Jottings By An Employer's Lawyer

Thursday, January 27, 2011

Kansas City Verdict - Another Successful "Reverse Discrimination" Claim

Earlier this month I commented that one trend we might see this year was more "reverse discrimination" claims. See, 2011 -- the Year of the Non-minority? The outcome of a suit in a Kansas City courtroom yesterday does not prove me right, but it certainly does nothing to prove me wrong.

Like many local governmental units, Kansas City faced with declining revenues dealt with the issue as is often the case by eliminating employees. In the 75 laid off were two, long service, white, female budget analysts, Jordan Griffin and Colleen Low. one in her early 50's, one in her early 60's. 

After they were laid off  they sued complaining that "younger employees or minorities with less experience and lower performance evaluations were kept on." Agreeing with their claims, the Jackson County state court jury awarded each $900,000 in punitive damages and compensatory damages of nearly $350,000 and $500,000 respectively. See, Two former workers win $2.6 million from KC.

Two things that can be drawn from the newspaper account of the story that will be all too familiar to those who try employment lawsuits.

First, the two plaintiffs both had "always received exemplary performance evaluations." And their boss had considered them "spectacular, fantastic employees." In this case those performance reviews may have been deserved, as were the comments, but anyone who has any significant experience in this area knows all too well of cases where such comments and reviews decidedly did NOT represent the true opinion of management that went into the decision making process.

Secondly, one of the things that likely offended the jury was the assertion that their manager had lied to them by telling them that they were not on the list. According to their lawyer:
He repeatedly and affirmatively lied to Jordan and Colleen. He wanted to lull Jordan Griffin and Colleen Low into a false sense of security.
While that could be true, my guess is that the manager had other more noble motivations. He testified that while he did tell them that they were not on the lay off list it was because:
  • the list hadn’t been finalized,
  • he was hoping they wouldn’t have to be on the list,
  • that they could find jobs elsewhere in city government, and
  • he was trying to protect the confidentiality of the list.
All of those reasons are certainly understandable, but it is also clear how actions that seem, even in hindsight to be reasonable, can play in the tinderbox of a court room.

And potentially underlying both of the lessons is the difficulty managers have in delivering bad news. That's one of the biggest reasons for erroneously inflated performance appraisals and why managers tell "white" lies in situations where there is at least a chance that the bad news won't have to be delivered.

I hasten to add I am by no means faulting these or any particular managers, delivering bad news is hard for most people. That and a thousand other reasons are why being a manager of people is one of the hardest jobs in America.

We should not be surprised that it sometimes leads to results such as this one. What is perhaps more amazing is how rarely it does.

Update: A Kansas City Business Journal article adds some additional information and does make it clear that this is the type of case I thought we might see more of this year. According to the article:
Jordan Griffin claimed that she applied to become Kansas City’s commissioner of revenue, a position that was vacant in 2006. Griffin alleged that the city would not consider her application or grant an interview because it hired an outside recruiter that specialized in diversity recruitment and that former City Manager Wayne Cauthen had a contract that provided financial incentives for minority hires.
See, Kansas City faces $2.66M discrimination verdict.

Trying to increase diversity, certainly a notable aspiration, and not discriminate on the basis of a protected category, both a noble aspiration and the law, is easy to talk about, but fraught with potential peril. No one ever said being an employer was easy.


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Tuesday, January 25, 2011

MMA Body Slam of $3.2 Million

$3.2 million is the total jury award to former Tapou T sales representative, Michelle Thomas, from a Los Angeles state jury. The jury first awarded $840,000 in compensatory damages, and then after finding the acts of the employer were with malice, added an additional $2.4 million. Jury Awards $2.4 Million in Punitive Damages to Ex-Employee of Apparel Firm

Although the newspaper article calls it a wrongful termination claim, the facts emphasized in the article were that Thomas was not paid the commissions she was promised, had to work 70 to 80 hours a week without overtime compensation, had to pay out of pocket for cable subscriptions that would allow her to watch the Tapou T show which airs on the Versus network, and one that particularly seemed to be galling that
she was roundly criticized by a supervisor for not watching one required program on her birthday.
I must admit that I had never heard of Tapou T and don't know a whole lot more about Mixed Martial Arts fighting, much less that there was a reality tv show about developing new fighters. And so my headline reference to body slam is probably an inappropriate reference that goes back fifty years ago when I watched professional wrestling from the Dallas Sportatorium with my grandfather.

At least back then, body slams were a big thing. Regardless of whether its an MMA term or not, it's likely that Tapou T is feeling pretty slammed today.


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Monday, January 24, 2011

Retaliation in the Supreme Court - Danger Zone for Employers

If there is one area of Supreme Court jurisprudence that employees can certainly not complain about it is the law of retaliation Today's decision in Thompson v. North American Stainless (S.Ct. 1/24/11) certainly does nothing to change that. A unaminous Court (with Justice Kagan not sitting) held that an employee who had been fired for his fiancee's protected activity was also protected by Title VII.

If I had any hope for an employer favorable decision, I had thought it would come from the strict constructionists, who could read the language of Title VII:
because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.
to mean that Congress had said it was the individual who actually engaged in the protected activity that was protected, since it did not read because "he, or someone he is close to" had done certain acts. Which is what the en banc 6th Circuit had done.

I thought that they might have also noted that Congress knows how to expand the zone when it wishes, e.g. the Americans with Disabilities Act which contains a specific provision for association type discrimination where of course Title VII does not.

But when I saw today's opinion was authored by Justice Scalia, I knew it was not to be.

As of now, employers have an unclear line (conceded by Justice Scalia) about what relationship will be considered sufficient to extend one employee's concerted activity to another:
Applying the Burlington standard to third-party reprisals, NAS argues will place the employer at risk any time it fires any employee who happens to have a connection to a different employee who filed a charge with the EEOC.
Although we acknowledge the force of this point, we do not think it justifies a categorical rule that third-party reprisals do not violate Title VII. As explained above, we adopted a broad standard in Burlington because Title VII’s anti-retaliation provision is worded broadly. We think there is no textual basis for making an exception to it for third-party reprisals, and a preference for clear rules cannot justify departing from statutory text.
The easy way to look at today's decision is that the zone of protected activity is now expanded beyond the protection of the one who engages in the activity. Just how far and under what circumstances that zone will reach will be fought out in the courts. A battle that no doubt starts today.
The guidelines, to the extent we have them are this:
We must also decline to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize. As we explained in Burlington,  “the significance of any given act of retaliation will often depend upon the particular circumstances.” Given the broad statutorytext and the variety of workplace contexts in which retaliation may occur, Title VII’s antiretaliation provision is simply not reducible to a comprehensive set of clear rules. We emphasize, however, that “the provision’s standard for judging harm must be objective,” so as to “avoi[d] theuncertainties and unfair discrepancies that can plague ajudicial effort to determine a plaintiff’s unusual subjective feelings.”
I am afraid those 'guidelines' leave a lot of "filling in" for the lower courts to do.  
So I was right -- the "strict constructionist view" controlled, just not the way I had hoped. Which may just show that even when one is "strictly construing" legislative wording, it is possible for judges to "make" not just "interpret" the law. Imagine that.


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Wednesday, January 19, 2011

A Ray of Sanity in the FLSA Collective Action Morass: Half-pay in Misclassification Cases

Given the overwhelming number of FLSA collective actions that continue to be filed, it is hard to find very much encouraging news, but one ray of sanity is the 4th Circuit's opinion in Desmond v. PNGI Charles Town Gaming, (4th Cir. 1/18/11) [pdf].

The issue was the not inconsequential question of how do you calculate damages in a misclassification case. Here, the employees were thought to be exempt under the administrative exemption, but the court held otherwise.

Plaintiffs of course seek a 150% premium (time and one-half) of the newly computed hourly rate, while defendants argue that overtime has already been calculated in. and so the premium should only be 50% or half-pay. The counter by the plaintiffs is that it gives the defendants the benefits of a fluctuating work week calculation, without having to comply with the regulations.

Noting that it was joining four other circuits and the DOL itself, the Court found the correct way of calculating damages in such cases to be set out by the Supreme Court in Overnight Motor Transportation Co. v. Missel (1942), one of the Court's early FLSA decisions. 

According to the court
The First, Fifth, Seventh, and Tenth Circuits all have determined that a 50% overtime premium was appropriate in calculating unpaid overtime compensation under 29 U.S.C. § 216(b) in mistaken exemption classification cases, so long as the employer and employee had a mutual understanding that the fixed weekly salary was compensation for all hours worked each workweek and the salary  provided compensation at a rate not less than the minimum wage for every hour worked.
Although there may be examples of where individuals were badly served by misclassification, in most cases, it is a case of individuals paid higher than most employees,who clearly understood that they were not receiving any pay for overtime, and were willing to work under those terms. Thus in many respects, any  recovery under the FLSA really is a windfall for them.

The 4th Circuit decision does not eliminate the penalty for misclassification, but it does at least rein it in, so that it is more appropriate.

One other lesson to be learned from this case is how it started.  It has been a highly contested (and no doubt expensive) case. Yesterday's decision is the second time it has been in the 4th Circuit and the second time it has been sent back to the district court for additional action.

Its genesis was when three racing officals were discharged because they unaminously declared the wrong horse to have won a race.  It certainly was not the first, nor will it be the last, case where an employee unhappy with his discharge, which may be perfectly legal makes it to counsel who can not help with the "presenting problem," but can help in other ways.


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Wednesday, January 12, 2011

Is Retaliation for Complaining About Sexual Orientation Discrimination a Violation of Title VII?

The headline in today's Daily Labor Report caught my attention, Court Revives Fired Gay Employee's Retaliation, Harassment Claims ($). I thought maybe it was another another step down the road for protection against sexual orientation discrimination, but still within the limits of Title VII.
But when I looked at the decision, Dawson v. Entek International (9th Cir. 1.10.11) [pdf] what I found was even more confusing.

The Court had in fact discussed the line of cases I was thinking about -- where a number of courts have found Title VII protection for sexual orientation based on gender stereotyping. However, the Court specifically found that there was no evidence of gender stereotyping in this case, and so dismissed what it called claims for sexual discrimination under both Title VII and Oregon state discrimination law. 

The Court held that it was error to dismiss Dawson's sexual orientation discrimination claim under Oregon state law. (There was a question about the effective date of the statute versus the conduct. The 9th Circuit side stepped that question by noting that even before the effective date Oregon had recognized a common law claim for sexual orientation discrimination.)

The part that obviously prompted the DLR headline, and caught my attention after reading the opinion, was the Court's holding that the trial court erred in dismissing his retaliation claim under both Title VII and Oregon state law.  There was no question Dawson had complained, but there was also no question that he had complained only about taunts based on his homosexuality, i.e. his sexual orientation, not anything based on gender stereotyping. 

I think the problem in the court's analysis is here:
Title VII prohibits an employer from discriminating against an employee for opposing an unlawful employment practice, such as filing a complaint alleging sexual orientation harassment and hostile work environment.
After making clear that sexual orientation is not protected under Title VII, the Court seems to have made a logical error in calling sexual orientation discrimination an unlawful employment practice.
In this case, depending on the remedies under Oregon state law, it may not matter, but as the decision is currently written it would certainly impact Title VII retaliation law.

It would be quite a step forward, not to mention ironic, if you could be fired for your sexual orientation, but could not be fired for complaining that you were being discriminated against because of your sexual orientation.

Surely we are not that much in the Alice in Wonderland world, at least not yet.


Can it not be argued that under the law persons who file or allege meritless charges or complaints are protected? To hold otherwise would serve as deterrent to individuals seeking the protection of the Act.
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Sunday, January 09, 2011

2011 --- the Year of the Non-minority?

Predicting what a new year will bring is a time honored tradition, but much like resolutions, most predictions rarely last longer than the first flip of the calendar. So rather than a long list, let me just start with one thing that I am guessing we might see, more cases where what might be thought to be "non-minority" employees are claiming that they have been treated differently because of their race.

One example of such a case comes from Peter Thompson's Maine Employment Lawyer's Blog, Can an employer fire a white employee for using the n-word if it lets black employees say it?. The employee in question was a news broadcaster at Fox 29 in Philadelphia before he was fired for using the n-word, while black employees were not disciplined for their use. According to Thompson's blog post,
Fox 29 argues that Mr. Burlington's comparison between his use of the n-word and black employees' use of the n-word ignores the fact that his use of the n-word offended some black employees; whereas no one took offense when the black employees used the n-word.
District Judge R. Barclay Surrick's 36 page opinion is a worthwhile read not only for the factual background, but for the complexity of the legal issues (which also includes a discussion of a cat's paw theory). Turning to the central issue he noted:
We begin by addressing an issue that does not appear to have been decided by the federal courts: can an employer be held liable under Title VII for enforcing or condoning the social norm that it is acceptable for African Americans to say “nigger” but not whites? ...

Historically, African Americans’ use of the word has been ironic, satirical, or even affectionate. Id. at 28-31. Too often, however, the word has been used by whites as a tool to belittle, oppress, or dehumanize African Americans. When viewed in its historical context, one can see how people in general, and African Americans in particular, might react differently when a white person uses the word than if an African American uses it. ...

Nevertheless, we are unable to conclude that this is a justifiable reason for permitting the Station to draw race-based distinctions between employees. It is no answer to say that we are interpreting Title VII in accord with prevailing social norms. Title VII was enacted to counter social norms that supported widespread discrimination against African Americans. See  McDonnell Douglas, 411 U.S. at 800 (stating that the purpose of Title VII was “to eliminate those discriminatory practices and devices which have fostered racially stratified job environments to the disadvantage of minority citizens”). To conclude that the Station may act in accordance with the social norm that it is permissible for African Americans to use the word but not whites would require a determination that this is a “good” race-based social norm that justifies a departure from the text of Title VII. Neither the text of Title VII, the legislative history, nor the caselaw permits such a departure from Title VII’s command that employers refrain from “discriminat[ing] against any individual . . . because of such individual’s race.” 42 U.S.C. § 2000e-2(a)(1).
In El Paso, right before Christmas, a jury returned a verdict in a case that also seems to make the point. The Odessa American headline over an AP story told the story, Anglo worker wins discrimination suit.

The case was brought by a white benefits manager who had an altercation with his Hispanic supervisor. The company fired both.  The employee's lawyer, John Wenke, argued that:
The company feared the human-resources manager, who is Hispanic, would file a discrimination lawsuit if fired, so company officials fired both Duncan and the manager. Wenke claimed the company feared the human-resources manager, who is Hispanic, would file a discrimination lawsuit if fired, so company officials fired both Duncan and the manager.
The jury apparently agreed, returning a $5.8 million verdict.

Two cases are hardly a trend, but they are enough to get one's attention.

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I am an HR professional with over 17yrs experience in the public and private sector. Use of that word is not exceptable for anyone...especially in the workplace regardless of the race of the person using it. Use of that word should be met with immediate and appropriate remedial action - including termination.

By the way, I am a Black Man.
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