Termination of Mozilla CEO Likely Violated California Law

As has been widely reported, Mozilla (the maker of the Firefox search engine) recently forced its CEO, Brendan Eich, to resign because he donated $1,000 in 2008 to support California's Proposition 8, which would have banned same sex marriage.  (The Proposition was approved by a majority of voters but invalidated by a federal district court).

The termination has generated a hot debate.  Most commentators have framed the issue, however, as how to properly strike a balance between an employee's political free speech and his employer's desire to communicate a particular corporate "culture."  (see e.g., here and here).

What these commentators seem to have overlooked, however, is that the California Labor Code has already resolved this debate.  Under California law it is blatantly illegal to fire an employee because he has donated money to a political campaign.  This rule is clearly set forth in Labor Code sections 1101-1102:

§ 1101. Political activities of employees; prohibition of prevention or control by employer

No employer shall make, adopt, or enforce any rule, regulation, or policy:

(a) Forbidding or preventing employees from engaging or participating in politics or from becoming candidates for public office.

(b) Controlling or directing, or tending to control or direct the political activities or affiliations of employees.

§ 1102. Coercion or influence of political activities of employees

No employer shall coerce or influence or attempt to coerce or influence his employees through or by means of threat of discharge or loss of employment to adopt or follow or refrain from adopting or following any particular course or line of political action or political activity.

Donating money to a political cause is obviously the most core form of political participation.  But employers and employees should also be aware that the California Supreme Court has broadly extended the scope of protected speech and conduct to include all types of advocacy.  Indeed, in Gay Law Students Association v. Pac. Tel. & Tel. Co., the Court specifically held that one's espoused attitudes about homosexuality were a form of protected conduct.

[Plaintiff's] allegations can reasonably be construed as charging that PT&T discriminates in particular against persons who identify themselves as homosexual, who defend homosexuality, or who are identified with activist homosexual organizations. So construed, the allegations charge that PT&T has adopted a “policy . . . tending to control or direct the political activities or affiliations of employees” in violation of section 1101, and has “attempt(ed) to coerce or influence . . . employees . . . to . . . refrain from adopting (a) particular course or line of political . . . activity” in violation of section 1102.

As terminating an employee for "defend[ing] homosexuality" is illegal political discrimination, one would be hard pressed to come up with a principled argument that opposition to same-sex marriage is somehow not also protected.  

Thus, to the extent employers want to follow in Mozilla's footsteps by policing their employees' politics in the interests of "culture," "inclusiveness," or corporate branding, they should be aware that their efforts will violate California law.  

 

 

 

Strict Liability for Harassment Is Limited to "Supervisors" Who Can Hire and Fire -- Vance v. Ball State University

When a company is sued for sexual harassment it makes a big difference who the alleged perpetrator is. If the perp is a low level "co-employee," the Company is not responsible for his conduct unless it was negligent in failing to prevent his harassment or in failing to investigate or remedy the harassment after it was brought to light. By contrast, if the harasser is a "supervisor" the employer is strictly liable for his conduct regardless of its diligence or good faith.

In Vance v. Ball State University, the U.S. Supreme Court thus gave employers a big win by using a restrictive standard for who qualifies as a "supervisor" under Title VII. EEOC regulations defined a supervisor as anyone whose workplace authority was sufficient "to assist the harasser explicitly or implicitly in carrying out the harassment." The Court rejected this definition as a "study in ambiguity." Instead, it defined the term to include only those who are "empowered by the employer to take tangible employment actions against the victim."

There are probably three main points worth making about this definition. First, it definitely tightens the standard and, as a result, reduces the number of managers for whom employers will be strictly liable.

Second, this new test is not as unambiguous as the Majority seems to imagine. Large companies often require consensus decision-making and there may be precious few individuals who are individually "empowered" to fire or demote employees. For example, consider a line manager who can give an employee a poor performance review. Another higher-up manager can rely on that negative review to recommend the elimination of the position. An executive VP can act on that recommendation, but only so long as the CEO and head of the HR Department give their permission. Who "had the power" to fire the employee?

Finally, the Vance decision may not have much impact in California, as the state law anti-discrimination statute contains its own definition of "supervisor." The California Fair Employment and Housing Act ("FEHA"), defines a supervisor in much broader terms:

"Supervisor" means any individual having the authority, in the interest of the employer, to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward, or discipline other employees, or the responsibility to direct them, or to adjust their grievances, or effectively to recommend that action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

So, at least in California, employers will still be strictly liable for anyone who can control the alleged victim's job assignments or who can "effectively recommend" rewards or discipline.

What Does it Mean to Be Terminated "Because Of" A Protected Characteristic -- Harris v. City of Santa Monica

Under California law it is illegal to terminate an employee "because of" his race, gender, religion, etc.  In Harris v. City of Santa Monica, the California Supreme Court delved into the question of what that means where an employer had "mixed motives" for a decision.

In a mixed-motives case . . . there is no single “true” reason for the employer's action. What is the trier of fact to do when it finds that a mix of discriminatory and legitimate reasons motivated the employer's decision? That is the question we face in this case. 

Such a "mixed motive" scenario scenario might arise, for example, where a decisionmaker clearly considered an employee's race (or other protected status) in deciding to terminate.  But where there is also clear evidence (such as poor performance or misconduct) that the employer would inevitably have made the same decision even if race had not been considered.       

[W]hat legal consequences flow from an employer's proof that it would have made the same employment decision in the absence of any discrimination. To be clear, when we refer to a same-decision showing, we mean proof that the employer, in the absence of any discrimination, would have made the same decision at the time it made its actual decision.

This question led the Court down the rabbit hole of what might be termed the metaphysics of causation.   For example, the Court considered at length whether an employee who would have been terminated anyway has still been discriminated against if his protected status also played a  "substantial" or "motivating"  factor in the employer's mind.   In the end, the Court emerged with the following standard:

We hold that under the FEHA, when a jury finds that unlawful discrimination was a substantial factor motivating a termination of employment, and when the employer proves it would have made the same decision absent such discrimination, a court may not award damages, backpay, or an order of reinstatement.

Harris v. City of Santa Monica is important insofar as it clarifies the language that courts should include in their instruction to the jury.  However, I am skeptical that such granular semantic distinctions will make any difference to the deliberations of real jurors.  Jurors don't need an instruction to know what "because of" means.  They will continue to evaluate the credibility of witnesses and the totality of evidence and will arrive at their own gut level determination of whether the plaintiff was discriminated against "because of" his protected status.         

 

Bad "Business Judgment" is not Discrimination -- Veronese v. Lucasfilm

The challenge in discrimination cases is always proving the subjective intent of the decisionmaker.  In other words, was the decision motivated by some legitimate business reason, or did the company base its decision on the plaintiff's _______? [fill in the legally protected category] 

As there is no way to peer into the mind of a decisionmaker the fact-finder must resort to making inferences from the surrounding circumstances.  And this raises a host of thorny issues regarding what constitutes legitimate evidence to prove up this inference of discrimination, and how such evidence may be considered.   

For example, in Veronese v. Lucasfilm a jury found that Lucasfilm had not hired the plaintiff due to her pregnancy.  The reviewing court, however, reversed the verdict and remanded the case for retrial because the judge had failed to give the jury the following special instruction:

You may not find that Lucasfilm discriminated or retaliated against Julie Gilman Veronese based upon a belief that Lucasfilm made a wrong or unfair decision. Likewise, you cannot find liability for discrimination or retaliation if you find that Lucasfilm made an error in business judgment. Instead, Lucasfilm can only be liable to Julie Gilman Veronese if the decisions made were motivated by discrimination or retaliation related to her being pregnant.

The purpose of the instruction is merely to advise the jury that it is not illegal, by itself, to treat someone unfairly or to do something that seems illogical.  Going forward some version of this instruction, which the parties and the Court referred to as a "business judgment instruction," will effectively be mandatory in all disparate treatment discrimination cases. 

Companies should not rely too heavily on this "business judgment" rule, however.  Like many legal instructions it may not have much impact on the deliberations of real juries.  Jurors are looking for logical reasons to explain what happened.  It is not particularly persuasive for an employer to argue that "our reason for firing the plaintiff may seem illogical and unfair but he still can't prove the real reason was discrimination."   Jurors are usually more than willing to chose an illegal reason over an illogical reason as the most likely version of what really happened.         

In Granting Class Certification District Courts "Must" Consider the Merits of the Claims -- Ellis v. Costco Wholesale Corp.

In Ellis v. Costco Wholesale Corp., the district court certified a nation-wide class of female Costco employees in what amounted to a carbon copy of the Dukes case against Wal-Mart.  The Ninth Circuit was therefore required to re-evaluate the certification decision in light of the Supreme Court's ruling in Dukes.

The result was a mixed bag that affirmed as to some certification findings but vacated and remanded as to others.  The most significant (in my opinion) aspect of the ruling is the Ninth Circuit's express directive to weigh the merits of the class-wide discrimination claims on remand as part of the certification decision:

[T]he merits of the class members’ substantive claims are often highly relevant when determining whether to certify a class. More importantly, it is not correct to say a district court may consider the merits to the extent that they overlap with class certification issues; rather, a district court must consider the merits if they overlap with the Rule 23(a) requirements.

This seems to be the culmination of long terms trend to break down the distinction between the procedural certification decision and the assessment of the merits of the case.  This emphasis on the merits may make certification more difficult in some cases.  However, it further reinforces the certification decision as the "big event" that not only decides whether the case may proceed as a class action but also suggests that the court is favorably disposed toward the merits.

  

California Court Requires Evidence of Same-Sex Harasser's Sexual Orientation -- Kelley v. The Conoco Companies

It is well-settled that an employee may state a claim for sexual harassment even if the harasser is the same gender as the victim.  But it is still mandatory to prove that the harassing conduct was directed at the victim "because of" his or her gender. 

Courts have been fairly willing to infer that any sexually charged comments from a man to a woman are based on her sex.  But when one (presumably heterosexual) man uses sexually charged comments to harass or intimidate another man courts have been much less likely to find that the conduct was "based on sex."

In Kelley v. The Conoco Companies, for example, the Fifth District Court of Appeal recently dealt with a same-sex harassment claim arising out of an incident on a construction site.  The plaintiff's foreman started out criticizing his technique for tying re bar and then proceeded to unleashed a slew of gay-sex themed comments about how he was going to make the plaintiff his "bitch," etc.  I won't repeat all the graphic comments, but if your into that kind of thing you can see them here.     

Despite the sexual nature of the comments, the Court upheld the grant of summary judgment on the ground that the Plaintiff had presented no evidence that the comments were "based on sex."  As the Court explained:

 The statements made to Kelley were crude, offensive and demeaning, as it was evident that they were intended to be. No evidence, however, was presented from which a reasonable trier of fact could conclude that they were an expression of actual sexual desire or intent by [the harasser], or that they resulted from Kelley's actual or perceived sexual orientation. The mere fact that words may have sexual content or connotations, or discuss sex is not sufficient to establish sexual harassment. While the use of vulgar or sexually disparaging language may be relevant to show discrimination, it is not necessarily sufficient, by itself, to establish actionable conduct. 

The Court went on to hold that in a same-sex harassment case a plaintiff must present "evidence that an alleged harasser was acting from genuine sexual interest" in order to raise "an inference of discrimination because of sex."

The Court's ruling seems problematic in several regards.  First, I don't see why the Court is so certain that a reasonable jury could not question the sexuality of a male who told another man he wanted to have sex with him. 

Second, to avoid summary judgment the Court's rule would apparently require plaintiffs to do pre-trial discovery and present evidence on the "genuine sexual interests" of the harasser.  One can only imagine the problems this rule will cause in practice.  Will plaintiffs be required to do discovery on a harasser's past sexual partners?  Will alleged harassers be required to undergo court ordered mental exams to ferret out evidence of repressed homosexual tendencies?

The Kelley Court also acknowledges that it creates a split with the Second District's 2006 opinion in Singleton v. United States Gypsum Company, which held that no evidence of a same-sex harasser's homosexuality is required.  Thus, this is an issue that may well be headed to the California Supreme Court.

 

US Supreme Court Holds Employers May Be Liable Under "Cat's Paw" Theory

Today, the U.S. Supreme Court ruled that an employer can have liability for discrimination based on a “cat’s paw” theory. As the Court explained in its decision Staub v. Proctor Hospital, the theory derives its name from a fable of Aesop. In the fable, a monkey convinces a cat to pull hot chestnuts from a fire (burning its paws in the process) and taking the chestnuts, leaving the cat with nothing for its efforts.

In this case, the plaintiff sued his employer for discrimination in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The plaintiff alleged that his supervisors discriminated against him due to his role as a military reservist. The plaintiff did not allege that the person who made the final employment decision to terminate his employment (Proctor’s HR manager, aka the cat), but that the decision was influenced by his two directed supervisors who did have animus towards his military service. As the Court explained:

The central difficulty in this case is construing the phrase “motivating factor in the employer’s action.” When the company official who makes the decision to take an adverse employment action is personally acting out of hostility to the employee’s membership in or obligation to a uniformed service, a motivating factor obviously exists. The problem we confront arises when that official has no discriminatory animus but is influenced by previous company action that is the product of a like animus in someone else.

While this case involved liability under USERRA, the Court noted that USERRA is “very similar” to Title VII which prohibits discrimination based on an individual’s race, color, religion, sex, or national origin. Therefore, it is very likely courts will hold that the “cat’s paw” theory of liability will extend into the more prevalent Title VII claims.

Also, as noted by the Ohio Employer’s Law Blog, this ruling will likely make it very difficult for employers to dispose of discrimination cases at the summary judgment stage as supervisor’s intent and causation issues almost always involve issues of fact. The likely result is that any cat’s paw theory cases will survive summary judgment and be heard before a jury. The case, Staub v. Proctor Hospital, can be downloaded from the Supreme Court’s website here [PDF].

Retaliation by Association is Illegal -- Thompson v. North American Stainless, LP

In Thompson v. North American Stainless, LP, the Supreme Court held that it is an unlawful employment practice under Title VII to terminate an employee's "close family member" in order to retaliate against her for filing a charge of discrimination with the EEOC.  It further held that a terminated fiancé would have standing to sue on his own behalf for this retaliatory termination. 

Neither of these holdings is surprising.  After all, the prospect of having a "close family" member fired is an obvious deterrent to filing an EEOC charge.  The terminated family member has just as obviously suffered a significant injury which is directly due to the prohibited retaliation.  Indeed, it would have been pretty shocking if the Court had said that such a terminated employee had no remedy.

More interesting are the issues that the Court specifically did not decide.  For example, while "close family members" are in the zone of protection it will be up to future cases to decide if friends, acquaintances, or even sympathetic strangers could file similar actions.   

Moreover, the Thompson case was decided based solely on the allegations of the pleadings, which the Court was bound to accept as true for purposes of the ruling.  As the Court explained:

Moreover, accepting the facts as alleged, Thompson is not an accidental victim of the retaliation-collateral damage, so to speak, of the employer's unlawful act. To the contrary, injuring him was the employer's intended means of harming [his fiancé]. Hurting him was the unlawful act by which the employer punished her. In those circumstances, we think Thompson well within the zone of interests sought to be protected by Title VII.

But this alleged scenario -- terminating employee A for the sole purpose of hurting employee B -- is probably not very common in the real world.  A more likely scenario is that once a whistleblower is terminated, his supporters or protégées may find themselves on the chopping block because they are now perceived as part of a disfavored or disloyal faction which has just lost its patron. 

Disentangling the acceptable rough and tumble of office politics from illegal retaliation will be a challenging task.  But the Thompson opinion seems to have started down a path that will require courts and juries to do exactly that in future cases.                  

Discriminatory "Stray Remarks" May Defeat Summary Judgment -- Reid v. Google

In age discrimination cases, plaintiffs frequently support their claims with evidence of comments by managers such as "you can't teach an old dog new tricks,"  that the company needs "young blood," or referring to some employees as "old timers."  When comments like these are made by those who not involved in the termination decision, or in a context unrelated to the decision, courts have tended to brand them as mere "stray remarks" which are not evidence of discrimination.

In Reid v. Google, Inc., the California Supreme Court held that such "stray remarks" cannot be "categorically" dismissed from consideration, however.   Instead, the Court explained that while such remarks may not be persuasive by themselves, they can tip the scale when combined with other evidence.  Thus when deciding whether to grant or deny summary judgment Courts must analyze the "totality of circumstances." 

In reality, this may not be much of a change in the law as courts were always really applying the "stray remarks" doctrine on a case-by-case, fact-specific basis anyway.  But the lesson for employers is to make all reasonable efforts expunge "politically incorrect" references from official communications.                 

Is The Recession Making Jurors More Anti-Plaintiff?

According to a recent Los Angeles Time article tough economic times are taking their toll on California jurors.  According to the article, prospective jurors are more insecure about their employment than ever before.  As a result, they are less willing or able to lose wages or take time away from work in order to serve on any case lasting more than a day or two. 

Based on his observation of jury selection proceedings and interviews with prospective jurors, the author opines that more prospective jurors are claiming "economic hardship" to be excused and those who can't get out of service are more likely to constitute a volatile, "disgruntled jury."  

The author cites one juror as suggesting that the recession is causing jurors to raise the bar for plaintiffs seeking money through the judicial system:  

"I think with what is going on in the country, there are a lot of angry people," said retired Broadway actor Sammy Williams. "Money is such an issue and to give money to someone for results of a case, it's really important that they're getting it for a real reason, an important reason."

I'm not so sure.  I could also see a "disgruntled jury" taking out its anger on an employer who fires an employee in this bad job market.  Or, perhaps, disgruntled jurors will tend to vent their frustration against whichever side is wasting the most trial time and keeping it empaneled unnecessarily.

Even if the "disgruntled jury" phenomenon is primarily anecdotal at this point, however, it's definitely something to think about whether you are representing plaintiffs or defendants. 

 

 

 

DFEH Review Shows That Disability Discrimination is Most Common Complaint

As part of a review commemorating its 50th Anniversary the California Department of Fair Employment and Housing has released an informative review of the DFEH's history and current activities

The Power Point presentation includes some interesting facts.  For example, disability discrimination is now far and away the most commonly alleged basis for administrative complaints.  Out of 18,785 charges filed in 2008, a full  36.4% (6,844) alleged discrimination on the basis of mental or physical disability.  By contrast, race (22.4%), age (19%), gender (12%), and sexual orientation (4.4%) weren't even close.

Also interesting are the settlement statistics showing that the administrative charges settled prior to the issuance of an accusation by the DFEH were settled for an average of $8,120.  Following an accusation the average was $39,196.  (These numbers obviously exclude the stronger cases in which plaintiffs are generally represented by counsel and seek an immediate right-to-sue in civil court).

Between A Rock and A Hard Place -- Ricci v. DeStefano Addresses the Conflict Between Disparate Treatment and Disparate Impact Theories

The U.S. Supreme Court decision in Ricci v. DeStefano is very much in the tradition of the Court's affirmative action jurisprudence of the last 40 years.  In other words, it is confusing and provides little or no practical guidance to real-world employers.

The factual scenario in Ricci placed the employer (the New Haven Fire Department) in an excruciating dilemma.  It had taken great pains to design and administer a promotion test that would be job related and fair to members of all ethnic groups.  But when the results came back, the only candidates eligible for promotion were white.  The minority candidates threatened a lawsuit if the test results were used.  And the white candidates threatened a lawsuit if they were thrown out.

The hapless City chose to be sued by the white firefighters.  In throwing out the test results, the City admittedly acted for  racially discriminatory reasons -- i.e. because "too many" whites had passed the test.  The City argued, however, that avoiding a lawsuit over the unintended  disparate impact of its test should be a legal justification for its intentional disparate treatment in voiding the results for racial reasons.

The Court recognized that employers may be faced with a conflict between potential liability for "disparate treatment" and  "disparate impact."  The Court's resolution was to create a new affirmative defense under which an employer may be immunized from liability for an adverse employment action if it had a "strong-basis-in-evidence" to believe that its action was necessary to avoid liability under another theory of discrimination.

This is a strange rule because it basically directs employers to put themselves on trial and reach a legal conclusion as to how they are most likely to be found liable (even where they believe they have done nothing wrong under any theory) . 

It also goes without saying that this "strong-basis-in-evidence" standard is inevitably in the eye of the beholder. After all, the Supreme Court ruled in favor of the white firefighters on the ground that the evidence of intentional disparate treatment was slam-dunk compared to the very weak claim for disparate impact from the test.  However, the First Circuit panel whose decision was overruled (including soon-to-be Supreme Court Justice Sonia Sotomayor) had looked at the same record and found the opposite to be true.    

The Supreme Court Tweaks Burden of Proof for Age Discrimination -- Gross v. FBL Financial Services, Inc.

The U.S. Supreme Court decision in Gross v. FBL Financial Services, Inc. has been hailed by the news media and some commentators as effecting a significant change in the law which makes it "much harder" to prove age discrimination.  The reality, however, is that the decision will have little or no impact in real world cases.

Under the prior rule if a plaintiff submitted direct evidence at trial (such as an admission by a person involved in his termination decision) that his age was a "motivating factor" in selecting him for termination, the burden of proof would then shift to the employer to demonstrate that it would have made the same decision regardless of age.  Gross v. FBL says that the burden should remain with the employee in this situation.

This might sound like a big deal.  But the "mixed motive" issue only arises after an employee has already submitted not only a prima facie case -- but strong "direct evidence" of a discriminatory motive.  At this point, arguing about who bears the ultimate burden of proof is a mostly metaphysical question. 

The jury will either believe discrimination was the real reason for the termination decision, or it won't.  But the burden of proof would only be dispositive in the highly unlikely event that the jury determines that the evidence submitted by both sides is in perfect equipoise.  This is simply not the way real jurors think or act.   

Furthermore, the decision applies only to claims under the federal ADEA and has no application to cases decided under Title VII or California anti-discrimination law.  And, in any event, the adverse publicity will cause Congress to legislatively overule the opinion in short order.  For all of these reasons, employers should take no comfort from Gross v. FBL.  

ADA Amendments Act (ADAA) Signed Into Law -- Federal Disability Protections Broadened

It didn't get much press this last week -- what with the economy collapsing in the midst of a presidential election -- but on Thursday President Bush signed the ADA Amendments Act (ADAA) into law.  The legislation will take effect on January 1, 2009 and will significantly broaden the federal definition of the "disabilities" that require accommodation under the ADA.

The new legislation preserves the traditional verbal formula that a covered disability is one which "substantially limits one or more major life activities."  However, Congress has now expressly changed the meaning of these words to expand the number of employees who will be covered by the ADA.  For example:

  • The term "disability" shall henceforth be interpreted broadly in favor of finding coverage under the Act.
  • A covered disability now includes any condition that "materially restricts" (rather than "substantially limits") a major life activity.  There is no telling what this new term is intended to means except that it is intended to be broader than the prior definition. 
  • An employees is now covered under the ADA whether or not he has a covered disability, so long as the employer "perceives" that he has an "impairment" that has an expected duration of more than six months.  
  • The employee's condition shall now be judged in its unmitigated state -- i.e., without regard to the effects of any corrective measures such as medications that would control the symptoms.

The main purpose of the legislation is to overturn a number of pro-employer Supreme Court decisions, including Sutton v. United Airlines, Inc., 527 U.S. 471 (1999), and Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184 (2002).  

Interestingly, the effect of these amendments will be to essentially conform the ADA to the already broadened disability protections of the California Fair Employment and Housing Act (FEHA). 

Employers Face a High Burden to Accommodate Returning Employees: Nadaf- Rahrov v. Neiman Marcus Group, Inc.

On September 10, the First District Court of Appeal issued what I believe is the very important disability discrimination case of Nadaf- Rahrov v. Neiman Marcus Group, Inc.  The decision is important not because it alters pre-existing disability law, but because it applies the law to the most common scenarios and real-life issues faced by employers and employees.  

The case involved a clothes fitter at Neiman Marcus who had gone out on a medical leave because she was "unable to work" according to a doctor's note.  When her leave expired and she did not submit a release to return to work she was terminated.  The trial court initially granted summary judgment to Neiman Marcus on the grounds that the plaintiff was still unable to perform the "essential duties" of her job.

The appellate court reversed, however, on the ground that Neiman Marcus had not done enough to investigate the plaintiff's actual condition or to explore potential alternate positions.  The Court noted that the employer does not have to offer a substitute job that would constitute a "promotion."   But otherwise, the appellate decision merely illustrated how exhaustive the employer's efforts must be if it expects to avoid legal liability.  For example:

  • The employer cannot avoid looking at alternate positions merely because a doctor's note states that the employee is "unable to work."  This language can be interpreted to mean that the employee is only unable to perform her original job, and may not apply to all potential substitute jobs.  
  • The employer must consider all vacant positions that the worker could perform.  For example, clerical jobs must be considered for employees who formerly performed only physical duties.
  • The employer must consider positions that are not yet vacant.  In other words, extending the employee's leave until a new position opens up is part of the "reasonable accommodation."
  • The employer must consider vacant positions at other facilities and locations.  If the employee signals a willingness to relocate, this may conceivably require a nationwide search for vacant positions that the employee could perform.

Satisfying this type of internal job search may not be easy or convenient but it is imperative to avoid liability under the ADA or the FEHA.  The lesson for employers is to never assume anything about the employee's condition or the nature of substitute positions without a specific, diligent investigation.         

 

U.S. Supreme Court Clarifies Test for "Disparate Impact" Age Discrimination in Meachum v. Knolls Atomic Power

It is not enough for employers to avoid deliberate discrimination against members of protected groups when selecting employees for layoff.  In addition, they must avoid inadvertently using any selection criteria that tend to have a "disparate impact" on a particular group.  

In Meachum v. Knolls Atomic Power Lab., the U.S. Supreme Court made it harder for employers to disprove this type of discrimination claim -- which is sometimes referred to as "negligent" or "unintended" discrimination.  As the Court explained, under the federal Age Discrimination in Employment Act (ADEA), it is the employer's burden to affirmatively prove that any statistical disparate impact against older workers is actually the result of a "reasonable factor" not tied to age.  

Disparate impact cases usually turn on conflicting expert analysis of the statistical data.  Having to carry the burden of persuading a jury on these complicated issues will thus tend to place employers at a significant disadvantage.   For example, in the trial court, the plaintiffs were able to prevail by showing that the employer's performance rankings included scores for "flexibility" and "criticality" and that older workers did significantly worse on these criteria.

To show a disparate impact, the workers relied on a statistical expert's testimony to the effect that results so skewed according to age could rarely occur by chance; and that the scores for “flexibility” and “criticality,” over which managers had the most discretionary judgment, had the firmest statistical ties to the outcomes.

The lesson for employers is to always check the outcomes of layoff criteria before implementing the terminations.  A significant over-representation of any one group is a red flag that should result in a re-evaluation of the criteria. 

 

"Lipstick on a Pig" -- Stray Remarks as Evidence of Discrimination

As political pundits talked about lipstick and pigs over the last several days, it occurs to me that this latest round of political posturing bears more than a passing resemblance to the disputes that animate much employment litigation.

For example, before replacing an over-40 worker with an outside consultant a manager might be heard to say that the company needs some "young blood," or that you "can't teach an old dog new tricks."    So what, if anything, do such comments demonstrate?  The Defendant will argue these are just commonplace cliches being used to demonstrate an innocuous point -- i.e., that the Company needs "change."   The Plaintiff will argue that using these expressions is either intentional "code," or at least evidence of unconscious bias against older workers.

No one can read the speaker's mind and both sides have every incentive to stretch the interpretation as far as they can in their direction.  Because such interpretations are very factual and context-specific, however, judges are often inclined to let the jury make the call.  Thus, the difference between a pig and a pig with "lipstick," might be the difference between having a case dismissed on summary judgment and having it argued to a jury.

   

 

Religious Discrimination or Just Running a Business? -- Employer Fires Muslim Workers Demanding Prayer Breaks

According to a front page story in the Los Angeles Times today, JBS Swift & Co. has just laid off about 100 Muslim workers who walked off their jobs as a protest for not receiving prayer breaks.   The layoffs occurred in Colorado and will inevitably implicate a host of collective bargaining issues.   But I think the story is more interesting because of the issues of religious discrimination and accommodation that it raises.

Virtually all employers realize that it is illegal to discriminate against a worker because of his religion.  Far fewer are aware that the law also requires employers to make an affirmative "reasonable accommodation" for an employee's "sincere"  religious beliefs and practices.  This duty is very similar to the requirement under the ADA to modify non-essential job duties for disabled workers.  Thus, if an employee's religion prevents him from working certain days or shifts due to Sabbath or pilgrimage issues, an employer may be legally required to re-arrange schedules or allow time off.

As a general rule, however, the employer is not required to offer an accommodation that involves a significant cost, imposes undesirable shift preferences on other employees, or creates an "undue hardship" for the business.

 

U.S. Supreme Court Turns Down Employer's Appeal Regarding FMLA Rights

The United States Supreme Court rejected an appeal by Progress Energy, Inc. regarding the waiver of an employee’s rights under the Family and Medical Leave Act (“FMLA”). In Progress Energy v. Taylor, the Court rejected – without comment – Progress Energy’s appeal from a 4th Circuit Court of Appeal ruling that held an employer cannot induce to waive their rights under the FMLA. The 4th Circuit based their ruling on a 1995 Labor Department rule that said employees cannot waive their rights under the act, nor can employers encourage them to do so. On appeal, Progress Energy argued that the Labor Department ruling only applied to the waiver of future rights, not to the settlement of past claims. Click here for more information on the case.

Although the Bush Administration agreed with Progress Energy’s position, it encouraged the Supreme Court to turn down the case because the Labor Department is issuing a new rule that makes clear that the waiver prohibition only applies to prospective rights, rather than past claims.

Thompson v. North American Stainless, LP: Anti-Retaliation Protection is Expanded to Include Friends, Relatives and Anyone "Closely Associated" with a Complaining Employees

In Thompson v. North American Stainless, LP, the plaintiff alleged he had been fired because his wife -- who had previously worked for the same employer –filed a charge of discrimination against it with the EEOC. The trial court granted summary judgment against the husband on the ground that he himself had never engaged in any of conduct protected by Title VII – such as opposing the alleged discrimination or participating in the government investigation. 

In a very significant March 31, 2008 opinion, the Sixth Circuit court of appeals reversed and allowed his suit to go forward. As the majority acknowledged, “a literal reading of [Title VII] section 704(a) suggests a prohibition on employer retaliation only when it is directed to the individual who conducted the protected activity.”  It concluded, however, that the language of the statute itself should not be controlling because “tolerance of third-party reprisals would, no less than the tolerance of direct reprisals, deter persons from exercising their protected rights under Title VII.” 

Thus, the Court followed the position urged by the EEOC by extending statutory protection to any third party that is deemed to be “so closely related to or associated with the person exercising his or her statutory rights that it would discourage that person from pursuing those rights.” (citing the EEOC Compliance Manual.)

In construing the rights provided by the California Fair Employment and Housing Act (FEHA), California courts typically follow the interpretations that federal courts have given to analogous provisions of Title VII. As a result, it is a safe bet that California courts will begin applying Thompson in state court FEHA actions at the first opportunity.

Employers must therefore recognize that action affecting “associated” individuals will now be subjected to increased scrutiny. For example, imagine a small employer who is being sued for wrongful termination while the plaintiff’s spouse continues to work in the same office – perhaps in a sensitive position with access to confidential information. The employer may rightly feel that the spouse is a “security risk” who may funnel confidential information to the other side, or that her loyalty must inevitably be tainted by her disgruntled spouse. Under these circumstances, it would be tempting to terminate or transfer the remaining spouse. Under Thompson this would be a very dangerous course of action.

The right ... to wear pants.

I am preparing for a press interview about how employers should approach dress code policies and it seems that it always is a surprise to people to learn that that the California Government Code specifically addresses employees' right to wear pants to work.  Section 12947.5 states:
(a) It shall be an unlawful employment practice for an employer to refuse to permit an employee to wear pants on account of the sex of the employee.
(b) Nothing in this section shall prohibit an employer from requiring employees in a particular occupation to wear a uniform.
Also, employers should note, dress standards or requirements for personal appearance need to be flexible enough to take into account religious practices.  While it is lawful for an employer to implement rules about employee physical appearance, grooming, or dress standards, the standards cannot discriminate based on a protected category, such as race or sex.  Also, click here to read a previous post about policies on tattoos, tongue rings, and body piercings in the workplace.

CA Supreme Court Holds Individuals Not Liable For Retaliation In Jones v. The Lodge At Torrey Pines

The California Supreme Court issued its ruling today in Jones v. The Lodge At Torrey Pines.  The Court held:
In Reno v. Baird (1998) 18 Cal.4th 640 (Reno), we held that, although an employer may be held liable for discrimination under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.), nonemployer individuals are not personally liable for that discrimination. In this case, we must decide whether the FEHA makes individuals personally liable for retaliation. We conclude that the same rule applies to actions for retaliation that applies to actions for discrimination: The employer, but not nonemployer individuals, may be held liable.
The opinion can be read here.

US Supreme Court Tackles Employment Law Cases This Week

Today, the Court will hear argument in Gomez-Perez v. Potter, on whether the Age Discrimination in Employment Act bars retaliation by public employers for the filing of age discrimination complaints.  For more information about the facts of the case, click here.

On Wednesday, the Court is scheduled to hear oral argument in CBOCS West v. Humphries, on whether a race retaliation claim can be brought under 42 U.S.C. § 1981 (Section 1981).  Section 1981 provides that any “person within the jurisdiction of the United States” has the same right to “make and enforce” contracts, regardless of their skin color.  Section 1981 protects parties to a contract (both at the time of formation and post-formation).  The argument arises that Section 1981 applies to aspects of the employment relationship because that relationship is considered contractual, but courts have not defined to what extent this protection exists in the employment context.  Employees who have not filed a lawsuits within the time limits proscribed by Title VII (which allows for retaliation claims), often revert to Section 1981 in order to keep their claim alive. 


Green v. State of California: Employee Alleging Disability Discrimination Has Burden To Prove Qualified For Job

The California Supreme Court ruled in employers' favor this week by holding that an employee alleging disability discrimination has the burden of proof to show that he or she can perform the essential functions of the job with or without reasonable accommodation. The case, Green v. State of California, clarified that it is the employee who must make this showing in order to prove disability discrimination and that the employer does not have to affirmatively prove that the plaintiff was unqualified in order to avoid liability. 

The Court stated:

[W]e disagree with the statement of defendant’s burden of proof adopted by the Court of Appeal and advocated by plaintiff here. Instead, we conclude that the Legislature has placed the burden on a plaintiff to show that he or she is a qualified individual under the FEHA (i.e., that he or she can perform the essential functions of the job with or without reasonable accommodation). As explained further below, legislative intent, case law, and legislative history support defendant’s position—a view that also finds support in Evidence Code section 500, which requires a plaintiff to prove each fact essential to the claim for relief he or she is asserting.

However, employers should still approach this subject very carefully. For example, an employer is required to explore with the employee all possible means of reasonably accommodating a person prior to rejecting the person for a job or making any employment related decision.  The accommodation may arise from a mitigating measure, such as medication taken for the primary disability.  An accommodation is reasonable if it does not impose an undue hardship on the employer’s business.  Reasonable accommodation can include, but is not limited to, changing job duties or work hours, providing leave, relocating the work area, and/or providing mechanical or electrical aids.  

Human resource professionals, in-house counsel and/or business owners in California should take a few minutes to review the DFEH’s website for an employer's general obligations in regards to disabled employees, particularly the following helpful documents:

[This is a good resource to refresh the basic requirements of California law, including, what is required by the interactive process, what constitutes an undue hardship and what questions may be asked of an applicant or employee about his or her ability to perform the job.]

[This is a brief two page pamphlet published by the DFEH summarizing the law.]

The Cost Of Bullies In The Workplace

Fast Company provides an excerpt from Robert I. Sutton’s book, The No Asshole Rule, which assists people in dealing with difficult co-workers and supervisors at work (as well has helps you avoid becoming the employee no one wants to work with). The excerpt:

The company decided that in addition to warnings and training, it was time to quantify the incremental costs of Ethan's bad behavior and deduct it from his bonus....The estimated costs were:

Time spent by Ethan's direct manager: 250 hours valued at $25,000

Time spent by HR professionals: 50 hours valued at $5,000

Time spent by senior executives: 15 hours valued at $10,000

Time spent by the company's outside employment counsel: 10 hours valued at $5,000

Cost of recruiting and training a new secretary to support Ethan: $85,000

Overtime costs associated with Ethan's last-minute demands: $25,000

Anger-management training and counseling: $5,000

Estimated total cost of asshole for one year: $160,000

Through my practice, I’ve come to realize the 5/90 rule: 5% of a company’s employees take up 90% of a company’s human resource department’s resources.  It is usually the same handful of employees that are causing discourse within the company, and these employees are probably not the company’s most productive employees. The most productive employees are too busy working to have time to create problems. 

I think if one could track these hours and costs, Sutton’s estimate would be very accurate. I would also like to add a few figures. If the 10 hours spent by outside employment counsel mentioned above was not enough to prevent a lawsuit from being filed, the costs associated with the time managers spent assisting outside counsel and the direct litigation costs could easily put the total costs well above $300,000. And the lawsuit might not even come from the jerk – it may come from his or her subordinate who thought that he was not treated with respect at the company, and that the company simply ignored his requests to help him deal with the jerk. 

The EEOC's Insatiable Appetite For Publicity In The Litigation Process

Any company that has had to defend a case against the EEOC knows of the special aggravation associated with litigation against the Federal Government. Unlike private litigants, who are motivated primarily by money, the EEOC often pursues political, ideological or bureaucratic agendas that can seem downright baffling to private sector lawyers. For example, the EEOC will often pursue claims that the supposed “victim” does not even wish to pursue – the EEOC lost a case recently against Universal where the individual on behalf who the EEOC was litigating the case settled out of court privately, but the EEOC still litigated the case.  Read more about the EEOC's loss here. 

Furthermore, as noted recently by Judge Frederick J. Martone of the Federal District Court of Arizona (who had distinguished career on Arizona’s Supreme Court prior to being appointed to Federal Court) in E.E.O.C. v. Serrano's Mexican Restaurants, LLC, that the EEOC should not utilize press releases as a litigation tool – a common practice by the EEOC. Judge Martone stated:

Our denial of the defendant’s motion is not an expression of our view on the underlying merits or the propriety of the EEOC in using press releases as part of its approach to litigation. Lawyers have a professional obligation to avoid extrajudicial statements that may prejudice a proceeding, see ER 3.6, and an obligation to be truthful in statements to others, see ER 4.1. LRCiv 83.2(d). There is a big difference between promoting the public’s right to know through keeping proceedings public, on the one hand, see Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir. 2003), and affirmatively issuing press releases, on the other. The United States, and its employees, have a special duty not to injure the reputations of its citizens. Nor should it use press releases as a bargaining tool in litigation.

Judge Martone’s comments are refreshing for employers and individuals who have had to litigate cases against the EEOC and to provide some good language for parties disputing the EEOC’s usual practice of issuing press releases upon settling a case. Hopefully many more judges in the Ninth Circuit follow Judge Martone’s example. 

[Hat tip to Jottings By An Employment Lawyer.]

Tips On Litigation

Mike Dillon, a General Counsel and Corporate Secretary for Sun Microsystems, Inc. has some great thoughts about litigation posted on his blog, The Legal Thing.  He notes:

No. 1 - You only litigate when you have an important interest to protect. Litigation is costly. Incredibly costly. But it is not the expense that is the real issue, it's the diversion of resources. Time employees spend reviewing e-mails and documents, educating lawyers and preparing for depositions is time away from the business. That's the real cost of litigation.

No. 2 - A non-judicial resolution is almost always preferable. When you file a complaint, you are turning over resolution of an issue to a third party - be it a judge, arbitrator or jury. To a great degree you lose control of the outcome.

No. 3 - You litigate when you have a high degree of confidence that you will prevail. Bluffing is for weekend games of Texas Hold'em . When you file suit, you need to have fully evaluated all aspects of the case to ensure that the outcome will be favorable.

No. 4 - You litigate to win. This means that your employees, board and management team fully understand and support the commitment (both financial and time) required to prevail. It also means having seasoned litigation counsel who understand your business and objectives.
While his perspective is towards enforcing a company's intellectual property rights, his analysis can easily be applied to defending employment litigation.  Most notably different is that employers do not chose when to be sued for wrongful termination or wage and hour claims.  However, the company should be completely prepared to defend itself in litigation - in California it is only a matter of when.  In order to develop a strong defense, the company should work with experienced employment attorneys to establish policies that (1) comply with the law and (2) assist the company when a lawsuit is filed.  I mention the second point because while companies have policies that comply with the law, when litigation starts the fact that you have complied with the law is good, but the company needs PROOF that it complied with the law.  An experienced employment litigator can help companies set up policies to document the areas that will most likely be areas of contention during litigation.  For example, California companies should have a clear "at-will" policy signed by the employee, should have a system (preferably computer based) for recording when employees take their meal breaks, and have a clear policy on rest breaks that is in some way acknowledged by employees.

Also, this process of working with an attorney in establishing solid policies is a great period to see if the company likes working with the attorney and (hopefully) develops a good relationship that is critical in any attorney-client relationship.  This also allows the attorney to become familiar with the company and its business and objectives as Mike mentions in No. 4 above.

Finally, companies need to understand Mike's point No. 4 - You litigate to win.  Once a case is filed against a company, the message communicated throughout the company should be that it is extremely important to spend the time necessary to assist the outside counsel in defending the case.  Owners, executives and employees must give their undivided attention to the litigation.  To do otherwise is a costly mistake.

Ledbetter v.Goodyear Tire & Rubber

At issue in the case of Ledbetter v. Goodyear Tire & Rubber, was whether Ledbetter had filed her employment discrimination case (alleging she was paid less than male coworkers) with the EEOC within 180 days "after the alleged unlawful employment practice occurred” as required by Federal law. The Court, in a 5-4 ruling held that Ledbetter had not filed the complaint with the EEOC in a timely manner, therefore barring her claim. 

As Orin Kerr notes at the Volokh Conspiracy, “Ledbetter worked for Goodyear for about ten years, and after she retired in 1998 she sued Goodyear for giving her low raises on account of her gender throughout the term of her employment. Goodyear responded that under federal law she could only sue for any discrimination within the last 180 days, and that no discrimination occurred within the 180-day window.” 

Ledbetter argued that the Court should apply a type of continuing violations doctrine to her situation. Under such a theory, Ledbetter argued that the first discriminatory act (receiving a lower than deserved raise because of her gender) continued with each additional pay raise because pay raises are cumulative over time. Therefore, she alleged that even though she had no evidence that her pay raises during the applicable 180 day time period to file a suit were discriminatory, the original discrimination continued into this time period.  

The Court disagreed with Ledbetter’s argument and held that employees must bring a claim within 180 days of the actual discriminatory act, which in this case was the actual discriminatory pay raise. The dissenting Justices argued that often times employees do not know other employees pay rates, and employees discriminated against may not discover this information until well after the discrimination, therefore it would be unfair to apply the strict 180 day filing period to these types of cases.

While the dissenting Justices relied on fairness to support an alternative holding than the majority, it would likewise not be fair to employers to force them to defend cases regarding acts that may have occurred ten or more years earlier. Statutes of limitations requiring plaintiffs to file lawsuits within a given timeframe are intended to promote justice because evidence goes stale, witnesses go missing, and memories fade over time. 

Increased Immigration Enforcement In California

Employers in California and across the country are realizing the increased enforcement of the immigration laws. As this Los Angeles Times article notes that the number of employees arrested for workforce violations has increased to 3,667 in 2006 from 485 in 2002, according to U.S. Immigration and Customs Enforcement.

“This year, federal immigration officials raided restaurants in California and 16 other states and arrested nearly 200 illegal immigrants working for a janitorial company. That followed similar high-profile raids in Maryland, Indiana and Kentucky that amounted to some of the largest and harshest penalties against employers in history.” The article also mentions that two executives of Golden State Fence Co. based in Riverside were found guilty of violating the Immigration Reform and Control Act of 1986 (IRCA) and were sentenced to six months of home confinement and fined a combined $300,000 for employing scores of illegal workers. In addition, the company was also required to pay a $4.7 million penalty.

With nearly 90% of illegal immigrants using fraudulent documents, employers are placed in a very difficult situation. Employers must accept the documents presented by the employee to verify employment eligibility if they reasonably appear to be genuine and relate to the employee who presents them. However, refusing to accept reasonable documents is discrimination and also violates the anti-discrimination provisions of IRCA.

IRCA requires that employers verify an employee’s eligibility to work, which includes having every employee fill out the Form I-9. The Form I-9 must be kept for 3 years after hire date or 1 year after termination, whichever is longer. The I-9 must be completed on the employee’s first day of work and the employer must complete section two of the form no later than the employee’s third day. 

Confidentiality in Sexual Harassment Investigations

This Business Week article about the human resources so-called confidentiality guideline known as the "Need to Know" standard raises a great point many companies could benefit from. The main topic of the article is how HR professionals may inadvertently (or no so inadvertently) disclose information that they said they would only disclose to people who “need to know.”

However, from a legal perspective, and my mantra during sexual harassment prevention training, is that when an employee complains that they or a co-worker is “uncomfortable” with another employee’s behavior or may be a victim of harassment, the HR professional (or supervisor) cannot and should not promise absolute confidentiality. A company has a duty to investigate any potential harassment, and this duty usually falls upon the HR manager. A proper investigation requires speaking to the victim, witnesses, and usually the alleged harasser as well. This probably also requires the disclosure of information reported to the company by the alleged victim. This is not to say that the company can and should not closely guard the facts of the allegation, but promising confidentiality up front can put the company and HR professional in an awkward position because absolute confidentiality cannot always be maintained.

DOL On-Line Self Assessment For Restaurateurs Employing Minors

The U. S. Department of Labor’s Wage and Hour Division website provides a self assessment tool for restaurants that employ minors. The assessment covers common violations of the Fair Labor Standards Act (FLSA ). Restaurant owners should note that this assessment does not cover California state law items. The assessment covers items that the DOL found in the past to be some of the most common problems encountered in restaurants, and therefore, are likely issues a DOL investigator will look for in a restaurant.

Here is a list of a few of the items covered in the assessment:

Do any workers under 18 years of age do the following:
1. Operate or clean power-driven meat slicers or other meat processing machines?

2. Operate or clean any power-driven dough mixer or other bakery machines?

3. Operate, load, or unload scrap papers baler or paper box compactors?

4. Drive a motor-vehicle on the job?


Do any workers under 16 years of age do the following:
5. Cook?

6. Bake?

7. Clean cooking equipment or handle hot oil or grease?

8. Load or unload goods from a truck or conveyor?

9. Work inside a freezer or meat cooler?

10. Operate power-driven bread slicers or bagel slicers?

11. Operate any power-driven equipment?

12. Work from ladders?

13. Work during school hours?

14. Work before 7:00 a.m. on any day?

15. Work past 7:00 p.m. between Labor Day and June 1?

16. Work past 9:00 p.m. between June 1 and Labor Day?

17. Work more than 3 hours on a school day, including Fridays?

18. Work more than 8 hours on any day?

19. Work more than 18 hours in any week when school was in session?

20. Work more than 40 hours in any week when school was not in session?

21. Do you employ any workers who are less than 14 years of age?

22. Do you fail to maintain in your records a date of birth for every employee under 19 years of age?

Click here to take the entire assessment. At the end of the assessment, there is a rules summary that explains an employer’s responsibility under the FLSA for the issues on the assessment.