Employers With Multiple Locations Dodge A Bullet On Benefit Plans Courtesy of the 1st Cir.
by Michael Fox
A well written brief can make an impression on a court, and you definitely get the opinion that occurred from today's decision in Candelaria-Ramos v. Baxter Healthcare Corp. of Puerto Rico, Inc. (1st Cir. 3/8/04) [pdf]. The basic argument was that when Baxter adopted a change to its pension plan that made it more advantageous for longer serving employees to retire, it discriminated against its Puerto Rican employees because it did not adopt the same version for its Puerto Rican operation. The Court carefully considers the plaintiffs' counsel's argument that there was at least a fact question on the issue of intentional discrimination, and you can tell is impressed by the argument made by counsel. Ultimately however, it disagrees and upholds the district court's grant of summary judgment. Part of its basis is an example of the common sense knowledge that it is so important that courts possess and use. To the allegation that Baxter had not presented accurate documentation of certain internal meetings, the Court noted:
anyone familiar with corporate decision-making culture would not be surprised that the remnants would be nothing more than agendas, scattered references in summaries and minutes, and a few memories secured by depositions.
Perhaps even more importantly, the Court refused to apply a disparate impact analysis, finding it precluded by the wording of Title VII itself:
It is true that disparate impact liability can be imposed regardless of whether an employer possesses an intent to discriminate, Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 987 (1988), but Title VII also says:
Notwithstanding any other provision of this subchapter, it shall not be an unlawful employment practice for an employer to apply different standards of compensation, or different terms, conditions, or privileges of employment pursuant to a bona fide seniority system . . . or to employees who work in different locations, provided that such differences are not the result of an intention to discriminate because of race, color, religion, sex, or national origin. 42 U.S.C. § 2000e-2(h) (2000) (emphasis added).
In other words, different treatment in different locations is permissible absent an intent to discriminate.
Absent that finding, employers with multiple locations could easily have found themselves having to frequently justify differing pay and benefit plans against not only claims of intentional discrimination, but the much more difficult and time consuming claims of disparate impact.