Thursday, July 23, 2015

Aurora Settles Federal Disability Discrimination Suit for $80,000

The Milwaukee field office of the Equal Employment Opportunity Commission ("EEOC") announced that Aurora Health Care, one of Wisconsin's largest employers, will pay $80,000 to settle a federal disability discrimination suit filed under the Americans with Disabilities Act ("ADA"). 

The lawsuit alleged that, in 2009, Aurora withdrew a job offer it had made to Kelly Beckwith ("Beckwith") for a position as hospice care coordinator upon learning during her pre-employment medical examination that she has multiple sclerosis (MS).  Beckwith had been diagnosed with MS some years earlier, but had not yet developed major symptoms. At the time she applied, Beckwith was working as a nurse and was fully qualified to perform the essential functions of the job.  Aurora attempted to argue that Beckwith did not disclose her MS.  The EEOC alleged that Aurora discriminated against Beckwith because of her disability by misusing confidential medical information to discriminate against her, and by using a qualification standard that tends to discriminate against those who are disabled.

The case was Equal Employment Opportunity Commission v. Aurora Health Care, Inc., Civil Action No. 12-cv-984.  

Wednesday, July 22, 2015

Title VII to be Amended to Protect Against Sexual Orientation and Gender Identity Discrimination?

Eric B. Meyer over at The Employer Handbook is reporting on a bill, called the "Equality Act," which will be introduced by Senator Jeff Merkley (D-OR) and several Senate Democrats as a “wide-ranging sexual orientation and gender identity discrimination bill.” A companion bill will also arrive in the U.S. House of Representatives.  Included in this wide-range of protections would be protection against discrimination in the workplace.  A fact sheet detailing the bill's plans can be found here.

As I have written about for several years now on this blog, the Employment Nondiscrimination Act ("ENDA") has failed time after time in Congress, and perhaps simply amending Title VII, especially with transgender and LGBT issues at the fore in the media lately, are all that is needed to provide for this much needed protection for thousands of employees across the United States as currently a majority of the states provide no protection, or limited protection for for the LGBT community in the workplace.

Stay tuned!

Abercrombie & Fitch Settle Supreme Court Case for $45,000

The now-famous Supreme Court case of EEOC vs. Abercrombie & Fitch Stores was recently settled for a mere $45,000.  That's right, only $45,000.  Abercrombie has agreed to pay Samantha Elauf $25,670.53 in damages and $18,983.03 in court costs.  Had Elauf been represented by a private law firm, the attorney's fees would have presumably been astronomical given this case went all the way to the SCOTUS.

Tuesday, July 21, 2015

EEOC Settles Age Discrimination Suit with Enterprice Rent-A-Car for $425,000

The Equal Employment Opportunity Commission (EEOC) announced last week that it had reached a settlement agreement with Enterprise Rent-A-Car Company of Los Angeles, LLC, a subsidiary of Enterprise Holdings, Inc., North America's largest rental car company.  Charges made to the EEOC alleged that job applicants over the age of 40 were passed over for hire into management trainee positions at the company's Burbank, Calif. location between 2008 and 2011 due to their age. An EEOC investigation determined that ten (10) job applicants over 40 were ultimately denied hire in favor of less qualified, younger applicants, a violation of the Age Discrimination in Employment Act (ADEA).  Though the local Enterprise company denied any wrongdoing, it has agreed to pay $425,000 to settle the charges and to enter into a 3-year conciliation agreement.

EEOC Holds Sexual Orientation Discrimination is Sex Discrimination Under Title VII

A temporary front line manager at a Federal Aviation Administration (FAA) facility in Miami, Florida, alleged he was not promoted to the permanent front line manager position because he was an openly gay man.  The FAA never reached a determination on the merits of the claim, and dismissed the complaint on the grounds it had not been raised in a timely fashion as required by EEOC regulations.  The complainant subsequently appealed the Agency's decision to the EEOC, which held that the complaint was timely.  And while the EEOC also did make a determination on the merits of the claim, they did conclude that Title VII forbids discrimination based on one's sexual orientation because it is a form of "sex" discrimination, which is consistent with an internal memorandum that was recently circulated instructing field offices to process and investigate sexual orientation, transgender, and gender identity claims

In reaching this decision, the EEOC held, "[s]exual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee's sex."  In reaching its conclusion, the Commission held "[d]discrimination on the basis of sexual orientation is premised on sex-based preferences, assumptions, expectations, stereotypes, or norms.  'Sexual Orientation' as a concept cannot be defined or understood without reference to sex," which is language from the landmark Supreme Court case of PriceWaterhouse v. Hopkins, 490 U.S. 228 (1989). 

The EEOC also addressed previous court decisions that rejected the argument that Title VII applied to sexual orientation discrimination because Congress, in 1964, did not intend Title VII to apply to sexual orientation and, therefore, Title VII could not be interpreted to prohibit such discrimination. The EEOC also rejected other court of appeals decisions that relied on the fact that Congress has  debated, but not yet passed, legislation explicitly providing protections for sexual orientation (referring to the Employment Non-Discrimination Act (ENDA)), holding instead:

[t]he idea that congressional action is required (and inaction is therefore instructive in part) rests on the notion that protection against sexual orientation discrimination under Title VII would create a new class of covered persons.  But analogous case law confirms this is not true.  When courts held that Title VII protected persons who were discriminated against because of their relationships with persons of another race, the courts did not thereby create a new protected class of "people in interracial relationships."

The EEOC referring to associational discrimination.  A very interesting decision and it may be nigh time for the U.S. Supreme Court to address the issue if ENDA continues to be shelved in Congress.

The case is Complainant v. Foxx, E.E.O.C., Appeal No. 0120133080 (July 16, 2015).

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?