA scores of any candidate who applied for the job.” It placed no weight on the omission of the Key Indicator Strategic System from the otherwise-detailed job description:
“[J]ob descriptions are often phrased in general terms, and employers then make the ultimate hiring decision in light of more specific factors – such as their strategic priorities and goals at the time, the strengths and weaknesses of the applicant pool, and the overall skills of and gaps in their existing workforce, among many other factors. We have said that courts must not second-guess an employer’s initial choice of appropriate qualifications; rather the courts ‘defer to the [employer’s] decision of what nondiscriminatory qualities it will seek’ in filling a position.” [Citation omitted]
While the panel majority read this as a case where the plaintiff was touting his relatively higher qualifications as evidence of pretext, the dissent (by Judge Rogers) picked up on a different thread: “Jackson’s appeal is based on evidence suggesting that the employer’s asserted nondiscriminatory reason for selecting another candidate was fabricated to mask unlawful discrimination.” AS the dissent elaborated
“By treating this case as simply a matter of the BOP choosing the more qualified applicant, see id. at 6-7, however, the court ignores the material issue of disputed fact raised by Jackson’s evidence that goes directly to the question of what type of applicant BOP actually sought in announcing the GS-14 research analyst position – a research analyst with the announced skills and experience or a computer programmer with Key Indicators experience?”
The record included other evidence bolstering the inference of discrimination, including “the absence of African-Americans from high-level positions at the BOP and the BOP’s failure several months earlier to fill another GS-14 research analyst position for which he had received a score of 98 out of 100, from which a reasonable inference of unlawful discrimination may be drawn.”
Now I understand that an employer might respond to this argument that, naturally, there shouldn’t be a trial over whether the agency in hindsight should have specified a particular job qualification in a job description. How does such an omission imply discrimination? To which I would reply, that it is the jury who gets to decide whether the employer unthinkingly omitted the qualification or simply concocted it after the fact, and (if the latter) to draw whatever inference the record rationally supports. Given the agency’s defense, it should be unafraid to try the case and win handily on the ground of honest mistake. But there should be no room in the process for courts to place a thumb (or a whole fist) on the employer’s side of the scale to shortcut the process. That is, at least as long as McDonnell Douglas remains the law. But unless I miss my guess, many courts long ago moved past the substance of McDonnell Douglas and nowadays apply it only in form.
Friday, August 10, 2007
In “Summary-Judgment-Land,” judges get to decide (instead of juries) whether sexual harassment is severe or pervasive, despite the indeterminate standard and the limitless combinations of facts that make up such claims. But sometimes district courts get their wings clipped, as in Craig v. M&O Agencies, Inc., No. 05-16427 (7th Cir. Aug. 9, 2007)
This case presented, in the panel’s words, “incidents inappropriate in any work environment and made all the more egregious here because they were perpetrated on the plaintiff by her direct supervisor.” The supervisor (an interim president named Byrd) made occasional remarks about the plaintiff’s body and once propositioned her over drinks. Then, during a “happy-hour” event at a restaurant, “[plaintiff] Craig excused herself to go to the restroom, and moments later Byrd followed her into the women’s bathroom. When Craig exited the stall, Byrd approached her, grabbed her arms, ‘gave her an open-mouthed kiss and stuck his tongue in her mouth.'” Byrd continued for eighteen more days to entice Craig into a romantic relationship, calling her, telling Craig that he “wanted” her, and trying to convince Craig (falsely) that she had expressed feelings for him. Finally, Craig sounded the alarm at HR, which took action against Byrd.
The Ninth Circuit reversed summary judgment. It held that the district court erred in finding that the conduct was not severe or pervasive enough for Title VII liability:
“The harassing behavior included repeated comments several months before the bathroom encounter and included at least four significant incidents after. Byrd’s actions, when viewed from his perspective, might seem innocuous enough, but when viewed from the perspective of a ‘reasonable woman,’ his behavior could be understood to be so obnoxious that it ‘unreasonably interferes with work performance’ and, consequently, ‘can alter a condition of employment and create an abusive working environment.'”
The panel also held that the employer did not establish its affirmative defense under Faragher/Ellerth, because Craig reported the harassment in a reasonable interval:
“[Defendant] argues that Craig unreasonably delayed reporting the harassment because she waited until August 27, 2003 to file a complaint with the company, some 19 days after the incident at the restaurant; it suggests that if Craig had reported the behavior earlier, it is quite possible that Byrd would not have made the subsequent phone calls or repeatedly propositioned her at work. However, we do not think that in this situation a 19-day delay is unreasonable; an employee in Craig’s position may have hoped the situation would resolve itself without the need of filing a formal complaint, and she justifiably may have delayed reporting in hopes of avoiding what she perceived could be adverse-or at least unpleasant-employment consequences.”
Accordingly, “The Mahoney Group’s affirmative defense fails, as Craig’s minor delay in reporting the behavior did not meet the stringent standard outlined in Faragher” (meaning, I wonder, whether the employer will be barred from presenting it at trial).
Thursday, August 9, 2007
Employment discrimination cases sometimes lose momentum when they hit court . . . and others even start to roll backwards over the employee, as demonstrated by the unfortunate case of Gilbert v. Des Moines Area Community College, No 06-3021 (8th Cir. Aug. 8, 2007).
After Gilbert was turned down for a promotion to president (from Urban Campus Prevost), he felt something was up and filed suit under federal and state law for race discrimination. So the school started to examine the application and interview process . . . and turned up evidence that Gilbert plagiarized his application essay out of textbooks. Although he laid blame with a consultant who helped him prepare his application, this explanation wore thin:
“Gilbert stated he had paid [the consultant] about one thousand dollars in cash (with no receipt from the consultant), [who] had prepared the essay answers. However, Gilbert could not recall the consultant’s name, the number of times he met with the consultant, or the length of their meetings. Gilbert was unable to provide a description of the consultant. When asked whether the consultant was male or female, Gilbert replied, ‘Both.’ Gilbert then said, ‘I met with more than one sex.’ When asked how many people he consulted, Gilbert stated, ‘It would be one or two, because I think there was [sic] two, but I’m not sure.'”
As a result of the plagiarism investigation, Gilbert also lost his job as a provost, was demoted down to grants specialist and assigned to a cubicle “near a [smoked glass] security camera dome.” Gilbert tacked on another claim for retaliation.
Summary judgment was eventually granted on the entire case. As to the alleged retaliation, the court affirmed that there was no genuine issue of material fact about pretext: “Gilbert admitted his application constrained plagiarized materials. Gilbert’s response during the investigation could generously be labeled not fully candid. Until DMACC began the investigation in response to Gilbert’s lawsuit, DMACC was unaware of the nature and extent of Gilbert’s plagiarism.”
(But it turns out that the college wasn’t above a little film -flammery itself. That smoked glass security dome? It was just a decoy: “The security dome at issue did not contain an actual camera was installed in the accounts receivable and financial aid areas to give students, not employees, the impression a security camera might be located in those areas.”)
Wednesday, August 8, 2007
We get two decisions reported the same day marking wins for employment plaintiffs in the rarest of circumstances.
1. Williams v. W.D. Sports N.M., No. 05-2127 (10th Cir. Aug. 7, 2007), proves the exceptional case where a plaintiff (in a Title VII retaliation and discrimination case) gets a jury trial, loses and obtains reversal on appeal. The reason was an intervening change of law during appeal:
“Several female former employees of the New Mexico Scorpions, a minor league hockey team, filed suit against the team and various of its managers, alleging that they engaged in sexual harassment and other conduct proscribed by Title VII and state law. After a 10-day trial, a jury found for defendants on all counts. In this appeal, plaintiffs direct us to no fewer than thirty rulings they argue were mistaken and require reversal. We find one such argument meritorious. After the district court’s decision, and during the pendency of this appeal, the Supreme Court issued Burlington Northern & Santa Fe Railway Company v. White, __ U.S. __, 126 S. Ct. 2405 (2006), setting forth a new rubric for analyzing Title VII retaliation cases. . . Because a reasonable jury could find that the employer in this case took such an action against one of the plaintiffs before us, Rosann Williams, we reverse and remand her retaliation claim for trial. On all remaining scores, we affirm the judgment of the district court.”
At the close of the plaintiffs’ case-in-chief, the district court granted judgment as a matter of law on Ms. Williams’s retaliation claim on the ground that she had failed to prove an “adverse employment action” under the n-prevailing law.
The Tenth Circuit found that the employer’s campaign of intimidation after Ms. Williams filed an EEOC charge — beginning with her termination — met the standard under White:
“Upon her discharge, [team president Mr. Frank allegedly warned Ms. Williams ‘not to fight’ him, and that if she did so, rumors about her sexual conduct would be made public without regard to their veracity; that he would seek to ruin her marriage; and that she should consider the repercussions of her actions on her family. W.D. Sports then arguably proceeded to make good on these threats, opposing Ms. Williams’s unemployment benefits in a submission alleging that the firm had fired Ms. Williams for sexual misconduct amounting to sexual harassment, R. 1734, an apparent falsity given Mr. Frank’s candid admission at trial that he did not fire Ms. Williams for such behavior, R. 3808-09. W.D. Sports did all this, moreover, in what the jury could find was an effort to impose yet another plainly adverse repercussion on Ms. Williams and her family – the loss of income associated with unemployment benefits. The company then allegedly solicited nothing short of a quid pro quo – proposing to drop its opposition to Ms. Williams’s unemployment benefits if Ms. Williams dropped her discrimination claims – thus starkly posing Ms. Williams with the choice whether to seek vindication of her Title VII rights or risk a former employer’s intentional efforts to damage her reputation and stymie her receipt of income.”
Ms. Williams’s claim of intimidation was bolstered by her own testimony that she suffered depression and “cried a lot” during this period. Finally, the court held that Ms. Williams presented enough evidence of pretext — that the company changed stories repeatedly, and offered to drop its opposition to unemployment benefits in exchange for the withdrawal of the charge — to earn a second chance to prove the claim to a jury.
2. In Porzig v. Dresdner Kleinwort, No. 06-1212 (2d Cir. Aug. 7, 2007), the employee prevailed at an arbitration on an age discrimination suit ($96,200 in compensatory damages, $27,679 in interest, and $96,200 in punitive damages), but lost out on an award of attorney fees. While the district court upheld the award, the Second Circuit panel vacated the order: “We find that a portion of the award in this case was issued in violation of the Federal Arbitration Act [FAA] and that additional significant portions were issued in manifest disregard of the law based on the convergence of multiple factors implicating the integrity of the award.”
At the first proceeding, the arbitration panel made no award of fees to the prevailing plaintiff, and ordered the employee to pay $13,840.75 in forum fees. On the first trip to federal district court, this portion of the award was vacated as a manifest disregard of the law. The district court remanded with specific instructions to shift the forum fees to the defendant and to award a reasonable attorney fee to the plaintiff.
On remand to the arbitration panel, the employer argued (contrary to well-settled law, Blanchard v. Bergeron, 489 U.S. 87 (1989)) that the award ought to be capped at the 1/3rd contingency fee in the retainer agreement. Although the lawyer had over a quarter million dollars in time and costs in the case, the panel awarded (nearly to the penny) $75,000 for attorney’s fees and $8,500 in costs. Worse yet, it ordered the employee’s lawyer reimburse the entire fee back to his client. This award was affirmed on the second trip to the district court.
On appeal, the court holds that the entire fee award must be vacated and remanded. The panel held that the award ordering the employee’s lawyer to pay fees back to his client did not draw from the essence of the contract: “Porzig’s attorney was not before the arbitration panel in any manner other than as Porzig’s counsel; Porzig was not before the Panel with respect to his relationship with his attorney; and neither Porzig nor [counsel] had agreed to arbitrate a dispute, if in fact there was one, over their fee contract.”
The balance of the award, the court held, was in manifest disregard of the law: “(1) the district court concluded the original attorney’s fee award was issued in manifest disregard of the law and vacated the award; (2) the same Panel on remand acted without authority with respect to a portion of the award; (3) Porzig accurately explained to the arbitrators the controlling law with regard to attorney’s fees, while the Defendants advanced several misstatements of law to the Panel – including one on the very point of law on which the district court had found manifest disregard; (4) the Panel did not explain how it came up with a fee award virtually identical to the contingent fee.”
Tuesday, August 7, 2007
For a decade now, plaintiffs’ lawyers in Minnesota have had the choice with claims under the Minnesota Human Rights Act to file in state court and get a bench trial (as provided by statute), or get a jury trial in federal district court under diversity or supplemental jurisdiction, by virtue of the Seventh Amendment. Gipson v. KAS Snacktime Co., 83 F.3d 225, 230-31 (8th Cir. 1996). Now it looks as if Pennsylvania litigants may have the same choice under the Pennsylvania Human Rights Act. In Marra v. Philadelphia Housing Authority, No. 06-1140 (3d Cir. Aug. 2, 2007), the Court stopped just short of so holding, although it noted with approval the numerous district court decisions in Pennsylvania that approved juries for PHRA claims, in place of judges in state court: “We thus conclude that the District Court was correct in looking beyond Wertz [v. Chapman Twp., 741 A.2d 1272 (Pa. 1999),] to determine, under the Seventh Amendment, whether Marrand DiGravio had a constitutionally guaranteed right to try their PHRA claims before a jury. We need not further decide whether the District Court correctly held that Marrand DiGravio were entitled to a jury trial on their PHRA claims under the Seventh Amendment, as PHA has not challenged this aspect of the District Court’s ruling.” [Citation omitted]
Monday, August 6, 2007
EEOC v. Concentra Health Services Inc., No. 06-3436 (7th Cir. Aug. 3, 2007), is likely to be a driving iron in the defense bar’s golf bag for years to come. It offers as detailed a roadmap as I have ever read about what an employee must allege in a Title VII action.
The opinion also casts an unflattering light on the EEOC’s litigation tactics. In its original complaint, it alleged that the employee (Charles Horn) was fired for filing an EEOC charge claiming “that his employer, Concentra Health Services, Inc., fired him when he reported a sexual affair between his supervisor and another employee.” The district court dismissed the complaint without prejudice on the ground that the report was not a protected activity: “it was clear at the time Horn reported the affair that favoring a subordinate because of a sexual relationship did not, without more, violate Title VII.” [For simplicity’s sake we dub this the “paramour theory.”]
Upon repleading, the “EEOC responded by filing a markedly less detailed amended complaint that did not allege the specifics of Horn’s report.” In place of the allegations about the nature of Horn’s report, the EEOC alleged:
“Since at least 2001, Defendant has engaged in unlawful employment practices at its Elk Grove location, in violation of Section 704(a) of Title VII, 42 U.S.C. § 2000e-3(a). Such unlawful employment practices include, but are not limited to, retaliating against Horn after he opposed conduct in the workplace that he objectively and reasonably believed in good faith violated Title VII by reporting the conduct to Concentra’s Director of Human Resources. Concentra’s retaliation includes, but is not limited to, issuing Horn unwarranted negative evaluations and terminating him.”
This complaint the district court dismissed with prejudice, on the alternative grounds that (1) “the complaint did not provide sufficient notice of the nature of the EEOC’s claim” and (2) “because the amended complaint refers to the charge, the EEOC must adopt all of the charge’s allegations,” including the nature of the alleged protected activity.
The panel affirmed, with a majority and concurring opinion, with the judges dividing over the significance of the recent discussion of Fed. R. Civ. P. 8 and 12(b)(6) in an antitrust case, Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007). The majority opinion — signed by Senior Judge Cudahy (and joined by Senior Judge Bauer) — held that before and after Bell Atlantic, Rule 8 required plaintiffs to plead with enough specificity to give the defendant fair notice of the claim and “plausibly suggest that the defendant [sic. — plaintiff] has a right to relief.” (The concurring opinion, signed by Chief Judge Flaum, agreed with the majority’s conclusions but would have forthrightly confessed a change in the law with Bell Atlantic.)
The panel rejected justification number (2). It agreed that the district court was likely correct in the first instance to dismiss the original complaint:
“As the Bell Atlantic Court explained, it is not enough for a complaint to avoid foreclosing possible bases for relief; it must actually suggest that the plaintiff has a right to relief, id. at 1968-69, by providing allegations that ‘raise a right to relief above the speculative level,’ id. at 1965. Horn’s report of a sexual affair is logically consistent with the possibility that the affair was caused by quid-pro-quo sexual harassment, but it does not suggest that possibility any more than money changing hands suggests robbery. Dismissal was probably correct.” [Emphasis in original.]
Nevertheless, the second complaint did not allege the paramour theory, and as such could not be dismissed on the ground that the plaintiff again plead itself out of court (as in Bell Atlantic). The majority rejected the employer’s suggestion that the EEOC effectively replead the discredited the paramour theory by citing to the charge. When the EEOC files suit, it (unlike a private litigant) is not bound by the scope of the charge if it discovers other violations in the course of its investigation. The charge was thus not central to the complaint and was not thus deemed adopted by reference under Fed. R. Civ. P. 10(c).
Yet the panel affirmed dismissal of the complaint on the first ground — that the complaint was too vague. “What our cases require . . . is that a defendant know some quantum of information about the plaintiff’s claim before discovery starts. The question that must be resolved in close cases is how much information is required.” At this juncture, the majority gets a lick in at the Commission:
“But a pleading standard designed to protect litigants and their lawyers from needless, counterproductive technicality is less convincingly invoked by a government agency seeking to simply step around a more informative complaint that has been dismissed for failure to state a claim. The rules do not require unnecessary detail, but neither do they promote vagueness or reward deliberate obfuscation.
* * * *
“In the present case the EEOC’s lawyers failed to persuade the district court that the facts it originally pleaded stated a claim, so it deleted enough information to disguise the nature of its claim before the court. This gambit is not necessarily fatal to a claimant, but such obfuscation certainly does not intuitively comport with the purposes of notice pleading. A complaint should contain information that one can provide and that is clearly important; the EEOC has removed information that it did provide and that showed that its prior allegations did not state a claim.”
The panel holds that a party “alleging illegal retaliation on account of protected conduct must provide some specific description of that conduct beyond the mere fact that it is protected.” The panel found, as did the district court, that “the EEOC’s amended complaint fails to provide the notice required by Rule 8(a)(2); it must further specify the ‘conduct in the workplace’ that Horn reported.” It then stated:
“Of course, as the EEOC cagily observed at oral argument, there is nothing in the complaint itself to indicate the full extent of what Horn told it, but the EEOC cannot avoid a requirement to provide limited detail simply by failing to provide it and suggesting-not even asserting!-that it cannot do so.”
The model pleading, then, would be “a description in very general terms (‘Horn complained that Concentra denied employees promotions because of their race,’ ‘Horn complained that Concentra supervisors were subjecting female employees to a hostile work environment,’ or some similar phrase) [that] would give Concentra much clearer idea of the EEOC’s claim.” The court also distinguished between pleading retaliation and discrimination claims; as to the latter —
“People have reasonably clear ideas of how a racially biased person might behave, and a defendant responding to an allegation of racial bias can anticipate the sort of evidence that may be brought to bear and can investigate the claim (by inquiring if any decision-making employees have a background of making racially insensitive comments and the like). An allegation of retaliation for some unspecified act does not narrow the realm of possibility nearly as much. Further, once a plaintiff alleging illegal discrimination has clarified that it is on the basis of her race, there is no further information that is both easy to provide and of clear critical importance to the claim.”
And the court concludes:
“[T]o require a more detailed complaint in the present case is neither to adopt fact pleading nor to impose the heightened pleading required in some instances by Rule 9(b); it is only to insist upon easily provided, clearly important facts. The proper analogue for the present complaint is not a complaint alleging racial discrimination in hiring; it is a complaint in which the plaintiff withholds the basis upon which she suspects her employer acted: ‘I was turned down for a job for a reason forbidden by Title VII.’ To permit the EEOC’s complaint would reward obfuscation, a perverse result.”
So besides heaping scorn on the EEOC, what has the panel accomplished? It tells us that it is incumbent on complaint drafters to plead “easily provided, clearly important facts.” This does not compel the plaintiff to set forth the facts underlying the prima facie case; Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002), holds otherwise. But it does require the employee to pinpoint the nature (if not the fine details) of the challenged actions, and some basis for believing (beyond speculation) that the acts were motivated by an unlawful intent. This does ratchet up the pleading standards a bit. But what the panel appears to be saying, in sum, is don’t play cute — cough up what you know right from the first, leaving the rest to be filled in by discovery.
Friday, August 3, 2007
In Jennings v. State of Illinois Department of Correction, No. 06-1637 (7th Cir. Aug. 2, 2007), we get a look at the direction of employment discrimination law, in which employers turn issues of employee discipline over to “independent” authorities and away from possibly-biased supervisors. Here, a 14-year veteran correctional officer, Mexican-American, was fired for smuggling and trading cigars with prisoners. Warden Gary Wyant and Major Steve Wright at the prison referred the matter to an “Employee Review Board,” which investigated the matter and recommended suspension, and the Illinois Department of Central Management Services (CMS) (a separate state agency) approved the discharge.
According to Jennings, Wyant and Wright frequently trafficked in anti-Mexican slurs (complaining about their work ethic, that affirmative action had gotten out of hand, that in the South “they had different ways of handling those types of people,” etc.). Such evidence might ordinarily have supported at least an inference that national origin was a motivating factor in the discharge. But the panel affirms summary judgment on the ground that CMS, not the warden, made the termination decision, “which broke any connection between Wyant’s and Wright’s improper motivations and the ultimate outcome, absolving IDOC of liability.” I love Judge Cudahy’s concurring opinion, though:
“I must agree with my colleagues that Jennings has not offered any evidence that Wyant had sufficient influence over the decision of the Department of Central Management Services (the ostensible decision-maker) to make Wyant’s motives decisive or even relevant; the suggestion that he controlled the outcome “rests on surmise.” How the warden’s lack of influence can be reconciled in the real world with the need for efficient prison administration is a bit mysterious, but it is not our task for present purposes to unravel that mystery.” [citation omitted]
Meanwhile, the Ninth Circuit contemplates the following question: when the parties do not know the date of receipt of a right-to-sue letter by the charging party or her counsel (which triggers a 90-day limitations period under Title VII and the ADEA), what presumption if any ought to apply? Payan v. Aramark Mgt. Services, No 05-15978 (9th Cir. Aug. 2, 2007) notes that several circuits apply a rebuttable presumption of receipt three days after the date of mailing (borrowed from the Federal Rule of Civil Procedure 6(e) mailbox rule), while one circuit (the Sixth Circuit) uses a five-day rule and two others (the Fifth and Tenth) suggest that even a seven-day rule may be appropriate. The panel (consisting of Circuit Judges Kleinfeld and Bybee, whose inclinations are likely well-known to Ninth Circuit regulars, and a visiting district court judge) goes with the three-day presumption, holds that the complaint was therefore filed three days late and affirms dismissal of the case.
Wednesday, August 1, 2007
The culture of summary judgment has conditioned some federal district courts to accept truly nonsensical defense arguments. Here are two recent cases, both from the Fifth Circuit, where the court of appeals had to set the trial judges straight (!!):
1. Alvarado v. Texas Dep’t of Public Safety (DPS), No. 05-51064 (5th Cir. July 16, 2007) The defendant obtained summary judgment on an argument that denial of a transfer of a female police sergeant to the Texas Rangers was not an “adverse employment action.” While the Fifth Circuit adheres to a strict definition of this prima facie element (see McCoy vs. City of Shreveport, No. 06-30453 (5th Cir. July 11, 2007), discussed below), even still, the Fifth Circuit found summary judgment on this issue to be incredible.
“In this case, there was evidence sufficient to raise a genuine issue of material fact on whether Alvarado’s non-selection to the Rangers was an adverse employment action. Viewed in the light most favorable to Alvarado, there is summary judgment evidence indicating that: (1) the Rangers are an elite unit within DPS and have a unique and illustrious history; (2) an appointment to the Rangers is, according to DPS, ‘one of the most competitive goals to which a law enforcement officer may aspire’; (3) the ‘promotion and selection’ process is complex and rigorous; (4) the competition to become a Ranger is ‘fierce,’ as evidenced by the large number of applicants for the few available positions, and is steeper than the competition for positions with any of DPS’s other divisions; (5) the minimum qualifications for becoming a Ranger Sergeant are higher than the minimum qualifications for becoming a Sergeant with Special Crimes; (6) the Rangers work under less supervision and have greater job responsibilities, including being the primary investigators of homicides and handling other major ‘high-profile’ and ‘sensitive’ cases; (7) although DPS regulations do not officially classify Ranger appointments as promotions because they do not entail an increase in pay, receiving an appointment to the Rangers is generally viewed within DPS as a promotion; and (8) newly appointed Rangers are honored at a special ‘promotional ceremony’ in Austin.”
You have to wonder what the DPS lawyers were thinking when it argued, in effect, that it’s not so very special to be a Ranger after all. I mean, come on, I’m not even from Texas and I know better than that. What I want to know now is whether DPS will pursue this argument at trial before a jury of Texas citizens.
2. Arismendez v. Nightingale Home, No. 06-40593 (5th Cir. July 26, 2007): Here, the employee won a pregnancy discrimination case under Texas state law and the jury awarded a $1 million dollar verdict, only to have the district court grant judgment as a matter of law on the ground that the employee had not proven that pregnancy was a motivating factor in her discharge. Mind, the jury heard evidence that her direct supervisor (named Vela) authorized the employee’s termination as follows:
“The Employee Separation Report was signed by Velas the supervisor and dated April 8. The report listed the reasons for the involuntary separation were ‘excessive sick leave/ job abandonment.’ Velalso told Arismendez that although Vela knew it was illegal to fire her because she was pregnant, Vela had a ‘business to run’ and ‘could not take having a pregnant woman in the office.'” [Emphasis added, but hardly necessary.]
Logically, the Fifth Circuit reversed and ordered entry of the jury verdict (but with a cap of $200,000 under state law), finding the record more than sufficient to establish Vela’s authority to terminate the plaintiff:
“Vela signed the papers to terminate Arismendez’s employment. There was evidence that Arismendez’s husband hand delivered a doctor’s note to Vela that extended the period of bedrest. That note was not in Arismendez’s file, and [regional manager] McCune was never made aware of it. McCune testified that he would have considered the circumstances regarding Arismendez’s bedrest if he had been made aware. McCune described Arismendez as a superior employee and a key person in the office. Vela communicated with Nightingale’s human resources department regarding terminating Arismendez. McCune testified that Vela initiated the ‘paperwork’ to terminate Arismendez. Indeed, McCune admitted that Vela provided all the information that he had in order to make the termination decision.”
You have to wonder what trial this district court judge was presiding over to miss all of this.