Jottings By An Employer's Lawyer

Wednesday, June 30, 2004

5th Circuit Panel Looks At Cat's Paw Theory

Earlier this week, the Supreme Court invited (i.e. told) the Solicitor General to submit the government's position on a 4th Circuit en banc decision discussed here earlier. Today, a panel of the 5th Circuit sets out the conditions for establishing discrimination under such a theory, but finds that plaintiff failed to meet the standard. Roberson v. Alltel Information Services (5th Cir. 6/30/04) [pdf]. The Court held:
To invoke the cat’s paw analysis, Roberson must submit evidence sufficient to establish two conditions: (1) that a co-worker exhibited discriminatory animus, and (2) that the same co-worker “possessed leverage, or exerted influence, over the titular decisionmaker.” Id. at 227; see also Laxton v. Gap Inc., 333 F.3d 572, 583 (5th Cir. 2003).
In affirming summary judgment, the Court found it was not necessary to decide whether there was any tension between McDonnell-Douglas and Desert Palace even though solicited to do so by the plaintiff. Without mentioning a separate panel's decision from last Friday, reported here which did address that issue, the Court found plaintiff had not presented sufficient proof under any conceivable standard. Additionally, the Court again rejected timing alone as the basis for making a prima facie case of retaliation.

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Monday, June 28, 2004

Not A Million Dollar Verdict, But A Million+ Dollar Award

For those who need a reminder that mandatory arbitration is not necessarily always a great thing for employers, check out the Contra Costa Times story, Fired gym employee wins $2.4 million. The award, which I assume has now been paid, was actually handed down in April, 2003. The publicity more than a year later is because of Arbitrator Barbara Chvany's subsequent ruling that the award could be made public. 24 Hour Fitness, the unfortunate defendant had argued that the award as well as other aspects of the proceeding should be confidential. A California state district court decided otherwise and now at least for this particular case, the cat is out of the bag. See the story, $3.5M ADR Award Against 24 Hour Fitness Unsealed about the fight to keep the record sealed. And note how by including the attorneys fee award, how differently the award can be characterized by two headline writers. Thanks to the Daily Labor Report for the tip to this story.

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Mixed Motive Analysis Applicable in ADEA Cases According to 5th Cir.

Friday, the 5th Circuit addressed an issue that was a logical follow up to last summer's Desert Palace decision by the Supreme Court. Is a mixed motive analysis applicable in cases under the ADEA? Although it would have a shock if it had gone the other way, the 5th Circuit did confirm it is applicable. Rachid v. Jack In the Box, Inc. (5th Cir. 6/25/04) [pdf]. The Court punted on the issue of whether a replacement only five years younger than plaintiff was insufficient to establish a prima facie age claim, holding that because there was other sufficient evidence to establish a prima facie case, it did not need to decide that question. For a recent survey from other Circuits, see my earlier note, Ever Wonder What the Bright Line for Age Discrimination Is - A Survey By the 6th Circuit .

The Court also set out what it viewed as the post-Desert Palace burden for plaintiffs once the employer has met its burden of articulating a legitimate business reason for the discharge:
“the plaintiff must then offer sufficient evidence to create a genuine issue of material fact ‘either (1) that the defendant’s reason is not true, but is instead a pretext for discrimination (pretext alternative); or (2) that the defendant’s reason, while true, is only one of the reasons for its conduct, and another ‘motivating factor’ is the plaintiff’s protected characteristic (mixed-motive[s] alternative)."

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Let's Hope They Don't Try To Outdo Each Other

Since the Phoenix Business Journal is calling the Phoenix EEOC the most active in the county in filing lawsuits against employers, let's hope it does not start a race among the other 23 offices to see who can top Phoenix. You can check out the story here.


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Saturday, June 26, 2004

Excluded from the FAA, But Not from Arbitration

Since the Supreme Court decided in Circuit City v. Adams that the workers excluded under the FAA was that very small group of transportation workers actually engaged in interstate commerce, we have waited for a case to outline the parameters of exactly who that would be. In Palcko v. Airborne Express, Inc. (3rd Cir. 6/18/04) [pdf] we learn it extends to a first line supervisor whose role includes "“monitoring and improving the performance of drivers under my supervision to insure [sic] timely and efficient delivery of packages.” As a second, not unexpected but important holding, the court held that even though the FAA did not apply, it did not preclude enforcement of the agreement under applicable state law. In this case, the parties had held that Washington state law was applicable in case the FAA did not apply. A nice touch, but it does not appear necessary to the basic holding.


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Friday, June 25, 2004

Apologies for Lack of Posting

For any who have been wondering if there were no employment law news for this week and much of last, worth mentioning, there no doubt has been. But rather than reporting it, I have been preparing for and handling two arbitrations this week --one labor, one employment, one in New Mexico and one in Houston. Hopefully, my busy weeks will concur with weeks where the courts/boards/agencies and those involved in making employment law news will choose not to do much, but undoubtedly that will not always be the case.

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Texas Supreme Court Turns Back Employee Class Action

Without hearing oral argument, the Texas Supreme Court today overturned a class certification that had been affirmed by the Corpus Christi Court of Appeals. Snyder Communications, LP v. Magana (Tex. 6/25/04). The trial court had certified a class consisting of:
All persons employed in the United States with Defendant Snyder Communications, L.P., on or after April 3, 1997 in the capacity of a sales associate (also known as a field representative position) and employed to sell the AT&T Long Distance Residential Program who submitted one or more LOAs to Defendant which Defendant did not pay.
The allegations were that Snyder had committed both fraud and breach of contract in paying (or from the plaintiffs' perspective, more aptly put, failing to pay) commissions for sales of long distance services.

Although anyone interrupted at dinner by a phone solicitor might have trouble deciding where sympathy should lie between the phone solicitor who called, or the company who hired legions of callers, fortunately that was not the basis for the court's decision. Instead the Court held that since there were as many as 5 reasons why a particular sale (LOA) could be rejected, each individual LOA would have to be considered. Under those circumstances, it was an abuse of discretion for the lower courts to find that common issues of law and fact predominated as required by the class certification rules. Although not all employee class actions will fall into this category, clearly many issues that could arise in an employment law case will.

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Wednesday, June 16, 2004

Sex Discrimination is Sex Discrimination - The End of "Ladies Night" In New Jersey

For those who think that sometimes the law just goes too far, you may not agree with Professor Joanna Grossman's Findlaw essay on why the N.J. Director of Civil Rights was correct when he held that a bar violated the New Jersey Law Against Discrimination by having a night when women were admitted without a cover charge and served discounted drinks. The End of "Ladies' Night" in New Jersey. Hard to quarrel legally with the decision, and hard to create an exception that might not become a slippery, or at a minimum a costly litigated slope. Perhaps more proof that when we are forced to use laws to right wrongs, we have a relatively blunt instrument to work with. Thanks to my colleague Rose Jennings for the tip to the article.

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Weingarten Rights Do, Do Not, Do, DO NOT Apply to Non-Union Employees

Proof that on some things elections do make a difference, a 3-2 decision by the newly appointed Bush (43) NLRB, reverses the position taken in Epilepsy Foundation of America only four years ago and holds as a matter of policy, not statutory construction, that non-unionized employees are not entitled to a fellow employee's presence when there is a meeting that could reasonably be anticipated to lead to disciplinary action. IBM Corp. Bd. No. 341-148 (6/9/04).

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Tuesday, June 15, 2004

Viagra = More Insurance Coverage For Contraceptives

Or perhaps, what is good for the gander, is good for the goose -- to transpose a cliche. At least that is what you get from the headline at, Increased insurance coverage for the pill / Study: Plans cover contraceptives due to lawsuits, Viagra, previewing a study released today by the Alan Guttmacher Institute. The actual press release about the study and the study itself or somewhat less provocative. But certainly not as catchy, or perhaps even newsworthy, as Marketplace, public radio's business show had the same hook last night with their story, The Economics of Viagra. Whatever the cause, it is good news.

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Monday, June 14, 2004

Constructive Discharge and Ellerth/Faragher - The Supreme Court Decides

One of the post-Ellerth/Faragher questions was whether or not constructive discharge would be a tangible job action. The stakes were potentially significant. If it was, and a supervisor were involved, the employer would arguably be strictly liable with no ability to prove the affirmative defense created by those two decisions. In fact that is what the 3rd Circuit held in the case that was today reversed by the Supreme Court. Pennsylvania State Police v. Suders (S. Ct. 6/14/04). In an 8-1 decision, the Court did not allow itself to be boxed in by its prior language. In effect, the court holds that constructive discharge can be a tangible job action, but the employer is still entitled to establish the affirmative defense unless the plaintiff can show that there was in fact some "official" act which was somehow involved.

Although it is hard to imagine many cases where there would be an "official" action that would not clearly involve a tangible job action as presently defined, the court cites a 7th Circuit case as an example. There a transfer was deemed an "official" action under the circumstances, which made it justifiable to deprive the employer of the right to establish the affirmative defense. The bottom line is that for the most part employers will, to quote Justice Ginsberg, author of the majority opinion "be afforded the ... chance to establish through the Ellerth/Faragher defense that it should not be held vicariously liable," even in cases of constructive discharge.

As a side note, the Court endorses the general principles of constructive discharge:
"Did working conditions become so intolerable that a reasonable person in the employee's position would have felt compelled to resign" and that "[U]nless conditions are beyond 'ordinary' discrimination, a complaining employee is expected to remain on the job while seeking redress."

All in all a most sensible decision.

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Thursday, June 10, 2004

Resume Fibbing - More Cautionary Tales

Stories about individuals lying on their resumes seem to be more frequent. An online survey by SHRM in April may have sparked many of them, but they all seem to report an increase at least anecdotally. The headline of the Newsday story carried in the Baltimore Sun seems to sum up the general view, Resume lies are on the rise.

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Tuesday, June 08, 2004

5th Circuit Clarifies Appellate Jurisdiction in Attempt to Compel Arbitration

When the principal fight is over whether or not the court has appellate jurisdiction, you can usually bet one side is pursuing victory on a "technicality." That is not meant as a slam, since "technicalities" are what keeps the law from sliding down a slippery slope into general courts of equity. Here the issue was a recent per curiam decision by the 5th Circuit, Cerveceria Cuauhtemoc Moctezuma S.A. de C.V. v. Montana Beverage Co., 330
F.3d 284 (5th Cir. 2003)(per curiam)[pdf] which contained language permitting the plaintiff employee to argue that the appeals court only had jurisdiction if the district court had first found that an agreement to arbitrate existed, and then failed to enforce it for other grounds. Since the court below had concluded there was not an agreement, there was no jurisdiction. A good argument but unavailing, as the Court declined to read Cerveceria in such a manner, instead saying if it in fact did say that, it would have been wrong and a violation of prior 5th Circuit law. May v. Higbee Company (5th Cir. 6/8/04) [pdf].

It was just not the plaintiff's day on the merits either. The Court held that Dillard's construction of how its mandatory arbitration plan documents worked was correct. When the employee signed the acknowledgement of receipt of the plan, it was not inconsistent to have the plan say that she agreed to arbitration by her continued employment. The trial court had used those phrases to find ambiguity and allow the employee's oral testimony that she had been told that the arbitration agreement would not apply to her and that she was only signing an acknowledgement that she received the document. Instead, the Court noted the purpose of the acknowledgement was to inform her how she was to assent, which was to continue to be employed. She remained employed, she assented -- not only under the governing law of Mississippi, but also of a number of other states including Texas. So, on to arbitration.


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Monday, June 07, 2004

Transsexual Discrimination - By Definition Sex Stereotyping and Actionable Under Title VII

My former summer clerk mate, then simply Guy Cole, now the Honorable R. Guy Cole, Jr. of the 6th Court of Appeals may well have opened a new fault line of social debate, just as the country is beginning to work through same sex marriages. Based on the Supreme Court's holding in Price Waterhouse v. Hopkins, in Smith v. City of Salem, Ohio (6th Cir. 6/01/04) [pdf] he finds that a fireman [masculine term purposely used], diagnosed with gender identification disorder, who had begun to adopt more feminine characteristics as the first steps toward a sex change, states a claim for gender discrimination under Title VII, whether based on "sexual stereotyping" or status as transsexual.

Interestingly, three news popular news sources seemed to have caught the story,, Gayapolis News and the Fox affiliate in Youngstown, WKBN.

If just reading the headline or the headnote, one might initially reject the argument, particularly the assertion that the status of transsexual alone is enough to gain Title VII protection. Before making that judgment, you should read Judge Cole's opinion before assuming even in circuits other than the 6th, that this is not a serious argument. And for future reference, at least in either the Supreme Court or the 6th Circuit, both have now rejected the use of quotes around the phrase sexual stereotyping.

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Optimism and Expectations in the Workplace

As the country remembers former President Reagan, one of his key attributes cited by most was his perpetual optimism. For some reason that jumped to mind as I saw Susan M. Heathfield's recent column, The Two Most Important Management Secrets: The Pygmalion and Galatea Effects. Her About Human Resources is a great source for HR professionals.

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A View from the Academic World

HR Gateway, a top quality British human resources portal [registration required] turned to Dave Ulrich, Professor of business at University of Mitchigan, listed by Business Week as the top educator in Human Resources, for answers to what does the future in Human Resources look like. Here are his answers to questions, part one and part two.

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1 in 4 - Your Odds of Being Sued By an Employee This Year

At least according to a recent survey undertaken on behalf of the Chubb Insurance companies, one of the major providers of Employment Practices Liability Insurance. Stories appearing in business journals across the country, such as this one in the Austin Business Journal, Employee suits common at private companies, gives the highlights. Here is the more detailed report on employment practices liability [pdf] and on fiduciary liability [pdf].

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It's On The Way - Bullying Policy In Florida School

Continuing my one person campaign, or perhaps watch is a better word, about the progress of bullying into America, the following article in the Lakeland, Florida Ledger caught my eye, Schools To Set Bullying Policy. As I have noted in the past, bullying as a cause of action exists across the pond, and that is all we need to really increase legal costs in the workplace.


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