Workplace Prof Blog

Important opinion from Hawaii Supreme Court

The Supreme Court of Hawaii has issued an important opinion that offers a new way to think about the McDonnell Douglas test. Adams v. CDM Media USA, Inc., 2015 WL 769745, No. SCWC-12-00000741 (Hawaii Feb. 24, 2015).

In Adams, the plaintiff alleged she was subjected to age discrimination when a company refused to hire her for a telephone sales position. The Hawaii Supreme Court found that the plaintiff established a prima facie case under McDonnell Douglas. The question in the case was whether the defendant met its burden in step two of that test, to articulate a legitimate, non-discriminatory reason for its action.

In support of its motion for summary judgment, the employer proffered several reasons for not hiring the plaintiff. The employer asserted the plaintiff lacked sales experience in the last five years, her prior sales experience was in other fields and involved face to face communication, she had little or no sales experience with corporate executives at Fortune 1,000 companies, and the decisionmaker was told the plaintiff disliked tedious work.

The Hawaii Supreme Court held that the employer failed to meet its burden of production under the second step of the McDonnell Douglas test. The Court emphasized that the second step in the test requires the employer’s decision to be “legitimate.” The Court interpreted the word “legitimate” through the lens of Hawaii discrimination law to require that the refusal to hire an individual must relate to the ability of the individual to perform the work in question.

The Court held that summary judgment in the employer’s favor was inappropriate because the reasons provided by the employer either were properly contested by the plaintiff, were based or inadmissible hearsay or did not relate to her ability to do the job. Importantly, the Court held that the employer could not use the lack of sales experience in the last five years as a legitimate reason if the plaintiff could perform the sales job adequately without recent experience. In this case, the employer admitted that the decisionmaker did not rely on the published criteria for the job in his decision to not hire the plaintiff, and the Court expressed concern that this “recent job experience” criteria was only being applied to the plaintiff and that it was not a legitimate reason to disqualify a person for the job in question.

This case represents an important new way of looking at the second step of the McDonnell Douglas test and shows the further separation of state discrimination law from federal law. Also, the majority and dissenting opinions illustrate how confusing McDonnell Douglas still is, even though the test has been mulled over by courts for more than 40 years.

Sandra Sperino

EEOC General Counsel David Lopez on Supreme Court Oral Arguments

I was recently asked by a reporter about metrics relating to case filings and monetary recovery for the past fiscal year. I responded that the metric that has garnered much of my attention this year is “two-and-a-half” – the number of cases involving the EEOC before the Supreme Court this term. This morning, the Supreme Court heard the case of EEOC v. Abercrombie and Fitch. This case involves a 17-year old Muslim teenager denied hire by an Abercrombie Kids store in Tulsa, Oklahoma. This is an appeal from an adverse 10th Circuit decision. 731 F.3d 1106 (10th Cir. 2013). According to the government’s brief: “The question presented is whether an employer can be liable under Title VII for refusing to hire an applicant or for discharging an employee based on a ‘religious observance and practice’ only if the employer has actual knowledge that a religious accommodation was required and the employer’s actual knowledge resulted from direct, explicit notice from the applicant or employee.”

This was the EEOC’s second visit to the Supreme Court this term as a party. In Mach Mining v. EEOC, argued on January 13, the EEOC appeared as Respondent in a case alleging systemic sex-hiring discrimination examining the Commission’s pre-suit requirements. The Seventh Circuit below had ruled in favor of the Commission. 738 F.3d 171 (7th Cir. 2013). On December 3, 2014, the Supreme Court heard the Young v. UPS case addressing the scope of the Pregnancy Discrimination Act. The EEOC appeared as an amicus in this case. The Fourth Circuit had ruled below in favor of UPS. 707 F.3d 437 (4th Cir. 2013). The EEOC, as a party, has had two cases before the Supreme Court in one term only once before. (Can you name the two cases? See below for the answer). The addition of UPS v. Young makes it an interesting term indeed. Moreover, the fact that these cases are the only cases involving federal anti-discrimination laws before the Court this term means that when the Supreme Court renders its decisions in these cases, these decisions will, no doubt, generate considerable commentary by practitioners and scholars alike. At that time, I certainly will welcome your thoughts and feedback. Of course, I won’t comment on the specifics of "Our Year in the Supreme Court" until the decisions are issued. The EEOC’s website (see www.eeoc.gov), however, includes general information about the Commission’s efforts to enforce the prohibitions against religious and pregnancy discrimination as well as our conciliation and other early resolution efforts.

David Lopez, EEOC General Counsel

Postscript: The two cases? In the October 1982 term, the Supreme Court heard Newport News Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S. 669 (1983) (the Pregnancy Discrimination Act of 1978 prohibits sex discrimination on the basis of pregnancy not only for female employees, but also female dependents of male employees); and EEOC v. Wyoming, 460 U.S. 226 (1983) (extension of the Age Discrimination in Employment Act to cover state and local governments is a valid exercise of Congress' powers under the Commerce Clause).

Suja Thomas on General Motors and the Jury System

There is an interesting discussion over at saveourjuries.com by friend-of-blog Suja Thomas (Illinois) which examines the proposed procedural changes being advanced by some large companies that would effect how discovery takes place.  These changes, if adopted, would have a dramatic impact on employment law cases -- potentially resulting in a greater number of dismissals and lower rates of success at trial.  From the discussion:

"Under the proposed rule, without relevant information, courts are even more likely to dismiss these cases and other cases . . . before trial. Also, if cases are not dismissed before trial and end up before a jury, the cases will continue to be more difficult to win without relevant information."

The is a really interesting topic, and I encourage you to take a look at the discussion and weigh in.  As many of you know, Suja testified before the Advisory Committee on the Civil Rules on this issue.

-- Joe Seiner

 

Ohio State Symposium

The Ohio State Law Journal has just published a symposium on employment discrimination and torts, organized by Martha Chamallas and Sandra Sperino who, in addition to their own interesting pieces, provide an enlightening introduction. It's Volume 75, Number 6, but here are the titles and links:

Martha Chamallas & Sandra F. Sperino, Torts and Civil Rights Law: Migration and Conflict: Symposium Introduction, 75 Ohio St. L.J. 1021 (2014).

William R. Corbett, What is Troubling About the Tortification of Employment Discrimination Law?, 75 Ohio St. L.J. 1027 (2014).

Charles A. Sullivan, Is There Madness to the Method?: Torts and Other Influences on Employment Discrimination Law, 75 Ohio St. L.J. 1079 (2014).

Sandra F. Sperino, Let’s Pretend Discrimination Is a Tort, 75 Ohio St. L.J. 1107 (2014).

W. Jonathan Cardi, The Role of Negligence Duty Analysis in Employment Discrimination Cases, 75 Ohio St. L.J. 1129 (2014).

Maria L. Ontiveros, The Fundamental Nature of Title VII, 75 Ohio St. L.J. 1165 (2014).

Catherine E. Smith, Looking to Torts: Exploring the Risks of Workplace Discrimination, 75 Ohio St. L.J. 1207 (2014).

Ifeoma Anjunwa, Genetic Testing Meets Big Data: Tort and Contract Law Issues, 75 Ohio St. L.J. 1225 (2014).

Laura Rothstein, Disability Discrimination Statutes or Tort Law: Which Provides the Best Means to Ensure an Accessible Environment?, 75 Ohio St. L.J. 1263 (2014).

Martha Chamallas, Two Very Different Stories: Vicarious Liability Under Tort and Title VII Law, 75 Ohio St. L.J. 1315 (2014).

L. Camille Hebert, Conceptualizing Sexual Harassment in the Workplace as a Dignitary Tort, 75 Ohio St. L.J. 1345 (2014).

Deborah L. Brake, Tortifying Retaliation: Protected Activity at the Intersection of Fault, Duty, and Causation, 75 Ohio St. L.J. 1375 (2014).

CAS

 

Welcome Guest Blogger David Lopez, EEOC General Counsel

It is with great pleasure that we welcome David Lopez, EEOC General Counsel, as a guest blogger with the Workplace Prof Blog.  As we are all aware, Mr. Lopez has had a distinguished career, and the EEOC has benefited greatly from his leadership.  Mr. Lopez hopes to be blogging with us as early as next week on the upcoming Abercrombie and Fitch oral arguments, and he will definitely be checking in from time-to-time on the important issues of the day.  I attach his biography below -- Welcome Mr. General Counsel!

David Lopez was sworn in as General Counsel of the U.S. Equal Employment Opportunity Commission (EEOC) on April 8, 2010. He was nominated by President Barack Obama and was confirmed by the Senate on December 22, 2010. He was confirmed a second time by the Senate on December 3, 2014. Mr. Lopez is the first EEOC field trial attorney to be appointed as the agency's General Counsel. He has served at the Commission in various capacities for the past 20 years, including as Supervisory Trial Attorney in the Phoenix District Office and Special Assistant to then‐Chairman Gilbert F. Casellas. As General Counsel, Mr. Lopez runs the Commission's litigation program, overseeing the agency's 15 Regional Attorneys and a staff of more than 325 lawyers and legal professionals who conduct or support Commission litigation in district and appellate courts across the country.  During his tenure, Mr. Lopez has cultivated "one national law enforcement agency," encouraging the EEOC's litigators nationwide to operate more collaboratively and cohesively with each other and other internal partners. Under his leadership, the EEOC's trial program has been extremely successful. Since fiscal year 2013, the EEOC won 13 out of 17 jury trials, including significant verdicts involving race discrimination such as in the case against AC Widenhouse, where the 4th Circuit upheld a $243,000 jury verdict for the EEOC. Also, among the notable victories is the $240 million jury verdict ‐ the Commission's largest award ever ‐ in Henry’s Turkey Service, a case brought on behalf of over thirty intellectually disabled men. Significant appellate victories in EEOC enforcement actions include Mach Mining (EEOC's conciliation efforts not judicially reviewable); Boh Brothers (plaintiffs can prove same‐sex harassment under Title VII of the Civil Rights Act with "gender stereotyping" evidence); Houston Funding ("lactation" discrimination violates Title VII as amended by the Pregnancy Discrimination Act); United Airlines(employers may have to reassign disabled employees non‐competitively as a reasonable accommodation under the ADA); Baltimore County (making older workers contribute more to pensions violates the Age Discrimination in Employment Act); and Serrano & EEOC v. Cintas (Commission can bring "pattern or practice" suit under section 706 of Title VII). Mr. Lopez has also served as Co‐Chair of the committee that developed the Commission's Strategic Enforcement Plan for 2013 to 2016. He is the Chair of the Commission's Immigrant Worker Team, a group tasked with strengthening and coordinating EEOC's enforcement and outreach on employment discrimination issues affecting immigrant and other vulnerable workers. In 2014, the National Law Journal named Mr. Lopez one of "America's 50 Outstanding General Counsels," and the magazine, Diversity and the Bar recognized Mr. Lopez as a “Latino Luminary” for his work as a civil rights attorney and as General Counsel. In 2011, Hispanic Business named Mr. Lopez to its list of 100 Influentials in the Hispanic community. Before becoming General Counsel, during his 12 years in the EEOC's Phoenix District Office, Mr. Lopez successfully tried several novel and noteworthy cases. He won significant jury verdicts against Alamo Rent-A-Car (the first "post‐9/11 backlash" religious accommodation case brought by the EEOC), and Do Daddy (a national origin (Moroccan), religion (Islam), and retaliation case), to name a few. From 1991 to 1994, Mr. Lopez was a Senior Trial Attorney with the Civil Rights Division, Employment Litigation Section, of the U.S. Department of Justice in Washington, D.C. Between 1988 and 1991, Mr. Lopez was an Associate with Spiegel and McDiarmid in Washington, D.C. Mr. Lopez graduated from Harvard Law School in 1988 and graduated magna cum laude from Arizona State University in 1985, with a B.S. in Political Science.

Suing Whistleblowers

For every revolution, there is a counter-revolution, or at least an attempted one. And we’re beginning to see serious push-backs by employers who have been sued by whistleblowers. One of the more extreme examples is currently before the New Jersey Supreme Court, and involves a school district employee who took a number of confidential documents from her employer for use in her whistleblower and discrimination suit against it. When the employer learned about the taking during discovery, it promptly informed the county prosecutor, who in turn promptly had the plaintiff indicted.

But criminal suits are not the only example of employer pushback against whistleblowers. In the False Claims Act context, one of the leading qui tam relator’s-side law firms, Phillips & Cohen, has been sued (unsuccessfully, so far) by one of the companies it had sued, the claim being that it and the relator stole company trade secrets for use in a FCA suit.

Another example of an unsuccessful suit is both interesting and perhaps an object lesson. In Rockwell Medical, Inc. v. Yokum, 2014 U.S. Dist. LEXIS 178142 (E.D. Mich. Dec. 30, 2014), the defendant, Yokum, was a former employee who had sued the plaintiff in California for wrongful termination. He claimed that his opposition to various Rockwell problems in clinical trials and the company’s drugs led to his discharge. Although Rockwell had prevailed in the wrongful discharge case, its victory wasn’t enough: it brought suit in Michigan against Yokum on a blizzard of claims, including defamation, violation of its nondisclosure agreement, and misappropriation of both tangible and intellectual property.

The district court granted Yokum’s motion for summary judgment, in the process lambasting the Rockwell’s attorneys for their failure to respond appropriately to the motion; rather than responding to the defendant’s specific claims, their brief “simply invited the court to review the 500+ pages of material submitted as exhibits and to conclude on its own, with no illuminating assistance from plaintiff, that their claims are not factually supported.”

This odd approach raises questions as to whether the goal of the litigation was ever to win a judgment – as opposed to dragging its former employee (presumably a California resident given where he filed his suit) to Michigan and putting him through an expensive discovery process and the cost of the summary judgment motion. This suspicion is, if anything, reinforced by the court’s treatment of the various claims.

The defamation claim, apparently based on Yokum’s allegations in the California suit, was defeated by the litigation privilege, which was never mentioned in the plaintiff’s response to the summary judgment motion, and, in any event, Rockwell failed to identify any specific false statement, much less put in evidence as to why it was false. Contract claims for breach of a nondisclosure agreement were dismissed because Rockwell never identified any specific item of confidential information that was disclosed, and because much of the relevant information had necessarily been disclosed to the FDA and doctors and patients in clinical trials. Ditto for the alleged trade secret theft. As for tortious interference, Rockwell failed to identify any specific contractual relationship with which Yokum supposedly interfered. Finally, the court rounded out its opinion by finding that Rockwell had also failed to identify any physical property Yokum had taken and not returned.

I said earlier that there may be an object lesson here, but it’s not exactly clear what it is. On the one hand, the spanking the court administered to Rockwell suggests that employers (and their attorneys) should tread carefully before launching a counterattack on an employee who has brought a whistleblower suit. But, on the other hand, Yokum probably paid a stiff price in attorneys’ fees to prevail, which means that the employer succeeded in imposing a penalty for his suit.

Of course, procedural rules provide some protection for truly meritless suits, but unfortunately, one is forced to wonder if this kind of “legal” retaliation might not be yet another reason for whistleblowers to think twice before commencing suit (and, if so, how courts are likely to respond to such retaliation).

Cross-posted at Health Reform Watch. 

CAS

Corporate Diversity Programs and Gender Inequality

    A recent paper investigates why corporate gender diversity programs tend to fail: Christine L. Williams,  Kristine Kilanski, and Chandra Muller, "Corporate Diversity Programs and Gender Inequality in the Oil and Gas Industry," Work and Occupations 41 (Nov. 2014): 440-476.  Here's the abstract: 

Since the 1980s, major U.S. corporations have embraced diversity as a management strategy to increase the number of women in top jobs. Diversity management programs include targeted recruitment, hiring, and promotions policies; mentoring programs; affinity groups; and diversity training. Few of these programs have proven effective in achieving gender diversity in the corporate world, despite their widespread popularity. To explore the reasons for this, the authors investigate the experiences of women scientists in the oil and gas industry who are targeted by these programs. In-depth interviews reveal possible reasons why these programs fail to achieve their intended goals. The authors find that these programs can paradoxically reinforce gender inequality and male dominance in the industry. The authors discuss alternative approaches for addressing gender inequality in work organizations and conclude with implications of their findings for corporate approaches to promoting diversity and for future research.

The paper is based on in-depth interviews with 30 experienced women geoscientists (selected by snowball sampling), supplemented by observations at three professional meetings, an informal focus group with high-level executives, and interviews with three male supervisors.

 

--Sachin Pandya

Spreading Like Kudzu

There's been a general consensus, based on a lot of anecdotal evidence, that the use of noncompetition agreements has proliferated, a perception reinforced by the recent news that Jimmy Johns requires all of its employees, including sandwich-slicers, to execute such documents.   This reportedly triggered an inquiry by the NY Attorney General.   It's nice to know that competition in the sandwich-building biz, at least in New York, may soon be unrestrained, but the question is whether this was an anomaly or indicative of a bigger trend.

It seems the latter.  Until recently there seems to have been no sustained effort to assess the use of such agreements across the American economy, a gap which is addressed in a working paper posted by Evan Starr, Norman Bishara, & JJ Prescott.  Noncompetes in the U.S. Labor Force.  The abstract explains:

 As a result of limited empirical evidence and controversial anecdotes, speculation over the ubiquity and importance of covenants not to compete in the U.S. labor market is rampant. Using data from a new survey, we present the first estimates of the overall incidence of noncompetes in the U.S. labor force, and characterize the incidence by worker, firm, and regional characteristics. The data show that noncompetes are a perhaps surprisingly common feature of the labor market. As a lower bound, we estimate that one in four workers have ever signed a noncompete, and 12.3% are currently working under one. Of those with college education or above, one in five are currently subject to a noncompete agreement. The occupations in which noncompetes appear most frequently are engineering (30%) and computer and mathematical occupations (28%), though they are prevalent in typically lower-skilled occupations as well: office support (9%), installation and repair (11%), production occupations (11%), and personal services (12%). We also find that noncompetes are more likely to be signed in states with higher noncompete enforcement policies. We conclude that while noncompetes are found in the places one would expect, they are nevertheless still prevalent in the low-wage, low-skill occupations. We discuss why firms might choose to use noncompetes, including an analysis of wage-tenure profiles and firm-sponsored training. We relate our findings to our understanding of the labor market and the debate over noncompete enforcement.

The study has some other interesting aspects, some pretty counterintuitive. For example, in California, where such agreements are unenforceable, some 13.9% of workers nevertheless sign them. As some have suggested, employers may see some advantage in trading on worker ignorance -- or at least insecurity -- regarding their rights. 

As for the argument that noncompetes are paid for by increased compensation, the study revealed that only about 10% of respondents who signed such agreements bargained over them, a decision strongly impacted by the fact that 70% of those asked to sign had no other offer.  But even among those with such an offer, only 20% bargained over the noncompete. However, the authors do report an increase in training and a $10,000 wage premium 8 years into tenure, although they note that longevity itself -- not the noncompete -- might explain the premium.

Well worth a read for those interested in this area of employment law! 

 CAS

More on Wages and Jobs

Perhaps because the issue is becoming highly politicized, there seems to be an uptick in the media on the amount of coverage of employee job growth and pay. The recent literature and studies have shown a gradual increase in employment opportunities as well as steady increases to worker salaries. The improved outlook for jobs is not new, but the higher wages are a welcome sign after seeing pay stagnate for such a long period of time. The New York Times has a wonderful and detailed article that looks at these different issues. From the piece:

"On the wage front, the jury is still out. Last month, average hourly earnings rebounded after falling in December, increasing 2.2 percent for the last 12 months and suggesting that the benefits of a tighter job market could soon begin to spread more broadly to ordinary workers."

I highly recommend taking a book at this article if you have the opportunity.

– Joe Seiner

How Well Does the Implicit Association Test Predict Discrimination? The Latest Round

    While the idea of implicit bias pervades discussions about employment discrimination and employment discrimination law, researchers continue to fight about how well the Implicit Association Test (IAT)—perhaps the most prominent measure of such bias--predicts how people actually behave.  Here are scenes from the latest round:

    Anthony Greenwald, Mahzarin Banaji, and Barry Nosek have posted “Statistically small effects of the Implicit Association Test can have societally large effects,” forthcoming in the Journal of Personality and Social Psychology (2015).  There, they dispute Oswald, Mitchell, Blanton, Jaccard, and Tetlock (2013), who found, in a meta-analysis of IAT studies, a lower average predictive validity correlation for IAT measures involving Black-White racial attitudes and stereotypes than reported in Greenwald, Poehlman, Uhlmann, and Banaji (2009).  Oswald et al. have posted a reply.

    Hart Blanton, James Jaccard, Erin Strauts, Gregory Mitchell, and Phillip Tetlock have also posted “Toward a Meaningful Metric of Implicit Prejudice,” forthcoming in the Journal of Applied Psychology.  Here’s the abstract:

The modal distribution of the Implicit Association Test (IAT) is commonly interpreted as showing high levels of implicit prejudice among Americans. These interpretations have fueled calls for changes in organizational and legal practices, but such applications are problematic because the IAT is scored on an arbitrary psychological metric. The present research was designed to make the IAT metric less arbitrary by determining the scores on IAT measures that are associated with observable racial or ethnic bias. By reexamining data from published studies, we found evidence that the IAT metric is “right biased,” such that individuals who are behaviorally neutral tend to have positive IAT scores. Current scoring conventions fail to take into account these dynamics and can lead to faulty inferences about the prevalence of implicit prejudice.

    Finally, Allan King, Gregory Mitchell, Richard Black, Catherine Conway, and Julie Totten have posted “Discovery and the Evidentiary Foundations of Implicit Bias,” Employee Relations Law Journal 40 (Winter 2014): 4-33.  Here’s the abstract:

This article documents the extent to which expert opinions regarding implicit bias rely on research that evades careful scrutiny by either the academic journals or the courts that admit the expert’s testimony, discuss the arguments that shield the data underlying research from discovery, argue for discovery of secondary data notwithstanding the arguments against disclosure, and argue for excluding expert testimony that relies on data beyond the reach of the opposing party.

Note: Of this paper’s authors, most are lawyers who typically represent large employers: King and Black at Littler Mendelson; Conway at Gibson, Dunn, and Crutcher; and Totten at Orrick, Herrington and Sutcliffe. Mitchell is a professor at the University of Virginia Law School and a co-author of some of the other papers cited above.

 

--Sachin Pandya

Nobody Discriminates Like Sara Lee?

There have been some egregious charges of discrimination brought against dessert giant Sara Lee. The allegations, reported in the Chicago Tribune, maintain that the company assigned African-American employees to work in dangerous conditions, singling these workers out for hazardous jobs at one of its facilities.  According to the article:

"Workers were exposed to asbestos, mold and other toxins. . . [The allegations maintain that] plant managers subjected black workers to racial slurs, intimidation and racial graffiti. Black employees were less likely than their white counterparts to be promoted."

If true, these are serious allegations, and an important reminder that racial discrimination continues to be a problem in our society.

-- Joe Seiner

Uber Good News and Hiring in an Improved Economy

There are a number of signs that the economy has turned a corner and that employers are finally hiring and paying higher salaries. Studies are now showing reduced unemployment rates and higher worker pay. The Wall Street Journal recently took a look at one such company -- Uber (which is a ride-sharing business for those of you not familiar with the company).  From the article:

"Uber’s labor pool is growing fast and large. .  . the number of new drivers is doubling every six months, with the company adding 40,000 new drivers in the U.S. in December alone. At the same time, Uber says nearly half its drivers become inactive after a year—either because they quit or are terminated. If those trends continue, Uber could end this year with roughly half-a-million drivers in the U.S. alone."

This is an encouraging case study and worth a read.  Hopefully, these trends will continue both at this company and in the economy as a whole.

-- Joe Seiner

Senate Hearing on NLRB Joint Employer Rule

As readers know, the NLRB's General Counsel is pursuing an action against McDonald's that, along with its opinion in the Roundy's case, would somewhat expand the concept of joint employment under the NLRA.  (Note that this article, which is otherwise good, mistakenly states that the NLRB has decided the issue.)  It's actually unclear to me how significant the GC's analysis would be in practice, but it's clearly a change in a direction that employers don't like.  As a result, the Senate recently held a hearing on the issue (there's a similar on the new representation rules that I'll post on once they happen later in the month).

Our emeritus blogger, Paul Secunda was one of the witnesses and seemed to do quite well).  There are obviously arguments about where the line between single and joint employment should be, but I think the GC is reasonably concerned about having their cake and eating it too (or Big Macs).  In other words, if corporations want more control over the employment practices of its franchises, it needs to take responsibility as well.  

-JH

Wage Raises Without Profit/Job Loss

The hot topic in labor and employment fields, economics, and the stock market this year has been the stagnation of wages and hopes of higher worker salaries. An interesting article over at PBS Newshour looks at different approaches that employers can use to raise worker salaries without impacting their bottom-line profits or cause any layoffs.  From the article:

"Better-compensated workers have been shown to be better workers. Therefore, when companies pay a higher wage, they will save money from reduced absenteeism, lower turnover and training and higher productivity. Those gains would defray roughly 20 percent of the total increase in the industry’s wage bill."

The article takes an interesting look at a study that was performed in this area, and provides a different perspective on this important issue.

- Joe Seiner

$1.7 Million in OSHA Damages

Workplace safety violations rarely grab headlines under OSHA, as the financial penalties are typically not substantial. A recent matter involving Ashley furniture – – one of the nation's largest furniture companies – – is a notable and very recent exception. The company was recently fined $1.7 Million for allegations of workplace safety violations by the federal government.  The New York Times ran an interesting story about the matter. From the article:

"The Department of Labor’s Occupational Safety and Health Administration cited the company for dozens of violations, including disregard for safety standards that led to a number of gruesome injuries. In July, one worker lost three fingers while operating a woodworking machine, the agency said."

OSHA  is a frequently overlooked employment law statute.  The article is an interesting one as it raises the profile of the statute  and discusses the nature of these types of violations and the potential penalties involved.  It is a great article to discuss if you are teaching employment law this semester. 

– Joe Seiner

"Big Glamour" in Big Trouble

There have recently been a couple of very high profile discrimination claims brought against two leaders in the fashion industry. The Huffington Post discusses a claim against Revlon which alleges unlawful retaliation and religious discrimination at the company. In another case against Saks Fifth Avenue,  a transgender woman employee maintains that she was required to use the male lavatory and was subjected to pervasive harassment by other employees.  From the article:

"The Charles Dickens classic, A Tale of Two Cities, is in part a study on inequality. Whether illegal discriminatory practices took place at Revlon or Saks will likely be revealed through deposition testimony. Lawsuits are big business with huge risks (and rewards), and for one party, it will be the best of times, and for the other, the worst of times".

It is interesting to see discrimination claims unfold in this industry, and these will be fascinating cases to follow in the coming months.

- Joe Seiner

Early Labor and Employment Supreme Court Decisions

Last week, the Supreme Court decided two labor and employment cases.  In one, M&G Polymers, a unanimous Supreme Court held that courts should apply ordinary contract principles when deciding whether health-care benefits survive the expiration of a collective-bargaining agreement.  This holding reversed the Sixth Circuit's Yard-Man presumption that CBAs intend these benefits to vest for life.  The Court remanded for the CBA to be interpreted by "ordinary contract principles," but ominously noted that "when a contract is silent as to the duration of retiree benefits, a court may not infer that the parties intended those benefits to vest for life."  This stance seemed to be a primary motivation for a four-Justice concurrence (the more liberal Justices).  The concurrence stressed that courts should be open to interpreting a CBA to intend vesting of retirees' health benefits, albeit without the Yard-Man "thumb on the scale."  The impact of M&G Polymers will depend on how courts apply the decision, so we'll have to wait and see.

In the other decision, Department of Homeland Security v. MacLean, the Court held (7-2, with Justices Sotomayor and Kennedy dissenting) that a TSA regulation did not eliminate whistleblower protection.  At issue was a provision in the federal whistleblower statute that makes an exception for disclosures "specifically prohibited by law."  In MacLean, the Court held that Congress intended this provision to apply to statutes, but not agency regulations (e.g., elsewhere in the statute, Congress used the phrase "law, rule, or regulation").  The dissenters largely agreed with the majority, but thought the exception was satisfied by the Homeland Security Act's mandate that the TSA prescribe regulations to prevent disclosure of certain information.  This case is certainly a win for federal whistleblowers and will require Congress to be more proactive if it wants exceptions for certain whistleblower disclosures.

-JH

 

Protected Conduct vs. Protected Conduct?

The Seventh Circuit just decided a Title VII retaliation case that could be viewed as a clash of two statute's views of protected conduct. Greengrass v. International Monetary Systems involved a retaliation claim, with the retaliation being the defendant employer's listing the plaintiff's EEOC charge, complete with her name, as the adverse action.

The Seventh Circuit had no trouble finding plaintiff's protected conduct (filing a charge with the EEOC) or the employer's adverse action (listing her by name in its 10Q forms under "Legal Proceedings" while describing it as meritless).  On the latter issue, the court stressed that plaintiff claimed that a recruiter told her the filing made her unemployable and she also alleged that a Google search of her name drew multiple hits. 

Plus there was considerable evidence of pretext - including the employer's inconsistent treatment of reporting litigation against it.  In earlier filings, it did not include litigants' names; then it did; then it didn't. Accordingly, a reasonable jury could conclude that its naming plaintiff was in response to advice about compliance with SEC regulations.

But what about the possibility that the employer was required by the SEC to name the plaintiff? After all, if it were, compulsion of law would seem to render any harm to the plaintiff simply a consequence of compliance. That could be viewed as either a kind of privilege or negating any employer intent to discriminate. At any rate, I'm informed by someone who knows that the rule is that a company needs to name the principal parties to material legal proceedings. Presumably, the question then would be whether the company so determined in good faith.   (I'm told that the fact that a firm simultaneously labels a claim as  "meritless" doesn't necessarily negate materiality. Go figure).  

So what should an employer do?  Passing on materiality in individual cases seems fraught after the 7th Circuit's decision, which suggests that maybe employers would be wise to name all litigants all the time. Not a happy result for employees, and one that leads me to wonder if naming all litigants might run afoul of the disparate impact theory -- assuming it applies in retaliation cases, which may be up for grabs in light of recent developments.  

 CAS

H/t to Tim Glynn, Steve Willborn.