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Hunter v. Valley View Local schools, No. 08-4109 (6th Cir. Aug. 26, 2009); Sandoval v. American Building Maintenance Industries, Inc., No. 08-2271 (8th Cir. Aug. 26, 2009)

| Aug 25, 2009 | Daily Developments in EEO Law |

Two cases, both involving custodians, lead to good results for the employees.  The Sixth Circuit addresses the significance of Gross v. FBL Fin. Servs., Inc., 129 S. Ct. 2343 (2009), in the context of the Family and Medical Leave Act. It holds — in spite of that recent Supreme Court blockbuster — that the circuit will continue to apply a mixed-motives theory under the FMLA retaliation section, 29 U.S.C. § 2615(a). In the Eighth Circuit, we have a progressive result — with an assist from the EEOC and National Employment Lawyers Association as amici — (1) applying the “integrated enterprise” rule under Title VII, and (2) extending the reach of when an employer might be on constructive notice of co-worker harassment (over a partial dissent).

Hunter v. Valley View Local schools, No. 08-4109 (6th Cir. Aug. 26, 2009): Plaintiff was a custodian who suffered from multiple physical problems owing to a car accident. After her third leave and a new set of physical restrictions, the employer placed her on involuntary, unpaid leave: “By letter dated October 3, 2005, [school Superintendent] Parr formally told Hunter that ‘as of October 14, 2005, you are hereby placed on unpaid medical leave not to exceed one (1) year based on your doctor’s restrictions limiting your ability to perform your job and excessive absenteeism for the past four (4) years.”

During discovery, the plaintiff obtained “the deposition testimony of Superintendent Parr. Parr testified that Hunter’s use of FMLA leave was one of two reasons she placed Hunter on involuntary leave.”  While the district court found that this testimony constituted direct evidence of a retaliatory motive under the FMLA, it granted summary judgment to the employer “because it would have placed Hunter on involuntary leave in any event due to Hunter’s permanent medical restrictions.”

The Sixth Circuit reverses.  It begins by analyzing whether an employee may proceed under the FMLA on a mixed-motive theory.  Noting that the recent Supreme Court decision Gross partially decoupled ADEA and Title VII precedent, the panel states that “Gross thus requires us to revisit the propriety of applying Title VII precedent to the FMLA by deciding whether the FMLA, like Title VII, authorizes claims based on an adverse employment action motivated by both the employee’s use of FMLA leave and also other, permissible factors. We conclude that it does.” It so holds by way of a DOL regulation, 29 C.F.R. § 825.220(c), finding that “the implementing regulations explicitly forbid an employer from considering an employee’s use of FMLA leave when making an employment decision. The phrase ‘a negative factor’ envisions that the challenged employment decision might also rest on other, permissible factors.”

Turns out in the end, though, that the plaintiff doesn’t need the benefit of mixed-motives. “Because Hunter has presented evidence of improper motive, the burden shifts to Valley View to prove by a preponderance of the evidence that it would have placed her on involuntary leave regardless of her use of FMLA leave. Valley View argues that it placed Hunter on involuntary leave because she was unable to perform the functions of her job. If this argument found support in the record, it might be sufficient to entitle Valley View to summary judgment. However, the evidence in the record belies Valley View’s position and shows, instead, that Hunter’s use of FMLA leave actually motivated Valley View to place her on involuntary leave.”

Thus, the employer failed to present even a fact issue about whether absenteeism was a genuine reason for her unpaid leave. “In sum, Parr’s deposition testimony completely undermines Valley View’s protestations that no issue of fact remains as to whether it would have made the same decision regarding Hunter even if she had not taken any FMLA leave and precludes summary judgment in Valley View’s favor.”

Sandoval v. American Building Maintenance Industries, Inc., No. 08-2271 (8th Cir. Aug. 26, 2009): This case involved eleven employees who worked as maintenance workers for a contractor — American Building Maintenance of Kentucky (ABMK) — which was itself owned by another enterprise, American Building Maintenance Industries, Inc. (ABMI).  Plaintiffs claimed that they suffered sex harassment in violation of Title VII and state law. The parties wrangled over whether the plaintiffs filed a timely amendment to add ABMK, and the Eighth Circuit panel affirms the district court’s decision that plaintiffs filed too late, so liability in this case depends on holding ABMI in as a defendant.

The panel reverses summary judgment and holds that there is a genuine issue of material fact about whether ABMI’s involvement in the operations of ABMK made them an integrated employer.  Though noting the “strong presumption” under Eighth Circuit case law that a parent corporation is not the employer of a subsidiary’s workforce, the panel applies a four-plank test — cribbed from the Title VII definition of U.S. citizens employed “in a foreign country” (42 U.S.C. § 2000e(f)) — to determine whether the presumption could be rebutted: “1) interrelation of operations, 2) common management, 3) centralized control of labor relations, and 4) common ownership or financial control.”

The panel holds the following commonalities significant: (1) both companies shared officers and directors; (2) ABMI owns the shares of ABMK; (3) under a service agreement, ABMI “agreed to provide certain services to ABMK, including accounting services, administrative services, electronic services, employee benefits, human resources, insurance, legal services, safety advice, and treasury services”; (4) ABMI provided human resources functions as well, including anti-harassment training and investigation of harassment claims; (5) the companies used a common employee handbook; (6) ABMI promoted to customers and the industry its integrated relationship with its subsidiaries. Overall, “[t]hese descriptions of ABMI’s involvement in the operations of its subsidiaries, and in particular ABMK’s, are sufficient to create a genuine issue of material fact with respect to whether ABMI and ABMK are an integrated enterprise.”

On the merits, though generally affirming (without comment) summary judgment on several claims, the panel majority (2-1) reverses two womens’ claims of harassment. The panel affirms the district court’s holding that the harassers were co-workers (not supervisors), and that on-site supervisors lacked authority to take action on complaints of harassment. But the panel majority holds that the district court failed to give due consideration to “plaintiffs alleg[ations that AMBI] was aware of nearly one hundred similar complaints made during the time plaintiffs were employed,” furnishing it with “constructive notice of rampant sexual harassment by on-site supervisors. . . . An employer has actual notice of harassment when sufficient information either comes to the attention of someone who has the power to terminate the harassment, or it comes to someone who can reasonably be expected to report or refer a complaint to someone who can put an end to it.”

The panel majority holds that “the district court refused to consider evidence of other sexual harassment claims, concluding it was barred by Eighth Circuit precedent limiting a plaintiff’s evidence in sexual harassment/hostile workplace cases to instances of harassment of which a plaintiff is aware. A plaintiff, however, is not limited to offering such evidence only to prove the subjective component of a sexual harassment claim. Irrespective of whether a plaintiff was aware of the other incidents, the evidence is highly probative of the type of workplace environment she was subjected to, and whether a reasonable employer should have discovered the sexual harassment. . . .  Accordingly, we conclude the district court erred in disregarding the evidence of widespread sexual harassment. Though the evidence cannot be used to prove the timely plaintiffs found their workplace subjectively hostile, it is highly relevant to prove the sexual harassment was severe and pervasive and that ABMK had constructive notice.”

Judge Gruender, dissenting on this point, finds that the various complaints of harassment were unconnected to the two plaintiffs’ complaints: “the Court ignores the fact that Laureano and Giron’s proffered evidence in this regard involved numerous sexual harassment complaints concerning different victims and different employees at different locations. ABMK has approximately 400 locations at which it provides janitorial services in Minnesota, including office buildings throughout Minneapolis and St. Paul. In their opening brief, the appellants state that during the period of harassment at least 85 other employees reported similar treatment by the appellants’ alleged harassers ‘or other first-line supervisors’ and list numerous citations to the record that purportedly support this claim. However, a thorough review of these citations reveals only one instance in which a coworker alleged that she was harassed by Laureano’s or Giron’s alleged harassers, and even that instance does not support their claim that ABMK knew of the harassment.”

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