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July 2005

| Jul 18, 2005 | Daily Developments in EEO Law |

Daily Developments in EEO Law
by Paul Mollica (c) 2005

Wednesday, July 27, 2005

As a lawyer for employees, I’ve never seen this situation: an employer swears out an ex parte summons in state court against a former employee, who it believes may have made off with business secrets. According to the plaintiffs’ complaint, the sheriff arrives at the door with an order to remove a computer hard drive and other electronic records. Because the former employee is not present, another resident in the house (of an undefined relationship to the former employee) bars the officer’s entry. The sheriff then parries with an ex parte writ of assistance that allows him to enter the residence without consent. The order is executed, with the officers removing the records (including those unrelated to the employment relationship).

As oppressive as this sounds, the Tenth Circuit in a 2-1 decision affirmed dismissal of a section 1983 action, finding no civil rights violation owing to the absence of state action. Yanaki v. Iomed Inc., No. 04-4051 (10th Cir. July 26, 2005). A generation ago, the Supreme Court in Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982), held that private parties who avail themselves of state law procedures to replevin goods do not operate under color of state law for purposes of the federal civil rights acts, where the opposing party has a sufficient remedy under state law (i.e., challenge or appeal the court order in state court). The plaintiffs in this case did not challenge the constitutionality of the procedures used to seize the records. Although they objected to the use of uniformed officers to execute the order as a form of state action, the panet majority demurred: “The involvement of the police in executing the court-ordered search, without more, does not convert Defendants’ abuse of state law into conduct attributable to the state for purposes of § 1983 liability.”

Judge Holloway dissented, finding that the police involvement was enough to characterize the events as state action.

“There are numerous allegations in the complaint which should fairly be read to demonstrate both significant assertion of authority by Deputy Sheriffs, which put the weight of the State behind the search of Plaintiffs’ home, and substantial cooperative action between Defendants and the officers in conducting the search, which establish Defendants as state actors. The Complaint alleges that at approximately 8:00 a.m. on Monday morning, April 15, 2002, Defendant attorney Matkin and Sheriff’s Deputy Kopp rang the doorbell of Yanaki’s home three separate times, awakening Plaintiff Moss. App. at 7. After she refused them entry, Mr. Matkin, an Iomed attorney, said: ‘We can come in now, or we can come in later.’ Id. at 8. Deputy Sheriff Kopp, ‘to support Matkin’s statement and to intimidate Moss, said: ‘we can kick in this door.”Id . (emphasis added).

“After leaving to obtain a writ of assistance from the state magistrate, the Majority Opinion notes that Defendant Matkin returned to Yanaki’s home and that Matkin and Officer Kopp and others entered Yanaki’s home and commenced the search. Maj. Op. at 4. ‘Shortly thereafter a second police officer, Sergeant Kendra Herlin, arrived to assist.’ Id. (emphasis added). The Majority Opinion also states that the ‘officers seized Moss and Yanaki’s computer and other material belonging to them.’ Id. (Emphasis added).”

I have no idea how common this kind of activity is, but I offer it here as a cautionary tale to plaintiff’s lawyers who represent departing employees in action industries. Prepare for the worst.

Tuesday, July 26, 2005

A lot of employers who thought they purchased insurance against discrimination and harassment claims should reexamine their policies in light of Coleman v. school Board of Richland Parish, No. 04-30445 (5th Cir. July 25, 2005). A school district — sued for race discrimination and breach of contract by an associate principal — tendered the defense to its insurer, Mid-Continent. Its policy ostensibly covered claims of “actual or alleged discrimination, whether based upon race, sex, age, national origin, religion, disability or sexual orientation,” and breach of contract. But the insurer declined to defend, relying on an exclusion of covered acts “committed with actual knowledge of its wrongful nature or with intent to cause damage.”

The school board joined the insurer in the principal’s action and both parties filed cross-motions for summary judgment (governed by Louisiana law) on the duties to defend and indemnify. The insurer prevailed fully. On appeal, the district argued that because discrimination and harassment are by their very nature intentional acts, the exclusion would eclipse all coverage, an “absurd result” and a violation of the state’s “reasonable expectations” doctrine.

Despite extensive authority finding such exclusions ambiguous and construing them against the insurers, the Fifth Circuit charted a different course. It held that the definition of a covered act and the exclusion could be reconciled if the policy were deemed to cover disparate impact claims only, which do not require proof of intent. Noting an absence of Louisiana authority on the question, the panel relied instead on a 25-year old Seventh Circuit decision reaching the same result (Solo Cup Co. v. Federal Insurance Co., 619 F.2d 1178 (7th Cir. 1980)). The school district did not wind up entirely empty handed, though: though finding that the insurer had no duty to indemnify, the panel did hold that the insurer had a duty to defend, as the complaint stated both disparate treatment and impact claims.

A word to plaintiffs’ counsel: Under this precedent, you are more likely to keep the insurance company involved in the case if your EEOC charge and complaint state both, alternative theories.

Monday, July 25, 2005

The Eighth Circuit on Friday issued an en banc decision in an ERISA case, focusing on the procedure that follows a denial of a claim for benefits that enters litigation. King v. Hartford Life and Accident Ins., No. 02-3934 (8th Cir. July 22, 2005).

The facts are common enough: Martin Schanus, a participant in a life insurance plan, died in a motorcycle crash; his death certificate recorded “acute alcohol intoxication” as a significant factor contributing to his death. The insurers denied his daughter’s claim for an accidental death benefit,on the ground that operating a motorcycle while drunk places the victim either (1) outside the definition of “accidental bodily injury,” because it was a “reasonably foreseeable” result of driving drunk; or (2) within a policy exclusion for “self-inflicted injury.”

After marching through the review process, the filing of a state law complaint and removal to federal court, the parties cross-moved for summary judgment. The insurer argued that the death was not accidental, based on a First Circuit opinion, Wickman v. Northwestern Nat’l Ins. Co., 908 F.2d 1077 (1st Cir.1990). The district court admitted evidence by the plaintiff – critically, without objection by the insurer – not originally presented to the plan administrator: statistical evidence that drunk driving deaths, as a percentage of persons arrested while driving intoxicated, was less than one percent. The district court granted summary judgment to the insurer, finding that the administrator’s finding that the death was not accidental under Wickman – while “extraordinarily hard” – was not arbitrary or capricious.

The original panel reversed the district court and remanded, finding that the decision was arbitrary or capricious even under the Wickman test. On en banc review, the majority of the full court (Colloton, J., author, joined by Lay, Bright, Wollman, Murphy, Bye, Melloy, Smith and Benton, J.J.) reversed summary judgment, on the avowedly “narrower ground” that “Hartford’s litigating position concerning the proper interpretation of ‘accidental bodily injury’ is fundamentally inconsistent with its stated basis for denying the claim in 2001 during the administrative process.”

The majority avoided deciding whether Mr. Schanus suffered an accidental death (although the concurring and dissenting judges crossed swords on this point). The court instead held, upon a rigorous review of the review procedures and history of the claim, that Hartford crossed itself up by prevailing in the administrative review on one theory (that Schanus’s death was “reasonably foreseeable”), while advancing a different theory in litigation (the Wickman standard). Wrote the court:

“We thus conclude that this case falls in the category where an administrator offers a post hoc rationale during litigation to justify a decision reached on different grounds during the administrative process. Even assuming it is reasonable to interpret the term ‘accidental’ to exclude ‘reasonably foreseeable’ injuries, Hartford does not defend the administrator’s decision on that basis. We will not uphold Hartford’s decision on a ground that is fundamentally inconsistent with its emphatic position that Wickman sets forth the proper interpretation of the term ‘accidental’ in the Hartford insurance policy, and its assertions that ‘applying Wickman here contributes to national uniformity and predictability of results, which in the future will promote early resolution of similar disputes.’ (Br. of Appellee at 11).”

The court remanded the case, mandating that the claim be returned to the plan administrator to decide the claim anew under the Wickman standard now advocated by Hartford, and in light of the plaintiff’s statistical evidence. As concurring Judge Bright observed, “I am quite sure that Hartford has spent considerably more to defend its denial of Schanus’s claim than it would have cost to pay the claim itself [$42,000 and interest]. It is time now to reasonably and properly conclude Schanus’s claim on all the facts and the correct law. On remand, the plan administrator can do just that.” [Foot note omitted.]

Friday, July 22, 2005

There is now a circuit split on the scope of the Department of Labor regulation 29 C.F.R. § 825.220(d), which states that “[e]mployees cannot waive, nor may employers induce employees to waive, their rights under [the] FMLA.” The Fifth Circuit previously weighed in with Faris v. Williams WPCI, Inc., 332 F.3d 316 (5th Cir. 2003), holding that the regulation applied only to prospective waivers of FMLA rights. But in Taylor v. Progress Energy, Inc., No. 04-1525 (4th Cir. July 20, 2005), the Fourth Circuit holds that this regulation covers even retrospectiver waives and releases, and prohibits such arrangements without prior approval of the DOL or the court. An interesting possible pitfall for private settlements of EEO cases with FMLA claims.

Thursday, July 21, 2005

A quarter an hour – that’s all it took to trigger events far more costly to the employer in time, fees and aggravation. Culver v. Gorman & Co., No. 04-3442 (7th Cir. July 20, 2005). The plaintiff, a well-reviewed assistant property manager, complained that she got a 25¢ smaller raise than her male counterparts. After a warning to management that Culver was unhappy about her raise and preparing to file an EEOC charge, within three days she was fired for insubordination.

Thought the district court granted summary judgment on her Title VII retaliation claim, the Seventh Circuit reversed. First, the court found that the plaintiff presented a genuine issue of material fact under the direct method of proof about whether her termination was motivated by retaliation. Her circumstantial evidence included (1) the short 72 hours that elapsed between her complaint and termination; (2) her favorable annual review, given the same day she complained about the raise, and by the same manager who terminated her; and (3) the manager’s alleged warning to the employee that she was “making a mistake” taking her complaint to another manager.

Second, whether employer honestly believed its avowed reasons for terminated Culver (that she committed insubordination) presented, by the panel’s lights, at least a triable issue of fact. Significantly (from the lawyer’s point of view, anyway), the supervisor failed to mention one incident entirely in his deposition, while he previously gave only vague explanations for his decision to fire plaintiff (“issues,” “performance issues”), and the employer’s entries explanation was only first presented in the summary judgment motion. So the litigation strategy (say nuthin’ about nothing), at least in this case, backfired on the employer’s credibility.

Wednesday, July 20, 2005

Federal district courts continue to dismiss claims on the pleadings for failure to allege sufficient facts; courts of appeals continue to reverse. Chao v. Rivendell Woods, Inc., No. 04-2330 (4th Cir. July 19, 2005). The U.S. Secretary of Labor brought suit against an employer for overtime and records-keeping violations under the FLSA. No doubt working from a form filed elsewhere many times without objection, DOL’s complaint simply adumbrated the violations and cited the relevant sections of the statute. The district court dismissed the first amended complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6). “The court characterized the Secretary’s allegations as ‘merely boilerplate recitations of the statute itself.’ The court also asserted the complaint was deficient for failing to identify the Supervisors in Charge, the dates of their employment, and the nature of the employment relationship. According to the district court, the deficiencies in the complaint made it ‘virtually impossible for the Defendants to prepare a defense.'”

The panel reversed, concluding — in language that usefully debunks an hoary defendant’s shibboleth — that “the sufficiency of a complaint does not depend on whether it provides enough information to enable the defendant ‘to prepare a defense,’ but merely ‘whether the document’s allegations are detailed and informative enough to enable the defendant to respond.'” (citing Wright and Miller).

Monday, July 18, 2005

A right-to-sue letter directed to a shuttered law firm — and never delivered to the client — nevertheless triggered the 90-day period for filing suit, under a now-inoperative EEOC regulation. Reschny v. Elk Grove Plating, No. 04-1979 (7th Cir. July 15, 2005). After the Commission completed investigating the employee’s Title VII claim, it sent a right-to-sue letter in 1998 to the lawyer (Greenberg) representing her at the law firm address. Unfortunately, the firm had closed for business (a bankruptcy), and the letter migrated back to the EEOC. Equally unfortunately, the employee had not kept the Commission up-to-date on her personal address. The Commission made no attempt to send her a copy of the letter.

Only one-year-and-a-half later did the employee begin to wonder what happened to her charge. A phone call in 1999 led the discovery of the hopelessly-expired right-to-sue letter, and a hastily-filed lawsuit. The district court judged the suit time-barred, finding that the employee was in constructive receipt of the letter.

On appeal, the plaintiff complained that the letter to her former lawyer had never reached the addressee, because the firm was closed. This argument was unavailing, because “Reschny and her attorneys failed to update their addresses, and she waited a year and-a-half before inquiring of the EEOC about the status of her claim. This negligence brought the constructive receipt doctrine into play and started running the 90-day limitation period in April of 1998.”

The plaintiff also invoked a rule requiring that duplicate notice be delivered to the employee, whether represented or not. But the panel held: “Reschny contends that she should not be penalized for the delay because the EEOC violated its regulations by not sending her a copy of the notice on April 30, 1998. She relies upon 29 C.F.R. § 1614.605(d) (1999), which states in relevant part, ‘When the complainant designates an attorney as representative, service of all official correspondence shall be made on the attorney and the complainant . . . .’ But that language was not in effect in April 1998; at that time, the regulation read: ‘When the complainant designates an attorney as representative, service of all documents and decisions on the complainant shall be made on the attorney and not on the complainant, and time frames for receipt of materials by the complainant shall be computed from the time of receipt by the attorney.’ 29 C.F.R. § 1614.605(d) (1998) (emphasis added); see also Rules and Regulations: Equal Employment Opportunity Commission, 64 Fed. Reg. 37644, 37661 (July 12, 1999) (to be codified at 29 C.F.R. pt. 1614). Because Greenberg was designated as Reschny’s attorney, the EEOC was not obligated to send her a copy. Therefore, the EEOC did not violate its rules when on April 30, 1998, it sent the notice to Greenberg only.”

The central facts dooming the employee’s claim were thus (1) the insensibly long time it took for her to wake up and discover that her claim had been frittered away, by her lawyer’s possible abandonment of the case; and (b) her own delay and failure to report her own change of address, as she was bound to do under the rules.

Friday, July 15, 2005

Hats off to a plaintiff (and his counsel) who beat the odds and won a $100,000 punitive damage award under Title VII against a major employer for firing an African-American employee falsely accused of theft. Tisdale v. Federal Express Corp., No. 03-6605 (6th Cir. July 14, 2005).

While the entire opinion (affirming the judgment and award of damages over a panoply of challenges) is worth a read, one notable aspect is the court’s response to FedEx’s assertion of its affirmative defense of good faith:

“FedEx argues that all of its employees involved in Tisdale’s termination are middle management and therefore, liability cannot be imputed to FedEx. The mere fact that FedEx is a large, global corporation with a multi-layered management structure is insufficient by itself to shield it from liability under Title VII. . . . In this case, the initial investigation was conducted by Stuthard, the operations manager at BNART, who had the authority to suspend and terminate employees. Moreover, Miller, whose authority is to supervise all of FedEx’s operations in the district, instigated the security investigation against Tisdale. Miller gave tacit approval to the actions taken by Bynum and Stuthard, and concurred in the decision to terminate Tisdale. Given their significant authority and discretion, a reasonable juror could find that Stuthard and Miller served FedEx in a managerial capacity for purposes of vicarious liability in the punitive damages context.

Moreover, evidence of FedEx’s discriminatory policies at the plaintiff’s unit was credited by the court to refute the sincerity of the employer’s anti-discrimination policies:

“Though FedEx has placed much evidence in the record in support of its anti-discrimination policies, Tisdale also presented evidence of a number of inconsistent practices at the BNART station, which calls into question FedEx’s sincerity to abide by its own written policies. Tisdale testified at trial that he had been complaining about the disparate treatment of African-American employees from 1997 through 2000, and that FedEx made little effort to change. Despite FedEx’s professed commitment to diversity, Tisdale explained that there were no African-American managers, supervisors, or office staff at the BNART station during the time he worked there. Several African-American employees testified that they believed that when office jobs became available, African-Americans were passed over in favor of white employees. To protest what they believed were management’s discriminatory practices, the African-American employees at BNART boycotted the 1999 Christmas Party. Eighteen African-American employees signed a letter to Miller outlining the perceived racial discrimination at BNART. At trial, FedEx’s operations managers conceded that there were racial tensions at BNART during those years. FedEx’s own internal documents admit “[s]everal incidents of poor management practices” at the BNART station which “foster[ed] the mistrust of management and [led] to the deterioration of morale.” J.A. at 1114 (Memorandum from Miller to Lana Luster 2 (Mar. 23, 2000)).”

Finally, the Sixth Circuit joined league with the other circuits that have found that a jury may award purely punitive damages under Title VII, without awarding actual or nominal compensatory damages.

Wednesday, July 13, 2005

Here’s a decision for plaintiffs’ counsel to clip and save: Russell v. City of Kansas City, No. 04-1654 (8th Cir. July 12, 2005), where a conservative panel (Chief Judge Loken, Judge Hansen and Judge Morris Sheppard Arnold) bends the law and reverses summary judgment for a Title VII plaintiff for race and gender discrimination, even chiding the employee’s lawyer for not being aggressive enough.

The occasion for this largesse was a municipal employer’s attempt to enforce workplace standards against harassing racial minorities and gay people. The City’s problem (as framed by the opinion) was that it allegedly singled out a white, female supervisor (Ms. Russell) for enforcement — meting out a two-level demotion (later reduced to a one-level demotion) — while apparently not taking comparable action against two males (one white, one black) who were accused of the same conduct.

The court found most significant the testimony (at an appeal-level administrative hearing provided by the City) of the two employees who the plaintiff allegedly insulted. Both testified that they did not personally regard the comments as offensive (one about Latino children playing under an open fire hydrant, the other a gay employee called “sissy pants”) and their belief that Russell was singled out because of race.

The panel found that this may constitute direct evidence of discrimination:

“At oral argument, Russell’s attorney conceded that she does not have direct evidence of discrimination. The concession may be ill-advised. The City’s primary stated reasons for disciplining Russell, as reflected in the Investigator’s report and in the Board’s decision, were her comment about Mexican children in Hernandez’s presence and her calling the homosexual Recar ‘sissy pants.’ On appeal, the City characterizes these as ‘derogatory comments based on . . . ethnicity and sexual orientation.’ But at the hearing, both Hernandez and Recar testified, under oath, that Russell had never made comments they considered bigoted, derogatory, or offensive. Moreover, they opined that Russell had been singled out for discipline on account of her race. When two co-workers who are the alleged victims of misconduct deny that misconduct occurred and assert that the plaintiff is herself the victim of discrimination by the employer, that may well be direct evidence of discrimination sufficient to withstand the employer’s motion for summary judgment. And if this testimony is not by itself sufficient, it is a powerful showing of the pretext needed to defeat summary judgment under McDonnell Douglas.” [Emphasis in original]

Ordinarily, I would expect that an employer could justify selecting out an employee for enforcement (someone always has to be first), and that the co-worker’s opinions about the effect of the conduct would not be relevant. The panel says not a word about why the opinion on co-workers would be admissible to prove the Personnel Board’s intent. But if the Eighth Circuit considers this to be not only relevant, but possibly direct evidence, then “Katie, bar the doors.” There’s a whole lot more cases just like this waiting to be filed.

Tuesday, July 12, 2005

In the wake of Desert Palace v. Costa, there was some question whether employers could invoke the “same action” affirmative defense to damages and other remedies under 42 U.S.C. § 2000e-5(g)(2)(B), regardless of whether the plaintiff plead her claim under 42 U.S.C. § 2000e-2(a)(1) (“because of”) or § 2000e-2(m) (“a motivating factor”).

While not a final answer, language in the recent decision Porter v. Natsios, No. 04-5061 (D.C. Cir. July 1, 2005), suggests that the keys to the defense may be in the plaintiff’s hands. Here, the plaintiff tried his retaliation case to a jury, prevailed on liability and obtained compensatory damages. But in post-trial proceedings, the plaintiff lost all equitable relief because the court found for the agency on the “same action” defense. On appeal, the plaintiff objected that the defense was purely a jury question. But the district court’s decision was affirmed:

“Even if the court were to assume that the 1991 Act reserves the ‘same action’ defense under § 2000e-5(g)(2)(B) for the jury, Porter waived any right to a jury instruction on that defense when he objected to USAID’s request for that instruction and agreed instead to an instruction that asked the jury only to determine liability based on a finding of discrimination or retaliation as ‘a motivating factor.’ Having chosen to prove liability under theless onerous standard of § 2000e-2(m), Porter cannot now disavow that choice to avoid facing a ‘same-action’ response to his request for equitable relief.” [Emphasis added.]

In short, if the plaintiff goes for broke and alleges only § 2000e-2(a)(1) “because of” discrimination, no “same action” appears to lie. It is only if the plaintiff pursues liability for a “motivating factor” that she might be subject to the defense.

Monday, July 11, 2005

As with Friday’s discussion (regarding the “same actor” inference), the circuits are also drifting apart on another facet of the indirect method of proof under McDonnell Douglas — just how “similarly situated” a plaintiff must be to persons outside the protected group to raise an inference of discrimination by the prima facie case. In Philip v. Ford Motor Co., No. 04-1735 (8th Cir. July 7, 2005), the panel divided over just this issue.

An African-American employee claims that he was removed from a “25 mile driver-inspector” position after a reorganization while white employees were “grandfatherd” into the same positions. The district court, and the panel majority, rejected the proffer of evidence about these white employees, through a union representative’s affidavit (Nancy Schillinger): “Schillinger’s affidavit offers no proof regarding the “comparability of the positions” into which the two Caucasians were place. It also did not offer proof regarding the comparability of the qualifications or seniority of the two Caucasians who received driver-inspector positions. Schillinger’s affidavit does not show how the grandfathering of the two Caucasians and the treatment of Philip by Ford are connected.”

But as Judge Heaney’s dissent observed, “Philip alleges that a portion of the company-wide collective bargaining agreement was applied to remove him from his position and was not applied to white employees whose jobs were reclassified in a similar fashion. Unlike disciplinary decisions, which may be made by an immediate supervisor, a policy dictated by a collective bargaining agreement will be implemented with some degree of uniformity. . . . The positions of Philip and the white employees offered for comparison were reclassified, and should have been opened for bid and awarded on the basis of seniority. These employees are therefore similarly situated in all relevant respects.”

Again, it may be time for the Supreme Court to take up this issue and clarify the prima facie burden.

Friday, July 8, 2005

A panel of the Ninth Circuit took the same-actor inference in a routine Title VII case and exalted it as a heightened standard of proof under the indirect method laid out by McDonnell Douglas. Coghlan v. American Seafoods Co., No. 03-35314 (9th Cir. July 7, 2005). Given the gradual evolution of this notion, its pernicious influence on summary judgment and the prevailing split in the circuits, it’s ripe for Supreme Court review.

Plaintiff, a fisherman, had served as a master on fishing vessels for the company in prior seasons, 1997-2000, but was passed over as master in 2002, and offered only the inferior position of mate. The same manager, over successive seasons, made the decision both to promote the plaintiff to master and (eventually) to knock him down to mate. Plaintiff and two others, also replaced, were Americans; their replacements were Norwegian.

The defendant essentially conceded the prima facie case, but defended summary judgment on the ground that it presented performance-based, non-discriminatory grounds for Coghlan’s termination. Nothing unusual there. But the panel took the opportunity to elaborate upon a 1996 decision, Bradley v. Harcourt, Brace & Co., 104 F.3d 267 (9th Cir. 1996), now holding that “when the allegedly discriminatory actor is someone who has previously selected the plaintiff for favorable treatment, that is very strong evidence that the actor holds no discriminatory animus, and the plaintiff must present correspondingly stronger evidence of bias in order to prevail” on the third stage of the McDonnell Douglas test. (Elsewhere, it says that the employee must make an “extraordinarily strong showing of discrimination” to rebut the inference.) Through that lens, it evaluated the evidence of pretext and found that it did not present a genuine issue of material fact against the now-announced, heightened standard of proof.

The Seventh Circuit rejected an elevated standard of proof in Johnson v. Zema Systems Corp., 170 F.3d 734, 745 (7th Cir. 1998). It wrote:

“The psychological assumption underlying the same-actor inference may not hold true on the facts of the particular case. For example, a manager might hire a person of a certain race expecting them not to rise to a position in the company where daily contact with the manager would be necessary. Or an employer might hire an employee of a certain gender expecting that person to act, or dress, or talk in a way the employer deems acceptable for that gender and then fire that employee if she fails to comply with the employer’s gender stereotypes. Similarly, if an employee were the first African-American hired, an employer might be unaware of his own stereotypical views of African-Americans at the time of hiring. If the employer subsequently discovers he does not wish to work with African-Americans and fires the newly hired employee for this reason, the employee would still have a claim of racial discrimination despite the same-actor inference.”

The court thus concluded that “the same-actor inference is not itself evidence of nondiscrimination.” Id. So if this Ninth Circuit ruling somehow survives en banc review, it sets up a dandy conflict for a cert petition.

Thursday, July 7, 2005

A panel of the Ninth Circuit agrees in the result — vacating and remanding judgment after a jury trial, finding that the district court erred by charging the jury with a “because of” instruction in as ADA case — but splinters over the rationale. Head v. Glacier Northwest Inc., No. 03-35567 (9th Cir. July 6, 2005) . The plaintiff was fired, allegedly for violating the company’s equipment use policy.

The plaintiff — who lost at trial — on appeal challenged the use of a single-motive, “because of” instruction in disparate treatment case. The majority found that in an ADA case, a judge may (depending on the record) give either a single-motive charge, or a mixed-motive “motivating factor” charge, as borrowed from Title VII. In so holding, it concurred with a number of other circuits that held that the ADA embraces a “motivating factor” analysis (and apparently, only the Sixth Circuit holds that the ADA requires proof that disability was the sole motivating factor). Because the record presented two reasons that might (together or separately) have motivated the termination, the panel majority found that it was prejudicial to furnish the sole-cause instruction. In his concurrence, Judge T.G. Nelson found that in ADA cases, the only permissible causation instruction is “motivating factor,” reasoning that the ADA (in contrast to Title VII) contains no “same decision” defense as in 42 U.S.C. § 2000e-5(g)(2)(B).

The panel unanimously agreed that plaintiff’s own testimony (about the effects of his depression and bipolar disorder on his daily life) was sufficient to create a genuine issue of material fact about suffering a substantial impairment in the major life activities of sleeping, interacting with others, thinking and reading.

Tuesday, July 5, 2005

The D.C. Circuit weighs in on the widening split among the circuits under the Federal Arbitration Act of severing unenforceable terms to enforce otherwise valid arbitration agreements in Booker v. Robert Half Int’l, Inc., No. 04-7089 (D.C. Cir. July 5, 2005) . The court affirmed enforcement of the agreement, turning back a number of the employee’s challenges to discovery rules, qualifications of the arbitrator and burdens of proof at trial under the AAA rules, which the panel deemed “mere speculation.”

The parties agreed that one provision, the bar on punitive damages, was unenforceable in the arbitration of a Title VII case. This left the issue of whether the concededly illegal provision could be severed. On the state of the law, the D.C. Circuit noted:

“We have never addressed this issue, but Booker’s argument – bolstered by support from the EEOC – has helped persuade some circuits to strike arbitration clauses in their entirety, rather than simply sever offending provisions. See Perez v. Globe Airport Sec. Servs., Inc., 253 F.3d 1280, 1287 (11th Cir. 2001); Shankle v. B-G Maint. Mgmt. of Colo., 163 F.3d 1230, 1235 & n.6 (10th Cir. 1999); Graham Oil Co. v. ARCO Prods. Co., 43 F.3d 1244, 1249 (9th Cir. 1994). Other circuits, however, have invoked the federal policy in favor of enforcing agreements to arbitrate to reject policy arguments like Booker’sand uphold severance of illegal provisions. See Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 675 (6th Cir. 2003); Gannon [v. Circuit City Stores, Inc.,] 262 F.3d [677,] 682-83 [(8th Cir. 2001)]; see also Hadnot, 344 F.3d at 478 (severing bar on punitive damages in arbitration clause without citing federal policy).”

The panel nonetheless found that the outcomes of these cases tended to ride on the terms of the particular agreements, that here the arbitration agreement contained a severability clause, and that the single illegal clause was not integral to the balance of the agreement.

Friday, July 1, 2005

Here is another case on the fringes of the query posed by Oncale v. Sundowner Offshore Serv., Inc., 523 U.S. 75, 80 (1998) — whether alleged acts of harassment were undertaken “because of sex” as defined by Title VII. In Medina v. Income Support Division (ISD) of the State of New Mexico, No. 04-2166 (10th Cir. June 28, 2005), the employee was a heterosexual woman office with others identified in the opinion as lesbians. Over the space of seven months, the plaintiff claimed she was subject to a “sexually-charged” environment (although the opinion noted that an internal investigation failed to substantiate her allegations). Summary judgment was granted on the harassment claim on the ground that the plaintiff did not demonstrate that she suffered discrimination “because of sex.”

Citing Bibby v. Philidelphia Coca-Cola Bottling Co., 260 F.3d 257, 263-64 (3d Cir. 2001), the plaintiff contended that she met her prima facie burden of establishing the hostile work environment was “because of sex” because the other employees were “acting to punish the plaintiff’s noncompliance with gender stereotypes.” The panel rejected this argument: “Here, however, there is no evidence-and no claim-that Ms. Medina did not dress or behave like a stereotypical woman. Instead, Ms. Medinapparently argues that she was punished for not acting like a stereotypical woman who worked at ISD-which, according to her, is a lesbian.” The panel held that the plaintiff’s claim reduced to an argument that she was singled out because of her heterosexuality — a claim not yet recognized under Title VII.

 

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