Jottings By An Employer's Lawyer

Sunday, June 30, 2013

June 1963 - Civil Rights Act Introduced

On June 20, 1963, what became the Civil Rights Act of 1964 was introduced as H.R. 7152, in the 1st Session of the 88th Congress. It was referred to the Judiciary Committee which was chaired by  Rep. Emanual Celler (D-NY). He referred it to a sub-committee, which he also chaired.

On June 26, 1963, the first hearing was held with Attorney General Robert F. Kennedy as the sole witness.

Since for purposes of this blog, the key provision was Title VII, which is the foundation for the advent of employment law, it is interesting to note some of the provisions of the bill as originally introduced:
  • It created four protected categories, race, color, national origin and religion;
  • It was designed to prevent discrimination in voting, education and public accommodations;
  • In the introduction it made the following statement:  It is also desirable that disputes or disagreements arising in any community from the discriminatory treatment on the basis of race, color, or national origin shall be resolved on a voluntary basis, without hostility or litigation. Accordingly, it is the further purpose of this Act to promote this end by providing machinery for the voluntary settlement of such disputes and disagreements.
  • There was a Title VII, which allowed the President to establish a Commission on Equal Employment Opportunity with a mission of eliminating discrimination on the basis of race, color, national origin and religion by government contractors and sub-contractors. It would have the powers given to it by the President and would be chaired by the Vice President of the United States, with the Secretary of Labor serving as the Vice-Chair.
Obviously, a far cry from what would emerge as Title VII one year later in the bill as passed by the Congress and signed into law by President Johnson.

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Tuesday, June 25, 2013

Let's Get a Grip, Employees' Rights Did Not End Yesterday

Reporting is no easy task. But I have heard several reports concerning the two Supreme Court decisions yesterday that  convey misleading information, or at least don't put it in proper context.  An example is By 5-4, a More Hostile Workplace by New York Times editorial board member Teresa Tritch.

My comments on the two decisions, Vance v. Ball State and University of Texas Southwestern Medical Center v. Nassar with links to the decision themselves, are here and here.

There is no doubt that the employer prevailed in both cases, and that employers will benefit from the two decision in the future. But implying they will lead to a more hostile workplace or some of the other ills being proclaimed, are off the mark.

The starting point of any discussion about the efficacy of employment law should start with a basic premise -- once an employer has been sued they have lost. The only question is how little they have lost. See (albeit in another context) my explanation of that point. Bullying As a Cause of Action - One Large Step Closer.

Secondly, by definition all employees who bring cases based on their termination come from a pre-selected pool. That pool consists of individuals intentionally selected by a business manager or group of managers as not working out as an employee, or in cases of economic driven layoffs, not being the best to keep.

You don't have to accept that all employers are free of discriminatory motives, although I would argue most are, to understand that just based on the hassle and cost of terminating an employee, not to mention the concern of being sued, that is not an action that will be taken lightly. Thus you should not expect that all terminated employees would have meritorious claims or that there should be some 50/50 split. That employers "win" most cases should be the rational rule, not some surprise. (Even then see prior paragraph, how "wins" by employers are really minimized losses.)

With that small bit of context, which almost is never recognized in such articles, here are some additional comments (portions of the article in italics)
But according to a 5 to 4 decision by the Supreme Court today, the answer is no. With that ruling, the conservative majority — Chief Justice Roberts, and Justices Alito, Kennedy, Scalia and Thomas — has left many victims of workplace harassment without legal recourse.
No victims of workplace harassment are without legal recourse. The importance of whether someone was a supervisor goes back to an earlier pair of Supreme Court decisions in which the Court determined what standard would be utilized to decide harassment cases. The Court decided that in cases of co-employees the standard would be negligence, that is, did the employer know (or should have known) about the harassment and failed to take action.

In the case of  harassment by "supervisors" the court held that there were two types of harassment. In those where in addition to the harassment there was a "tangible employment action," then the standard was strict liability, the employer would have no defense. However, if there was harassment by a supervisor, but no tangible employment action, the employer would be strictly liable unless it could establish a two part affirmative defense.

In other words, the manner of proof depends on the status of the harasser and whether there was any tangible job action. There are three buckets:
  1. co-workers (or third parties);
  2. supervisors + tangible employment action; and
  3. supervisors with no tangible employment action.
Based on yesterday's decision, more people in the work force fall into bucket 1, as opposed to buckets 2 and 3. Each bucket is protected from harassment, just in different ways.

To be fair, Tritch later qualifies her earlier statement:
Under Title VII of the 1964 Civil Rights Act, employers are liable for discrimination by a “supervisor,” but not by co-workers (unless the victim has reported abuse by co-workers to a supervisor who does nothing to remedy the situation.)
The relegation of the whole first bucket to the parenthetical shows a misunderstanding of how harassment law works. It also fails to mention that the negligence standard covers not only situations where abuse was reported and the employer failed to act, but situations where the employer should have known abuse was occurring and failed to act.

What Justice Alito was doing was defining what standard would apply. Since there are different methods of proof, it is not insignificant, but it is hardly the end of the world and it is certainly not removing protection from harassment from any employee.

In the Nassar case, Tritch starts out on a wrong foot:
A second employment case, University of Texas Southwestern Medical Center versus Naiel Nassar, decided by the same 5 to 4 majority also thwarts the ability of employees to sue for discrimination under Title VII.
The whole basis of Nassar is that there are different standards, in different parts of the statute, for discrimination and retaliation under Title VII. Nassar has absolutely no impact on any employee claiming that they have been discriminated against because of their race, color, national origin, religion or sex, the five protected categories under Title VII. It only deals with retaliation.

The biggest error is this:
The university medical center appealed, saying that for Dr. Nassar to prevail, he had to show that retaliation was the sole factor leading to the job denial.

Tritch later repeats that mistake saying Justice Kennedy said that Nassar had to "show that retaliation was the sole factor in the job denial."

The trouble is he does not, even after yesterday's decision.

There are at least three different standards for finding liability in employment cases. The easiest way to show the difference is to use mathematical terms, although it is admittedly an oversimplification:
  1. motivating factor - Means that the person making the challenged decision had both legal and illegal motives in making the decision. For e.g. if 40% of the reason for firing an employee was her sex, and 60% her attendance, she could establish sex was a motivating factor.
  2. but for - Means that in the same case, the employee would not have been fired for her attendance if she were a man. Using the mathematical terminology, she would have to show that sex was 51% of the reason she was fired.
  3. sole reason - The employee would have to show that sex was 100% the reason she was fired.
If as Tritch said, the Supreme Court had held that an employee had to show retaliation was the sole reason, it would have been a really big deal. But the Court didn't. It held that you had to use test #2, but-for, not test #1, motivating factor.

Again, I am not saying it is not a victory for employers, nor insignificant. However, I would argue that in all fairness if it is not the only reading of the law as written, it is at least a fair reading of the law on which reasonable minds could differ.

It also is a repeat of what the Supreme Court decided was the standard in ADEA cases in Gross v. FBL Financial Services, and although there were similar cries that the world was ending for age cases, I haven't seen any support that has actually happened in the four years since Gross was decided.

There are also good reasons why motivating factor is not a workable standard for use when we have jury trials. In fact I testified before the Senate Judiciary Committee to that effect when they were considering legislatively reversing Gross. See link here. I would like to say my testimony persuaded them otherwise, but I am fairly certain it had more to do with legislative grid-lock than anything I had to say.

Employers definitely won yesterday. But in a system where employers lose just by being sued, to imply that these were drastic decisions demolishing the protections of the workplace, just goes too far.

I mean,
The question now is how far and how deeply the infection will spread before Congress passes legislation to establish the E.E.O.C’s reasonable definition of “supervisor” as the law of the land.

Really? Let's all get a grip.

For example, one lawyer writes: "Arguably, Nassar is a natural outgrowth of the 2009 Gross decision, but the law is now clear that a plaintiff must show that his or her protected activity was the singular cause of the employer’s action, not just one of the causes."

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Monday, June 24, 2013

"But For" Not "Motivating Factor" is Standard for Title VII Retaliation

Maybe it is because I practice in the 5th Circuit, but today's other major Supreme Court decision for the employment law world, University of Texas Southwestern Medical Center v. Nassar, (S.Ct. 6.24.13) is by far the more important case. The Court holds that retaliation under Title VII will use a "but for" not "motivating factor" standard.

Justice Kennedy writing for the majority, in language that is music to a defendant's ears, says it bluntly: "This, of course, is a lessened causation standard."

Looking beyond this victory, does today decision (coupled with Gross) establish a default standard for all federal employment law statutes? Maybe.

Justice Kennedy set out this rationale:
The approach respondent and the Government suggest is inappropriate in the context of a statute as precise,complex, and exhaustive as Title VII. As noted, the laws at issue in CBOCS, Jackson, and Gómez-Pérez were broad, general bars on discrimination. In interpreting them the Court concluded that by using capacious language Congress expressed the intent to bar retaliation in addition to status-based discrimination. See Gómez-Pérez, supra, at 486–488. In other words, when Congress’ treatment of the subject of prohibited discrimination was both broad andbrief, its omission of any specific discussion of retaliation was unremarkable.
The last part was the Court's way of explaining its prior (in my view) overly broad expansion of retaliation where Congress had not specified it. 

Going forward in reviewing other statutes, unless Congress specifically used "motivating factor" or other similar language, e.g. the language from SOX,  "protected activity was a contributing factor in the unfavorable action," "but for" is the likely test.

My guess is that this will turn out to be a chronological issue. Certainly any statute before 1991 is unlikely to have such specific language, but probably most statutes passed after the Civil Rights Act of 1991 will.

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Supreme Court Adopts Narrow Definition of Supervisor for Harassment Law

Justice Alito writing for the court succinctly sets out today's holding in Vance v. Ball State (S.Ct. 6/24/13):
We hold that an employer may be vicariously liable for an employee’s unlawful harassment only when the employer has empowered that employee to take tangible employment actions against the victim, i.e., to effect a “significant change in employment status, such as hiring,firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” Ellerth, supra, at 761. We reject the nebulous definition of a “supervisor” advocated in the EEOC Guidance and substantially adopted by several courts of appeals.
For employers, at least in circuits that had not adopted the "nebulous" definition, this falls into the dodging a bullet category, and for those circuits which had adopted such a rule (Justice Alito specifically mentions the 2nd and 4th Circuits)  it is a very positive day.

Given the other opinions coming in the next few days, it is unlikely Vance v. Ball State will get much attention outside the labor and employment law bar. However, Justice Alito's opinion is one that is going to be worthy of substantial attention as it covers a number of important topics ranging from the importance of simplified jury instructions, the importance of summary judgment in certain contexts, the unique nature of the NLRA given its subject matter of regulating differences between labor and management not to mention the explication of Farragher and Ellerth which ultimately is the basis on which the case is decided.

Justice Ginsburg writes the dissent and once again looks to Congress as the way out:
The ball is once again in Congress’ court to correct the error into which this Court has fallen, and to restore the robust protections against workplace harassment the Court weakens today.
That's the same song that is being sung about the Italian Colors Restaurant decision, and my view is the same. Unlikely to happen any time soon.

I am curious how this will affect labor law and the NLRA. I see its affect on employment law, but not the connection to the NLRA.
My mention of the NLRA was probably not clear. This decision won't impact the NLRA. However, Justice Alito has a long foot note (7) discussing why the definition of supervisor under the NLRA is not really applicable to the decision. Hs opinion touches on quite a broad spectrum of labor and employment issues and that was just one of them.
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Supreme Court Will Decide Recess Board's Fate

It would have been more of a shock (and an even bigger problem) if it had not done so, but today the Supreme Court granted cert of the D.C. Circuit's Noel Canning decision. See, What Now for the NLRB? Recess Appointments Invalid  for the background.

One small step toward removing the Board from its current legal limbo.

In the long term, a potentially game changing decision on the powers of the Presidency versus the Senate.

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Thursday, June 20, 2013

Supreme Court Arbitration Jurisprudence - No Class Action If You Say So

Combining today's decision in American Express Co. v. Italian Colors Restaurant, (6.20.13) with its decision 10 days ago in Oxford Health Plans v. Sutter,  (S.Ct. 6.10.13) the Supreme Court's position now seems clear. If an employer wants to avoid class or collective actions, it can do so by having an arbitration agreement that precludes arbitration of claims on a class basis.  But to be sure that happens, you need to be explicit about it.

There is no doubt more nuance than that, and I  have no doubt that there will be new arguments why such bans will not work, and it may be that there will be some courts will go for it, but the Supreme Court position seems quite definitive.

The most logical way for it to be changed is legislative, and of course there has been legislation introduced for the past several Congresses that would ban requiring an arbitration agreement as a condition of employment. But at least for the foreseeable legislative future, that seems unlikely.

The net result of these decisions is a rather clunky way to solve a huge problem that is plaguing the employer community, the collective FLSA (and class claims under state equivalents) action.  The courts have been unwilling or unable to address that issue by establishing an appropriate standard for conditional certification.  And now, because arbitration appears it will be a solution, that means a large number of employers who have not implemented arbitration plans will be re-thinking the decision.

All of that will have impacts on the employment law world. It is unlikely that anyone can predict all of the ramifications with certainty. But that there will be a changed world now seems inevitable.

Just as a side note, what ever you may think of  the judicial view of Justice Kagan, who goes from writing for the Court in Sutter  to dissenting today, you have to enjoy her clear cut writing.
And here is the nutshell version of today’s opinion, admirably flaunted rather than camouflaged: Too darn bad.
And a second side note, which surely can and will be amplified by those who really are students of the Supreme Court. particularly if I am right, some of Scalia's references to Justice Kagan's dissent, seem much more respectful than he sometimes is. When she was appointed, some of the commentary was that she might be able to build some personal bridges with members of the Court in the conservative wing and this makes me wonder if there is some, very small to be sure, signs that could be so.

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Wednesday, June 12, 2013

After JFK's National Address

Medgar Evers, a field secretary for the NAACP was shot dead as he got out of his car in his drive way in Jackson, Mississippi.  It was just one of many incidents in the summer of 1963 that kept the pressure for the passage of the Civil Rights Act of 1964 moving forward. Medgar Evers Wikipedia entry.

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Tuesday, June 11, 2013

A Doorway Stand and One Big Step Forward

On June 11, 1963, George Wallace made his famous "segregation forever" speech while standing in the door to block the integration of the University of Alabama. (Wonder what Coach Saban would think of that idea?).  After President Kennedy nationalized the Alabama National Guard, Wallace stepped aside.

Although that was certainly the iconic moment of the day, a much more important event occurred that evening when President Kennedy addressed the nation on the issue of civil rights. The NYT's editorial today talks about its significance, Kennedy’s Civil Rights Triumph.

For the first time, the President framed civil rights as a "moral issue."  More importantly for the development of employment law, President Kennedy promised that his administration would be introducing and supporting a comprehensive civil rights bill that would cover among other things employment.

Earlier in Congress, a civil rights bill had been introduced but it was fairly toothless. What was contemplated and what ultimately was introduced was a much more significant act.

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Monday, June 10, 2013

The Equal Pay Act of 1963, The First Tentative Step

The first 87 Congresses of the United States did not really give much thought to the relationship between an employer and its employees.  When Congress had acted the focus was on regulating the power between organized labor (unions) and management. While certainly a major factor in the work world, those legislative actions only incidentally involved the basic relationship between the individual employee and their employer.

In 1938, Congress had established some work place minimums, but even then it was as much a desire to help pull the country out of the depression as regulating the workplace. And with the limited exceptions that led to the 1947 Portal to Portal Act, the FLSA was a relatively minor player up until at least the 1980's.

The genesis for the Equal Pay Act arose when women entered the work force in greater numbers during the war years. As early as 1945, "The Women's Equal Pay Act of 1945," was introduced. Subsequent versions were introduced regularly but never gained traction.

In 1962, like the years before when the legislation was introduced, it was not "equal pay for equal work," but "equal pay for comparable worth," a much broader concept that would be fought again later.

The comparable worth standard was strongly backed by the Kennedy administration and actually passed out of the House Committee. But on the floor,  Representative Katharine St. George, (R-NY) offered an amendment defining equal pay act claims as those "for equal work on jobs, the performance of which requires equal skills." The Senate concurred with the St. George amendment, but the bill failed to come out of conference and so it was not finally adopted until the next Congress.

This time, the bill was introduced with the St. George amendment, dealing with the specific (and much narrower) situation where employers would hire men and women for the same position, but relying on societal and market norms, pay women less. 

The bill was signed by President Kennedy, 50 years ago today.  The current version can be found here, The Equal Pay Act of 1963 (EPA).

One procedural aspect of the EPA was that it was drafted as an amendment to the FLSA, and in its early years contained the same white collar exemptions, a limitation not removed until 1972.

The EPA was a limited piece of legislation and was quickly overshadowed by the much broader Civil Rights Act of 1964, passed one year later.

But if nothing else it marked a major shift in Congress' willingness to enter the relationship between an employer and their employees.  My personal view is that employment law as a discipline, really begins with the passage of the CRA.

But if the EPA was not the baby that started employment law, it was at least the twinkle in Congress' collective eye.

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Sunday, June 09, 2013

50 Years Ago ...

In the summer of 1963, the summer between the 7th and 8th grade for me, my main concern was playing first base for Tapp's Pony League baseball team. (It was Tapp's the furniture store, not the funeral home, although I doubt that many in the small town new, or for that matter cared.) In other parts of the country, there were much more significant matters as the civil rights movement which had been building since the mid-1950's was beginning yet another significant and violent summer.

What I would do for a living was probably the furthest thing from my mind, but if I had been asked, one thing that I could not have answered is that I would be a lawyer specializing in employment law.  That job didn't yet exist.

I am certainly not the first person who has ended up spending a lifetime doing something that did not even exist when they were born. But I don't think when I exaggerate the role employment law has had not only on me, but on our whole society.

For the last 10, now almost 11 years I have been making these notes, I have focused on current developments in the world of work. But it seems like a good time to look backwards and reflect on just how far we have come in the last 50 years.

Although the civil rights movement is focused on the struggle and treatment of black Americans, the first tentative step toward this new discipline was focused on a different group and one particular problem. More about that tomorrow.

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