Monday, June 15, 2015

May Edition of Employment Law Blog Carnival is LIVE

Philip Miles over at Lawffice Space hosted this month's edition of the employment law blog carnival and it is available to read here.  Thanks, Phil!

Wednesday, June 10, 2015

4th Circuit Holds "Porch Monkey" Comments Amount to Hostile Work Environment

The Court of Appeals for the Fourth Circuit this past month joined other state and federal courts that have held that single racial epithet can amount to a racially hostile work environment under Title VII.  Though the facts are utterly key in employment law cases, the facts in Boyer-Liberto v. Fontainebleau Corporation (4th Cir. 2015) make the 4th Circuit's decision easy to understand. 

The plaintiff in Boyer-Liberto is an African-American who, within a single 24-hour period in 2010, was twice called a "porch monkey" and threatened with the loss of her job by her Caucasian manager while working as a cocktail waitress at the Clarion Resort Fontainebleau Hotel in Ocean City, Maryland.  When the plaintiff reported these incidents to the hotel's owner, she was fired.  The plaintiff then filed a complaint against the hotel alleging a hostile work environment and retaliation under Title VII.  The district court granted summary judgment in favor of the hotel, then a not-fully-unanimous panel of the 4th Circuit affirmed and subsequently vacated by a grant of a rehearing en banc.

In reversing summary judgment, the 4th Circuit underscored the Supreme Court's holding in Faragher v. City of Boca Raton, 524 U.S. 775, 788 (1998), where it was held that a single isolated incident of harassment, if extremely serious, can create a hostile work environment.  This makes sense as think of an incident where a female employee is groped in her 'private part(s)' or a minority is called by the utmost offensive slur.  Surely one would not believe groping would have to occur more than once for it to give rise to a sexual hostile work environment claim.

Though Wisconsin is not within the jurisdiction of the 4th Circuit, the 7th Circuit, where Wisconsin is within, has indicated that a single instance of racial harassment can establish a hostile work environment in Daniels v. Essex Group, Inc., (7th Cir. 1991).

Tuesday, June 2, 2015

EEOC vs. Abercrombie & Fitch Stores

The United States Supreme Court this week issued its decision in the closely-followed failure-to-accommodate religion case filed under Title VII by the Equal Employment Opportunity Commission ("EEOC") against popular retailer, Abercrombie & Fitch.  Relatively surprising is that the decision was 8-1, with Justice Scalia delivering the opinion of the Court.  The lone dissenter was Justice Thomas, who was actually chairman of the EEOC under the Reagan administration.

I first blogged about this case about two years ago when the 10th Circuit reversed the EEOC's victory in district court.  As a brief summary of the case, again, the issue presented was whether Title VII's prohibition against an employer from hiring an applicant in order to avoid accommodating a religious practice that it could accommodate without undue hardship applies only where an applicant has informed the employer of his need for an accommodation.

Samantha Elauf is and was a practicing Muslim who, consistent with her understanding of her religion's requirements, wears a headscarf known as a hijab.  Elauf applied for a position in one of Abercrombie's stores and was interviewed and received a rating that qualified her for hiring.  However, the person that interviewed Elauf was concered that the hijab would conflict with Abercrombie's "Look Policy."  Toward that end, the interviewer went to the store manager for guidance to inquire as to whether the hijab was a forbidden "cap" under the Look Policy.  The store manager did not answer the interviewer so she then went to the district manager and told him that she believed Elauf wore the headscarf because of her faith.  The district manager told the interviewer that the headscarf would violate the Look Policy, as would all other headwear, religious or otherwise, and directed the interviewer not to hire Elauf.  Elauf then filed a charge with the EEOC and the EEOC then sued Abercrombie on her behalf, claiming that its refusal to hire Elauf violated Title VII.

The district court granted the EEOC summary judgment on the issue of liability, held a trial on damages, and awarded $20,000.  The 10th Circuit reversed and awarded Abercrombie summary judgment, holding that ordinarily an employer cannot be liable under Title VII for failing to accommodate a religious practice until the applicant (or employee) provides the employer with actual knowledge of his need for an accommodation.

Supreme Court's Decision

Scalia began by citing Title VII's two types of claims that may be brought:  disparate treatment and disparate impact claims.  Abercrombie argued that an applicant cannot show disparate treatment without first showing that an employer has "actual knowledge" of the applicant's need for an accommodation.  The SCOTUS disagreed.  Instead, the Court held, an applicant need only show that his need for an accommodation was a motivating factor in the employer's decision.

The disparate treatment provision forbids employers to:  (1) "fail ... to hire" an applicant (2) "because of" (3) "such individual's ... religion" (which includes his religious practice).  In breaking these elements down, the Court noted that Abercrombie (1) failed to hire Elauf and that (3) Elauf's wearing of a headscarf is a "religious practice."  Thus, the only existing issue and argument was whether she was not hired (2) "because of" her religious practice.

In discussing the term "because of," the Court noted that it typically imports, at a minimum, the traditional standard of but-for causation, but that Title VII relaxes this standard to prohibit even making a protected characteristic a "motivating factor" in an employment decision.  Furthermore, the Court stated, "it is significant that sec. 2000e-2(a)(1) does not impose a knowledge requirement."

The Court then stated, firmly, that "the rule for disparate-treatment claims based on a failure to accommodate a religious practice is straightforward:  An employer may not make an applicant's religious practice, confirmed or otherwise, a factor in employment decisions." 

The Concurring Opinion

Justice Alito delivered the concurring opinion which essentially took issue with the majority opinion's seeming omission of the employer's inability in the case to posit the defense of undue hardship.  The majority opinion did reference undue hardship in a footnote stating:
For brevity's sake, we will in the balance of this opinion usually omit reference to the sec. 2000e(j) "undue hardship" defense to the accommodation requirement, discussing the requirement as though it is absolute.
Unless I am incorrect, I do not believe Abercrombie attempted to show undue hardship as a defense and more or less "hung its hat," so to speak, on their argument about not having actual knowledge of Elauf's religion or potential need for accommodation.

The Dissent

Justice Thomas delivered the lone dissent in this case claiming that the EEOC can only prevail if Abercrombie engaged in intentional discrimination, and that because Abercrombie's application of its neutral Look Policy does not meet that description, that he would affirm the 10th Circuit's decision granting summary judgment.

Justice Thomas believed Abercrombie's Look Policy was neutral and did not intentionally discriminate against any religion.  The problem, especially in this case, is the fact Abercrombie knew--either because of the obvious appearance of Elauf and her name--that Elauf is Muslim and more than likely needed to wear the headscarf every day because of her religion, and inquired about how to handle the hiring decision.  At that point, it's arguable Abercrombie knew that they would have to consider accommodating her religion and allowing her to wear the headscarf, in violating of their Look Policy, or, argue that her wearing the headscarf served as an undue hardship, which essentially means they'd have to argue that the headscraf would harm their sales and image--a public relations nightmare. 

Employment law cases are almost always reliant on detailed facts.  Thus, this case perhaps turns out different with one slight deviation in the facts.  I have read several articles in the aftermath of the ruling and the defense bars is making the decision perhaps out to be worse than it is by implicating employers will face liability without fault.  As I stated earlier in this post, Elauf's name, combined with the headscarf, prompted the Abercrombie interviewer to inquire about the Look Policy, which showed their decision not to hire her was based on her religion as she was otherwise rated as 'hire-able.'  If Abercrombie wanted to truly stick behind its neutral policy and/or argue undue hardship, they surely had opportunity to do so but they probably knew arguing that the "Muslim look" is not compatible with their marketing and target demographic would have surely doomed them.  

Thursday, May 28, 2015

EEOC Will Now Process and Investigate Sexual Orientation, Transgender, and Gender Identity Claims

The Equal Employment Opportunity Commission ("EEOC") issued an internal memorandum whereby field offices were instructed to handle LGBT charges as follows:

1) Complaints of discrimination on the basis of transgender status or gender identity-related discrimination should be accepted under Title VII and investigated as claims of sex discrimination in light of Commission precedent; and
2)  Individuals who believe they have been discriminated against because of their sexual orientation should be counseled that they have a right to file a charge with the EEOC, and their charges should be accepted under Title VII and investigated as claims of sex discrimination in light of Commission precedent.

The memorandum then sets forth several items of precedent both in private sector litigation and Commission actions.  Essentially, the EEOC is taking the position that discrimination based on sexual orientation may be grounded in sex-based stereotypes (e.g., that men should be sexually attracted to women and that women should be sexually attracted to men) and thus violate Title VII's prohibition on sex discrimination.  The EEOC also takes the position that complaints of sexual orientation discrimination can constitute "protected activity" for purposes of a retaliation claim under Title VII.

Currently, some federal circuits have held that Title VII does not prohibit sexual orientation discrimination, while other courts have expanded Title VII to allow such claims.  The 7th Circuit in Muhammad v. Caterpillar, Inc., (7th Cir. 12-1723) stated categorically that Title VII does not prohibit sexual orientation discrimination or related retaliation.  The EEOC approved participation as amicus curiae in support of panel rehearing the case.

Given the Employment Nondiscrimination Act ("ENDA") may never be passed given attitudes in both parties about LGBT rights, the EEOC's best hope (thought also unlikely) is for the Supreme Court to hold that Title VII does cover these types of claims so ENDA's passage does not become as necessary.

Luckily for Wisconsin employees, the Wisconsin Fair Employment Act ("WFEA") does prohibit discrimination on the basis of sexual orientation, though arguments similar to the EEOC's argument under Title VII could be applied to the WFEA for gender identity and transgender discrimination.

Wednesday, May 27, 2015

Wisconsin Court of Appeals Holds Promise of Continued Employment Constitutes Consideration in Restrictive Covenant

In a landmark case out of the Wisconsin Court of Appeals, the Court finally addressed the issue of whether an employer's forebearance of its right to terminate an existing at-will employee in exchange for the employee agreeing to a restrictive covenant constitutes lawful consideration.  The Court held that it does constitute lawful consideration for signing a restrictive covenant and further held, in addressing the circuit court's opinion that the employer's promise not to fire the employee immediately if he signed the restrictive covenant was an illusory promise and did not constitute consideration, that an employee would be protected by other contract formation principles such as fraudulent inducement or good faith and fair dealing.

The plaintiff in the case, David Friedlen, had been an employee of Runzheimer International Limited since 1993, as an at-will employee, but in 2009, Runzheimer required all its employees to sign restrictive covenants, preventing them from working for competitors for two years after employment with Runzheimer ended  (the Court of Appeals discussed the difference between covenants signed by current employees and covenants presented to new hires).  Friedlen signed the agreement, but was fired two years later.  Friedlen then consulted with an attorney on the enforceability of the restrictive covenant and was advised that it was unenforceable for lack of consideration and so Friedlen took a job with a competitor of Runzheimer which prompted them to file suit against both Friedlen and his new employer.  A Milwaukee County Circuit Court Judge held that the restrictive covenant's promise of continued employment was not lawful consideration and held the restrictive covenant as unenforceable.  Runzheimer then appealed.

In arriving at this conclusion, the Court noted that jurisdictions throughout the country are split o whether forebearance of the right to terminate an at-will employee is lawful consideration for an employee's promise to forego certain rights and that the jurisdictions that hold that a promise not to fire is not lawful consideration for a covenant not to compete represent the "distinct minority."  The Court also noted that the American Law Institute supports their holding.

The case was remanded back to circuit court because the record and arguments before the Court of Appeals was undeveloped on the issue of reasonableness of the covenant's terms.  Justice Shirley Abrahamson wrote a concurring opinion where she points out that the majority's holding is "ambiguous and troublesome."  After all, the Court held a promise of continued employment constitutes consideration but completely fails to address exactly how much continued employment is reasonable.  That is, what if an employee is fired one month later?  6 months later?  1 year later?  When might the principles of fraudulent inducement or good faith and fair dealing arise? 

Wednesday, May 20, 2015

May Edition of Employment Law Blog Carnival is Live! #ELBC

Attorney Jon Hyman of the Ohio Employer's Law Blog hosted this month's edition of the Employment Law Blog Carnival and it is available to read here.  Thanks, Jon! 

Wednesday, May 6, 2015

6th Circuit Holds That Regular and Predictable On-Site Job Attendance is an Essential Function

An often very difficult analysis when it comes to disabled employees is the issue of reasonable accommodations.  A recent decision out of the Court of Appeals for the Sixth Circuit discusses the issue in-depth, but to the peril of the employee-plaintiff.

Facts

The plaintiff, Jane Harris, was a resale buyer (i.e., a resale buyer of steel who purchases raw steel from steel supplies and then resells the steel to parts manufacturers known as "stampers") who suffered from rather severe irritable bowel syndrome ("IBS").  Harris worked for Ford Motor Company for a little over 6 years and won a few awards, being recognized for her "strong commodity knowledge" and "diligent" work effort.  However, over time, Harris' performance began to sink, and her attendance became unreliable, with her IBS contributing to the situation.

When Harris' IBS became so severe that she couldn't even make the hour drive to work, Ford tried to help by adjusting her schedule to help her establish regular and predictable attendance.  Toward that end, Harris was allowed to telecommute on an ad hoc basis in an "Alternative Work Schedule."  However, this did not succeed as Harris was never able to ultimate establish regular and consistent work hours and "failed to perform the core objectives of the job."  Ford then tried its "Workplace Guidelines," which is a reporting tool specially designed to help employees with attendance issues tied to illnesses.  These also failed.  However, even though both of these attempts failed, Harris still requested leave to work up to 4 days per week from home.  After all, she had been allowed to do it before, Ford's policy also said her job was appropriate for it, and several of her coworkers telecommuted.  As the Court would show and discuss, after discussing Harris' job in-depth, this was held to not be a reasonable accommodation because the employer's judgment as to Harris' attendance as an essential job function--evidenced by their words, policies, and practices and taking into account all relevant factors--is "job-related, uniformly-enforced, and consistent with business necessity."

Harris believed telecommuting was a reasonable accommodation, and the Equal Employment Opportunity Commission ("EEOC") agreed and filed suit on her behalf, alleging Ford failed to reasonably accommodate Harris' disability and that it discharged her in retaliation for filing her charge, both in violation of the Americans with Disabilities Act ("ADA").  The district court granted Ford's motion for summary judgment concluding that "working from home up to 4 days per week is not a reasonable" accommodation under the ADA and that "the evidence did not cast doubt on Ford's stated reason for terminating Harris' employment: poor performance."  The EEOC appealed, and a divided panel of the 6th Circuit reversed on both claims.  Review was granted en banc, vacating the panel's decision.

Reasonable Accommodation

The 6th Circuit, like most court of appeal decisions begin, discussed the ADA and reasonable accommodations, at-length.  The Court noted that Ford had a duty to reasonably accommodate Harris, if she is "qualified."  To be "qualified" under the ADA, Harris must have been able to "perform the essential functions of [a resale buyer]" "with or without reasonable accommodation."  A "reasonable accommodation" may include "job restructuring and part-time modified work schedules,
 but it does not include removing an "essential function" from the position, for that is per se unreasonable.   Harris was ultimately held to not be a "qualified individual" because her excessive absences prevented her from performing the essential functions of a resale buyer, and also, in a broader context, held that regular and predictable on-site job attendance is an essential function (and a prerequisite to perform other essential functions) of Harris' resale-buyer job.

The 6th Circuit obviously did not make a bright line rule and stated, "Much ink has been spilled establishing a general rule that, with few exceptions, 'an employee who does not come to work cannot perform any of his job functions, essential or otherwise'"  (Emphasis added).  Further, the 6th Circuit wrote, "That general rule ... aligns with the text of the ADA.  Essential functions generally are those that the employer's 'judgment' and 'written job description' prior to litigation deem essential.  And in most jobs, especially those involving teamwork and a high level of interaction, the employer will require regular and predictable on-site attendance from all employees (as evidenced by its words, policies, and practices)."

The Court held that the EEOC could not show that regularly attending work was merely incidental to Harris' job because it was essential to her job and that the employee bears the burden of proposing an accommodation that will permit her to effectively perform the essential functions of her job.  However, Harris only proposed one accommodation and that accommodation sought to eliminate an essential functions from her job therefore making it unreasonable.  The Court then showed how Harris' previous attempt at telecommuting failed and how her coworkers seldom telecommuted.

Because the Court concluded Harris was unqualified for her position then made it unnecessary for them to consider whether Ford showed bad faith in the discussions to work out a reasonable accommodation while Harris was still employed, but they did anyway and discussed how Ford did attempt to work with Harris a couple of times to allow her to regularly and predictably attend work, to no avail. 

Retaliation Charge

Given Harris' slipping performance and her failure to improve under a performance plan, the Court held that no reasonable jury could have found that Harris' EEOC charge was the reason she was terminated (i.e., "but-for" her charge, she would not have been terminated).

The case is EEOC v. Ford Motor Co., No. 12-2482 (6th Cir., Apr. 10, 2015)

Thursday, April 23, 2015

EEOC Settles First of Its Transgender Lawsuits

Currently, there is no specific ban on employment discrimination against those in the LGBT community has ENDA has been stalled once again.  However, the Equal Employment Opportunity Commission (EEOC) has been innovative in using the ban on sex discrimination under Title VII in pursuing these claims under the theory of failure to conform to gender stereotypes and norms.  

Toward that end, last September the EEOC filed its first two lawsuits against private employers alleging sex discrimination under Title VII based on gender identity.  One of those lawsuits against Lakeland Eye Clinic of Florida has settled with the Clinic agreeing to make two payments of $75,000.  The represented plaintiff in that suit, Brandi Branson, had been the Clinic's Director of Hearing Services.  Branson had been hired as a male and began transitioning to female after about six months on the job. The lawsuit claimed that doctors all but stopped referring patients to her and that her position was eventually eliminated in a bogus “RIF.”(A replacement was reportedly hired into the “eliminated” position only two months later.)  The EEOC alleged that the Clinic violated Title VII by discriminating against Ms. Branson because of her sex (failure to conform to gender stereotypes).

The other EEOC lawsuit,  EEOC vs. R.G. & G.R. Harris Funeral Homes, Inc. (Case No. 14CV13710 E.D. Mich), against a funeral home operation in the Detroit area, is still pending.

Monday, April 20, 2015

April Edition of the Employment Law Blog Carnival is Live #ELBC

Ari Rosenstein and the great team at CPEhr’s Small Biz HR Blog hosted this month's edition of the employment law blog carnival.  Check it out here! 

Thursday, April 9, 2015

Virginia Becomes 19th State to Pass Workplace Social Media Password Privacy Law

In a continuing trend addressing social media in the workplace, Virginia has become the 19th state since 2012 when Maryland was the first state, to pass legislation protecting employees against employers seeking to gain entry to an applicant's or current employee's social media content.  More specifically, the law prohibits employers in Virginia from requiring, requesting, or causing a current or prospective employee to disclose the username and password to the individual’s social media account.  Additionally, the law also prohibits employers from requiring an employee to add another employee, a supervisor, or an administrator to the list or contacts associated with the individual’s social media account or changing the privacy settings.  

Wisconsin does provide similar protection for its applicants and employees (and also applies to educational institutions and landlords) pursuant to Wis. Stat. section 995.55 and allows for violations to be filed with the Equal Rights Division of the Wisconsin Department of Workforce Development  (Wis. Stat. section 106.54(10)).  

For more of a lay explanation, in Wisconsin, it is now illegal for a Wisconsin employer to request or require that an employee or applicant provide the employer with access to his/her personal Internet account.  More specifically, the law prohibits the following:

  1. Requesting or requiring an employee or applicant for employment, as a condition of employment, to disclose access information for the personal Internet account of the employee or applicant or to otherwise grant access to or allow observation of that account.

  2. Discharging or otherwise discriminating against an employee for refusing to disclose access information for, grant access to, or allow observation of the employee’s personal Internet account, opposing a prohibited practice, filing a complaint or attempting to enforce any such right, or testifying or assisting in any action or proceeding to enforce any such right.

  3. Refusing to hire an applicant for employment because the applicant refused to disclose access information for, grant access to, or allow observation of the applicant’s personal Internet account.
Similar to Virginia's law, Wisconsin's law does NOT prohibit the following:

  1. Requesting or requiring an employee to disclose access information to the employer in order for the employer to gain access to or operate an electronic communications device supplied or paid for in whole or in part by the employer or in order for the employer to gain access to an account or service provided by the employer, obtained by virtue of the employee’s employment relationship with the employer, or used for the employer’s business purposes.

  2. Discharging or disciplining an employee for transferring the employer’s proprietary or confidential information or financial data to the employee’s personal Internet account without the employer’s authorization.

  3. Conducting an investigation or requiring an employee to cooperate in an investigation of any alleged unauthorized transfer of the employer’s proprietary or confidential information or financial data to the employee’s personal Internet account, if the employer has reasonable cause to believe that such a transfer has occurred, or of any other alleged employment-related misconduct, violation of the law, or violation of the employer’s work rules as specified in an employee handbook, if the employer has reasonable cause to believe that activity on the employee’s personal Internet account relating to that misconduct or violation has occurred.

  4. Restricting or prohibiting an employee’s access to certain Internet sites while using an electronic communications device supplied or paid for in whole or in part by the employer or while using the employer’s network or other resources.

  5. Complying with a duty to screen applicants for employment prior to hiring or a duty to monitor or retain employee communications that is established under state or federal laws, rules, or regulations.

  6. Viewing, accessing, or using information about an employee or applicant for employment that can be obtained without access information or that is available in the public domain.

  7. Requesting or requiring an employee to disclose the employee’s personal electronic mail address.
The Wisconsin law also does not apply to a personal Internet account or an electronic communications device of an employee engaged in providing financial services, who uses the account or device to conduct the business of an employer that is subject to the content, supervision, and retention requirements imposed by federal securities laws and regulations or by the rules of a self-regulatory organization. Wis. Stat. § 995.55(2)(c)