Roberts/Alito Court Employment Law Scoreboard: Employees One, Employer Zero

Posted 1:36 PM by Michael Fox

• The 11th Circuit held that the use of the term "boy" without prefacing it with a racial qualifier such as "black" or "white", was not evidence of discrimination. The Supreme Court wants a much more nuanced interpretation:

  Although it is true the disputed word will not always be evidence of racial animus, it does not follow that the term, standing alone, is always benign. The speaker's meaning may depend on various factors including context, inflection, tone of voice, local custom, and historical usage.

  The error it seems was the lower court's overstatement that without a qualifier it could never be evidence of discrimination.

• The second misstatement occurred when the Court held that pretext could be established by comparing qualifications, only when "the disparity in qualifications is so apparent as virtually to jump off the page and slap you in the face." In vivid language the Court found:

  The visual image of words jumping off the page to slap you (presumably a court) in the face is unhelpful and imprecise as an elaboration of the standard for inferring pretext from superior qualifications.

  A much more bland version (that perhaps means the same thing) --- "disparities in qualifications must be of such weight and significance that no reasonable person, in the exercise of impartial judgment, could have chosen the candidate selected over the plaintiff for the job in question" was quoted, along with articulations used by other courts -- although the Court noted this was not the time to "define more precisely what standard should govern pretext claims based on superior qualifications. "

Neither of these holdings in and of itself seems to be a change, much less a drastic one, in existing law, although the "slap you in the face" language was a nice bit of rhetoric to have on one's side. And the Court may have been influenced by the petitioner's brief listing six pages of decisions in the 5th and 11th Circuits using that language.

What is more significant is when the highest Court whose function is more clearly viewed as making sure the law of the land is correct and ultimately uniform, than in making sure that any one case is not improperly decided, goes to the trouble of calling a lower court on these "overstatements." That is a higher level of scrutiny in the employment arena than many have come to expect. It may be nothing, but my guess is that in many federal court chambers, today's action will not go unnoticed.

*The appeals court decision is found in the appendix to Petitioner's petition for writ of certiorari.

A hat tip to Ross Runkel at lawmemo.com for the first alert to today's decision.

Cowtown Jury Gives a Million in Sexual Harassment Case

Posted 6:42 AM by Michael Fox

Or more correctly a sexual harassment retaliation case as a former pressman at the Fort Worth Star Telegram gets a jury verdict of $156,000 in back pay, $13,300 in benefits, and $948,000 in compensatory and exemplary damages. The motivating factor in his termination -- his complaint that he was being sexually harassed by his manager. That complaint, according to Glenn Westfall, led to several months mistreatment before his termination in September 2002.
Not many details in the story in the Fort Worth Star Telegram, serving the unhappy duel role as both the unlucky employer and the reporter of the story, Jury awards $1.1 million to former S-T employee. Clearly something upset the jury, but it's not clear what it was from the story.

The verdict was on January 30th, but didn't make the papers until this weekend; maybe million dollar verdicts are not that big a deal anymore, or perhaps it just reflects the benefit of owning the press.

Labels: MDV

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Friday, February 17, 2006

EEOC Wins 2nd Round with Sidley Austin

Posted 12:12 PM by Michael Fox

Thanks to Howard Bashman for his quick find of today's decision by the 7th Circuit, EEOC v. Sidley Austin (7th Cir. 2/17/06) [pdf]. The underlying lawsuit is the EEOC's effort to bring age discrimination claims on behalf of 30 or so "partners" who the EEOC contends for purposes of Title VII were mere employees protected by the Age Discrimination in Employment Act. Today's ruling was on an interlocutory appeal to determine whether or not the trial judge correctly decided that the EEOC could recover damages on behalf of the "partners" even though they would be barred from bringing an action on their own behalf because of their failure to timely file a claim.

Sidley Austin had the benefit of prior precedent, since the 7th Circuit previously answered that precise question, no. But unfortunately for Sidley, the intervening decision of the Supreme Court in Waffle House now required a different answer. While Waffle House had to do with the impact of an arbitration agreement on the powers of the EEOC, its underlying rationale makes it clear that the rights of the EEOC are not vicarious (and thus dependent on the employee administratively protecting his or her claim) but stand alone.

The net result, the EEOC can continue on its quest for losses for the "partners." Judge Posner wrote the decision, his second ruling in favor of the EEOC in this on-going litigation. For background on the litigation and Judge Posner's first ruling (enforcing a subpoena) see my earlier post, Discriminating Against Your Partner? - Sidley & Austin Sued By EEOC .

Labels: EEOC

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Wednesday, February 15, 2006

When 3 Wins Equals A Loss

Posted 9:15 PM by Michael Fox

When John Eastman felt he was terminated because of his complaints regarding his company's practices with respect to government contracts, he brought a common law public policy claim in Ohio state court. Since he based the public policy on two federal statutes, the defendant did what ever self respecting defendant does (or at least seriously considers) -- removed, here on the basis of federal question.

Preferring to have his case heard in state court, Eastman moved to remand, which the Court denied. Win #1. One year later, Eastman asked the Court to reconsider whether it had jurisdiction. It declined. Win #2. With jurisdiction now firmly established, the employer's motion for summary judgment was granted. Win #3.

On appeal, the first question -- as it always is -- was there federal court jurisdiction? Here the Court noted that this is not like the majority of cases based on federal question - where the cause of action clearly arises under a federal law. Instead the employer argued for what the Court called the"less traveled"way to federal court -- "where state law claims implicate federal issues." The Court now had to decide the question it had previously left unanswered - "whether a wrongful discharge claim based on federal public policies invokes federal jurisdiction."

Two factors seemed to tip the balance in favor of no jurisdiction - Congress had not created a cause of action for violation of the statutes on which the claim was based and more importantly, a decision would be "disruptive of the sound division of labor between state and federal courts envisioned by Congress." The Court explained its rationale for the latter argument:

[O]ur perception is that the bulk of the judicial business in the United States in this area [employment litigation] is conducted by the state courts. This balance would be upset drastically if state public policy claims could be converted into federal actions by the simple expedient of referencing federal law as the source of that public policy. We believe such a dramatic shift would distort the division of judicial labor assumed by Congress under section 1331.

Eastman v. Marine Mechanical Corp. (6th Cir. 2/15/06) [pdf]. I would be interested in seeing statistics on whether there is more employment litigation in state than federal court, but the Court offered nothing other than its "perception."

Since Texas has such a limited public policy exception, it wouldn't unleash any floodgate of litigation here, but other states are more liberal in the use of public policy as an exception to the at will rule.

Back to where we started -- notwithstanding 3 legal wins -- the employer is now back to where it started, in state court with the disposition on the merits still to come. It's always a bummer to lose on appeal, but this one has to sting even more than usual. But somewhere in the great hereafter, Professor Bernie Ward, my federal courts' teacher is smiling -- yet another court has validated his mantra that federal courts are "courts of limited jurisdiction."

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No Valentine for Employer in Interpretation of No Strike Clause

Posted 5:26 PM by Michael Fox

The 2000 annual shareholder's meeting of Engelehard Corp. has long since ended, but one piece of unfinished business ended up before the 3rd Circuit for resolution yesterday. When negotiations for a new contract stalled, the IBEW organized a protest at the 2000 annual meeting, including 50 bargaining unit members, in order to put pressure on the company to renew negotiations.

The Company's view was that such participation would violate the current collective bargaining agreement's no-strike/no-lockout provision which precluded any picketing "whatsoever." After employees who participated in the demonstration were suspended for 3 days, the Company challenged an NLRB ruling of an unfair labor practice charge, resting their defense on their reading of the provision.

In full it read:

The Employer and the Union declare it to be their intention to prevent any suspension of work due to labor disputes during the term of this Agreement. To carry out this intention, the Employer agrees that there shall be no lockout of any of its Employees or discrimination against them because they have raised a dispute or grievance. The Union agrees that it will not call, participate in, or sanction, during the term of this Agreement, any strike, boycott, picketing, work stoppage or slow-down whatsoever. The Union further agrees that any Employee engaging in an unauthorized strike, boycott, picketing, organized work slowdown or stoppage, or any other type of interference with the EmployerÂ?s business, shall be subject to immediate discharge at the discretion of the Employer with no recourse to the grievance procedure contained herein.

Unfortunately for the company, the Administrative Law Judge, the Board and ultimately the 3rd Circuit found that the language was not applicable, as it did not meet the "clear and unmistakeable waiver" standard required. The resolution turned in large part on the introductory sentence, which the Court found required that the picketing had to lead to a work stoppage, which picketing at the shareholder's clearly did not. Engelhard Corp. v. NLRB (3rd Cir. 2/14/06) [pdf] .

It seems unlikely that this case will make it to the Supreme Court for review, but if it did, it would pose an interesting question --- what does Justice Alito do since he sat on the original panel? However, since he was, as the opinion says "elevated" to the Supreme Court after argument, but did not participate in the decision, maybe if he disagreed he would get to cast his vote anyway.

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Tuesday, February 14, 2006

Stirring the Pot - the Center for Union Facts

Posted 12:58 PM by Michael Fox

In an action bound to set off a substantial debate, a new group, the Center for Union Facts, launched what they hope will be a 5 million dollar publicity program giving a different view of factual information than that presented by organized labor. The NYT story, Group Starts Anti-Union Campaign, has more details on the beginning and role of the group.

Financed by companies and a foundation that the Executive Director, Richard Berman, does not identify, one of the purposes is to make sure that information is made available to workers whose employers have agreed to elections by card checks, or although not mentioned in the article, have agreed to remain neutral during an organizing campaign. Under those circumstances, the CUF's view is that workers get only one side of the story.

If you missed their full page ads that the CUF took out in major publications yesterday, you can check out what they have to say at their website, unionfacts.com. In addition to the ads, they also took a page from unions' playbook by picketing AFL-CIO headquarters. For a look at their emblem for unions and pictures of "management pickets" if you will, you can go here.

I anticipate numerous cries of foul from those in organized labor and Nathan Newman is one of the first at How Corporate Right Lies About Union Corruption. Hard for me to claim neutrality given my role, but I wonder how many will agree with Newman's view after reviewing the site that:

Any union illegal conduct should be rooted out, but in a world of multi-billion corporate corruption, unions are pure as snow, especially in comparison to the criminals running corporate America.

I would be surprised if he gets many takers on the "pure as snow" part of that quotation.

Although there will no doubt be more shots taken at the CUF, beneath it all, organized labor has to be thrilled that they have proven themselves worthy of a response. That may well be the most significant aspect of this matter.

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Friday, February 10, 2006

Sarbanes Oxley - The Reach?

Posted 8:48 AM by Michael Fox

Earlier this year we learned that Sarbanes Oxley stops at the country's edge, SOX - Strictly Domestic According to 1st Circuit, but there remain lots of unanswered questions. The AP story, Lawsuit tests whistleblowers' protection, highlights one of them - what sort of complaints are protected? A North Carolina federal court is considering whether Donald Livingston's complaints that Wyeth's training and oversight procedures of its manufacturing process were faulty is protected activity under Sarbanes Oxley. The rub is that Sarbanes Oxley only protects employees who:

provide information ... regarding any conduct which the employee reasonably believes constitutes a violation of section 1341 [mail fraud], 1343 [wire fraud], 1344 [bank fraud], or 1348 [securities fraud], any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders.

What does that statutory gobbledy-gook mean? The answer provided by Law Professor Robert Vaughn of American University as quoted in the article, "The basic principle is this: Is the information something that investors and shareholders should know about?". If Professor Vaughn is right and his standard is interpreted expansively, it could bring any complaint about any practice of material size within the protective fold of Sarbanes Oxley.

OSHA, the agency charged with the enforcement of the whistleblowing provisions of Sarbanes Oxley, thought Livingston's complaints were not protected. But the District Court for the Middle District of North Carolina gets to make its own determination and has scheduled a hearing next Monday on Wyeth's motion for summary judgment. If you are keenly interested and would like to see the Motion and Response, you are out of luck since they were filed under seal. In my experience, a move almost certain to engender more interest and attention than anything you could possibly do.

Bet that as it may, once the Court issues its hopefully not sealed ruling on the Motion, we will have taken another small step along the way of finding out just how big Sarbanes Oxley will be.

Comments:

You'v got to be kidding. Congress, in its infinite wisdom, has assigned administration of SOX, which, by its terms, covers only whistle-blowing to protect shareholders, i.e., mail, wire, secrities fraud issues, and NOT included reports of violations of laws directed at protection of workers or consumers, and then assigned its administration and enforcement to OSHA, which presumably knows about those things but zip about securities regulation, mail and wire fraud, etc.?

Actually, no, you're probably not kidding. As my law school dean and prof John W. Wade used to say, quoting Will Rogers, "Every time Congress tells a joke, it's a law, and every time they pass a law, it's a joke!"

Who else could write and pass a law that protected employees whose tips protect wealthy investors and campaign contributors from losing money at the casino we call a stock market, but not infants from possibly dangerous vaccines due to bad management, and then assign its enforcement to an agency with expertise in real goods but not accounting and fraud?

Of course, a withdrawal and big class action lawsuit on behalf of babies given vaccine produced under the conditions described might impact the price of the maker's stock, but why would the law require that step in proof before a whistele-blower trying to protect infannts from personal injury, rather than gambler-investors from losses, or the courts, have to go through that sticky wicket to find out if they are protected?

This positively reeks of payoffs, bribery, and corruption.

peterschamberlain@earthlink.net

# posted by  Anonymous : 8:49 AM

 

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A Throwback to the Old Union Ways

Posted 4:25 AM by Michael Fox

Much has been said about the changing view of the labor movement on illegal aliens, from threat to hope for the future. Before that there was a similar view of unions as anti-women and anti-minority. Fortunately, I think that view, if it was ever accurate, is less true today.

Which gives Maalik v. International Union of Elevator Constructors, Local 2 (7th Cir. 2/9/06) an anachronistic feel. The district court found that Maalik had been prevented from obtaining certification as a mechanic (which would have entitled her to a substantial pay raise) because the master mechanics (and fellow union members) with whom she worked would not give her on the job training. The reason they would not train her -- she was a black woman. Notwithstanding its finding of discrimination, the district court feeling limited by an earlier decision of the 7th Circuit, found Title VII provided no remedy.

Not so, says Judge Easterbrook in an opinion that among other things:

• provides an on line reference to the collective bargaining agreement under which Maalik worked, probably not a first but still a rarity in judicial opinions;
• distinguishes the earlier opinion relied on by the district court noting that it involved terms and conditions of employment, for which an employer alone is liable, since it ultimately controls them;
• distinguishes this because it involves a failure of the Union in its agency function (bargaining and implementing contracts) where it is liable for discrimination;
• holds that although the Union was not vicariously liable for the discrimination of its members, it still was not permitted to turn a blind eye, and
• like here, when it had failed to do all it could do to prevent discrimination, such as disciplining its members through the powers of fine or expulsion for their refusal to train, it could be liable.

Showing a real world understanding of what often controls union actions, Judge Easterbrook writes:

[The Union] appears to take the view that its members may do as they please, and that the local's leaders won't risk a threat to reelection by taking the side of any minority or stirring up intra-membership conflict.

His contrast with an employer's role is somewhat less insightful:

That is no more responsible -- and no more legally permissible -- than an employer's declaration that its staff may run the shop any way they like, and that blacks or women whose lives are made miserable must lump it. Both managers and union officials may prefer the quiet life, but Title VII requires action.

While I have no quarrel with the outcome as a legal matter or even as the "right" answer, I do think a union leader whose job, at least as a union official, is dependent on the vote of his constituents is in a different position than the manager whose position is generally not contingent on the views of those he supervises. That the union leader may be put in a harder spot because of the conduct of others is no excuse for discrimination, but it seems fair to at least note the difference.

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Thursday, February 09, 2006

EEOC Charges Down in Number

Posted 5:17 PM by Michael Fox

Ross Runkel at the Lawmemo Employment Law Blog has a good post on the recently released EEOC statistics for the government fiscal year that ended September 30, 2005. The headline tags one of the big points, EEOC discrimination charges decline in 2005.

The EEOC is attributing the decline to its active outreach program. To the extent that the outreach is to employees, I would have thought that it would have had the opposite effect.

One other factor not mentioned that I think should have resulted in more charges not less, is the impact of National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002). A number of courts have interpreted Morgan, correctly in my view, to require separate charges for discrete employment acts, even if they occur after an initial charge has been filed.

Maybe that hasn't resulted in more charges because the EEOC disagrees with that position. You have to go to footnote 186 of Chapter 2 of their Compliance Manual to find their position. In fairness they do point out one appellate court has held and another has hinted that their position is wrong:

But see Martinez v. Potter, 347 F.3d 1208, 1210-11 (10th Cir. 2003) (finding that under Morgan, discrete acts that occurred after a charge is filed must be raised in a new charge, even if related to acts included in the pending charge); EEOC v. Joe's Stone Crabs, Inc., 296 F.3d 1265, 1272 n.5 (11th Cir. 2002) (court stated that because the issue of post-charge discrimination had not been presented squarely, it would not address it, but noted that a charge may not encompass events that occur after it is filed because Title VII requires a charge to be filed after the unlawful employment practice occurred). The Commission disagrees with this view. Nothing in Morgan suggests that a new charge must be filed when a charge challenging related acts already exists. Thus, Morgan does not affect existing case law that permits subsequent related acts to be addressed in an ongoing proceeding.

If they are wrong, then Potter should lead to more charges being filed not less.

A couple of other things that jumped out at me from the Commission's numbers -- 1 out 5 charges is for disability discrimination and 1 out of 3 allege retaliation, often in conjunction with some other substantive claim. Couple that last figure with the increasing number of retaliation claims brought under statutes outside the EEOC's purview and you begin to see how important retaliation is as a cause of action.

Labels: EEOC

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Clear and Convincing Under SOX - High, But Not Unobtainable

Posted 2:38 PM by Michael Fox

At least under some circumstances. Given the still relatively small number of cases under the SOX whistleblowing provisions, the decision last week by the Administrative Review Board, the appellate level of the adminstrative process, is worth looking at for its overall view of how the law may be interpreted. Halloum v. Intel Corp. (ARB 1/31/06). Among the points it makes:

• the same legal standard as used under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century will be used for SOX cases;
• even though an employee who informed the SEC was wrong that Intel was withholding payment of invoices to increase their balance sheet (under their procedures the invoices were charged to the balance sheet when received not when paid), the standard for protected activity is "reasonable belief" of a violation and this met that test;
• modifying a Corrective Action Plan with goals that were unreasonable and could not be completed in the allocated time was an adverse personnel action; and
• that the protected activity does not have to be the primary motivating factor but only a contributing factor.

But notwithstanding that the employee showed his protected activity was a motivating factor in an adverse personnel action, the company still won. How? By meeting the "clear and convincing standard" required by SOX that it would have taken the same action even if he had not engaged in the protected activity.

Although the ARB did not provide much in the way of an explanation of what it takes to meet the clear and convincing standard, here it was because the employer had passed up an opportunity to fire the employee when it found he had secretly taped conversations with co-employees. Instead of the firing, they gave him the unobtainable goals.

A couple of factors probably helped the employer. First Halloum was pro se and some evidence he submitted at the ARB stage was not considered since it had not been presented at the administrative hearing. Secondly, when he was informed that he was not progressing satisfactorily under the Corrective Action Plan, he applied for Intel's Voluntary Separation Program which entitled him to several months severance pay. (No mention as to whether or not the Separation Program required a release, and if it did why it did not bar the claim.)

Although employers are certainly not wild about having to meet a clear and convincing standard, clearly under the right circumstances it can be done.

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Wednesday, February 08, 2006

Regular Rate of Pay - an 8th Circuit Reminder

Posted 8:42 PM by Michael Fox

Wading into one of the more arcane areas of wage and hour law, the 8th Circuit manages to split amongst itself and also with the 6th Circuit. The area of contention -- whether payments to firefighters under a sick leave buy back should be included as part of their regular rate of pay. Regular rate of pay is important because it is that figure that is used in calculating overtime. According to the 2 member majority of the 8th Circuit panel, it is. Acton v. City of Columbia (8th Cir. 2/8/06) [pdf].

The main function of the case may be to serve as a reminder of the general principle -- all payments to an employee must be included in the computation of the regular rate of pay, unless it meets one of 8 specific statutory exclusions. Just one of the many traps in the FLSA for the unwary employer.

Labels: FLSA

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Monday, February 06, 2006

Retaliation - Same MDV Song, Multiple Verse

Posted 2:54 PM by Michael Fox

Although I am beginning to sound like a broken record, it continues to be true that retaliation claims really do resonate with juries. Latest case in point comes from Western Tennessee. Although Dan Long alleged that Procter & Gamble, his employer, had made a practice of ""race discrimination against its African-American technicians" at its Pringles plant, the only claim submitted to the jury was retaliation.

Long claimed that his filing a charge of race discrimination with the EEOC was the real reason for his termination. The headline from the Jackson Sun, Ex-P&G worker wins $2.6M suit, makes it clear that the jury agreed. The breakdown -- $2 million in punitive damages, $500,000 for emotional pain and mental anguish, $29,000 for lost medical insurance with back wages and attorneys fees still to be determined.

The employer's view of the problem - timing. When an adverse employment action happens close in time to concerted activity, the "unofficial burden of persuasion" -- to show that the employer acted fairly -- which is present in every employment law case, becomes a lot heavier.

Labels: MDV

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Sunday, February 05, 2006

Most Wrongful Termination Cases Are Really Cases of Bad Hiring

Posted 5:35 PM by Michael Fox

That is at least what most employment lawyers who defend companies believe. And although he doesn't put it in those terms, Jeff Bezos of Amazon at least knows the importance of the hiring process:

I'd rather interview 50 people and not hire anyone than hire the wrong person. Cultures aren't so much planned as they evolve from that early set of people.

Bezos' contribution to Fast Company's recently released book, 55 Essential Ideas to Help Smart People (and Organizations) Perform At Their Best as reported in their blog, Fast Company Now.

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Wednesday, February 01, 2006

4th Circuit - Analyzes Prima Facie Case Where Plaintiff Is a Poor Performer

Posted 5:40 PM by Michael Fox

And Brian Peterson, who is on top of all things germane to West Virginia jurisprudence has his own analysis of the 4th Circuit's effort: Fourth Circuit affirms dismissal of age discrimination case. The bottom line -- while establishing a prima facie case is not meant to be an onerous burden, it still requires enough to satisfy the purpose - - setting up a legitimate inference of discrimination absent an explanation.

The decision is Warch v. Ohio Casualty Insurance Co. (4th Cir. 1/30/06) [pdf].

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Sexual Orienation Soon to Be a Protected Category in Washington State

Posted 2:49 PM by Michael Fox

Maybe. A legislative effort begun in 1977 made it as far as the Governor's desk for signature yesterday as Washington state amends its discrimination statute to include sexual orientation as a protected category. Washington's new law defines sexual orientation as:

heterosexuality, homosexuality, bisexuality, and gender expression or identity. As used in this definition, gender expression or identity" means having or being perceived as having a gender identity, self-image, appearance, behavior, or expression, whether or not that gender identity, self-image, appearance, behavior, or expression is different from that traditionally associated with the sex assigned to that person at birth.

Although signed into law yesterday, the bill which according to the Washington Post story makes Washington the 17th state to protect gays and lesbians and the 7th to protect transgendered individuals from discrimination, will not be effective until 90 days after the legislative session ends which would be sometime in June.

But an effort to repeal it through a voter initiative is in the process of being filed by Tim Eyman, described in an Olympian online story about the effort, as a long time initiative promoter. If enough signatures to put the measure repealing the newly enacted amendment are obtained, the law would not go into effect unless it survived a November referendum.

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