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August 2006

| Aug 18, 2006 | Daily Developments in EEO Law |

Daily Developments in EEO Law
by Paul Mollica (c) 2006

Thursday, August 31, 2006

The Supreme Court’s decision in Burlington Northern v. White, 126 S. Ct. 2405 (2006), has led to some marked improvement for employees challenging retaliation under the federal anti-discrimination statutes, by stretching the definition of materially adverse actions. (Recent cases reversing summary judgment on this ground include Kessler v. Westchester Co. Dep’t of Social Services, No. 05-2582 (2d Cir. Aug. 23, 2006), and Jordan v. City of Cleveland, No. 04-3389 (6th Cir. July 6, 2006) ).

Now comes Moore v. City of Philadelphia, No. 03-1465 (3d Cir. Aug. 30, 2006), to remind us just how awful things can get for employees in a command-control, paramilitary setting such as (in this case) an urban police department. The plaintiffs are three white officers who complained about the commanding officer’s alleged bias against their fellow black squad members. The acts of retaliation are extensive and egregious, but here’s one that especially stuck with me:

“In October 1997, William and Carnation first raised concerns about racial tensions in the squad to their superiors. In that month, William and Carnation were shot at while on their beat. The suspects were apprehended by other police officers within a minute and a half. Five minutes after the shooting William and Carnation were relieved so that they could give a statement as to what had happened. Their temporary sergeant supervisor recommended commendation for their role in the shooting. Within a week of the shooting, they had a meeting with Captain Colarulo and Lieutenant Frank Bachmeyer to express concern that they did not receive back-up after the shooting quickly because ‘we felt that it was the blacks were being singled out . . . and because of our association with the black officers, we weren’t getting the backup, like, we would have been, if I guess, we didn’t associate with them.’ App. at 274.”

While the district court granted summary judgment to the police department, the Third Circuit reversed and remanded for trial. The evidence of retaliatory animus was on the surface for all to see:

“We find it difficult to imagine a Title VII plaintiff producing stronger evidence of retaliatory animus than Carnation’s account of his conversation with [Captain] Colarulo on February 6, 1998. On that date, the captain of Carnation’s district called him into his office – in the presence of Carnation’s sergeant and lieutenant – on an unrelated matter and expressly threatened Carnation with retaliation if he filed an EEOC complaint about Maroney’s treatment of black officers. Carnation recalled that Colarulo declared that he would ‘make my life a living nightmare if I make an EEOC complaint’ and asked ‘How dare I accuse Sergeant Maroney of being unfair to the black officers?'”

The panel, in a lengthy footnote, observed that the district court could not be blamed for missing the “living nightmare” comment, because the plaintiffs failed to cite it in opposition to summary judgment, though it was in the record. It will almost certainly though be placed in evidence at trial (if the case does not first settle), and the panel cited the comment often in support of its reversal of summary judgment.

The panel did pick up a genuine error in the district court’s analysis, where the judge below found that evidence of discriminatory remarks made outside the presence of black officers were inadmissible to prove discrimination:

“If a white supervisor told white employees that he fired someone because he was black or harassed someone because she was female, it would not matter that this comment was made outside of earshot of the victim or that the employee did not actually witness the firing or the harassment. Contrary to the view of the District Court, racial epithets of which the targets were not aware may very well form the basis for a reasonable belief that discrimination has occurred or was occurring, depending on the circumstances. When offered for the purpose of showing what the employee reasonably believed, the employee’s account of the supervisor’s statement would not be hearsay. F. R. Evid. 803(3).”

The court also found that the department’s disciplinary actions, transfers and other actions against each of the officers who opposed racial discrimination could be materially adverse, retaliatory actions against them, requiring a trial. The court did affirm dismissal of claims of co-worker harassment, finding that as to such actions that the department took due care to correct the co-workers.

Tuesday, August 29, 2006

In the course of reversing summary judgment for an employer in a gender compensation discrimination case, the Tenth Circuit explains the difference between Equal Pay Act and Title VII claims in Mickelson v. New York Life Ins. Co., No. 05-3049 (10th Cir. Aug. 28, 2006), and deals a body-check to the alleged “market defense” under both statutes. (Here, the employee gets an able assist from the EEOC appellate office, as amicus.) The employee, a marketing service coordinator (MSC), demonstrated that each of the women serving in that grade and title in her office obtained starting salaries less than the comparable men.

The court explained that the district court erred in analyzing each claim, crediting too much weight to the employer’s defense that the male to whom Ms. Mickleson compared herself (Mr. Harriman) had broker-dealer experience that commanded a higher market wage. On the EPA claim, the error was all the more egregious because the employer — having conceded the plaintiff’s prima facie case — bore the burden of proof (rather than simply the burden of production) on the defense of a “reasonable factor other than sex.” Here, the record did not persuade to a legal certainty that this market defense was justified:

“No documents were executed contemporaneously with Mr. Harriman’s hiring that indicated NYL was looking for someone with broker-dealer experience or that Mr. Harriman was hired because of his broker-dealer experience.”

“When Ms. Mickelson first inquired as to why Mr. Harriman’s starting salary was twenty percent higher than her own, [manager] Mr. Vavra made no mention of NYL’s need for someone with experience in the broker-dealer market.”

“The form prepared after Mr. Harriman’s interview states that the reason he was hired was because of his ‘life ins[urance] background, self-motivation/drive, team orientation, relevant non-life [insurance] experience (i.e. marketing, communications, securities)].'”

“Although Mr. Harriman’s experience and qualifications necessarily include his broker-dealer experience, the first indication that NYL was looking for such experience and that Mr. Harriman’s background in that field warranted the disparity in pay came from the New York office’s internal investigation of Ms. Mickelson’s complaint.”

“Moreover, though NYL maintains that it was trying to penetrate the broker-dealer market at the time it hired Mr. Harriman, Mr. Vavr admitted that the market for those products crashed in the summer of 2001, well before Mr. Harriman was hired, and that NYL sold very few variable life insurance products as a result.”

“Also, what is conspicuously missing from the record is any suggestion that Mr. Harriman ever used his experience in the broker-dealer market in any capacity at NYL. In fact, Mr. Vavr admitted that Mr. Harriman’s responsibilities were essentially the same as Ms. Mickelson’s.”

“In addition, it is undisputed that Ms. Mickelson and [CSM] Ms. Day had more life insurance industry experience than Mr. Harriman-Mr. Harriman’s resume reflects that he had only two years of experience in the life insurance industry. In contrast, Ms. Mickelson had approximately six part-time years in the life insurance industry before she was hired at NYL, and another eighteen months of experience in the industry by the time Mr. Harriman was hired.

“There are also disputed issues of fact as to whether ‘market factors’ and ‘salary history’ warranted the disparity in pay. As to ‘market factors’ playing a role in setting Mr. Harriman’s salary, Ms. Billings recalled that Mr. Harriman had multiple job offers and that NYL had to compete for his services . . But NYL produced no evidence that it had to pay him $60,000 in order to retain him.”

“Casting further doubt on NYL’s asserted justifications for the disparity in pay is that one of its reasons was that Mr. Harriman has more NASD licenses, which refers to the Series 6, 7, and 63 licenses. To begin, NYL presented no evidence that a Series 7 license is either required or even relevant to the MSC job. Further, Ms. Mickelson had a Series 6 license and a CLU designation – which neither Mr. Shelton nor Mr. Harriman had. Mr. Vavra testified that the CLU designation was more important to the position than a Series 7 license.”

Further, the panel found that the same evidence rebutted (under Title VII) the non-discriminatory reasons the employer proffered for the disparity in compensation. “As the above discussion demonstrates, Ms. Mickelson has cast doubt on all NYL’s proffered reasons for paying Mr. Harriman a substantially larger salary for performing identical work such that a jury might reasonably disbelieve NYL’s proffered reasons for the disparity in pay, and conclude, instead, that NYL discriminated on the basis of sex in setting salaries.” The panel also held that the district court erred in disregarding affidavits of female co-workers demonstrating, from their own experience, that female employees in the office routinely received less pay, despite equal skill and credentials.

Monday, August 28, 2006

Here’s a case that presents itself nearly as a law school hypothetical. The employee claims age discrimination motivated the employer’s decision not to promote him to store manager. The employer responds that the employee was under a written performance “coaching,” which under a unwritten policy (conceded by the employee) disqualified him for promotion for the one year period when the opportunity became available. The performance “coaching” stated:

“I am challenging Robert’s [Cortez’s] overall performance as a merchandise manager. There are certain duties Robert is responsible [sic]. Robert went on vacation and did not plan his business accordingly. Robert did not leave any notes to be carried out. Robert did not complete the alcohol [move] that was asked of him. Robert did not leave specific training plans for his new associates to do. Robert’s team leader ended up on vacation at the same time he was on vacation. Robert’s overall performance as a manager needs to improve. These issues and opportunities were discussed with Robert in mid-February.”

The employee challenges the “coaching” as having been issued while he was on vacation (and thus could not respond to it), as factually inaccurate and as a pretext for pushing him out the door.

Is the employer entitled to judgment as a matter of law? Cortez v. Wal-Mart Stores, Inc., No. 05-2169 (10th Cir. Aug 25, 2006) holds “no,” affirming a judgment entered after a jury verdict in the employee’s favor. It holds that the “coaching” is a subjective, rather than objective, basis for the decision, and that the employee made out his prima facie case (e.g., that he was qualified for the promotion) by challenging the bona fides of the employer’s rationale.

“There are undoubtedly legitimate business reasons for the no-coaching aspect of Sam’s Club’s promotion policy. Unlike truly objective criteria, however, . . ., the no-coaching qualification can be used as a tool for unlawful discrimination. That Sam’s Club chooses to call the qualification an objective measure does not make it so. Therefore, we conclude that Cortez’s admission that he received a coaching within one year of the promotions at issue was not fatal to his prima facie case, and the district court did not err by submitting the case to the jury. Under the standard set forth in Reeves, the jury was entitled to infer discrimination based on Cortez’s prima facie case, combined with sufficient evidence to find that Sam’s Club’s asserted justification for not promoting him was false.”

Two questions left unanswered by the opinion. First, the employee quit in 2003, so his damages (under the ADEA) were limited to the loss of the additional income from the promotion for maybe 18 months or so; what was the judgment amount? Second, why are we still talking about the prima facie case after a full jury trial? See, e.g., Coleman v. B-G Maint. Mgmt. of Colo., Inc., 108 F.3d 1199, 1205 (10th Cir.1997) (when Title VII case is fully tried, issue of whether plaintiff established prima facie case drops out, and court considers only whether plaintiff proved his claim at trial). This foolishness must end!

Friday, August 25, 2006

While affirming summary judgment in a Title VII/§ 1981 co-worker race harassment case (finding that the employer took due care to correct the situation, by eventually firing the harasser), the Eighth Circuit took space in Green v. Franklin Nat’l Bank, No. 05-2513 (8th Cir. Aug. 23, 2006) to disaffirm the district court’s holding that the employee failed to prove a “severe or pervasive” hostile work environment.

The harassment allegedly took the form of a single co-worker persistently calling the plaintiff “monkey,” “black monkey,” and “chimpanzee.” The court held that such allegations were enough to support the claim:

“Green had told Howard that she thought the term ‘monkey’ was roughly equivalent to ‘Nigger.’ Other courts have agreed with Green’s assessment of calling African-Americans ‘monkeys.’ White v. BFI Waste Servs. LLC, 375 F.3d 288, 298 (4th Cir. 2004). ‘To suggest that a human being’s physical appearance is essentially a caricature of a jungle beast goes far beyond the mere unflattering; it is degrading and humiliating in the extreme.’ Id. The use of the term ‘monkey’ and other similar words have been part of actionable racial harassment claims across the country. . . . Primate rhetoric has been used to intimidate African-Americans and monkey imagery has been significant in racial harassment in other contexts as well.

“In all, there are eight alleged instances of Howard using racially insensitive terms toward Green in a three-month time frame. We have found just a few incidents in a longer time span to be sufficient for a hostile work environment claim.

“Howard’s comments about wanting to eat Green’s liver [a reference to cannibal/killer Hannibal Lector in The Silence of the Lambs] are also noteworthy. While the comments were not in themselves obviously racially motivated, they do constitute the sort of physical threats that are significant in cases like this one. Howard also told Green he liked to ‘get even’ with people who wronged him. Howard facilitated an atmosphere of intimidation that accentuated the effect of his racial slurs directed at Green.”

Thursday, August 24, 2006

The Seventh Circuit offers a couple of valuable insights into the typical indirect (McDonnell Douglas ) order of proof.

In Crawford v. Indiana Harbor Belt Railroad Co., No. 05-2825 (7th Cir. Aug. 23, 2006), Judge Posner writes upon the vexing issue of when employees may be deemed “similarly situated” for purposes of the prima facie examination. Affirming summary judgment in a disciplinary termination case under Title VII, the court observes that the demand for some fit between the plaintiff-employee and others outside the protected group arrests untoward picking and choosing:

“We know that the defendant employs about 200 conductors and that it fired 10 of them, besides the plaintiff, for safety and other infractions in a two-year period that includes the one-year period in which the plaintiff worked. The plaintiff’s lawyer insisted at argument that two other conductors whose infractions were as serious as the plaintiff’s were not fired. Suppose then that 12 male employees- the 10 who were fired and the 2 who were not-were comparable to the plaintiff; then 5/6 of the comparable males were treated as badly as the plaintiff. This means that 100 percent of the ‘bad’ black female workers were fired and 83 percent of the ‘bad’ white males, but since there was only one worker in the first class, namely the plaintiff, the percentage could not be less than 100 percent. Since perfect enforcement of company rules is hardly to be expected, the fact that ‘only’ 83 percent of the ‘bad’ white men were fired does not support an inference that the defendant treats white men better than black women.”

On the other hand, the panel notes, some courts have been guilty of fetishize the “similarly situated” test:

“But if as we believe cherry-picking [by plaintiffs] is improper, the plaintiff should have to show only that the members of the comparison group are sufficiently comparable to her to suggest that she was singled out for worse treatment. Goodwin v. Board of Trustees of University of Illinois, 442 F.3d 611, 619 (7th Cir. 2006); Ezell v. Potter, 400 F.3d 1041, 1049-50 (7th Cir. 2005). Otherwise plaintiffs will be in a box: if they pick just members of the comparison group who are comparable in every respect, they will be accused of cherrypicking; but if they look for a representative sample, they will unavoidably include some who were not comparable in every respect, but merely broadly comparable. The cases that say that the members of the comparison group must be comparable to the plaintiff in all material respects get this right.”

Here, where eight different reprimands were issued against the plaintiff by four different supervisors, especially in a setting where the supervisors exercise discretion in disciplinary decisions — against other employees with difference service histories and supervisors — the court held that any inference of discrimination evaporates.

In EEOC v. Target Corporation, No. 04-3559 (7th Cir. Aug. 23, 2006), the court reversed summary judgment on a number of individual hiring claims (as well as a rare claim of inadequate record retention under 42 U.S.C. § 2000e-8(c)). It noted, in evaluating Target’s unusually feeble justification for not hiring one of the charging parties, that the employer has a burden of production under McDonnell Douglas-Burdine to “explain its claimed reason for rejecting the applicant clearly enough to allow the court to focus its inquiry on whether the employer honestly believed that reason, . . . and to allow the plaintiff to identify the kind of evidence it must present to demonstrate that the reason is a pretext.” This turned out to be the rare case where the employer failed to meet its burden of production: “Here, Target did not meet its burden because its explanation was only that ‘[b]ased upon [his] interview, Target decided that [Daniels] did not meet the requirements for an ETL position, and therefore elected not to hire him as an ETL.’ (Appellant’s App. 27). Without more detail, this explanation does not frame the dispute such that the EEOC can respond to Target’s asserted reason with specific evidence that this reason was a pretext for a discriminatory.” Thus, the EEOC survives summary judgment without having to respond to this explanation. The court cited to two especially valuable cases on this point: Patrick v. Ridge, 394 F.3d 311, 317 (5th Cir. 2004) and Chapman v. AI Transport, 229 F.3d 1012, 1034-35 (11th Cir. 2000).

Tuesday, August 22, 2006

In an omigod moment, the D.C. Circuit held today in Murphy v. Internal Revenue Service, No. 05-5139 (D.C. Cir. Aug. 22, 2006) that under the Sixteenth Amendment, the definition of compensation under Internal Revenue Code § 104(a)(2) “is unconstitutional as applied to her award because compensation for a non-physical personal injury is not income under the Sixteenth Amendment if, as here, it is unrelated to lost wages or earnings.” This affects virtually all settlements and judgments of employment discrimination claims, and must be of commanding interest to the employment discrimination bar. (Though not a tax practitioner, I imagine that the potential reach of this opinion — constitutionalizing the definition of “income” — will unleash a flurry of activity by taxpayers and resisters alike.)

The employee in this case obtained $70,000 in reputational and mental distress damages in an administrative action against the N.Y. Air National Guard (she alleged whistle-blowing claims). After paying $20,665 in federal taxes, she applied for a refund, contending alternatively that her payment fell within the IRC § 104(a)(2) exclusion of awards for “physical injury” or “physical sickness,” or that the restriction by this section to these limited categories placed nontangible injuries by implication into the “income” category, in violation of the Sixteenth Amendment.

The panel rejected the former statutory argument, and reached the constitutional challenge. Murphy argued that because a compensatory award for emotional or reputational damages is “neither a gain nor an accession to wealth, her award is not income,” because they are intended to make the tort victim whole. The government in turn argued that the physical injury exclusion is, in essence, legislative grace which itself could be revoked. Bad mistake for the government:

“[We reject the Government’s breathtakingly expansive claim of congressional power under the Sixteenth Amendment — upon which it founds the more far-reaching arguments it advances here. The Sixteenth Amendment simply does not authorize the Congress to tax as ‘incomes’ every sort of revenue a taxpayer may receive. As the Supreme Court noted long ago, the ‘Congress cannot make a thing income which is not so in fact.’ Burk-Waggoner Oil Ass’n v. Hopkins, 269 U.S. 110, 114 (1925). Indeed, because the ‘the power to tax involves the power to destroy,’ McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 431 (1819), it would not be consistent with our constitutional government, and the sanctity of property in our system, merely to rely upon the legislature to decide what constitutes income.”

The panel finds that the Sixteenth Amendment definition of “income” — at the time of its ratification, as revealed in the legislative history of the original IRC and contemporaneous case law — “strongly suggest that the term ‘incomes’ as used in the Sixteenth Amendment does not extend to monies received solely in compensation for a personal injury and unrelated to lost wages or earnings.” Under then-understanding of “income,” compensation for non-physical personal injuries would not have been income at all. Thus:

“In sum, every indication is that damages received solely in compensation for a personal injury are not income within the meaning of that term in the Sixteenth Amendment. First, as compensation for the loss of a personal attribute, such as wellbeing or a good reputation, the damages are not received in lieu of income. Second, the framers of the Sixteenth Amendment would not have understood compensation for a personal injury — including a nonphysical injury — to be income. Therefore, we hold § 104(a)(2) unconstitutional insofar as it permits the taxation of an award of damages for mental distress and loss of reputation.”

Start spreading the news to your clients — this is big fun!

Friday, August 18, 2006

Employees in the federal branches face special challenges pursuing their claims of employment discrimination. Federal agency employees know the phalanx of procedures they face (first filing with the agency, then appealing to the EEOC), although ultimately they may opt for a civil action in federal court. (Employees in the intelligence and military communities may find their claims barred entirely by immunity. Sterling v. Tenet, 416 F.3d 338, 96 FEP 225 (4th Cir. 2005); Hedin v. Thompson , 355 F.3d 746, 93 FEP 311 (4th Cir. 2004).) Judicial branch employees face the bleakest prospects for review of their claims; they may only file internal complaints under the aegis of the chief judges of their courts. Dotson v. Griesa , 398 F.3d 156, 95 FEP 248 (2d Cir. 2005).

Congressional employees, until the Congressional Accountability Act of 1995 (“CAA”), lacked a cause of action under the various federal anti-discrimination statutes, and found lawsuits on constitutional and common law grounds often barred by the Speech and Debate Clause. Now comes Fields v. Office of Eddie Bernice Johnson, No. 04-5335 (D.C. Cir. Aug 18, 2006), in which the en banc court revisits and retracts the circuit’s decades’ old immunity against actions by Congressional employees whose duties were said to be “directly related to the due functioning of the legislative process.”

The court reviewed two orders denying Fed. R. Civ. P. 12(b)(1) motions to dismiss actions against two legislators, alleging race, sex and disability discrimination and a violation of the FLSA. Bringing itself in line with another recent decision in a different circuit (Bastien v. Office of Senator Ben Nighthorse Campbell, 390 F.3d 1301, 94 FEP 1760 (10th Cir. 2004)), the court holds that the proper scope of the Speech and Debate Clause immunity looks not to the duties of the employees (as the circuit previously held in Browning v. Clerk, U.S. House of Representatives, 789 F.2d 923 (D.C. Cir. 1986)), but to whether liability implicates protected legislative activity (such as speech or debate on the floor, proposing and voting legislation, publishing legislative reports, investigative activities and participating in hearings). The court affirms the denial of the motions to dismiss and remands for further proceedings.

The decision, though in agreement on the bottom-line outcome (and the overruling of the employee-duties standard in Browning), fragments into a plurality and three concurring opinions. (Note that there are only ten active judges on the court, and two — Judges Garland Kavanaugh — did not sit here.)

The plurality (authored by Judge Randolph for four judges) erected an elaborate method for testing whether an evidentiary application of the Speech and Debate Clause may foreclose investigation into a Member’s motives for an adverse action:

“In employment discrimination cases under the Accountability Act, then, as in any other employment discrimination case, the defendant will provide evidence of a legitimate nondiscriminatory reason for the discharge. To invoke the Speech or Debate Clause, the employing office should include with this evidence an affidavit from an individual eligible to invoke the Speech or Debate Clause recounting facts sufficient to show that the challenged personnel decision was taken because of the plaintiff’s performance of conduct protected by the Speech or Debate Clause. The affiant must have personal knowledge of the facts underlying his averment and otherwise must be able to assert a Member’s Speech or Debate Clause immunity. . . . The affidavit must indicate into what ‘legislative activity’ or into what matter integral to the due functioning of the legislative process the plaintiff’s suit necessarily will inquire.”

A separate plurality (written by Judge Brown for three judges) would allow relatively loose rein in litigation against a Member’s “employing office” (an entity authorized by the CAA related to the Member’s personal office that functions as the defendant in CAA cases), concluding that the Speech and Debate Clause protects only legislators (and their “alter egos”) personally and not the employing office.

Separate concurring opinions hold the balance of the decision. Judge Rogers — who signs the narrowest opinion creating the necessary majority — writes three pages adopting the plurality’s overall approach but disaffirming the above-stated formula for adjudicating evidentiary immunity issues. Judge Tatel, who joined the plurality, writes separately to respond to the “alter ego” analysis favored by the other plurality opinion.

Thursday, August 17, 2006

Two creative attempts by employees to expand the frontiers of federal and state anti-discrimination law end in tears (for the plaintiffs).

In Ofori-Tenkorang v. American International Group, Inc., No. 05-5272 (2d Cir. Aug. 15, 2006) (available at the Second Circuit website), plaintiff appeals dismissal of his complaint for failure to state a claim, arguing that 42 U.S.C. § 1981 as applied to his employment discrimination claim is extra-territorial (he worked and lived in South Africa). Not a chance, says the Second Circuit, if you read the statute: “[Unlike those other civil rights statutes, which have been amended deliberately to reach conduct occurring outside the United States [ADA, ADE and Title VII], Section 1981 protects only “persons within the jurisdiction of the United States,” 42 U.S.C. § 1981(a).” Thus, that the employment relationship originated in the U.S. or, by the plaintiff’s reckoning, had its “center of gravity” here, is immaterial to applying section 1981 to conduct half a world away.

The Ninth Circuit also staunches an effort by three disability discrimination plaintiffs to invoke California’s Unruh Civil Rights Act (“Unruh Act”), Cal. Civ. Code § 51 (governing discrimination in public accommodations) and Disabled Persons Act (“DPA”), Cal. Civ. Code §§ 54, 54.1, in an employment case. In Bass v. County of Butte, No. 04-16705 (9th Cir. Aug. 15, 2006), the plaintiffs — seeking accommodations following on-the-job injuries — invoked the usual panoply of federal and state acts (ADA, Rehabilitation Act, and 42 U.S.C. § 1983), although (for reasons not disclosed in the opinion) omitting the state’s Fair Employment and Housing Act (“FEHA”). After summary judgment was entered on all claims, the plaintiffs took an appeal purely based on the Unruh Act and DPA. Plaintiffs faced the problem that California courts and the Ninth Circuit have historically rejected efforts to stretch these two acts to cover employment claims (the field said to be occupied by the FEHA).

Plaintiffs’ ace was that California ended the Unruh Act and the DPA, in 1992 and 1996 respectively, to provide expressly that “[a] violation of the right of any individual under the Americans with Disabilities Act of 1990 shall also constitute a violation of this section.” Because the amendment did not confine itself to Titles II (government facilities) and III (public accommodation) of the ADA, plaintiffs argued that — on the face of the statute — Title I of the ADA governing employment was also incorporated into the two acts. While this reading was admittedly a sweeping one, it conformed to the plain language of the amendments.

The panel solves the California Assembly’s drafting problem by judicially repairing the amendment, to exclude Title I:

“Here, the context of the 1992 amendment leads us to conclude that the California legislature intended to incorporate into the Unruh Act and the DPA only those provisions of the ADA germane to the original scope of those state laws. Beginning, as instructed, with the common sense meaning of the text, we conclude that the amendments merely incorporate any otherwise relevant ADA standards as a ‘floor’ under state law. Plaintiffs’ reading would, in effect, add to the text that a violation of an individual’s right under any part of the ADA shall constitute a state law violation as well, even if the subject matter of the alleged ADA violation is wholly outside the state-law protection at issue.” [Emphasis in original]

The panel cites to two justifications for its reading. First, the amendments occurred coincidently with amendments to the FEHA, and “[i]f, as Plaintiffs argue, the legislature intended to transform the Unruh Act into an all-inclusive anti-discrimination law, then its simultaneous strengthening of FEHA would have been unnecessary and anomalous.” Second, “Plaintiffs’ attempt to expand the subject matter scope of these statutes to incorporate Title I of the ADA would create an end-run around the administrative procedures of FEHA solely for disability discrimination claimants.” So both reasons given by the court are, on their face, Reimagining of what the legislature should have done or perhaps meant to do, but not what it actually did.

Understandably, the panel did not want to trigger a race to the federal courthouse by upsetting a long-held understanding that only FEHA (with its variegated procedures and deadlines) governs the field of employment in California. Nor did it wish to be responsible for a mini-crisis that would compel the California assembly to amend the acts once again. What the panel’s holding possesses in comity and common sense, though, it loses in analytical integrity — holding that a statute that says “x” really says “x, except y.” Certifying the question to the California Supreme Court might have been the wiser course.

Wednesday, August 16, 2006

The plaintiffs in Meacham v. Knolls Atomic Power Laboratory, No. 02-7378 (2d Cir. Aug. 14, 2006) (available at the Second Circuit website) suffer a bitter blow after pending on appeal for four years. The plaintiffs in this collective action had won a trial on the merits on an ADEA/N.Y. state law age-disparate impact case, challenging how the employer implemented a reduction-in-force (directing managers to rate employees on matrix based on performance, flexibility and criticality of skills, plus a bonus for length of service). The judgment was affirmed on appeal. Meacham v. Knolls Atomic Power Laboratory, 381 F.3d 56, 94 FEP 602 (2d Cir. 2004). Then the Supreme Court granted certiorari, vacated and remanded the decision for reconsideration in light of Smith v. City of Jackson, 544 U.S. 228 (2005). Smith affirmed the viability of disparate impact under the ADEA, subject to a broad defense of “reasonable factors other than age” (RFOA) for employers (29 U.S.C. § 623(f)(1)). Smith expressly rejected the Griggs-Wards Cove “business necessity” defense as too stringent for ADEA cases, because it allows inquiry into whether there were other less-restrictive ways for an employer to implement its goals.

The Second Circuit panel on remand — in a 2-1 decision — reverses the judgment and orders entry of a judgment for the employer. The majority holds that the burden of proving reasonableness rests on the employee (following Pippin v.Burlington Res. Oil & Gas Co., 440 F.3d 1186, 1200 (10th Cir. 2006)). While the employees’ challenge to the RIF targeted the company’s reliance on subjective evaluations of “flexibility” and “criticality” established a statistically-significant impact on employees age 40 and over, the employer presented testimony that these factors were commonly-understood and -applied concepts in management, and necessary to the functioning of a shrinking workforce. Although the employees challenged this testimony with evidence that the criteria were vague and unvalidated, the panel majority found that the rebuttal failed to discharge the burden of proving unreasonableness. Statistical evidence of age disparity alone could not carry the day: “It is important to distinguish between evidence that KAPL’s IRIF resulted in an unlikely, ‘startlingly skewed’ age distribution of laid-off employees–which is relevant to plaintiffs’ prima facie case–and evidence that KAPL’s business justification for the specific design and execution of the IRIF was ‘unreasonable.’ The fact that the IRIF resulted in a skewed age distribution of laid-off employees is not itself necessarily probative of whether KAPL’s business justification for particular features of its IRIF was ‘reasonable.'”

And the testimony at trial, held the majority, established that the method selected by the employer to prune its workforce was, if not perfect, at least reasonable:

“The probative record evidence suggests that the factors used in KAPL’s IRIF could have been better drawn and that the process could have been better scrutinized to guard against a skewed layoff distribution. However, KAPL set standards for managers constructing matrices and selecting employees for layoff, and it did monitor the implementation of the IRIF. The IRIF restricted arbitrary decision-making by individual managers, and the measures that KAPL put in place to prevent such arbitrary decision-making and ensure that the layoffs satisfied KAPL’s business needs–while not foolproof–were substantial. Any system that makes employment decisions in part on such subjective grounds as flexibility and criticality may result in outcomes that disproportionately impact older workers; but at least to the extent that the decisions are made by managers who are in day-to-day supervisory relationships with their employees, such a system advances business objectives that will usually be reasonable.”

The dissent, signed by the author of the original majority opinion (Judge Pooler), argues that the burden of proof was misassigned on RFOA to the employee, and that in any event that the employer had waived the RFO argument by failing to request a jury charge on the issue. But the outcome on remand wipes out a huge verdict for plaintiffs, while according employers broad latitude to adopt policies that rake out the thatch, or clear the deadwood, or whatever cliche is currently in fashion.

Tuesday, August 15, 2006

Two vintage opinions in Title VII cases find themselves in print today.

In Jordan v. Alternative Resources Corp., No. 05-1485 (4th Cir. Aug. 14, 2006), the court essentially republishes its original opinion affirming dismissal of a Title VII retaliation case (my original coverage can be found at May 15, 2006), involving an incident of alleged workplace harassment (white employees loudly associating the notorious Beltway snipers, John Allen Muhammad and Lee Boyd Malvo, with gorillas). Dissenting (again), Judge King adds that Monday’s opinion on rehearing basically tracks the original panel opinion: “By order of July 5, 2006, we unanimously granted panel rehearing, thereby vacating the panel majority’s earlier decision, which had affirmed the district court’s dismissal order, see Jordan v. Alternative Res. Corp., 447 F.3d 324 (4th Cir. 2006), and from which I had dissented, see id. at 336 (King, J., dissenting). By its decision today, the majority has again affirmed the district court’s dismissal order. In so doing, it has rewritten its earlier opinion to reduce the importance of the snipers’ capture in its discussion of Jordan’s Title VII claim (although the capture remains prominent in the majority’s analysis of that claim), and in an endeavor to further explain its decision concerning Jordan’s § 1981 discrimination claim, which had previously been relegated to two conclusory sentences, see id. at 334 (majority opinion). In these circumstances, I am disappointed that our panel rehearing has merely prolonged the decisional process, without altering the result reached.”

Meanwhile, in Keri v. Board of Trustees of Purdue Univ., No. 05-4400 (7th Cir. Aug. 14, 2006), the panel takes the uncommon step of adopting in its entirety a district court opinion granting summary judgment (signed by U.S. district court judge Theresa L. Springmann, N.D. Ind.), with only a short cover opinion summarizing the outcome. The plaintiff, an native Ghanaian assistant professor at a state university, does not even get off the blocks on his claim that he was denied renewal on his contract because of race and national origin. Not only does the court hold that he failed to show he was performing to reasonable expectations (many complaints from students and reviewers), but he also fails to identify comparable employees who were treated more favorably, so he fails at the prima facie stage.

Monday, August 14, 2006

Because virtually every state has an FEP agency that administers employment discrimination laws, attorneys sometimes take for granted that the time for filing a charge with the EEOC is presumptively limited to 180 days, not 300 days. 42 USC § 2000e-5(e)(1). The timing issues can get a good deal hairier, depending on the interplay of worksharing agreements and the scope of state EEO law.

For an example, take a look at the recent decision of McDonald v. Grace Church Seattle, No. 04-35984 (9th Cir. Aug. 11, 2006) . The events occurred in Washington state, a deferral state (by virtue of the Washington Law Against Discrimination (LAD)) recognized without exception under 29 C.F.R. § 1601.71(b). Plaintiff, a church office administrator (presumably not covered by any “ministerial” exception), alleged sexual harassment and retaliation. According to the opinion, “she filed her charges with the EEOC and with the Washington [Human Rights] Commission more than 180 days, but less than 300 days, after the last act of alleged discrimination.”

Ordinarily, filing within this period would suffice, but Washington state law (unlike Title VII) expressly exempts “nonprofit religious organizations.” What effect does this exclusion on the Washington Commission’s status as a deferral agency? It makes all of the difference in the world. The Ninth Circuit affirms dismissal (judgment on the pleadings) on the ground that religious exclusion renders the Washington Commission — for purposes of this claim — not a deferral agency. The Ninth Circuit specifically eschews reliance on 29 C.F.R. § 1601.71(b), finding that the regulation is not a comprehensive listing of all possible exceptions. “As a result, the EEOC’s designation in 29 C.F.R. § 1601.74(a) of the Washington Commission as a FEP agency without exception as to any charge is not determinative of whether the Washington Commission had subject matter jurisdiction over MacDonald’s charges.”

Scrutinizing the LAD, and the state decisional law, it finds that Washington state law would not support plaintiffs complaint. This means that McDonald has no claim under Washington law and hence no boost from deferral. So, lawyers, keep a sharp lookout for possible discontinuities in the EEOC galaxy.

Wednesday, August 9, 2006

Employment discrimination claimants can find themselves on a razor’s edge in meeting the requirement to file an administrative charge within 180 days (or 300 days in deferral jurisdictions). The Supreme Court in Morgan divided the world into discrete and non-discrete claims. Discrete claims, where the claim is complete in one act (termination, demotion, etc.), trigger the running of the limitations period; non-discrete claims (harassment) accumulate incident-by-incident and do not require the immediate filing of a charge. Another overlay is the Supreme Court’s decision last term in Burlington Northern v. White, No. 05-259 (U.S. June 22, 2006), which in the retaliation arena defined the scope of the claim to include any materially adverse action that would deter a reasonable employee from taking protected action.

Thus, knowing in 2006 which claims fall on the “discrete” side of the line and require the filing of a charge has become more challenging. Haynes v. Level 3 Communications, No. 04-1307 (10th Cir. Aug. 8, 2006) presents just such an example. A saleswoman has several accounts taken away from her one by one, frustrating her efforts to meet her sales quotas, and sees them reassigned to a younger male employee (named Quivey). Eventually she is placed on a performance improvement plan (PIP) — a form of probation — and later terminated in a reduction-in-force.

Haynes sues under Title VII, the ADE and ADA. So where are the discrete actions? Well, of course, the termination counts. But what about the acts leading up to it? The court holds (consistently with other circuits) that the probationary PIP status is not a materially adverse employment action (no loss of pay or status is attached to it).

But it turns out, surprisingly enough, that each reassignment of an account is deemed a “discrete” action, requiring the filing of a charge each time it occurred. This may, of course, have something to do with the vagaries of record in this case:

“As Haynes repeatedly stated, these actions directly caused a significant change in her employment status and benefits. According to Haynes, [supervisor] Larson’s discriminatory actions caused Quivey to receive the rewards of her work and, conversely, she was unable to meet her sales quotas. Although she did not identify the precise accounts unfairly removed, the dates they were transferred to Quivey or the amount of income she lost as a result of the transfers, Haynes clearly knew the discriminatory nature of Larson’s actions and the resulting detrimental effect to her income. Indeed, in a November 7, 2000 e-mail to Larson, Haynes stated, ‘this has impacted my sales output tremendously, as the work I’ve done is not reflected in my base and someone else is now getting paid on much of my work.’ (R. Vol. III at 333.) Because each removal of an account constituted an actionable adverse employment action, Haynes was required to file an administrative charge within 300 days of each removal. She did not do so. Thus, any claim based on the removal of her accounts is time-barred.”

It could be that this case turns on the plaintiff’s admission that the reassignments put her on notice about discrimination. (Elsewhere in the opinion, Haynes is quoted as describing the initial reassignment as a “watershed” moment in her relationship with the employer.)

But this strikes me as a potentially perilous turn in the evolution of EEO law. Employees suffering discrimination that takes place in drips and drabs (denials of overtime opportunities comes to mind, but I’m sure there are many more) now have to decide whether to report each incident in an EEOC charge within 180/300 days, or forever lose it. I sure can’t see how this helps employers, whose HR staffs will be put to the task of answering incrementally smaller complaints. (Query: How can we square this decision with the Tenth Circuit’s prior decision in Croy v. Cobe Laboratories, Inc., 345 F.3d 1199, 92 FEP 1218 (10th Cir. 2003), that a series of decisions denying a female employee various promotions constitutes a non-discrete “glass ceiling” claim?) This is a development worth following.

Tuesday, August 8, 2006

The appeal in Carpenter v. The Boeing Co., No. 04-3334 (10th Cir. Aug. 7, 2006) of a putative Title VII sex discrimination class action tells us several things —

1. Despite that “an order denying a motion to reconsider a decision on class certification [under Rule 23(c)(1)(C)] is an ‘order . . . granting or denying class action certification’,” as set forth in Fed. R. Civ. P. 23(f), the literal terms of subsection (f) do not rescue from untimeliness an appeal taken more than 10 days after the principal order respecting class certification. A motion to reconsider does not toll the ten days allowed by law under that rule, unless filed (as with a Rule 50 or 59 motion) no more than ten days of the original order. The panel notes that an appeal of the order denying a motion to reconsider would, at best, preserve only the arguments raised anew in that motion and deprive the reviewing court of authority to reopen the prior decision. “[Given the multifactor analysis that courts must apply in deciding the propriety of class certification, such a limited review would often require contorted thinking that exceeds the capacities of even appellate courts.”

2. In a Title VII disparate impact case (here challenging the managers’ discretionary allocation of overtime), it is insufficient to establish a prima facie case simply by exposing a statistically-significant disparity between the protected group and its similarly-situated cohort group. “[A] statistical analysis cannot establish a plaintiff’s prima facie case unless it is based on data restricted to qualified employees, or (1) reliable data with respect to that group are unavailable and (2) the plaintiff establishes that the statistical analysis uses a reliable proxy for qualification. ”

Here, the panel affirmed the district court’s finding that the plaintiff’s statistical expert failed to incorporate the employees’ collective bargaining agreement (CBA) eligibility requirements in his analysis. Plaintiffs rejoined that reliable electronic data of those requirements were, according to Boeing, unavailable. But (ouch!) “data may be available in nonelectronic form. Electronic datare undeniably more convenient, especially for use in statistical studies, but inconvenience does not excuse failure to collect the data. Plaintiffs have presented no reason why the omitted information could not have been procured through other methods, such as depositions or interrogatories. It appears that they were simply satisfied with Boeing’s indication that the data were unavailable in their electronic payroll records.”

Moreover, even if data were not available, there was no evidence (according to the panel) that the “statistical analysis produce[d] a reliable surrogate for qualifications for overtime; that is, that the results accurately reflect comparisons between individuals who were equally eligible for overtime assignments under the CBA.”

3. There is also the fallacy of equoting “confusing the magnitude of the disparities with their level of statistical significance, as measured in standard deviations.” As the panel concluded, affirming summary judgment on the disparate impact claim, “the very large number of standard deviations [in plaintiffs’ study] does not mean that the gross difference in the amount of overtime worked by men and women is itself large; it just means that the difference is very unlikely to be random.” But lack of randomness here did not equate to an inference of discrimination, where the statistical study did not consider the relevant CBA eligibility standards.

4. Finally, any class representative who “demand[s] to be paid a ‘consultant’s fee’ of 15% of any attorney fees obtained by class counsel” — as several plaintiffs in this case apparently did — is likely to get her wings clipped. Here, the putative class representatives were removed. Moreover, “Plaintiffs’ repeated public references to privileged conversations with class counsel only strengthened its initial conclusion that they put their own interests above those of the class. ”

Monday, August 7, 2006

The Seventh Circuit elaborates on the definition of “adverse employment action” in a Title VII/ADE action in Minor v. Centocor, Inc., No. 05-3080 (7th Cir. Aug. 4, 2006). Last term, the U.S. Supreme Court had occasion to decide the standard of materiality for a claim of retaliation under Title VII in Burlington Northern v. White, No. 05-259 (U.S. June 22, 2006). But because the anti-retaliation section of Title VII (42 U.S.C. § 2000e-3(a)) uses language different and more expansive than the anti-discrimination section (42 U.S.C. § 2000e-2(a)), White did not entirely resolve what kinds of claims might be actionable as discrimination. The Seventh Circuit opinion refocuses the discussion in a case where the employee (in sales for a medical supply company) alleges that she was required to expand her work week from 50-55 hours to 70-90 hours, to respond to a (supposedly) discriminatory demand to visit her clients twice a month. Summary judgment was granted to the employer.

Although the employer contended that the new work rules was not an “adverse employment action,” the Seventh Circuit panel disagreed:

“Although hundreds if not thousands of decisions say that an ‘adverse employment action’ is essential to the plaintiff’s prima facie case, that term does not appear in any employment-discrimination statute or McDonnell Douglas, and the Supreme Court has never adopted it as a legal requirement. The statutory term is ‘discrimination,’ and a proxy such as ‘adverse employment action’ often may help to express the idea-which the Supreme Court has embraced-that it is essential to distinguish between material differences and the many day-to-day travails and disappointments that, although frustrating, are not so central to the employment relation that they amount to discriminatory terms or conditions. . . . Helpful though a judicial gloss such as ‘adverse employment action’ may be, that phrase must not be confused with the statute itself or allowed to displace the Supreme Court’s approach, which inquires whether the difference is material.”

Not surprisingly, the panel holds that a 20-40 hour leap in the work week is material and adverse.

Nevertheless, the court affirms summary judgment, finding that the employee was not treated any differently from any other sales staff under the new rule, and that much of the increase in her work week was her personal choice to cover the territory by car, using out-and-back routes. The Court (per Judge Easterbrook), helpfully offers this travel advice:

“The most efficient method may have been to meet accounts in Springfield, drive to St. Louis (where her major customers were located), and after doing the rounds there use a combination of air travel and rental cars to visit Des Moines, Iowa City, Peoria, Evansville, and Owensboro before returning by air to St. Louis and driving home to Springfield. Expenses of air travel and auto rental would have been fully reimbursed by Centcor.

“How to construct the shortest route that visits all destinations is an old subject: in graph theory and linear programming it is known as the ‘traveling salesman problem’ and is the subject of a considerable literature. Many of the important papers on the topic are collected at http://www.tsp.gatech.edu/history/biblio/tspbiblio.html. Our suggested routing may or may not be optimal-that depends in part on airline schedules-but is better than the automobile-only, hub-and-spoke system that Minor preferred.”

Meanwhile, the Fifth Circuit holds that the “piggybacking” or “single filing” rule — which allows an employee who has not filed an administrative charge (with the EEOC or deferral agency) to join a similarly-situated employee’s charge in civil litigation instead — does not extend to an employee who seeks to file their own separate, individual case based on another employee’s charge. Price v. Choctaw Glove & Safety Co., Inc., No. 05-60094 (5th Cir. Aug. 3, 2006) .

Thursday, August 3, 2006

Employees in two cases tried egregious, co-worker racial harassment claims and won liability at trial, but lost out on punitive damages.

In Jeffery v. Kansas City Southern Ry., No. 05-2220 (8th Cir. Aug. 4, 2006) , the jury awarded $900,000 in punitive damages ($128,000 actual damages) in a Title VII case, but the district court granted a Rule 50 motion to set them aside. The Eighth Circuit affirms, finding that in key instances the record failed to establish that acts of harassment (including offensive language, graffiti in the break room bulletin board, and vandalism of his locker) reoccurred after he lodged complaints with management. The Court accordingly found that the employee did not prove a wilful violation under Kolstad .

The panel noted that the employee’s appeal was sabotaged by an incomplete record: “Although the timing of events is crucial in this appeal, the record is often silent on when certain events occurred. Consequently, the descriptions contained herein do not always point to precise dates or sequence the events in a definitive order. Further, while the record is replete with significant egregious conduct, the plaintiffs have often failed to provide any evidence concerning Southern’s knowledge of certain events. While we have attempted to read the record in a light most favorable to the jury’s verdict, the record is incomplete in several important respects.” (Lesson: Before trying a case, prepare a demonstrative exhibit of the timeline, with all key events plotted. Even if it is not admitted into the record, it can be used as a checklist to make certain all dates get into the record.)

In Azimi v. Jordan’s Meats, Inc., No. 05-2602 (1st Cir. Aug. 3, 2006), a Title VII and § 1981 case, the employee won liability but was unable to persuade the jury that he suffered a compensable injury. To obtain punitive damages, under prevailing First Circuit law, the employee was required to prove some damages. (N.B.: That is not the law in other circuits, as the opinion notes at page 18.) On appeal, he argues that he should have been allowed to make a demand for nominal damages. But he failed (or counsel made a strategic decision) to omit such a request from the jury charge. Even still, the First Circuit allows an employee a second bite: to request the district court to enter nominal damages post-verdict. But the employee didn’t make a timely demand for that relief, either. So no damages at all for Mr. Azimi. (Lesson: Pursue nominal damages in your complaint, pre-trial order, jury charge and post-verdict if necessary.)

Thursday, August 3, 2006

By statute (and by virtue of the Supremacy Clause), Federal Reserve Banks enjoy a status akin to federal government agencies, with attendant immunity from conflicting state laws. The Federal Reserve Act — which under 12 U.S.C. § 341 grants the Federal Reserve Banks the power to dismiss “at pleasure” any employee — has been held in different contexts to preempt state anti-discrimination laws. The U.S. Courts of Appeals have arrived at conflicting answers about the reach of this preemption.

The Third Circuit chimes in with Fasano v. Federal Reserve Bank of N.Y., No. 05-4661 (3d Cir. Aug 3, 2006). In an issue of first impression for the court, the court rejects the view of the Sixth Circuit that state law is categorically preempted, but holds that state law may not provide greater rights or remedies than corresponding federal acts:

“Federal Reserve Act § 341 (Fifth), as impliedly amended by the AD and 12 U.S.C. § 1831j, preempts any state employment law that goes beyond the remedies and protections provided by those federal laws. Such “additional” provisions – including provision for unlimited punitive damages, individual liability on the part of employees, and coverage of less severe disabilities – would conflict with Congress’s intent to provide Federal Reserve Act § 341 (Fifth), as impliedly amended by the AD and 12 U.S.C. § 1831j, preempts any state employment law that goes beyond the remedies and protections provided by those federal laws. Such “additional” provisions – including provision for unlimited punitive damages, individual liability on the part of employees, and coverage of less severe disabilities – would conflict with Congress’s intent to provide Federal Reserve Banks with the broadest latitude possible in carrying out their statutory duties, while giving due recognition to the applicability of the AD and 12 U.S.C. § 1831j’s requirements.”

Here, the court holds that New Jersey’s Law Against Discrimination well exceeds the scope of the federal Americans With Disabilities Act, and is to that extent preempted. The LAD provides (1) for individual liability by supervisors; (2) for direct resort to court, without the filing of an administrative charge; (3) a more generous definition of “disability”; and (4) uncapped damages and attorney fee risk multipliers. These remedies no doubt cheer advocates for employees in the private sector, but Ms. Fasano’s case must come to an end.

Wednesday, August 2, 2006

The Seventh Circuit holds that a single act of physical sex harassment, short of rape or comparable trauma, might constitute a hostile work environment in Patton v. Keystone RV Company, No. 05-3891 (7th Cir. Aug. 1, 2006) . The male harasser (Ramey), who (it was uncontested) was the female employee’s (Patton’s) supervisor, was a plant quality control manager.

While it was his job to monitor work performance, according to the summary judgment record he regularly exploited his authority to station himself near Patton. He leered at and stalked the plaintiff:

“Ramey also touched Patton inappropriately. The first (and most serious incident) occurred when she was wearing shorts, crouching in the doorway of a nearly finished RV. As she finished cleaning that portion of the vehicle, she spun around, legs open to the outside. Ramey was standing there, presumably observing her work, and he slid his hand under Patton’s shorts, up her inner thigh, while commenting that her legs were smooth. His hand went as far as her underwear, at which point Patton fell backwards to break the contact. On another occasion, Patton was on her knees cleaning the floor of an RV and was working backward toward the door to the outside. Ramey was standing right outside of the RV, and he put his hand on her calf as she reached the doorway. Another incident occurred in the bedroom area of an RV. As Patton was squatting down to repair carpet, Ramey crouched down behind her and put his arm on her back with his hand near her neck. He then placed his face quite close to her ear and told her to meet him for a drink. Patton declined and squirmed away from him.”

The district court, cobbling together some of the Seventh Circuit’s more permissive harassment decisions, concluded that the level of physical contact was not enough to total up to a hostile work environment. The Seventh Circuit reversed:

Ramey’s groping of Patton under her shorts might be sufficient alone to create an abusive working environment. But it was not the sole act. Ramey had already raised the alleged rumor of a sexual affair between himself and Patton. At least two people-Patton and Miller-agreed that Ramey leered at her in an obsessive manner. And on three more occasions he exploited the proximity to Patton provided by his managerial position to touch her. Significantly, one of these acts occurred in the isolated back bedroom of an RV. Ramey approached Patton from behind, squatted down behind her, put his arm on Patton’s back with his hand up by her neck, and whispered into her ear his desire to have a drink with her. We think these facts, when considered in their totality, easily make reasonable Patton’s constant fear that while she was working alone in the RVs Ramey would “sneak up” and touch her in a sexual manner or worse. A reasonable jury could find that Patton was subjected to a hostile work environment.”

Indeed, the court found this behavior sufficient to present a genuine issue of material fact about constructive discharge. “[A] reasonable factfinder could agree with Patton’s fear that her supervisor was an obsessed man who-based on previous acts showing no regard for Patton’s right to control who could touch intimate areas of her body was capable of, and desirous of, physically assaulting her in a serious way. We need not conclude that a rape or other assault was likely, but only whether a reasonable fact finder could find that Patton should have quit immediately to protect herself.”

Now, while it is possible that the employer has a Faragher defense to this conduct (not discussed in the opinion), it should at least send a shudder through the hearts of HR executives everywhere that managers can subject their employers to civil liability by a single repellant act, such as alleged here. All the due care and training in the HR world will do nothing to prevent such liability, but preventative measures (as simple as keeping an ear to the ground about rumors of abuse) may help.

, Judge Posner writes upon the vexing issue of when employees may be deemed “similarly situated” for purposes of the prima facie examination. Affirming summary judgment in a disciplinary termination case under Title VII, the court observes that the demand for some fit between the plaintiff-employee and others outside the protected group arrests untoward picking and choosing:

“We know that the defendant employs about 200 conductors and that it fired 10 of them, besides the plaintiff, for safety and other infractions in a two-year period that includes the one-year period in which the plaintiff worked. The plaintiff’s lawyer insisted at argument that two other conductors whose infractions were as serious as the plaintiff’s were not fired. Suppose then that 12 male employees- the 10 who were fired and the 2 who were not-were comparable to the plaintiff; then 5/6 of the comparable males were treated as badly as the plaintiff. This means that 100 percent of the ‘bad’ black female workers were fired and 83 percent of the ‘bad’ white males, but since there was only one worker in the first class, namely the plaintiff, the percentage could not be less than 100 percent. Since perfect enforcement of company rules is hardly to be expected, the fact that ‘only’ 83 percent of the ‘bad’ white men were fired does not support an inference that the defendant treats white men better than black women.”

On the other hand, the panel notes, some courts have been guilty of fetishize the “similarly situated” test:

“But if as we believe cherry-picking [by plaintiffs] is improper, the plaintiff should have to show only that the members of the comparison group are sufficiently comparable to her to suggest that she was singled out for worse treatment. Goodwin v. Board of Trustees of University of Illinois, 442 F.3d 611, 619 (7th Cir. 2006); Ezell v. Potter, 400 F.3d 1041, 1049-50 (7th Cir. 2005). Otherwise plaintiffs will be in a box: if they pick just members of the comparison group who are comparable in every respect, they will be accused of cherrypicking; but if they look for a representative sample, they will unavoidably include some who were not comparable in every respect, but merely broadly comparable. The cases that say that the members of the comparison group must be comparable to the plaintiff in all material respects get this right.”

Here, where eight different reprimands were issued against the plaintiff by four different supervisors, especially in a setting where the supervisors exercise discretion in disciplinary decisions — against other employees with difference service histories and supervisors — the court held that any inference of discrimination evaporates.

In EEOC v. Target Corporation, No. 04-3559 (7th Cir. Aug. 23, 2006), the court reversed summary judgment on a number of individual hiring claims (as well as a rare claim of inadequate record retention under 42 U.S.C. § 2000e-8(c)). It noted, in evaluating Target’s unusually feeble justification for not hiring one of the charging parties, that the employer has a burden of production under McDonnell Douglas-Burdine to “explain its claimed reason for rejecting the applicant clearly enough to allow the court to focus its inquiry on whether the employer honestly believed that reason, . . . and to allow the plaintiff to identify the kind of evidence it must present to demonstrate that the reason is a pretext.” This turned out to be the rare case where the employer failed to meet its burden of production: “Here, Target did not meet its burden because its explanation was only that ‘[b]ased upon [his] interview, Target decided that [Daniels] did not meet the requirements for an ETL position, and therefore elected not to hire him as an ETL.’ (Appellant’s App. 27). Without more detail, this explanation does not frame the dispute such that the EEOC can respond to Target’s asserted reason with specific evidence that this reason was a pretext for a discriminatory.” Thus, the EEOC survives summary judgment without having to respond to this explanation. The court cited to two especially valuable cases on this point: Patrick v. Ridge, 394 F.3d 311, 317 (5th Cir. 2004) and Chapman v. AI Transport, 229 F.3d 1012, 1034-35 (11th Cir. 2000).

Tuesday, August 22, 2006

In an omigod moment, the D.C. Circuit held today in Murphy v. Internal Revenue Service, No. 05-5139 (D.C. Cir. Aug. 22, 2006) that under the Sixteenth Amendment, the definition of compensation under Internal Revenue Code § 104(a)(2) “is unconstitutional as applied to her award because compensation for a non-physical personal injury is not income under the Sixteenth Amendment if, as here, it is unrelated to lost wages or earnings.” This affects virtually all settlements and judgments of employment discrimination claims, and must be of commanding interest to the employment discrimination bar. (Though not a tax practitioner, I imagine that the potential reach of this opinion — constitutionalizing the definition of “income” — will unleash a flurry of activity by taxpayers and resisters alike.)

The employee in this case obtained $70,000 in reputational and mental distress damages in an administrative action against the N.Y. Air National Guard (she alleged whistle-blowing claims). After paying $20,665 in federal taxes, she applied for a refund, contending alternatively that her payment fell within the IRC § 104(a)(2) exclusion of awards for “physical injury” or “physical sickness,” or that the restriction by this section to these limited categories placed nontangible injuries by implication into the “income” category, in violation of the Sixteenth Amendment.

The panel rejected the former statutory argument, and reached the constitutional challenge. Murphy argued that because a compensatory award for emotional or reputational damages is “neither a gain nor an accession to wealth, her award is not income,” because they are intended to make the tort victim whole. The government in turn argued that the physical injury exclusion is, in essence, legislative grace which itself could be revoked. Bad mistake for the government:

“[We reject the Government’s breathtakingly expansive claim of congressional power under the Sixteenth Amendment — upon which it founds the more far-reaching arguments it advances here. The Sixteenth Amendment simply does not authorize the Congress to tax as ‘incomes’ every sort of revenue a taxpayer may receive. As the Supreme Court noted long ago, the ‘Congress cannot make a thing income which is not so in fact.’ Burk-Waggoner Oil Ass’n v. Hopkins, 269 U.S. 110, 114 (1925). Indeed, because the ‘the power to tax involves the power to destroy,’ McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 431 (1819), it would not be consistent with our constitutional government, and the sanctity of property in our system, merely to rely upon the legislature to decide what constitutes income.”

The panel finds that the Sixteenth Amendment definition of “income” — at the time of its ratification, as revealed in the legislative history of the original IRC and contemporaneous case law — “strongly suggest that the term ‘incomes’ as used in the Sixteenth Amendment does not extend to monies received solely in compensation for a personal injury and unrelated to lost wages or earnings.” Under the n-understanding of “income,” compensation for non-physical personal injuries would not have been income at all. Thus:

“In sum, every indication is that damages received solely in compensation for a personal injury are not income within the meaning of that term in the Sixteenth Amendment. First, as compensation for the loss of a personal attribute, such as wellbeing or a good reputation, the damages are not received in lieu of income. Second, the framers of the Sixteenth Amendment would not have understood compensation for a personal injury — including a nonphysical injury — to be income. Therefore, we hold § 104(a)(2) unconstitutional insofar as it permits the taxation of an award of damages for mental distress and loss of reputation.”

Start spreading the news to your clients — this is big fun!

Friday, August 18, 2006

Employees in the federal branches face special challenges pursuing their claims of employment discrimination. Federal agency employees know the phalanx of procedures they face (first filing with the agency, then appealing to the EEOC), although ultimately they may opt for a civil action in federal court. (Employees in the intelligence and military communities may find their claims barred entirely by immunity. Sterling v. Tenet, 416 F.3d 338, 96 FEP 225 (4th Cir. 2005); Hedin v. Thompson , 355 F.3d 746, 93 FEP 311 (4th Cir. 2004).) Judicial branch employees face the bleakest prospects for review of their claims; they may only file internal complaints under the aegis of the chief judges of their courts. Dotson v. Griesa , 398 F.3d 156, 95 FEP 248 (2d Cir. 2005).

Congressional employees, until the Congressional Accountability Act of 1995 (“CAA”), lacked a cause of action under the various federal anti-discrimination statutes, and found lawsuits on constitutional and common law grounds often barred by the Speech and Debate Clause. Now comes Fields v. Office of Eddie Bernice Johnson, No. 04-5335 (D.C. Cir. Aug 18, 2006), in which the en banc court revisits and retracts the circuit’s decades’ old immunity against actions by Congressional employees whose duties were said to be “directly related to the due functioning of the legislative process.”

The court reviewed two orders denying Fed. R. Civ. P. 12(b)(1) motions to dismiss actions against two legislators, alleging race, sex and disability discrimination and a violation of the FLSA. Bringing itself in line with another recent decision in a different circuit (Bastien v. Office of Senator Ben Nighthorse Campbell, 390 F.3d 1301, 94 FEP 1760 (10th Cir. 2004)), the court holds that the proper scope of the Speech and Debate Clause immunity looks not to the duties of the employees (as the circuit previously held in Browning v. Clerk, U.S. House of Representatives, 789 F.2d 923 (D.C. Cir. 1986)), but to whether liability implicates protected legislative activity (such as speech or debate on the floor, proposing and voting legislation, publishing legislative reports, investigative activities and participating in hearings). The court affirms the denial of the motions to dismiss and remands for further proceedings.

The decision, though in agreement on the bottom-line outcome (and the overruling of the employee-duties standard in Browning), fragments into a plurality and three concurring opinions. (Note that there are only ten active judges on the court, and two — Judges Garland Kavanaugh — did not sit here.)

The plurality (authored by Judge Randolph for four judges) erected an elaborate method for testing whether an evidentiary application of the Speech and Debate Clause may foreclose investigation into a Member’s motives for an adverse action:

“In employment discrimination cases under the Accountability Act, then, as in any other employment discrimination case, the defendant will provide evidence of a legitimate nondiscriminatory reason for the discharge. To invoke the Speech or Debate Clause, the employing office should include with this evidence an affidavit from an individual eligible to invoke the Speech or Debate Clause recounting facts sufficient to show that the challenged personnel decision was taken because of the plaintiff’s performance of conduct protected by the Speech or Debate Clause. The affiant must have personal knowledge of the facts underlying his averment and otherwise must be able to assert a Member’s Speech or Debate Clause immunity. . . . The affidavit must indicate into what ‘legislative activity’ or into what matter integral to the due functioning of the legislative process the plaintiff’s suit necessarily will inquire.”

A separate plurality (written by Judge Brown for three judges) would allow relatively loose rein in litigation against a Member’s “employing office” (an entity authorized by the CAA related to the Member’s personal office that functions as the defendant in CAA cases), concluding that the Speech and Debate Clause protects only legislators (and their “alter egos”) personally and not the employing office.

Separate concurring opinions hold the balance of the decision. Judge Rogers — who signs the narrowest opinion creating the necessary majority — writes three pages adopting the plurality’s overall approach but disaffirming the above-stated formula for adjudicating evidentiary immunity issues. Judge Tatel, who joined the plurality, writes separately to respond to the “alter ego” analysis favored by the other plurality opinion.

Thursday, August 17, 2006

Two creative attempts by employees to expand the frontiers of federal and state anti-discrimination law end in tears (for the plaintiffs).

In Ofori-Tenkorang v. American International Group, Inc., No. 05-5272 (2d Cir. Aug. 15, 2006) (available at the Second Circuit website), plaintiff appeals dismissal of his complaint for failure to state a claim, arguing that 42 U.S.C. § 1981 as applied to his employment discrimination claim is extra-territorial (he worked and lived in South Africa). Not a chance, says the Second Circuit, if you read the statute: “[Unlike those other civil rights statutes, which have been amended deliberately to reach conduct occurring outside the United States [ADA, ADE and Title VII], Section 1981 protects only “persons within the jurisdiction of the United States,” 42 U.S.C. § 1981(a).” Thus, that the employment relationship originated in the U.S. or, by the plaintiff’s reckoning, had its “center of gravity” here, is immaterial to applying section 1981 to conduct half a world away.

The Ninth Circuit also staunches an effort by three disability discrimination plaintiffs to invoke California’s Unruh Civil Rights Act (“Unruh Act”), Cal. Civ. Code § 51 (governing discrimination in public accommodations) and Disabled Persons Act (“DPA”), Cal. Civ. Code §§ 54, 54.1, in an employment case. In Bass v. County of Butte, No. 04-16705 (9th Cir. Aug. 15, 2006), the plaintiffs — seeking accommodations following on-the-job injuries — invoked the usual panoply of federal and state acts (ADA, Rehabilitation Act, and 42 U.S.C. § 1983), although (for reasons not disclosed in the opinion) omitting the state’s Fair Employment and Housing Act (“FEHA”). After summary judgment was entered on all claims, the plaintiffs took an appeal purely based on the Unruh Act and DPA. Plaintiffs faced the problem that California courts and the Ninth Circuit have historically rejected efforts to stretch these two acts to cover employment claims (the field said to be occupied by the FEHA).

Plaintiffs’ ace was that California ended the Unruh Act and the DPA, in 1992 and 1996 respectively, to provide expressly that “[a] violation of the right of any individual under the Americans with Disabilities Act of 1990 shall also constitute a violation of this section.” Because the amendment did not confine itself to Titles II (government facilities) and III (public accommodation) of the ADA, plaintiffs argued that — on the face of the statute — Title I of the ADA governing employment was also incorporated into the two acts. While this reading was admittedly a sweeping one, it conformed to the plain language of the amendments.

The panel solves the Californi assembly’s drafting problem by judicially repairing the amendment, to exclude Title I:

“Here, the context of the 1992 amendment leads us to conclude that the California legislature intended to incorporate into the Unruh Act and the DPA only those provisions of the ADA germane to the original scope of those state laws. Beginning, as instructed, with the common sense meaning of the text, we conclude that the amendments merely incorporate any otherwise relevant ADA standards as a ‘floor’ under state law. Plaintiffs’ reading would, in effect, add to the text that a violation of an individual’s right under any part of the ADA shall constitute a state law violation as well, even if the subject matter of the alleged ADA violation is wholly outside the state-law protection at issue.” [Emphasis in original]

The panel cites to two justifications for its reading. First, the amendments occurred coincidently with amendments to the FEHA, and “[i]f, as Plaintiffs argue, the legislature intended to transform the Unruh Act into an all-inclusive anti-discrimination law, then its simultaneous strengthening of FEHA would have been unnecessary and anomalous.” Second, “Plaintiffs’ attempt to expand the subject matter scope of these statutes to incorporate Title I of the ADA would create an end-run around the administrative procedures of FEHA solely for disability discrimination claimants.” So both reasons given by the court are, on their face, Reimagining of what the legislature should have done or perhaps meant to do, but not what it actually did.

Understandably, the panel did not want to trigger a race to the federal courthouse by upsetting a long-held understanding that only FEHA (with its variegated procedures and deadlines) governs the field of employment in California. Nor did it wish to be responsible for a mini-crisis that would compel the California assembly to amend the acts once again. What the panel’s holding possesses in comity and common sense, though, it loses in analytical integrity — holding that a statute that says “x” really says “x, except y.” Certifying the question to the California Supreme Court might have been the wiser course.

Wednesday, August 16, 2006

The plaintiffs in Meacham v. Knolls Atomic Power Laboratory, No. 02-7378 (2d Cir. Aug. 14, 2006) (available at the Second Circuit website) suffer a bitter blow after pending on appeal for four years. The plaintiffs in this collective action had won a trial on the merits on an ADEA/N.Y. state law age disparate impact case, challenging how the employer implemented a reduction-in-force (directing managers to rate employees on matrix based on performance, flexibility and criticality of skills, plus a bonus for length of service). The judgment was affirmed on appeal. Meacham v. Knolls Atomic Power Laboratory, 381 F.3d 56, 94 FEP 602 (2d Cir. 2004). Then the Supreme Court granted certiorari, vacated and remanded the decision for reconsideration in light of Smith v. City of Jackson, 544 U.S. 228 (2005). Smith affirmed the viability of disparate impact under the ADEA, subject to a broad defense of “reasonable factors other than age” (RFOA) for employers (29 U.S.C. § 623(f)(1)). Smith expressly rejected the Griggs-Wards Cove “business necessity” defense as too stringent for ADEA cases, because it allows inquiry into whether there were other less-restrictive ways for an employer to implement its goals.

The Second Circuit panel on remand — in a 2-1 decision — reverses the judgment and orders entry of a judgment for the employer. The majority holds that the burden of proving unreasonableness rests on the employee (following Pippin v.Burlington Res. Oil & Gas Co., 440 F.3d 1186, 1200 (10th Cir. 2006)). While the employees’ challenge to the RIF targeted the company’s reliance on subjective evaluations of “flexibility” and “criticality” established a statistically-significant impact on employees age 40 and over, the employer presented testimony that these factors were commonly-understood and -applied concepts in management, and necessary to the functioning of a shrinking workforce. Although the employees challenged this testimony with evidence that the criteria were vague and invalidated, the panel majority found that the rebuttal failed to discharge the burden of proving unreasonableness. Statistical evidence of age disparity alone could not carry the day: “It is important to distinguish between evidence that KAPL’s IRIF resulted in an unlikely, ‘startlingly skewed’ age distribution of laid-off employees–which is relevant to plaintiffs’ prima facie case–and evidence that KAPL’s business justification for the specific design and execution of the IRIF was ‘unreasonable.’ The fact that the IRIF resulted in a skewed age distribution of laid-off employees is not itself necessarily probative of whether KAPL’s business justification for particular features of its IRIF was ‘reasonable.'”

And the testimony at trial, held the majority, established that the method selected by the employer to prune its workforce was, if not perfect, at least reasonable:

“The probative record evidence suggests that the factors used in KAPL’s IRIF could have been better drawn and that the process could have been better scrutinized to guard against a skewed layoff distribution. However, KAPL set standards for managers constructing matrices and selecting employees for layoff, and it did monitor the implementation of the IRIF. The IRIF restricted arbitrary decision-making by individual managers, and the measures that KAPL put in place to prevent such arbitrary decision-making and ensure that the layoffs satisfied KAPL’s business needs–while not foolproof–were substantial. Any system that makes employment decisions in part on such subjective grounds as flexibility and criticality may result in outcomes that disproportionately impact older workers; but at least to the extent that the decisions are made by managers who are in day-to-day supervisory relationships with their employees, such a system advances business objectives that will usually be reasonable.”

The dissent, signed by the author of the original majority opinion (Judge Pooler), argues that the burden of proof was misassigned on RFOA to the employee, and that in any event that the employer had waived the RFO argument by failing to request a jury charge on the issue. But the outcome on remand wipes out a huge verdict for plaintiffs, while according to employers broad latitude to adopt policies that rake out the thatch, or clear the deadwood, or whatever cliche is currently in fashion.

Tuesday, August 15, 2006

Two vintage opinions in Title VII cases find themselves in print today.

In Jordan v. Alternative Resources Corp., No. 05-1485 (4th Cir. Aug. 14, 2006), the court essentially republishes its original opinion affirming dismissal of a Title VII retaliation case (my original coverage can be found at May 15, 2006), involving an incident of alleged workplace harassment (white employees loudly associating the notorious Beltway snipers, John Allen Muhammad and Lee Boyd Malvo, with gorillas). Dissenting (again), Judge King adds that Monday’s opinion on rehearing basically tracks the original panel opinion: “By order of July 5, 2006, we unanimously granted panel rehearing, thereby vacating the panel majority’s earlier decision, which had affirmed the district court’s dismissal order, see Jordan v. Alternative Res. Corp., 447 F.3d 324 (4th Cir. 2006), and from which I had dissented, see id. at 336 (King, J., dissenting). By its decision today, the majority has again affirmed the district court’s dismissal order. In so doing, it has rewritten its earlier opinion to reduce the importance of the snipers’ capture in its discussion of Jordan’s Title VII claim (although the capture remains prominent in the majority’s analysis of that claim), and in an endeavor to further explain its decision concerning Jordan’s § 1981 discrimination claim, which had previously been relegated to two conclusory sentences, see id. at 334 (majority opinion). In these circumstances, I am disappointed that our panel rehearing has merely prolonged the decisional process, without altering the result reached.”

Meanwhile, in Keri v. Board of Trustees of Purdue Univ., No. 05-4400 (7th Cir. Aug. 14, 2006), the panel takes the uncommon step of adopting in its entirety a district court opinion granting summary judgment (signed by U.S. district court judge Theresa L. Springmann, N.D. Ind.), with only a short cover opinion summarizing the outcome. The plaintiff, a native Ghanaian assistant professor at a state university, does not even get off the blocks on his claim that he was denied renewal on his contract because of race and national origin. Not only does the court hold that he failed to show he was performing to reasonable expectations (many complaints from students and reviewers), but he also fails to identify comparable employees who were treated more favorably, so he fails at the prima facie stage.

Monday, August 14, 2006

Because virtually every state has an FEP agency that administers employment discrimination laws, attorneys sometimes take for granted that the time for filing a charge with the EEOC is presumptively limited to 180 days, not 300 days. 42 USC § 2000e-5(e)(1). The timing issues can get a good deal hairier, depending on the interplay of worksharing agreements and the scope of state EEO law.

For an example, take a look at the recent decision of McDonald v. Grace Church Seattle, No. 04-35984 (9th Cir. Aug. 11, 2006) . The events occurred in Washington state, a deferral state (by virtue of the Washington Law Against Discrimination (LAD)) recognized without exception under 29 C.F.R. § 1601.71(b). Plaintiff, a church office administrator (presumably not covered by any “ministerial” exception), alleged sexual harassment and retaliation. According to the opinion, “she filed her charges with the EEOC and with the Washington [Human Rights] Commission more than 180 days, but less than 300 days, after the last act of alleged discrimination.”

Ordinarily, filing within this period would suffice, but Washington state law (unlike Title VII) expressly exempts “nonprofit religious organizations.” What effect does this exclusion on the Washington Commission’s status as a deferral agency? It makes all of the difference in the world. The Ninth Circuit affirms dismissal (judgment on the pleadings) on the ground that religious exclusion renders the Washington Commission — for purposes of this claim — not a deferral agency. The Ninth Circuit specifically eschews reliance on 29 C.F.R. § 1601.71(b), finding that the regulation is not a comprehensive listing of all possible exceptions. “As a result, the EEOC’s designation in 29 C.F.R. § 1601.74(a) of the Washington Commission as a FEP agency without exception as to any charge is not determinative of whether the Washington Commission had subject matter jurisdiction over MacDonald’s charges.”

Scrutinizing the LAD, and the state decisional law, it finds that Washington state law would not support plaintiffs complaint. This means that McDonald has no claim under Washington law and hence no boost from deferral. So, lawyers, keep a sharp lookout for possible discontinuities in the EEOC galaxy.

Wednesday, August 9, 2006

Employment discrimination claimants can find themselves on a razor’s edge in meeting the requirement to file an administrative charge within 180 days (or 300 days in deferral jurisdictions). The Supreme Court in Morgan divided the world into discrete and non-discrete claims. Discrete claims, where the claim is complete in one act (termination, demotion, etc.), trigger the running of the limitations period; non-discrete claims (harassment) accumulate incident-by-incident and do not require the immediate filing of a charge. Another overlay is the Supreme Court’s decision last term in Burlington Northern v. White, No. 05-259 (U.S. June 22, 2006), which in the retaliation arena defined the scope of the claim to include any materially adverse action that would deter a reasonable employee from taking protected action.

Thus, knowing in 2006 which claims fall on the “discrete” side of the line and require the filing of a charge has become more challenging. Haynes v. Level 3 Communications, No. 04-1307 (10th Cir. Aug. 8, 2006) presents just such an example. A saleswoman has several accounts taken away from her one by one, frustrating her efforts to meet her sales quotas, and sees them reassigned to a younger male employee (named Quivey). Eventually she is placed on a performance improvement plan (PIP) — a form of probation — and later terminated in a reduction-in-force.

Haynes sues under Title VII, the ADE and ADA. So where are the discrete actions? Well, of course, the termination counts. But what about the acts leading up to it? The court holds (consistently with other circuits) that the probationary PIP status is not a materially adverse employment action (no loss of pay or status is attached to it).

But it turns out, surprisingly enough, that each reassignment of an account is deemed a “discrete” action, requiring the filing of a charge each time it occurred. This may, of course, have something to do with the vagaries of record in this case:

“As Haynes repeatedly stated, these actions directly caused a significant change in her employment status and benefits. According to Haynes, [supervisor] Larson’s discriminatory actions caused Quivey to receive the rewards of her work and, conversely, she was unable to meet her sales quotas. Although she did not identify the precise accounts unfairly removed, the dates they were transferred to Quivey or the amount of income she lost as a result of the transfers, Haynes clearly knew the discriminatory nature of Larson’s actions and the resulting detrimental effect to her income. Indeed, in a November 7, 2000 e-mail to Larson, Haynes stated, ‘this has impacted my sales output tremendously, as the work I’ve done is not reflected in my base and someone else is now getting paid on much of my work.’ (R. Vol. III at 333.) Because each removal of an account constituted an actionable adverse employment action, Haynes was required to file an administrative charge within 300 days of each removal. She did not do so. Thus, any claim based on the removal of her accounts is time-barred.”

It could be that this case turns on the plaintiff’s admission that the reassignments put her on notice about discrimination. (Elsewhere in the opinion, Haynes is quoted as describing the initial reassignment as a “watershed” moment in her relationship with the employer.)

But this strikes me as a potentially perilous turn in the evolution of EEO law. Employees suffering discrimination that takes place in drips and drabs (denials of overtime opportunities comes to mind, but I’m sure there are many more) now have to decide whether to report each incident in an EEOC charge within 180/300 days, or forever lose it. I sure can’t see how this helps employers, whose HR staffs will be put to the task of answering incrementally smaller complaints. (Query: How can we square this decision with the Tenth Circuit’s prior decision in Croy v. Cobe Laboratories, Inc., 345 F.3d 1199, 92 FEP 1218 (10th Cir. 2003), that a series of decisions denying a female employee various promotions constitutes a non-discrete “glass ceiling” claim?) This is a development worth following.

Tuesday, August 8, 2006

The appeal in Carpenter v. The Boeing Co., No. 04-3334 (10th Cir. Aug. 7, 2006) of a putative Title VII sex discrimination class action tells us several things —

1. Despite that “an order denying a motion to reconsider a decision on class certification [under Rule 23(c)(1)(C)] is an ‘order . . . granting or denying class action certification’,” as set forth in Fed. R. Civ. P. 23(f), the literal terms of subsection (f) do not rescue from untimeliness an appeal taken more than 10 days after the principal order respecting class certification. A motion to reconsider does not toll the ten days allowed by law under that rule, unless filed (as with a Rule 50 or 59 motion) no more than ten days of the original order. The panel notes that an appeal of the order denying a motion to reconsider would, at best, preserve only the arguments raised anew in that motion and deprive the reviewing court of authority to reopen the prior decision. “[Given the multifactor analysis that courts must apply in deciding the propriety of class certification, such a limited review would often require contorted thinking that exceeds the capacities of even appellate courts.”

2. In a Title VII disparate impact case (here challenging the managers’ discretionary allocation of overtime), it is insufficient to establish a prima facie case simply by exposing a statistically-significant disparity between the protected group and its similarly-situated cohort group. “[A] statistical analysis cannot establish a plaintiff’s prima facie case unless it is based on data restricted to qualified employees, or (1) reliable data with respect to that group are unavailable and (2) the plaintiff establishes that the statistical analysis uses a reliable proxy for qualification. ”

Here, the panel affirmed the district court’s finding that the plaintiff’s statistical expert failed to incorporate the employees’ collective bargaining agreement (CBA) eligibility requirements in his analysis. Plaintiffs rejoined that reliable electronic data of those requirements were, according to Boeing, unavailable. But (ouch!) “data may be available in nonelectronic form. Electronic data are undeniably more convenient, especially for use in statistical studies, but inconvenience does not excuse failure to collect the data. Plaintiffs have presented no reason why the omitted information could not have been procured through other methods, such as depositions or interrogatories. It appears that they were simply satisfied with Boeing’s indication that the data were unavailable in their electronic payroll records.”

Moreover, even if data were not available, there was no evidence (according to the panel) that the “statistical analysis produce[d] a reliable surrogate for qualifications for overtime; that is, that the results accurately reflect comparisons between individuals who were equally eligible for overtime assignments under the CBA.”

3. There is also the fallacy of equoting “confusing the magnitude of the disparities with their level of statistical significance, as measured in standard deviations.” As the panel concluded, affirming summary judgment on the disparate impact claim, “the very large number of standard deviations [in plaintiffs’ study] does not mean that the gross difference in the amount of overtime worked by men and women is itself large; it just means that the difference is very unlikely to be random.” But lack of randomness here did not equate to an inference of discrimination, where the statistical study did not consider the relevant CBA eligibility standards.

4. Finally, any class representative who “demand[s] to be paid a ‘consultant’s fee’ of 15% of any attorney fees obtained by class counsel” — as several plaintiffs in this case apparently did — is likely to get her wings clipped. Here, the putative class representatives were removed. Moreover, “Plaintiffs’ repeated public references to privileged conversations with class counsel only strengthened its initial conclusion that they put their own interests above those of the class. ”

Monday, August 7, 2006

The Seventh Circuit elaborates on the definition of “adverse employment action” in a Title VII/ADE action in Minor v. Centocor, Inc., No. 05-3080 (7th Cir. Aug. 4, 2006). Last term, the U.S. Supreme Court had occasion to decide the standard of materiality for a claim of retaliation under Title VII in Burlington Northern v. White, No. 05-259 (U.S. June 22, 2006). But because the anti-retaliation section of Title VII (42 U.S.C. § 2000e-3(a)) uses language different and more expansive than the anti-discrimination section (42 U.S.C. § 2000e-2(a)), White did not entirely resolve what kinds of claims might be actionable as discrimination. The Seventh Circuit opinion refocuses the discussion in a case where the employee (in sales for a medical supply company) alleges that she was required to expand her work week from 50-55 hours to 70-90 hours, to respond to a (supposedly) discriminatory demand to visit her clients twice a month. Summary judgment was granted to the employer.

Although the employer contended that the new work rules was not an “adverse employment action,” the Seventh Circuit panel disagreed:

“Although hundreds if not thousands of decisions say that an ‘adverse employment action’ is essential to the plaintiff’s prima facie case, that term does not appear in any employment-discrimination statute or McDonnell Douglas, and the Supreme Court has never adopted it as a legal requirement. The statutory term is ‘discrimination,’ and a proxy such as ‘adverse employment action’ often may help to express the idea-which the Supreme Court has embraced-that it is essential to distinguish between material differences and the many day-to-day travails and disappointments that, although frustrating, are not so central to the employment relation that they amount to discriminatory terms or conditions. . . . Helpful though a judicial gloss such as ‘adverse employment action’ may be, that phrase must not be confused with the statute itself or allowed to displace the Supreme Court’s approach, which inquires whether the difference is material.”

Not surprisingly, the panel holds that a 20-40 hour leap in the work week is material and adverse.

Nevertheless, the court affirms summary judgment, finding that the employee was not treated any differently from any other sales staff under the new rule, and that much of the increase in her work week was her personal choice to cover the territory by car, using out-and-back routes. The Court (per Judge Easterbrook), helpfully offers this travel advice:

“The most efficient method may have been to meet accounts in Springfield, drive to St. Louis (where her major customers were located), and after doing the rounds there use a combination of air travel and rental cars to visit Des Moines, Iowa City, Peoria, Evansville, and Owensboro before returning by air to St. Louis and driving home to Springfield. Expenses of air travel and auto rental would have been fully reimbursed by Centcor.

“How to construct the shortest route that visits all destinations is an old subject: in graph theory and linear programming it is known as the ‘traveling salesman problem’ and is the subject of a considerable literature. Many of the important papers on the topic are collected at http://www.tsp.gatech.edu/history/biblio/tspbiblio.html. Our suggested routing may or may not be optimal-that depends in part on airline schedules-but is better than the automobile-only, hub-and-spoke system that Minor preferred.”

Meanwhile, the Fifth Circuit holds that the “piggybacking” or “single filing” rule — which allows an employee who has not filed an administrative charge (with the EEOC or deferral agency) to join a similarly-situated employee’s charge in civil litigation instead — does not extend to an employee who seeks to file their own separate, individual case based on another employee’s charge. Price v. Choctaw Glove & Safety Co., Inc., No. 05-60094 (5th Cir. Aug. 3, 2006) .

Thursday, August 3, 2006

Employees in two cases tried egregious, co-worker racial harassment claims and won liability at trial, but lost out on punitive damages.

In Jeffery v. Kansas City Southern Ry., No. 05-2220 (8th Cir. Aug. 4, 2006) , the jury awarded $900,000 in punitive damages ($128,000 actual damages) in a Title VII case, but the district court granted a Rule 50 motion to set them aside. The Eighth Circuit affirms, finding that in key instances the record failed to establish that acts of harassment (including offensive language, graffiti in the break room bulletin board, and vandalism of his locker) reoccurred after he lodged complaints with management. The Court accordingly found that the employee did not prove a wilful violation under Kolstad .

The panel noted that the employee’s appeal was sabotaged by an incomplete record: “Although the timing of events is crucial in this appeal, the record is often silent on when certain events occurred. Consequently, the descriptions contained herein do not always point to precise dates or sequence the events in a definitive order. Further, while the record is replete with significant egregious conduct, the plaintiffs have often failed to provide any evidence concerning Southern’s knowledge of certain events. While we have attempted to read the record in a light most favorable to the jury’s verdict, the record is incomplete in several important respects.” (Lesson: Before trying a case, prepare a demonstrative exhibit of the timeline, with all key events plotted. Even if it is not admitted into the record, it can be used as a checklist to make certain all dates get into the record.)

In Azimi v. Jordan’s Meats, Inc., No. 05-2602 (1st Cir. Aug. 3, 2006), a Title VII and § 1981 case, the employee won liability but was unable to persuade the jury that he suffered a compensable injury. To obtain punitive damages, under prevailing First Circuit law, the employee was required to prove some damages. (N.B.: That is not the law in other circuits, as the opinion notes at page 18.) On appeal, he argues that he should have been allowed to make a demand for nominal damages. But he failed (or counsel made a strategic decision) to omit such a request from the jury charge. Even still, the First Circuit allows an employee a second bite: to request the district court to enter nominal damages post-verdict. But the employee didn’t make a timely demand for that relief, either. So no damages at all for Mr. Azimi. (Lesson: Pursue nominal damages in your complaint, pre-trial order, jury charge and post-verdict if necessary.)

Thursday, August 3, 2006

By statute (and by virtue of the Supremacy Clause), Federal Reserve Banks enjoy a status akin to federal government agencies, with attendant immunity from conflicting state laws. The Federal Reserve Act — which under 12 U.S.C. § 341 grants the Federal Reserve Banks the power to dismiss “at pleasure” any employee — has been held in different contexts to preempt state anti-discrimination laws. The U.S. Courts of Appeals have arrived at conflicting answers about the reach of this preemption.

The Third Circuit chimes in with Fasano v. Federal Reserve Bank of N.Y., No. 05-4661 (3d Cir. Aug 3, 2006). In an issue of first impression for the court, the court rejects the view of the Sixth Circuit that state law is categorically preempted, but holds that state law may not provide greater rights or remedies than corresponding federal acts:

“Federal Reserve Act § 341 (Fifth), as impliedly amended by the AD and 12 U.S.C. § 1831j, preempts any state employment law that goes beyond the remedies and protections provided by those federal laws. Such “additional” provisions – including provision for unlimited punitive damages, individual liability on the part of employees, and coverage of less severe disabilities – would conflict with Congress’s intent to provide Federal Reserve Act § 341 (Fifth), as impliedly amended by the AD and 12 U.S.C. § 1831j, preempts any state employment law that goes beyond the remedies and protections provided by those federal laws. Such “additional” provisions – including provision for unlimited punitive damages, individual liability on the part of employees, and coverage of less severe disabilities – would conflict with Congress’s intent to provide Federal Reserve Banks with the broadest latitude possible in carrying out their statutory duties, while giving due recognition to the applicability of the AD and 12 U.S.C. § 1831j’s requirements.”

Here, the court holds that New Jersey’s Law Against Discrimination well exceeds the scope of the federal Americans With Disabilities Act, and is to that extent preempted. The LAD provides (1) for individual liability by supervisors; (2) for direct resort to court, without the filing of an administrative charge; (3) a more generous definition of “disability”; and (4) uncapped damages and attorney fee risk multipliers. These remedies no doubt cheer advocates for employees in the private sector, but Ms. Fasano’s case must come to an end.

Wednesday, August 2, 2006

The Seventh Circuit holds that a single act of physical sex harassment, short of rape or comparable trauma, might constitute a hostile work environment in Patton v. Keystone RV Company, No. 05-3891 (7th Cir. Aug. 1, 2006) . The male harasser (Ramey), who (it was uncontested) was the female employee’s (Patton’s) supervisor, was a plant quality control manager.

While it was his job to monitor work performance, according to the summary judgment record he regularly exploited his authority to station himself near Patton. He leered at and stalked the plaintiff:

“Ramey also touched Patton inappropriately. The first (and most serious incident) occurred when she was wearing shorts, crouching in the doorway of a nearly finished RV. As she finished cleaning that portion of the vehicle, she spun around, legs open to the outside. Ramey was standing there, presumably observing her work, and he slid his hand under Patton’s shorts, up her inner thigh, while commenting that her legs were smooth. His hand went as far as her underwear, at which point Patton fell backwards to break the contact. On another occasion, Patton was on her knees cleaning the floor of an RV and was working backward toward the door to the outside. Ramey was standing right outside of the RV, and he put his hand on her calf as she reached the doorway. Another incident occurred in the bedroom area of an RV. As Patton was squatting down to repair carpet, Ramey crouched down behind her and put his arm on her back with his hand near her neck. He then placed his face quite close to her ear and told her to meet him for a drink. Patton declined and squirmed away from him.”

The district court, cobbling together some of the Seventh Circuit’s more permissive harassment decisions, concluded that the level of physical contact was not enough to total up to a hostile work environment. The Seventh Circuit reversed:

Ramey’s groping of Patton under her shorts might be sufficient alone to create an abusive working environment. But it was not the sole act. Ramey had already raised the alleged rumor of a sexual affair between himself and Patton. At least two people-Patton and Miller-agreed that Ramey leered at her in an obsessive manner. And on three more occasions he exploited the proximity to Patton provided by his managerial position to touch her. Significantly, one of these acts occurred in the isolated back bedroom of an RV. Ramey approached Patton from behind, squatted down behind her, put his arm on Patton’s back with his hand up by her neck, and whispered into her ear his desire to have a drink with her. We think these facts, when considered in their totality, easily make reasonable Patton’s constant fear that while she was working alone in the RVs Ramey would “sneak up” and touch her in a sexual manner or worse. A reasonable jury could find that Patton was subjected to a hostile work environment.”

Indeed, the court found this behavior sufficient to present a genuine issue of material fact about constructive discharge. “[A] reasonable fact finder could agree with Patton’s fear that her supervisor was an obsessed man who-based on previous acts showing no regard for Patton’s right to control who could touch intimate areas of her body-was capable of, and desirous of, physically assaulting her in a serious way. We need not conclude that a rape or other assault was likely, but only whether a reasonable fact finder could find that Patton should have quit immediately to protect herself.”

Now, while it is possible that the employer has a Faragher defense to this conduct (not discussed in the opinion), it should at least send a shudder thought the hearts of HR executives everywhere that managers can subject their employers to civil liability by a single repellant act, such as alleged here. All the due care and training in the HR world will do nothing to prevent such liability, but preventative measures (as simple as keeping an ear to the ground about rumors of abuse) may help.

 

Topics

Daily Developments in EEO Law
EEO Case Summaries by Circuit
Old “Daily Developments” Blog Archive

Recent Updates

November 01, 2010
Stiefel v. Bechtel Corp., No. 09-55764 (9th Cir. Nov. 1, 2010); Kepas v. eBay Inc., No. 09-4200 (10th Cir. Nov. 2, 2010)

September 29, 2010
Newberry v. Burlington Basket Co., No. 09-3082 (8th Cir. Sept. 28, 2010)

September 08, 2010
Payne v. Salazar, No. 09-5291 (D.C. Cir. Sept. 7, 2010)

September 06, 2010
EEOC v. Prospect Airport Services, No. 07-17221 (9th Cir. Sept. 3, 2010)

August 31, 2010
Hatmaker v. Memorial Medical Center, No. 09-3002 (7th Cir. Aug. 30, 2010)

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