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February 2008

| Feb 18, 2008 | Daily Developments in EEO Law |

Thursday, February 28, 2008

With so much focus on the latest pronouncements of the U.S. Supreme Court, I have been remiss in reporting on my regular beat, i.e., the U.S. Courts of Appeals. So here’s a nice, tidy opinion from my home circuit addressing a bit of AD arcana: the “association discrimination” section of the ADA, § 12112(b)(4), which bars an employer from discriminating against an employee as a result of “the known disability of an individual with whom [the employee] is known to have a relationship or association.”

In Dewitt v. Proctor Hospital, No. 07-1957 (7th Cir. Feb. 27, 2008), the plaintiff — a nurse supervisor — alleged association discrimination and (belatedly) sought to add a claim of retaliation under ERISA § 510. (There were also routine sex and age discrimination claims, which fell out of the case unceremoniously.) The fact pattern is a familiar one, a throwback to an earlier day when employers fired employees who suffered catastrophic medical needs with impunity. Here, the plaintiff’s spouse ran up hundreds of thousands of dollars in medical bills under the employer’s self-insured plan to treat cancer. The employer began to pressure the family to ease up on the treatment:

“In September 2004, Davis confronted Dewitt about Anthony’s high medical claims. Specifically, she asked what treatment Anthony was receiving, and Dewitt responded that he was undergoing chemotherapy and radiation. Davis asked Dewitt if she had considered hospice care for her husband; Dewitt responded that Anthony’s doctor considered less expensive hospice care placement to be premature. Davis explained that a committee was reviewing Anthony’s medical expenses, which she described as unusually high.”

The rest of the story is framed in pathos by Judge Terrence Evans’ majority opinion:

Proctor fired Dewitt on August 3, 2005, and designated her as ‘ineligible to be rehired in the future.’ Proctor provided no explanation for its ‘ineligible for rehire’ decision. [fn.1] Dewitt’s medical benefits with Proctor continued through the end of August. After that, Dewitt paid for COBRA coverage (which she was able to get for a maximum of 18 months) for herself and her husband. But 18 months, as it turned out, wasn’t necessary as Anthony, a year and a week after Dewitt was fired, gave up his fight with cancer. He died on August 9, 2006.”

The district court granted summary judgment on all of the employee’s claims, but the Seventh Circuit reverses in part. The opinion thankfully spares us a description of how the district court messed up what sounds like a strong circumstantial case of discrimination. Instead, the majority reminds us that in this circuit, under Larimer v. International Business Machines Corp., 370 F.3d 698, 700 (7th Cir. 2004), it recognizes “three categories into which ‘association discrimination’ plaintiffs generally fall. We called them (1) expense; (2) disability by association; and (3) distraction. In the ‘expense’ scenario, we noted that an employee, fired because her spouse has a disability that is costly to the employer (i.e., he is covered by the company’s health plan) is within the intended scope of the ‘associational discrimination’ section of the ADA.” The court also held that the employer’s intense interest in the spouse’s treatment, combined with the suspicious timing of the nurse’s termination, was sufficient evidence to warrant an inference of discrimination. The panel also remanded the issue of whether the employee could amend her complaint to add an ERISA § 510 claim.

Judge Posner contributed a good concurring opinion that once against straightens out the lingering mess between the “direct” and “indirect” methods of proof (as if anyone is still listening).

Wednesday, February 27, 2008

The U.S. Supreme Court drops its second EEO-related decision in two days: Federal Express Corporation v. Paul Holowecki, No. 06-1322 (U.S. Feb. 27, 2008). In contrast to yesterday’s inconclusive holding in an ADEA case (Mendelsohn), today a 7-2 majority interpret the ADEA directly and hold that an effective ADEA charge is one that includes the information “required by the [EEOC] regulations, i.e., an allegation and the name of the charged party,” and that should “be reasonably construed as a request for the agency to take remedial action to protect the employee’s rights or otherwise settle a dispute between the employer and the employee.” It spurned a call by the management bar to require more, i.e., that the charge only becomes effective when the employer receives notice of it. Justice Kennedy authored the majority decision; Justices Thomas and Scalia dissent.

The ADEA does not define what must be included in a charge and, in the breech, the EEOC issued regulations in this area (29 U.S.C. §§ 1626.3, .6 and .8). Here, the plaintiff filed an Intake Questionnaire (a pre-charge form) that included all of the information formally required by the regulations, but (at the time) no formal Form 5 charge. The EEOC failed to inform the employer of the filing of the questionnaire. After 60 days elapsed the plaintiff filed a civil action, as is allowed under the ADEA. FedEx argued in the district court, and on appeal to the Second Circuit, that the Intake Questionnaire — of which it had no prior knowledge — could not serve as a charge. The Second Circuit held, though, that a paper which otherwise meets the regulatory requirements of a charge was sufficient, provided that the complaint “manifested” the employee’s “intent” to invoke the EEOC’s investigatory machinery. FedEx obtained writ of cert to the Supreme Court.

The court was thus faced with four competing visions of what ought to constitute an ADEA charge: (1) petitioner FedEx’s view that a charge only ripens into a “charge” when served on the employer; (2) respondent Holowecki’s view that a paper meeting the regulatory requirements is enough; (3) the Second Circuit’s view that a charge must meet the regulatory requirements and “manifest the intent” of the filer to file a charge; and (4) the EEOC’s view (expressed in amicus) that a charge must meet the regulatory minimand state a request that the EEOC take action on the complaint. The Court goes with (4) and, in this case, finds that Holowecki’s charge fits the bill.

Both the majority and dissent join hands in finding that the present EEOC regulations defining the contents of an ADEA charge are indefinite and are not a complete statement of what must appear. (Both in oral argument and at the tail-end of the majority opinion, the Court urges the EEOC to clean up the regulations.) The majority, seeking to complete the picture, then accords deference to EEOC internal compliance documents defining a charge.

The Court summarizes the EEOC’s position: “The EEOC submits that the proper test for determining whether a filing is a charge is whether the filing, taken as a whole, should be construed as a request by the employee for the agency to take whatever action is necessary to vindicate her rights.” It then extends intermediate deference to the EEOC’s internal guidance, including a 2007 memo issued after the Supreme Court granted certiorari. “In our view the agency’s policy statements, embodied in its compliance manual and internal directives, interpret not only the regulations but also the statute itself.” Applying the Skidmore “measure of respect” standard to these directives, the Court observes that “the relevant interpretive statement, embodied in the compliance manual and memoranda, has been binding on EEOC staff for at least five years” and that despite uneven enforcement, was worthy of deference.

The court also goes on to tweak the “manifest intent” test previously in use in the Second Circuit and other courts of appeals, stating that “If this formulation suggests the filer’s state of mind is somehow determinative, it misses the point. If, however, it means the filing must be examined from the standpoint of an objective observer to determine whether, by a reasonable construction of its terms, the filer requests the agency to activate its machinery and remedial processes, that would be in accord with our conclusion.”

It seems to me that the Court reached a just solution (and, in full disclosure, I authored an amicus brief for a coalition of public interest groups in support of Holowecki). It recognizes that most charges are filed by uncounselled lay folk. “The system must be accessible to individuals who have no detailed knowledge of the relevant statutory mechanisms and agency processes. It thus is consistent with the purposes of the Act that a charge can be a form, easy to complete, or an informal document, easy to draft.” (And had the opinion come out the reverse way, imagine the headline on that story: “Supreme Court Says Age Bias Claim Loses Because Employee Files Wrong Form.”) It is also a smashing vindication of deference to the EEOC’s administrative authority, very useful for plaintiffs in future cases.

I also think this decision goes a long way to solving a different problem, not directly addressed by this case, but very important under Title VII, the AD and ADEA: how thorough the statement of facts must be in a charge to support a claim in a civil action. Many courts dismiss claims that do not strictly appear originally within the four-corners of the charge. I think the court’s liberality about how to construe a charge will help plaintiffs mount an argument to avoid such dismissals. Writes Justice Kennedy: “Documents filed by an employee with the EEOC should be construed, to the extent consistent with permissible rules of interpretation, to protect the employee’s rights and statutory remedies. Construing ambiguities against the drafter may be the more efficient rule to encourage precise expression in other contexts; here, however, the rule would undermine the remedial scheme Congress adopted.” Amen.

Tuesday, February 26, 2008

Justice Thomas manages to compose a perfect white-hole in Sprint/United Management Company v. Mendelsohn, No. 06-1221 (U.S. Feb. 26, 2008), a unanimous decision that holds practically nothing at all, and resists any attempt at interpretation beyond the correct appellate standard of review to apply to the exclusion of witness testimony.

In this case, the district court denied admission of several of plaintiff’s witnesses at an ADEA trial who would have testified that they, too, suffered age discrimination during the same reduction in force as the plaintiff. The minute order concerning the ruling was, on a fair reading, opaque as to whether the district court excluded the testimony (1) under conventional 401/403 grounds; or (2) by application of a per se rule (suggested by Aramburu v. Boeing Co., 112 F. 3d 1398 (10th Cir. 1997)) that evidence of discrimination outside the employee’s immediate worksite is substantively inadmissible in an employment discrimination case. The jury returned with a defense judgment. On appeal, a 2-1 panel of the Tenth Circuit held that the district court thereby abused its discretion, remanded for a new trial and ordered admission of the testimony.

When cert was granted in this case, the management bar sought a broad ruling expelling evidence of discrimination against other employees in the protected group by the same employer to prove a claim of disparate treatment (here under the ADEA). Here was the petitioner’s question presented in its petition for writ of certiorari: “This case presents a recurring question of proof in employment discrimination cases: whether a district court must admit ‘me, too’ evidence – testimony, by nonparties, alleging discrimination at the hands of persons who played no role in the adverse employment decision challenged by the plaintiff.”

But the decision today did not grasp the nettles presented by the company’s cert petition, and focused instead on an issue only an appellate lawyer could love: whether the court of appeals erred — in applying an abuse-of-discretion standard — by ordering admission of the witness testimony at a new trial, rather than remanding the case to the district court to weigh admissibility under the correct standard. The Court answers in the affirmative, vacates the Tenth Circuit ruling and remands for further review by the district court.

Justice Thomas summarizes:

“The parties focus their dispute on whether the Court of Appeals correctly held that the evidence was relevant and not unduly prejudicial under Rules 401 and 403. We conclude, however, that the Court of Appeals should not have engaged in that inquiry. Rather, as explained below, we hold that the Court of Appeals erred in concluding that the District Court applied a per se rule. Given the circumstances of this case and the unclear basis of the District Court’s decision, the Court of Appeals should have remanded the case to the District Court for clarification.”

The ruling tracks almost precisely the Solicitor General’s argument in its amicus brief, which concluded:

“The better course for this Court is likewise to send this case back to the district court to make the requisite evidentiary determinations in the first instance, applying the legal principles articulated by this Court. Since this Court does not owe any deference to the court of appeals’ de novo Rule 401 and 403 determinations, affirming or reversing those determinations on the merits would require this Court to engage in its own de novo review of the proffered evidence and the record as a whole to consider the potential impact on the trial of the admission of that evidence. This Court does not custom a rily perform such a classic trial-court function and there is no particular reason to take on that task here.”

The Supreme Court writes that, when reviewing the district court’s evidentiary rulings, it ought to have assumed (absent clear indications in the record to the contrary) that it applied the correct legal standard: “An appellate court should not presume that a district court intended an incorrect legal result when the order is equally susceptible of a correct reading, particularly when the applicable standard of review is deferential. . . . When a district court’s language is ambiguous, as it was here, it is improper for the court of appeals to presume that the lower court reached an incorrect legal conclusion. A remand directing the district court to clarify its order is generally permissible and would have been the better approach in this case.”

So the decision turned on the appellate standard of review rather than anything substantive under the ADEA or kindred statutes. If the Court accomplished anything of substance under these statutes, it was rejecting the extreme exclusionary arguments tendered by the management bar: “The question whether evidence of discrimination by other supervisors is relevant in an individual ADEA case is fact based and depends on many factors, including how closely related the evidence is to the plaintiff’s circumstances and theory of the case.” So rock on, plaintiffs! The issue remains wide open.

Thursday, February 21, 2008

[Paul Secunda of Workplace Profs Blog noted a goof in my post: Jackson v. Birmingham Board of Education, 544 U.S. 167 (2005) is the case that found a private right of action for retaliation under Title IX, not Smith v. City of Jackson, as posted earlier. Similar titles, same term, but I should have known better. I have now corrected it. Thanks Prof. Paul!]

Here’s the highlights of what happened in the U.S. Supreme Court oral argument (transcript linked here) on February 20, 2008 in Humphries v. CBOCS West, Inc., which will decide whether there may be a claim of retaliation under section 1981. The court wrestled with the collision between stare decisis — whether to extend or contract decisions in Sullivan v. Little Hunting Park, Inc., 396 U. S. 229 (1969) (implying retaliation under section 1982) and Jackson v. Birmingham Board of Education, 544 U.S. 167 (2005) (same under Title IX) — and the Court’s recent retrenchment in implying private rights of action. Summarized in a sentence, the survival of retaliation claims under section 1981 depends on a change of heart by Justice Kennedy, who dissented in Jackson and behaved skeptically here. One can only hope that the Solicitor General, supporting the plaintiff-respondent, managed to turn him around.

1. Counsel for the defendant-petitioner (Cracker Barrel) ran into flack from Justices Scalia, Kennedy and Alito when he tried to argue that the 1991 Civil Rights Act had the effect of narrowing, rather than broadening, liability under that section:

JUSTICE ALITO: Well, wasn’t the purpose of the 1991 act to broaden the scope of 1981 rather than narrow it?

MR. HAWKINS: Your Honor, with respect to the ’91 act, it was supposed to specifically pick up the post-formation contract issues under Patterson.

JUSTICE SCALIA: Which is to say it was designed to overrule Patterson.

MR. HAWKINS: Well, Your Honor –

JUSTICE SCALIA: Not overrule. They can’t overrule it, but change the law –

MR. HAWKINS: Well, it didn’t –

JUSTICE SCALIA: — so that Patterson would no longer be right.

* * * *

JUSTICE KENNEDY: Do you mean Patterson would come out the same under 1981 as amended by the 1991 act.

MR. HAWKINS: Yes. I think Patterson would come out the same, Your Honor.

JUSTICE KENNEDY: I think Congress would have been quite amazed at that rule.

JUSTICE SCALIA: I think that they would be astounded.

2. Defense counsel got scolded for mispronouncing the name of the Chief Judge of the U.S. Court of Appeals for th Seventh Circuit:

MR. HAWKINS: It didn’t change Patterson. I believe as Chief Judge Easterbrook said, Patterson has been cited some 27 times by this Court –

JUSTICE GINSBURG: “EES-ter-brook.”

MR. HAWKINS: Or “EAS-ter-brook.” I’m sorry. Thank you, Your Honor.

3. Chief Justice Roberts suggests that there is no practical difference in the ordinary case between a claim of racial harassment and retaliation:

CHIEF JUSTICE ROBERTS: Now, is your position that in that situation a retaliation is not covered by 1981?

MR. HAWKINS: Yes, Your Honor.

CHIEF JUSTICE ROBERTS: I would have thought that you could argue that it’s direct discrimination. In other words, if you’re fired, whatever form the retaliation takes, that, as Justice Ginsburg suggests, that would be on the basis — basis of race. And I thought your position, or at least your position could be narrowed to say it’s only when the individual against whom the retaliation takes place is not the individual complaining of the direct discrimination that your position would be pertinent.

MR. HAWKINS: Well, Your Honor, we take the position that in order to have a retaliation claim under section 1981, it really has to be a discrimination claim. You have to be able to show that you –

CHIEF JUSTICE ROBERTS: Well, that’s right. That’s why I thought the person directly discriminated against would be able to phrase the retaliation claim certainly as a discrimination claim.

MR. HAWKINS: Well, Your Honor, they can make — phrase it however they want to in terms of their particular complaint, but the issue in terms of the analysis under the plain text of section 1981 is whether or not a white person in this situation is being treated differently with respect to making a similar complaint.

4. This raises Justice Scalia’s hackles:

JUSTICE SCALIA: Surely — surely, you don’t mean what you just said a minute ago, that in order to have a retaliation claim you must have a discrimination claim.

MR. HAWKINS: Well –

JUSTICE SCALIA: Surely it’s your position that even when you have a discrimination claim, you don’t have a retaliation claim. I thought it was your position there are no retaliation claims under this statute.

5. Defense counsel also rubbed Justice Kennedy the wrong way a second time by telling a whopper.

JUSTICE KENNEDY: Perhaps you can maybe just tell me based on your experience: After 1981 was amended, did 1981(b) supersede Title VII in run-of-the-mill termination and harassment cases?

MR. HAWKINS: No, Your Honor. In my 32 years of experience of doing labor and employment law, and particularly in employment law, individuals are not typically bringing 1981 retaliation claims, where most —

JUSTICE KENNEDY: No, no, not retaliation. I mean harassment, discharge, et cetera.

MR. HAWKINS: Did we see a big spurt in those?

JUSTICE KENNEDY: Yes.

MR. HAWKINS: No, Your Honor.

JUSTICE KENNEDY: Why not? There’s a longer statute of limitation. There’s no cap on damages.

MR. HAWKINS: From our experience, more and more people — there’s been a trend to go to State court because more and more States –

6. Justice Breyer wraps up the case from the plaintiff-respondent’s side in a tidy paragraph: “Well, here we have a Federal policy, and the Federal policy is that black people shall be treated the same as white in respect to making a contract. But were the law to allow you to fire anybody who complained about it, then black people wouldn’t have that right. And therefore the policy is that you can’t do it under this statute because otherwise the written policy is ineffective.”

7. Justice Breyer also notes that because the courts imply a private right of action under section 1981, courts can also define the cause-of-action’s outer boundaries: “So we’ve implied that. And therefore, if I can imply that, why can’t we imply a lawsuit on behalf of those who need the lawsuit to make the right effective?” The Chief Justice chimes in: “We do have those recent cases [cutting back on implied rights of action], but we also have the Sullivan case interpreting — interpreting 1982, which arose under the prior approach to these questions. And my question for you is: Under principles of stare decisis, which body do we follow, the earlier case interpreting 1982 under the more freewheeling approach to statutory interpretation or this later body of law that says we’re not going to do that any more?”

8. When counsel for plaintiff-respondent steps up, Justice Scalia gives her a minute to warm up, then launches into the speech he’s been waiting to give. “That’s a good argument to Congress. Congress should enact a retaliatory provision. But the statute says what it says, and what it says is that there has to be discrimination on the basis of race. And firing somebody for — in retaliation for making a complaint is not firing him on the basis of race. Indeed, the person making the complaint may not have been the person who was racially discriminated against. You would acknowledge that you couldn’t fire — if retaliations claims lie, you couldn’t fire a white whistleblower who says this employer has been discriminating against blacks. Wouldn’t that white whistleblower have a cause of action for being fired?” After counsel acknowledges that the whistleblower in such a case would have a claim, he continues: “On your theory, but that has nothing to do with the text of the statute, which requires discrimination on the basis of race. I agree with you entirely that it would make sense to provide a cause of action for retaliation, but we don’t write statutes. We read them. And there’s nothing in this statute that says that.”

9. Justice Scalia rudely skewers retired Justice O’Connor’s majority opinion in Jackson (locating a retaliation claim in Title IX), and gallery rewards his laugh-line:

MS. HYNDMAN: This Court held in the Jackson case that discrimination on the basis — that retaliation when there was a complaint about sex discrimination constituted discrimination on the basis of sex. So it follows that here under section 1981 if someone makes a complaint about race discrimination and they are retaliated against that they are being discriminated against on the basis of race.

JUSTICE SCALIA: Well, you can say that, but it doesn’t make any sense.

MS. HYNDMAN: Well, that’s what the Court held in Jackson, Your Honor.

JUSTICE SCALIA: It didn’t make any sense then, either.

(Laughter.)

Later in the argument, though, Justice Breyer takes this on: “But is the rationale of those cases — and it’s important to get the right rationale. If I say this and I’m wrong tell me I’m wrong. And I thought that the heart of it is not that the retaliated — the act of retaliation is discrimination. It isn’t. What they say is when the white man helps the black man from being discriminated against, it falls within the statute, not because you’ve discriminated against the black man, but because if it didn’t fall within the statute it would seriously erode or destroy the black man’s right. That’s what it seemed to me Douglas said in Sullivan.”

10. Justice Kennedy bristles at plaintiff counsel’s suggestion that Congress “clearly” made the choice to provide an alternative remedy under section 1981 without caps (as under Title VII: “Well, you say it’s clear, but neither you or the government seems to tell me any words in this statute. Your argument is that we should create a cause of action in order to make this effective. I understand that argument. I think the Court’s cases stand against it, and if you want to -but it seems to me that you’re admitting that nothing in the words of the statute as amended help you. And the government — which as well is an impairment, which I think is quite wrong because that’s not what section (c} intended for. But that’s almost an admission on the government’s part that it can’t find any words in section (b) either.”

He later dispair that it would be difficult to write an opinion in plaintiff’s favor: “What I’m — what I’m taking away from the argument is that if I were to write this opinion in your favor, I would have to say that it’s necessary to imply a cause of action prohibiting retaliation in order to make these other words effective. And that seems to me a very limited argument and a very difficult argument for you to prevail upon, given the authorities and the approach of the Court that we’ve discussed.”

11. solicitor General Paul Clement (arguing in support of respondent) is a class act:

GENERAL CLEMENT: This Court has already inferred a private cause of action under section 1981. So the question before the Court now is simply the scope of the basic guarantee in section 1981 and particularly whether it prohibits retaliation against someone who exercised their undoubted right to complain about racial discrimination in a contractual process.

JUSTICE SCALIA: It’s a little more complicated than that. We inferred that cause of action in the bad old days, when we were inferring causes of action all over the place.

Now, the position the Government takes here is that we should infer this new cause of action to assist the one that’s already on the books. Is the Government going to be consistent in this position? And you want us to in the future go back to our prior practice of readily inferring causes of action that are not set forth in the — in the text of this statute? Is the Government willing to live with that?

GENERAL CLEMENT: No, Justice Scalia, we’re not asking to you to go back to the bad old days. But I think it’s important to recognize that we are simply asking you to interpret the scope of the cause of action you’ve already inferred. And I think that’s consistent with the way this Court has approached 1981 cases. Patterson would be a great example. This Court in Patterson didn’t say, are we going to infer a new cause of action for harassment? No. This Court interpreted the basic prohibition of 1981 and said it didn’t cover harassment. We think if you interpret the basic prohibitions in 1981, it covers retaliation.

JUSTICE SCALIA: Patterson was still the bad old days. When do you think the bad old days ended?

(Laughter.)

GENERAL CLEMENT: Patterson was 1989. I don’t think anybody thinks Patterson was the bad old days.

JUSTICE SCALIA: Oh, I’m sorry. I was thinking of Sullivan.

GENERAL CLEMENT: The bad old days ended when you got on the Court, Mr. Justice Scalia.

(Laughter.)

The Solicitor General does an excellent job weaving the threads of Sullivan and Jackson:

Mr. Chief Justice, you also asked about stare decisis and which cases that this Court should point to. I think there are a couple reasons why Sullivan is the precedent that this Court should follow in this case. First of all, this Court followed it in a less analogous context just a few terms ago in Jackson.

Second, this Court has a whole line of cases, including Tillman and Runyon, that treat 1982 cases as binding authority for section 1981 purposes. So if this Court were to turn its back on Sullivan, I think it would also be turning its back on cases like –

CHIEF JUSTICE ROBERTS: You don’t have any doubt that Sullivan would come out differently today under our current analysis?

GENERAL CLEMENT: It — I mean, it’s hard to say. I mean, you know, Jackson was just three terms ago, Mr. Chief Justice, so — and I don’t know how Jackson would have been decided without the benefit of Sullivan.

12. Defense counsel wastes his rebuttal by reaching for grandiloquence:

George Washington said in 1790 “I’ve always been persuaded that the success of our nation and our government depends upon the acceptance its people and that would depend upon the interpretation and execution of its laws. Therefore, it is important that the judicial system should not only be independent in its operation but as perfect as possible in its formation.”

To follow the text of the statute, this Court’s interpretations of section 1981 and the –

JUSTICE SCALIA: This is no longer Washington, right?

MR. HAWKINS: I understand, Your Honor. (Laughter.)

JUSTICE SCALIA: Okay. I didn’t know where he stopped and you began. (Laughter.)

Justice Kennedy’s statement above (at 10) worries me most, but counsel got the employees’ best arguments out there and we can hope for the best.

Wednesday, February 20, 2008

If you — the employer — have a serial harasser in your midst, what is your responsibility to excise him or her from the workplace altogether? Not just an abstract question for human resources, for one unfortunate employer this question may be decided by a jury in Hawkins et al. v. Anheuser-Busch, Inc., No. 07-3235 (6th Cir. Feb. 19, 2008). The facts transcend the ordinary arc of hostile work environment cases, and perhaps the harasser (named Robinson) — based on the summary judgment record, anyway — suffered serious mental illness. But we’ll see that this hardly mitigated the employer’s responsibility. Instead of removing the harasser, the employer kept shifting the women to other locations.

The story begins in 1993. The employees worked in close proximity on the assembly line. Robinson’s first victim received anonymous threatening notes (later traced back to Robinson) and had her car sideswiped. This behavior earned him a six-month suspension, after a union-management grievance hearing. Here are the notes excerpted:

“The first note stated: ‘Are you looking for a real good hot time with a real hard body man if so I’m your man. Call my line to nite [sic] for some read [sic] hot sex talk. 1800-334-1256. I’ll be waiting.’ The second note read: ‘Hi – Are you lonely and looking for a real hot time if so I’m the man for you. If you want something Hot and Hard call me at 1-800-335-666. They call me Mr. Big Daddy.’ The final note stated: ‘What’s up sexy. So are your ready for something nice and hard because I think it’s about time we got together so we can have a good time all nite [sic] long. I no [sic] you like it long and Hard. And I have tools to do that all nite [sic] thing. P.S. Don’t worry I will make real good to you. I no [sic] what you like PAIN.’

One has to wonder what the union was doing when it backed this guy’s grievance, but the union is not a defendant, so we move on.

The next two victims (plaintiffs Cunningham and Hill) were stalked, touched, and propositioned in the crudest terms by Robinson. Both women insisted on transfers away from Robinson because of the behavior. In Hill’s case, events spiraled into the life-threatening after she reported Robinson to the company:

“On December 9, 2000, a few weeks after Hill reported the allegations of harassment, but before the brewery had finished its investigation, someone set fire to Hill’s car while it was parked at her home. Although Hill believed that Robinson was responsible for the fire, no arrests related to the fire were made. Hill informed the fire investigators about her suspicions and reported the incident to both [supervisors] Davidson and Schlarman. Davidson did not investigate the incident, and instead told Hill that if she did not have any proof of Robinson’s involvement, she should not make allegations against him. Schlarman told Hill that she could be sued for slander for accusing Robinson. Nothing in the record suggests that the brewery took any steps to investigate Hill’s allegation that Robinson set fire to her car. At some point during December of 2000, however, the brewery transferred Hill to a different line.”

An anonymous letter arrived at the brewery after the Hill investigation petered out:

“It recounted specific allegations of violence against women at the brewery, noting that Hill’s car had been set on fire shortly after she accused Robinson of sexual harassment, that Robinson had threatened to ‘kill that Bitch’ (meaning Hill) if he lost his job, and that all four tires of another employee’s car were slashed after a woman threatened to report that Robinson had harassed her. The letter also stated that Robinson bragged in the cafeteria that he had slashed the tires to ‘repay the woman for telling on him,’ and that it was ‘this type of retribution’ that ‘keeps people from speaking out’ against Robinson. Finally, the letter concluded by stating: ‘I have no vendetta against Bill Robinson. My only hope is that the truth be told and Cherri Hill might be seen as an example of what to do when they’ve been sexually harassed.’ It was signed, ‘a concerned employee.'”

Yet somehow, through all of this, Robinson kept his job. Only when he moved through several more women on the line did the company fire Robinson in 2003, an incredible ten years after the first incidents.

The final victim was Robinson himself, and his girlfriend (unnamed in the opinion), who both died by Robinson’s hand shortly after the termination.

I recommend the opinion for perusal, especially its discussion of when an employer may be deemed on notice of a hostile work environment. But the main point for me was that, if the summary judgment record is accurate, the employer let this guy grease through its business for a decade before it took terminal action. “Notwithstanding Anheuser-Busch’s arguments, a jury could find that, in light of the brewery’s knowledge that Robinson was a serial harasser, management acted inappropriately by repeatedly removing the victims of harassment from line 75 while failing to undertake more fundamental action, such as training, warning, or monitoring Robinson. Although some courts have indeed found that simply removing a harasser from the victim’s work environment is sufficient to preclude liability, none of the cases cited by the brewery involved a serial harasser such as Robinson or the type of threatening behavior at issue in the present case.” All I’d add is that no amount of training was likely to work in this case, and the suspension evidently did no good at all.

Finally, the Sixth Circuit joins the First, Third, Seventh, Ninth and Tenth Circuits in recognizing employer liability for co-worker retaliation: “we hold that an employer will be liable for the coworker’s actions if (1) the coworker’s retaliatory conduct is sufficiently severe so as to dissuade a reasonable worker from making or supporting a charge of discrimination, (2) supervisors or members of management have actual or constructive knowledge of the coworker’s retaliatory behavior, and (3) supervisors or members of management have condoned, tolerated, or encouraged the acts of retaliation, or have responded to the plaintiff’s complaints so inadequately that the response manifests indifference or unreasonableness under the circumstances.”

* * * *

Also, in a useful case for lawyers who do class action work, the Ninth Circuit held that a district court presented with a proposed class settlement under Fed. R. Civ. P 23(e) must decide that motion ahead of the merits: In re Syncor ERISA Litigation, No. 06-55265 (9th Cir. Feb. 19, 2008). “Failure to do so – even when the district court has already drafted a summary judgment order – is an abuse of discretion.”

In this case, plan participants who had invested in a Syncor ESOP (Employee Stock Ownership Plan) took a wallop when their employer disclosed, during the course of a merger with Cardinal Health, that executives at a Syncor subsidiary (including plan fiduciary Monty Fu) had paid cash bribes to Taiwanese hospitals, in violation of the Foreign Corrupt Practices Act. Plaintiffs alleged that “Syncor also systematically encouraged the managers of its other foreign operations to use bribes in the countries in which they did business. Despite these illegal practices, the Plan’s committee members, including Fu and Funari, allowed the Plan to hold and acquire Syncor stock when they knew or had reason to know of Syncor’s foreign bribery scheme.” As a consequence, the Syncor stock lost half of its value and the ultimate exchange rate for the merger was far less favorable to the Syncor shareholders.

An ERISA suit for breach of fiduciary duty followed these events and the district court certified a class. While a motion for summary judgment was pending on the class, the parties settled the case and filed a notice of the settlement with the court. Meanwhile, the district court had already written a decision granting summary judgment, but had not yet filed it. Instead of waiting for the parties to file the settlement, the court entered judgment against the class, finding no genuine issue of material fact on the breach of fiduciary duty. The district court denied Fed. R. Civ. P. 59(e) and 60(b) motions to set aside the judgment.

On appeal, the Ninth Circuit reversed the district court on the post-judgment motions and the summary judgment. On the former, the court held that “[b]ecause the parties bound themselves to a settlement agreement subject only to court approval (which they had agreed to seek) and gave the required notice of the agreement, the district court should not have (1) filed its order granting the motions for summary judgment and (2) entered final judgments against the Class.”

The defense tried to crawfish out of the settlement on appeal, but the panel called foul:

“Defendants argue that the district court has the discretion to enter final judgment rather than review the proposed settlement in order to manage its calendar. Defendants argue that, because the settlement was not yet final, the district court did not abuse its discretion by entering the judgments on the merits. These arguments, however, are not compelling under these circumstances. Because the parties provided appropriate notice to the district court of the settlement agreement, the court should never have filed its order or entered the final judgments. The parties informed the district court that they had entered a binding settlement agreement the day before the district court entered its summary judgment order and two days before the district court entered the final judgments. The district court thus should have reviewed the settlement document as required under Fed. R. Civ. P. 23(e). The district court’s management of its docket must not undercut a valid settlement agreement between the parties that is appropriately provided to the district court for review.”

On the merits, the panel tosses the summary judgment. Although with ESOPs, the thumb tends to be on the scale of plan administrators (the Moench presumption, Moench v. Robertson, 62 F.3d 553, 571 (3d Cir. 1995)), the panel found enough in the record to warrant a trial:

“[ERISA] 29 U.S.C. § 1104(a)(2) does not exempt fiduciaries from the first prong of the prudent man standard, which requires a fiduciary to act with care, skill, prudence, and diligence in any investment the fiduciary chooses. See Wright, 360 F.3d at 1097, 29 U.S.C. § 1104(a)(1)(B). A prudent man standard based only upon a company’s alleged financial viability does not take into account the myriad of circumstances that could violate the standard. A violation may occur where a company’s stock did not trend downward over time, but was artificially inflated during that time by an illegal scheme about which the fiduciaries knew or should have known, and then suddenly declined when the scheme was exposed. While financial viability is a factor to be considered, it is not determinative of whether the fiduciaries failed to act with care, skill, prudence, or diligence. . . . Here, there is a genuine issue whether the fiduciaries breached the prudent man standard by knowing of, and/or participating in, the illegal scheme while continuing to hold and purchase artificially inflated Syncor stock for the ERISA Plan.”

Bet the defendants will pay plenty for this appeal, in interest alone if nothing else (the settlement, if it’s still together, is now over two years old).

Tuesday, February 19, 2008

The U.S. Supreme Court added three more employment-related matters to its docket for next term. One is directly related to EEO, concerning the continued vitality of Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). In 14 Penn Plaza v. Pyett, et al., 07-581, the court granted cert on the following question:

“Is an arbitration clause constrained in a collective bargaining agreement, freely negotiated by a union and an employer, which clearly and unmistakably waives the union members’ right to a judicial forum for their statutory discrimination claims, enforceable?”

Alexander had — in an era less hospitable to arbitration of statutory claims — held that a CBA did not waive the right to bring a Title VII claim in a federal civil action:

“We are also unable to accept the proposition that petitioner waived his cause of action under Title VII. To begin, we think it clear that there can be no prospective waiver of an employee’s rights under Title VII. It is true, of course, that a union may waive certain statutory rights related to collective activity, such as the right to strike. Mastro Plastics Corp. v. NLRB, 350 U.S. 270 (1956); Boys Markets v. Retail Clerks Union, 398 U. S. 235 (1970). These rights are conferred on employees collectively to foster the processes of bargaining and properly may be exercised or relinquished by the union as collective bargaining agent to obtain economic benefits for union members. Title VII, on the other hand, stands on plainly different ground; it concerns not majoritarian processes, but an individual’s right to equal employment opportunities. Title VII’s strictures are absolute, and represent a congressional command that each employee be free from discriminatory practices. Of necessity, the rights conferred can form no part of the collective bargaining process, since waiver of these rights would defeat the paramount congressional purpose behind Title VII. In these circumstances, an employee’s rights under Title VII are not susceptible of prospective waiver. See Wilko v. Swan, 346 U. S. 427 (1953).”

But that principle has taken a beating since the intervening decision in Gilmer v. Interstate-Johnson Lane Corp., 500 U.S. 20 (1991), which held that a non-collectively bargaining agreement to arbitrate could be enforced against an employee with an ADEA claim.

The Court once before approached the perimeter of this issue in Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998), but because the agreement to arbitrate in that case was not covered by the Federal Arbitration Act and was not clear and unmistakable, the Court did not have to resolve the tension between Gilmer and Alexander. In this case, though, the waiver of the individual employee’s right to bring a civil action seems clear enough:

“There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership, or any characteristic protected by law, including, but not limited to, claims made pursuant to Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the New York State Human Rights Law, the New York City Human Rights Code, … or any other similar laws, rules or regulations. All such claims shall be subject to the grievance and arbitration procedure (Articles V and VI) as the sole and exclusive remedy for violations. Arbitrators shall apply appropriate law in rendering decisions based upon claims of discrimination.”

Yet the Second Circuit held in Pyett v. Pennsylvania Bldg. Co., 498 F.3d 88 (2d Cir. 2007), held under Alexander that no such waiver was valid. This case, then, tees up the issue once and for all whether any part of Alexander remains good law.

The Court will also consider whether a union may charge non-union members for litigation costs expended on behalf of the union members’ rights generally (Locke v. Karass, 07-610), and how a divorcing spouse may waive rights to the other spouse’s pension benefits under ERISA (Kennedy v. DuPont Plan Administrator, 07-636).

Wednesday, February 13, 2008

Here’s a tidy decision that will help employees who have claims that cross jurisdictions: Schuler v. Pricewaterhousecoopers, No. 06-7207 (2d Cir. Feb. 12, 2008).

The employee worked as a managing director in D.C. and was denied a promotion to partner, a decision that would have been made in New York (PwC’s headquarters). The employee incontestably met his duty to file an ADEA charge with the EEOC under 29 U.S.C. § 626(d). In his 2005 charge, filed in the NYC district office, he alleged that “PwC has followed and continues to follow age discriminatory practices for promotion to partnership that favor employees younger than 40 years old and harm me and other older employees.”

Despite plaintiff having expressly requested that the charge be cross-filed with both New York and D.C., the EEOC submitted it only to the N.Y. Commission on Human Rights. (Another piece of the puzzle: The same employee had a prior ADEA claim pending against the same employer in New York. Mistaking that case for the charge before it, it dismissed the 2005 charge on the basis of pending litigation.)

Following the issuance of a right-to-sue letter, the employee in 2005 filed a pattern-or-practice ADEA collective action in the U.S. District of the District of Columbia. But the district court dismissed the case because it held that the employee had not met the parallel obligation under 29 U.S.C. § 633(b) to cross-file his charge with the appropriate state or local agency.

The D.C. Circuit reversed. The panel first held that the district court misapprehended the complaint as two discrete actions (i.e, denials of promotions on July 1, 2004 and July 1, 2005) rather than a single pattern-or-practice allegation. “Put simply, Schuler’s first claim is this: ‘PwC has engaged in a pattern and practice of age discrimination in making decisions regarding assignments and promotions in violation of section 4 of the ADEA, 29 U.S.C. § 623(a).’ Id. ¶ 50. The dates July 1, 2004 and July 1, 2005 appear nowhere in claim one. Schuler’s second claim, styled ‘Claim Two,’ alleges similar violations of the DCHRA [D.C. Human Rights Act].”

The court next held that, under two separate theories, the plaintiff did invoke local remedies.

First, under the worksharing agreement between D.C. and the EEOC, physical cross-filing of the charge with D.C. was unnecessary. EEOC regulation 29 C.F.R. § 1626.10(a) authorizes the Commission to “enter into agreements with State or local fair employment practices agencies to cooperate in enforcement, technical assistance, research, or public informational activities, and [to] engage the services of such agencies in processing charges assuring the safeguard of the federal rights of aggrieved persons.”

The filing of the charge with the EEOC, even if in the New York district office, was enough for the charge to be deemed filed under the worksharing agreement with the D.C. Office of Human Rights (which waived the physical filing of the charge). PwC argued that the worksharing agreement covered only filings in the local district office in the same jurisdiction. The panel held instead that the agreement covered the entire EEOC, i.e., 29 C.F.R. § 1626.10(c), under a worksharing agreement . . . [c]harges received by one agency under the agreement shall be deemed received by the other agency.”

And the charging party had further protected itself by expressly requesting cross-filing with D.C. (as well as New York). So “even if the DCOHR required physical receipt of Schuler’s charge-and we have no reason to believe that it does-in order to initiate proceedings over a complaint the agency has already disclaimed any intention of acting upon, Schuler cannot be held responsible for the EEOC’s failure to forward the charge as he explicitly requested.”

The court rejected PwC’s attempts to cabin the worksharing agreement not only based on its plain language, but on the liberal spirit animating the charge-filing requirement: “it would effectively rewrite the ADEA’s administrative prerequisites, making them traps for the unwary, poised to spring into action and deny those who may have suffered employment discrimination their right to seek redress in federal court.”

Second, the court held that the charge-filing requirement was also met by the filing in New York. The part of the decision hinged, though, on whether the N.Y. state law (N.Y. Exec. Law § 296) applied to this action. In a potentially far-reaching decision for employers based in New York, the D.C. Circuit construed the NYHRA to extend extraterritorially. “[T]he law forbids all employers in the state from engaging in discriminatory acts. Thus, absent some exception or limitation, section 296, on its face, applies to PwC’s adoption, maintenance, and implementation of an allegedly discriminatory promotion policy.” To date, only federal district courts and the N.Y. Appellate Division have considered the question, and arrived at mixed conclusions. “Absent a contrary interpretation by the New York Court of Appeals or the Second Circuit, we conclude that in addition to satisfying ADEA section 633(b)’s deferral state filing requirement via the D.C. worksharing agreement, Schuler adequately sought a state administrative remedy in New York by having his charge cross-filed with the NYSDHR.”

In closing, the court held that the employee was relieved from filing serial charges after the first alleging denial of promotion, where the first charge and complaint allege a pattern-or-practice, deeming such subsequent charges to be of no practical significance: “Schuler seeks damages flowing from the first application of PwC’s allegedly discriminatory policy through to the present.”

Tuesday, February 12, 2008

UPDATE: How many ways can you go wrong in defending a Title VII retaliation case when (1) the employer is a law firm that holds itself out as a “Boutique Chicago law firm concentrating in corporate and employment law”; (2) a named partner — married to the other named partner — supposedly carried on a five-year long affair with the plaintiff (according to the summary judgment record); and (3) the firm pursued a pretext argument that allowed the court of appeals to write that the record, rather “than demonstrating Benders’ incompetence, . . . show[s] a general environment of distrust and dysfunction at the firm, where many employees – including Benders herself – were confused about [their] role and responsibilities.”

The Seventh Circuit reversed summary judgment on the retaliation and a state law claim. Benders v. Bellows & Bellow, No. 06-1487 (7th Cir. Feb. 12, 2008). (At least there’s no need to consult the malpractice carrier: according to the docket sheet, the defendant represented itself.)

============

Both Title VII and the ADA require “reasonable accommodations”: 42 U.S.C. § 12112(b)(5)(A) for disabilities, 42 U.S.C. § 2000e(j) for religion. While there is a robust case law interpreting the ADA requirement, we see relatively few cases under the religion section. One reason may be that courts have allowed employers to avoid the religious accommodation requirement of Title VII if they can show anything more than a de minimus cost to accommodation, a standard lower than the parallel case law provides under the ADA.

Litigants have recently attempted to push courts to tighten the standard for religious accommodation, suggesting that an accommodation satisfies Title VII only if eliminates the conflict between the religious practice and the work requirement. Case law in the Second, Seventh and Ninth Circuits has used the “eliminate” formulation. Baker v. The Home Depot, 445 F.3d 541, 548 (2d Cir. 2006); EEOC v. Ilona of Hungary, Inc., 108 F.3d 1569, 1576 (7th Cir. 1996); Opuku-Boateng v. California, 95 F.3d 1461, 1467 (9th Cir. 1996). But the U.S. Courts of Appeals more recently have not been receptive. Last month, the Eighth Circuit rejected this suggestion in Sturgill v. UPS, No. 06-4042 (8th Cir. Jan. 15, 2008) (see my entry for January 16, 2008 on this case), holding that it was enough that the proposed accommodation minimize rather than eliminate a conflict.

And now we have the Fourth Circuit’s word in target=”_blank”>EEOC v. Firestone Fibers, No. 06-2203 (4th Cir. Feb. 11, 2008), agreeing with the Eighth Circuit that it is enough for an employer to offer an accommodation to minimize conflict. As with so many other such cases, this involved a claim about scheduling work around religious sabbath and holiday obligations.

This case proved an unfortunate vehicle to pursue a change in the law. For while in Sturgill, the plaintiff (who won at trial, incidentally) was a traditional sabbatarian who could not work after sundown on Fridays, the charging party here (named Wise) — who was a lab technician for Firestone and an adherent of the Living Church of God — sought not just a sabbath accommodation, but up to fourteen addition al days off a year for other observances. To a degree, the employee managed by cobbling together vacation and other leave time, but after restructuring and layoffs he was bumped out of the shift that enabled him to meet his religious obligations. Because of the collective bargaining agreement, the company could not feasibly shift him into another position or shift, nor could they reasonably require other employees to cover his sabbath hours on an overtime basis. Eventually, the employee missed work without leave for a religious observance and was fired.

The Fourth Circuit, affirming summary judgment, held that the obligation of reasonable accommodation (and corresponding defense of “undue hardship” in the same section) required the employer to bend only so far:

“As the statutory language of § 2000e(j) makes clear, this is not an area for absolutes. Religion does not exist in a vacuum in the workplace. Rather, it coexists, both with intensely secular arrangements such as collective bargaining agreements and with the intensely secular pressures of the marketplace. Hence the import of the statutory term ‘accommodate.’ The provision’s use of the terms ‘reasonably’ and ‘undue hardship’ likewise indicates that this is a field of degrees, not a matter for extremes. Both terms are ‘variable ones,’ dependent on the extent of the employee’s religious obligations and the nature of the employer’s work requirements.”

The court declared that “the burden is on the employer to show either (1) that it has provided the plaintiff with a reasonable, though not necessarily a total, accommodation or (2) that such reasonable accommodation was not possible without causing undue hardship to the conduct of its business.” Here the court held that the employer did reasonably accommodate the employee, within the terms of the CBA, by providing a seniority-based bidding system for working shifts; fifteen, eight-hour vacation days and three floating holidays (including the ability to break the time up into half-day increments); the ability to switch shifts twice a quarter (eight times a year); and sixty hours unpaid leave time. addition ally the employee’s supervisor allowed the employee more than the allocated half-day vacations and scanned the shift assignment every week to look for places to slot the employee.

And because the accommodation offered was already reasonable, the employer was not required to do more: “Given the frequency with which Wise wanted time off and the fact that a lab technician needed to be present whenever the treating unit was operating, Firestone asserts that excusing Wise from the attendance policy’s sixty-hour leave limit would impose a disproportionate and unfair burden on his fellow employees. Specifically, Firestone thought it could not accommodate Wise’s request because ‘other lab employees would be imposed upon from the standpoint of being required to work to cover for [Wise].'”

And although Wise’s co-workers apparently did not complain about covering his time, the court held that the employer had reason to believe that such forbearance may be short-lived: “Other employees may be left wondering why they are forced to work during valuable personal or family time despite having higher seniority. Indeed, such an accommodation treats an employee with a religious obligation differently than an employee with important, but non-religious, obligations of their own, such as caring for a sick child or spouse.” Finally, the employer was not obligated by Title VII to give the employee a special leave of absence for a recurring obligation: “If Firestone were to grant a special exception for Wise for recurring obligations, it would have imposed the same type of burdens on the seniority-based scheduling system and Wise’s fellow employees as if it had excused him from the attendance policy altogether.”

Friday, February 8, 2008

Here are two EEO cases liable to draw attention for entirely different reasons:

1. A district court held, as a matter of law, that habitual breast-staring did not create a hostile work environment? It takes the First Circuit, in a typically crisp opinion signed by Judge Howard, to set this one straight. Billings v. Town of Grafton, No. 06-2145 (1st Cir. Feb. 7, 2008).

Plaintiff Billings, a secretary to a town administrator named Connor, alleged that several times a day Connor stared at her breasts while talking to her, often for seconds at a time. Even after she and other women complained about the problem to the town’s Board of Selectmen, the behavior only slowed for a while and then resumed. The practice continued over the employee’s two and a half year tenure. (Adding fuel to the fire, an outside lawyer hired by the town to investigate the complaint concluded that the behavior did not constitute harassment. An attorney fee entirely wasted on useless, even damaging, advice.)

In her lawsuit under Title VII and state law, Billings alleged both sex harassment and retaliation — in the latter category, being reprimanded, banned from the administrator’s office, charged personal time for attending a deposition and mediation (while other town employees were not charged) and transferred from the town administrator’s office down to the recreation department, an arguably less prestigious position that required her to clock in. The district court granted summary judgment on all claims.

The First Circuit vacated and remanded the summary judgment. It found that the district court erred in applying the standard of objective offensiveness for a hostile work environment:

“While the district court properly articulated [the objective] standard, we think it applied the standard in too rigid a manner. In particular, we think the court’s analysis placed undue weight on the fact–undisputed though it was–that Connor’s alleged behavior did not include touching, sexual advances, or ‘overtly sexual comments to or about her.’ As we have just explained, the hostility vel non of a workplace does not depend on any particular kind of conduct; indeed, ‘[a] worker need not be propositioned, touched offensively, or harassed by sexual innuendo in order to have been sexually harassed.'” [Citations omitted.]

The defendants also argued that breast-staring was not “because of sex,” a proposition that the panel finds cannot sustain summary judgment: “We cannot reasonably accept, however, that a man’s repeated staring at a woman’s breasts is to be ordinarily understood as anything other than sexual.” Lesson: sometimes courts, and their defense counsel enablers, get unmoored from reality.

(The panel also reversed summary judgment on the retaliation claim, finding that the plaintiff presented sufficient, objective evidence that her forced transfer and other penalties were materially adverse under the Burlington Northern standard.)

2. Have we turned a corner in how lawyers may plead and answer a multi-plaintiff, Title VII case? Perhaps in the Eleventh Circuit, we have. Davis v. Coca-Cola Bottling Consolidated, No. 05-12988 (11th Cir. Feb. 6, 2008).

A group of nine African-American employees claimed (principally) that they (1) had been subjected to a racially-motivated pattern or practice of being denied promotions (in a system that relied on word-of-mouth) and (2) suffered a racially hostile work environment. The district court granted summary judgment, holding inter alia that individual employees may not pursue pattern-or-practice cases outside of a Rule 23 class action (which the plaintiffs evidently did not seek). Breaking apart the nine plaintiffs’ personal claims, the panel found that none survived as a matter of law. The Eleventh Circuit affirmed as to nearly all of the claims, remand only a few stray claims for further development.

Two important things emerge from this decision for lawyers practicing in that circuit. First, the Eleventh Circuit holds that individual plaintiffs typically lack standing to pursue a pattern-or-practice case. It reasons that individual plaintiffs cannot pursue systemic equitable and declaratory relief because, under City of Los Angeles v. Lyons, 461 U.S. 95 (1983), they cannot customarily establish that they would personally benefit from such class-wide relief (as here, lose out on a promotion in the future). Moreover, the panel concludes that the plaintiffs’ failure to pursue class relief would supposedly stir confusion about issues such as claim- and issue-preclusion and limitations.

Second, the panel pillories both parties for their pleadings, devoting a round dozen pages to the thrashing:

“The complaint is a model ‘shotgun’ pleading of the sort this court has been roundly, repeatedly, and consistently condemning for years, long before this lawsuit was filed. And the defendant’s answer is no better. Both pleadings were drafted by AV rated law firms whose appearances in district courts of this circuit, and in this court, have been ubiquitous. The steps counsel took in litigating their respective clients’ interests – the pleading strategies they employed – were not taken out of ignorance; they were deliberate, calculated.”

After attacking the original and amended complaints for a lack of specificity, failing to tie particular alleged violations to specific plaintiffs, the panel condemned the defense counsel’s strategy as tit-for-tat:

“No competent lawyer – whether skilled in Title VII litigation or not – could compose an answer to these sweeping and multifaceted acts of discrimination that would be in keeping with what the framers of the Rules envisioned in fashioning Rule 8(b). Yet, CCBCC’s attorneys framed one. They used the same shotgun strategy plaintiffs had employed. Their answer constrain four teen defenses. The first defense responded to the complaint paragraph by paragraph, admitting or denying the allegations thereof. The second through the fourteenth defenses were affirmative defenses, and except for the seventh defense, consisted of only one sentence. These affirmative defenses did not respond to specific causes of action, because the drafter of the answer could not identify the specific causes of action each named plaintiff was purporting to allege. Consequently, the affirmative defenses referred to none of these plaintiffs by name.”

(The firms, both prominent in the field of employment discrimination class action litigation, are identified by name at page 42, n.55 of the opinion.)

Monday, February 4, 2008

In Adamson v. Multi Community Diversified Services, Inc., and Cartridge King of Kansas, Inc., No. 05-3478 (10th Cir. Feb. 1, 2008), the court begins (in an opinion signed by visiting district court judge John L. Kane Jr.): “This is an appeal from the entry of summary judgment in a non-profit corporate employer’s favor on federal age and sex discrimination claims brought by plaintiff family members after they were simultaneously terminated from their employment by the corporation’s board of directors.” The novel question presented was whether their family relationship somehow presented a protected classification under Title VII. The answer by the court, unsurprisingly, was “no.”

The bare facts presented were that Barry and Patriciadawson, together with their daughter, Jessica Curl, were removed from the MCDS board of directors on the same day in October 2002, after the new CEO incorporated its wholly-owned franchise, Cartridge King (CKK), and installed his own wife and daughter as business manager and sales representative. Further,

“According to Plaintiffs, their terminations came without warning and without explanation. Reasons later given were that Mr. Adamsons’ unilateral management style and actions with respect to CKK, and in particular money transfers from MCDS to CKK, had raised eyebrows and alienated employees, and that the board was concerned the family’s employment relationships were ill-advised and within the scope of the company’s anti-nepotism policy.1 The board replaced Adamson as CEO with Sherry Plenert, a long-term female employee of the company, who was 63 at the time.”

The family filed a complaint studded with discrimination (age and gender), contract, tort and state statutory claims. The district court granted summary judgment on the federal claims and dismissed the state claims without prejudice (28 U.S.C. § 1376).

On the Title VII claim based on “familial relationship” between the plaintiffs, the district court declined to specifically address the viability of such a claim, finding it unnecessary to do so in light of what it saw as the very weak evidence of pretext. But the panel held that the district court ought to have cut the case off at the prima facie stage, as the plaintiffs’ “familial status” theory was untenable:

“Requiring employers to answer and engage in costly discovery to refute an inference of “discrimination” that is not otherwise actionable is both inefficient and unjust.

“‘Familial status’ is not a classification based on sex any more than is being a ‘sibling’ or ‘relative’ generally. It is, by definition, gender neutral. The use of gender to parse those classifications into subcategories of ‘husbands, wives and daughters’ is a social and linguistic convention that neither alters this fact nor elevates those subcategories to protected status.”

The court also held that there was no genuine issue of material fact whether the anti-nepotism rule was used in a discriminatory fashion.

“We conclude Barry’s [Adamson] reverse discrimination claim premised on the company’s selective application of the anti-nepotism policy falls with his claim based on familial status. While Barry incants the phrase ‘as a man’ in his claim, he makes clear his purpose in targeting the company’s application of its anti-nepotism policy is not to demonstrate reverse discrimination under Notari, but to reveal the company’s ‘true’ purpose was to terminate him on the basis of his familial status as Patricia’s husband Jessica’s father. According to Barry, the anti-nepotism policy was applied to fire him, his wife and daughter while a father and son also working at the company were not fired. Because discriminating against him as ‘husband’ and ‘father’ is not actionable discrimination under Title VII, “direct evidence” of such an intent states no cognizable claim for relief.”

Friday, February 1, 2008

Two more wins for employees to report to conclude the week.

In Darveau v. Detecon, Inc., No. 06-2092 (4th Cir. Jan. 31, 2008), the court holds that — like Title VII — the FLSA does not require proof of a materially adverse employment action under its anti-retaliation section, 29 U.S.C. § 215(a)(3). After an employment relationship broke up, the following sequence of events occurred:

“On August 1, 2005, Darveau filed a complaint against Detecon in federal district court, seeking, inter alia, compensation for unpaid overtime under the FLSA. Two weeks later, Detecon filed an action in the Circuit Court of Fairfax County, Virginia, against Darveau, alleging fraud and fraudulent concealment arising out of a sales contract whose termination Darveau assertedly hid in order to meet his annual bonus of $50,000. Detecon later amended its complaint in state court to substitute claims for breach of contract and constructive fraud related to these same incidents. In response, Darveau amended his own federal complaint to include both a breach of contract and retaliation claim, contending that Detecon’s action constituted retaliation under the FLSA in violation of 29 U.S.C. § 215(a)(3). Darveau then removed Detecon’s state court action to federal court; that action was consolidated with Darveau’s suit and treated as a counterclaim.”

Darveau has alleged that his former employer filed the action against him with a retaliatory motive and without a reasonable basis in fact or law.

Citing Title VII authority, the district court held that the employee had “to demonstrate that he suffered a materially adverse employment action involving an ultimate employment decision related to hiring, leave, discharge, promotion, or compensation. The court reasoned that because Darveau had left Detecon’s employment six months prior to filing his FLSA suit, he could not possibly have suffered any employment action, adverse or otherwise, from Detecon.”

The panel reversed, holding that the Title VII authority relied upon by the district court had been superceded by newer Supreme Court decisions:

“In Robinson v. Shell Oil Co.,519 U.S. 337, 345-46 (1997), the Court explicitly held that for purposes of Title VII’s retaliation provision, ’employee’ encompasses former, as well as current, employees. Even more recently, in Burlington N. & Santa Fe Ry. Co. v. White, 126 S. Ct. 2405, 2414 (2006), the Court held that a Title VII retaliation plaintiff need not allege or prove an ultimate adverse employment action, because ‘[t]he scope of the anti-retaliation provision extends beyond workplace-related or employment-related retaliatory acts and harm.'”

The court also deemed Title VII a relevant analogue to the FLSa anti-retaliation section: “we find no significant differences in either the language or intent of the two statutes regarding the type of adverse action their retaliation provisions prohibit. The FLS and Title VII contain identical general definitions of ’employee.’ . . . Moreover, both statutes provide the same broad definition of a prohibited retaliatory act; each statute renders it unlawful to ‘discriminate against’ any employee who has engaged in the described protected activities.”

Meanwhile, in Mickey v. Zeidler Tool & Die Co., No. 06-1960 (6th Cir. Jan. 31, 2008), we have an ADE and state law retaliation case where the facts sting in the nostrils — the employee is fired within days of the decision-maker learning of the protected activity (filing an EEOC charge) — and yet (1) the district court still granted summary judgment, and (2) the panel splits 2-1 over the probative value of these facts.

Here is the sequence of events summarized in the opinion:

“EEOC records show that Mickey filed his [ADEA] charge on October 7, 2004, and that the EEOC sent a notice of [plaintiff] Mickey’s charge to Zeidler a week later on, October 14, 2004. [Company owner] DeForge spent the days of October 15 to 18, 2004, at Limberlost Farms.

“DeForge terminated Mickey’s employment on the morning of Tuesday, October 19, 2004. Mickey testified that when he arrived for work at 7:30 a.m. that morning, DeForge followed him into his office, told him that he was laid off, and that he should pack up his belongings. When asked at his deposition whether he had seen Mickey’s EEOC charge at that time, DeForge first responded that ‘I don’t remember’ before admitting that ‘I did see it.'”

DeForge, the record showed, learned of the charge the same morning that he fired the plaintiff.

The district court granted summary judgment on the retaliation claim on the ory that temporal proximity alone can never constitute prima facie evidence of causation, citing language in several Sixth Circuit decisions. But the panel majority, reversing summary judgment, set circuit law straight on this issue:

“Where an adverse employment action occurs very close in time after an employer learns of a protected activity, such temporal proximity between the events is significant enough to constitute evidence of a causal connection for the purposes of satisfying a prima facie case of retaliation. But where some time elapses between when the employer learns of a protected activity and the subsequent adverse employment action, the employee must couple temporal proximity with other evidence of retaliatory conduct to establish causality. [Citation omitted.]

“The reason for this distinction is simple: if an employer immediately retaliates against an employee upon learning of his protected activity, the employee would be unable to couple temporal proximity with any such other evidence of retaliation because the two actions happened consecutively, and little other than the protected activity could motivate the retaliation. Thus, employers who retaliate swiftly and immediately upon learning of protected activity would ironically have a stronger defense than those who delay in taking adverse retaliatory action.”

Thus the panel majority would hold that “[i]n those limited number of cases-like the one at bar-where an employer fires an employee immediately after learning of a protected activity, we can infer a causal connection between the two actions, even if Mickey had not presented other evidence of retaliation.”

But even this common-sense ruling drew a stubborn separate opinion concurring in the judgment. Judge Batchelder writes that temporal proximity, without more, cannot support an inference of retaliatory intent, but allows that such an inference may arise in “a case in which the employer’s learning of the protected activity is so closely followed by the employer’s taking of an adverse action that the two are virtually contemporaneous.” (Um, and why shouldn’t this issue of proximity simply go to the jury?)

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