D.C. Circuit rules short-lived affirmative action hiring plan for U.S. Foreign Service officers met Title VII standards; Ricci decision inapplicable
As we await the U.S. Supreme Court’s second ruling in a case addressing the constitutionally of race-conscious action in public university admissions, the federal appeals court for the District of Columbia Circuit has upheld a federal government employer’s affirmative action plan under Title VII standards. Affirmative action expert John C. Fox notes in a recent blog post that this ruling is “the only major case decision to uphold an employment preference pursuant to Title VII of the 1964 Civil Rights Act in the last 25 years.”
Last month, in an opinion authored by Judge Sri Srinivasan*, a D.C. Circuit panel ruled that a white Foreign Service Officer’s challenge to a long since defunct, and short-lived, State Department affirmative action hiring plan, which was aimed at increasing racial diversity among the officer corps in the U.S. Foreign Service, was properly dismissed by a federal district court. Rejecting the plaintiff’s argument that the Supreme Court’s 2009 decision in Ricci v DeStefano [92 EPD ¶43,602] controlled it’s analysis of the case, the appeals court found that the challenged plan was valid and that the plaintiff failed to establish that the Department’s justifications for the plan were pretextual (Shea v Kerry, August 7, 2015, 99 EPD ¶45,366).
Hiring plan. In 1985, based on its perception that there was an underrepresentation of minorities among Foreign Service Officers, Congressional enacted legislation directing the Department to develop a plan designed to significantly increase the numbers of minorities groups in the Foreign Service, with a particular emphasis on achieving significant increases in the numbers of minority group members in the mid-levels of the Foreign Service,” the FS-02 and -03 levels. Two years later, concluding that the State Department had been unsuccessful in its efforts to recruit and retain members of minority groups, Congress instructed the Department to substantially increase its efforts, specifically directing the Department to ensure that those efforts effectively addressed the need to promote increased numbers of qualified minorities into the senior levels of the Foreign Service. A 1989 General Accounting Office (GAO) report buttressed these concerns, and a House subcommittee held hearings focusing on the GAO report. Moreover, the EEOC repeatedly warned at that time that the State Department lacked an effective plan or program for overcoming the underrepresentation of minorities in the Foreign Service.
Responding to these concerns, the Department undertook various measures, including the affirmative action plan at issue in the present case. The plan consisted of a special hiring path for minorities into the Foreign Service’s mid- and upper-level ranks.
Although the challenged plan ceased to exist over twenty years ago, the plaintiff joined the Foreign Service during the two years the plan was in effect. When he applied for an entry-level Foreign Service Officer position in 1990, the Foreign Service career ladder consisted of six pay grades, ranging from FS-06 (entry level) to FS-01 (upper level), with the Senior Foreign Service (SFS) a step above FS-01. The Department generally filled vacancies at more senior ranks through internal promotions rather than external hires. Therefore, applicants from outside the agency usually entered the Officer corps only at the junior levels (FS-04, -05 and -06 levels). In May 1992, the plaintiff was hired into the Foreign Service at the FS-05 level.
At that time, the State Department operated two distinct programs that allowed applicants to bypass the Department’s usual preference for internal promotions and allowed the direct hiring of outside applicants into mid- and upper-level (FS-01, -02 and -03) positions. Under the one program, the Career Candidate Program (CCP), which was race-neutral, the Department accepted certain applications from outside candidates for FS-01, -02, and -03 positions. But the Department, in accordance with its general preference for filling vacancies through internal promotions, could hire an otherwise viable outside applicant through the CCP only if the Department issued a “certificate of need” attesting that no internal candidates could fill that vacancy. It would then consider the outside applicant consistent with its typical hiring procedures. In the absence of a certificate of need, no outside candidate could receive an offer of employment through the CCP.
The other program, the 1990-92 Affirmative Action Plan (1990-92 Plan), targeted minority applicants. Pursuant to this plan, the Department provided a special path for minorities seeking direct placement as outside hires into the FS-01, -02, and -03 ranks. The sole advantage to minority applicants under this plan was an automatic waiver of the CCP’s certificate-of-need requirement for American Indians, Alaska Natives, Asians and Pacific Islanders, Blacks, and Hispanics. Aside from the certificate-of-need waiver at the threshold stage, the 1990-92 Plan granted no benefits to minorities in the course of the hiring process.
In 2001, the plaintiff filed an administrative grievance with the State Department, asserting that he started at a lower pay grade by virtue of the 1990-92 Plan’s preferential treatment of minority applicants, infringing his rights under Title VII as well as the equal protection component of the Due Process Clause of the Fifth Amendment. Following the administrative dismissal of his grievance, he filed suit in federal court, alleging that, because of the plan, he entered the Foreign Service at a lower level than would have been the case had he been a minority applicant.
District court ruling. After his case traveled back and forth between the district court and the DC Circuit on the issues of whether his Title VII and equal protection claims had been timely filed, the district court, in light of the Lilly Ledbetter Fair Pay Act of 2009, ultimately found that the plaintiff’s Title VII claims were timely under the Ledbetter Act but that his equal protection claims were untimely. Addressing the merits of the Title VII claim, the district court determined that his claim was controlled by the Supreme Court’s decisions in Johnson v Transportation Agency, Santa Clara County, California (480 U.S. 616 (1987)), and United Steelworkers of America, AFL-CIO-CLC v Weber (20 EPD ¶30,026 (1979).
Those decisions, which upheld employers’ affirmative action plans against Title VII challenges, called for application of the three-step burden-shifting framework set forth by the High Court in McDonnell Douglas Corp v Green (3 EPD ¶8607). Applying this framework, the district court found that: (1) the plaintiff established a prima facie case, (2) the Department had presented evidence that, if accepted as true, permitted the conclusion that the Department had acted pursuant to a lawful affirmative action plan, and (3) the plaintiff’s lay statistical evidence presented in an attempt to show the program was unlawful failed to raise any genuine factual issue concerning the validity of the affirmative action plan. Therefore, the court granted summary judgment in favor of the Department.
Standing. As an initial matter, the DC Circuit ruled that the plaintiff had standing. He alleged that the 1990-92 Plan denied him the opportunity to compete on an equal basis by extending a preference to minority candidates that was unavailable to him—the ability to gain consideration for entry to a mid-level position without any certificate of need. Although he could have sought direct mid-level placement through the race-neutral CCP program, he instead applied only for an entry-level FS-05 position. Nevertheless, relying on the Supreme Court’s 2003 decision in Gratz v Bollinger (84 EPD ¶41,416), the DC Circuit found that the plaintiff here suffered an actual or imminent injury as a result of the 1990-92 Plan. Like one of the plaintiffs in Gratz, the plaintiff here refused to apply through a race-conscious program unless and until that program’s use of race-conscious preferences ceased, but he stood able and ready to apply to the mid-levels should the State Department cease to use race as a factor in mid-level hiring. Because of his stated intent to apply if the policy had been changed, he had standing to challenge the Department’s affirmative action plan even though he did not apply for a mid-level position through the CCP program.
Controlling case law. The plaintiff argued the standards articulated in Johnson and Weber had been displaced by Ricci. In Johnson and Weber, the Court upheld employers’ affirmative action programs because they were designed to eliminate a conspicuous (i.e. manifest) racial (Weber) or gender (Johnson) imbalance in traditionally segregated job categories. Adopting a new standard that underscored the tension between Title VII disparate treatment and disparate impact liability, the High Court in Ricci held that before an employer can engage in intentional discrimination to avoid or remedy an unintentional disparate impact, the employer must have a “strong basis in evidence” to believe it will be subject to disparate impact liability if it fails to take the race-conscious, discriminatory action.
Citing Ricci, the plaintiff argued that the court must eschew the framework of Johnson and Weber, and instead examine whether the State Department can show a strong basis in evidence that, had it not instituted an affirmative action plan, it would have been liable for discrimination under Title VII. Disagreeing with the plaintiff, the DC Circuit determined that Ricci did not upend Johnson and Weber such that those earlier decisions no longer guided the analysis of the claims at issue here.
Johnson and Weber were directly applicable to this case at hand, and there was simply no reason to conclude that Ricci, by implication, overruled those decisions. Noting that Ricci did not mention or even cite, much less discuss Johnson and Weber, the court pointed out that Ricci addressed a particular situation not in issue here. In Ricci, a group of white, and one Hispanic, firefighters sued the City of New Haven, Connecticut and its officials, challenging the city’s decision to toss the results of firefighter promotion exams on the premise that certifying the exam results would lead to disparate impact litigation by nonwhites. Unlike the city employer in Ricci, the employers in Johnson and Weber did not modify the outcomes of personnel processes for the asserted purpose of avoiding disparate-impact liability under Title VII. Likewise, the State Department did not do so here. Rather, the Department acted to expand job opportunities for minorities and to eliminate traditional patterns of racial segregation. Thus, Ricci was inapplicable, and Weber and Johnson still controlled. The DC Circuit noted that the Second Circuit reached the same conclusion in its 2011 decision in United States v Brennan (650 F.3d 65).
Prima facie case. Applying the McDonnell Douglas framework, (as required by Johnson and Weber) and noting that throughout, the plaintiff retained the burden of proving the invalidity of the Department’s 1990-92 Plan, the court first ruled that the State Department waived its only argument challenging the plaintiff’s prima facie case. For the very first time in the lengthy history of the case, the Department, on this appeal, argued that the plaintiff suffered no adverse employment action from his hiring at an entry-level (rather than mid-level) position because he never applied for direct mid-level placement, either through the 1990-92 Plan or through the race-neutral CCP. However, this argument was forfeited by the Department because it failed to raise it until this late stage of the litigation.
Valid affirmative action plan. Next, the court found the affirmative action plan at issue was valid under Title VII because it worked to target manifest imbalances in senior-level positions in the Foreign Service Officer corps, and that those imbalances resulted from past discrimination and because the plan refrained from unnecessarily trammeling the rights of non-minority candidates.
The State Department, citing the 1989 GAO Report demonstrated the existence of statistical disparities between the racial makeup of the employer’s workforce and that of a comparator population, in this case, those in the labor force who possessed the relevant qualifications. When it adopted the 1990-92 Plan, the Department relied upon the 1989 GAO Report, and the Department’s own formal analysis. The cited these two statistical studies as its principal evidence of a manifest imbalance between minority representation in the Foreign Service and the comparator population. After a detailed review of this evidence, the court concluded that the evidence cited by the Department demonstrated that there had been a past practice of discrimination with continuing effects through the early 1990s. Accordingly, the Department made an adequate evidentiary proffer that the 1990-92 Plan served to remedy the lingering effects of its past discrimination.
Finding that the 1990-92 Plan did not unnecessarily trammel the rights of white applicants, the court first noted affirmative action in hiring generally poses less of a concern than affirmative action in layoffs because hiring decisions upset settled expectations to a lesser degree and they affect a more diffuse group (all potential applicants) than do layoffs, which target specific employees. In addition, the Department’s 1990-92 Plan provided for the hiring only of qualified candidates because minority applicants underwent the same rigorous application path as did white candidates considered through the race-neutral CCP, with the only difference coming in the form of the certificate-of-need waiver at the threshold. Further, the plan was limited in duration as it ceased to operate in 1993 and has not been replaced. Also, the plan was not an absolute bar to the advancement of non-minorities in the Foreign Service ranks. Non-minority candidates from outside the agency could apply directly to the mid-level ranks through the race-neutral CCP, and internal white candidates could—and did—gain promotion to mid-level positions from the Foreign Service entry-level ranks, the court pointed out.
On top of all this, only sixteen minority candidates were hired into the midlevels through the 1990-92 Plan over the three calendar years of its operation. “With such a modest effect on the hiring process, the 1990-92 Plan was necessarily limited in the extent to which it could ‘trammel’ on the plaintiff’s rights, ‘unnecessarily’ or otherwise,” the court observed. Finally, the appellate court agreed with the district court’s assessment that the Department’s evidence showed that it turned to the 1990-92 Plan’s race-conscious measures only after race-neutral efforts were unsuccessful.
Pretext. Finally, the court turned its attention to whether the plaintiff proved that the Department’s justification for the plan was pretextual. Before the district court, the plaintiff introduced his own lay statistical evidence in an attempt to show that the Department’s identified manifest imbalances did not exist, but the district court rejected every piece of the plaintiff’s statistical evidence as inadmissible. The plaintiff did not appeal those rulings, and he did not raise any other arguments to show that the plan was invalid. As such, the appeals court ruled that he failed to carry his burden as to the third step of the McDonnell Douglas analysis.
Concurrence. Senior Circuit Judge Williams filed a concurrence. He explained that he wrote separately “to note that this area of the law continues to be rather amorphous,” pointing out that there was uncertainty in the case law as to the precise meaning of “manifest imbalance.” In addition, he called attention to what he viewed as a statistical problem disclosed by the record but not raised by the plaintiff on appeal. The description in the record of the State Department’s study did not state what statistical test or standard of statistical significance the authors used, or indeed whether they used any statistical method at all, he pointed out.
“Certainly they do not suggest that they made an adjustment in the standard for statistical significance to account for the multiplicity of subgroups, as would be necessary if we assume that State was seeking to identify only ‘imbalances’ not attributable to random chance,” he observed. Furthermore, the value of the analysis was impaired by the fact that many of the subsets utilized “are so small as to indicate a complete lack of intelligible criteria for State’s assertions of ‘manifest imbalance,’ a term the report often uses but never explains.”
* Judge Srinivasan and I are both alumni of Lawrence High School in Lawrence, Kansas, where he graduated one year prior to me.
Many companies encourage their employees to utilize blogging as a means of communicating, learning and developing new ideas. If your company’s not blogging, its likely being left behind. For years now employment professionals have cautioned employers regarding the necessity to implement a blogging policy protect against the practical and legal ramifications of blogging, including disclosure of trade secrets, financial information, or competitive data. A comprehensive policy would also include a statement defining the organization’s stance on blogging during working hours and on company owned equipment. Additionally, a disclaimer on views expressed in the blog may also be necessary.
In a number of instances, social media companies have successfully resisted claims by non-employee contributors who have asserted that they should be compensated for their blog posts appearing on a company’s website. But what about an employer that encourages its employees to post blogs from which it expects to derive some benefit. That was the situation recently faced by the court Tagupa v. VIPDesk, Inc. In that case, the court was called upon to consider whether an employee who “voluntarily” contributed to an employer’s blog stated a cause of action for overtime under the FLSA.
Request for blogging “volunteers.” The employee’s regular job was as a customer service representative for an employer in the travel industry. Five years into her employment, the employer sent an email announcing a “weekly blog” it was starting to enhance client websites. The email sought “volunteers to help write the blogs.” The employer’s correspondence with the “Blogger Team” emphasized the “voluntary” nature of the work. The employee attested that she prepared an additional 52 blogs over the next year, resulting in over 2,000 hours of unpaid time, though she never actually submitted them.
Starting in March 2011, the employee complained to supervisors about the failure to pay bloggers. She also complained to the Hawaii Department of Labor and Industrial Relations and the U.S. Department of Labor. She complained again in August and September. In early September, she was fired. The employee filed suit in 2013, asserting, among other claims, that the employer violated the FLSA. In response, the employer filed a motion for summary judgment.
Notice of uncompensated blog work. Here, the employee survived the employer’s summary judgment on her claim for overtime pay under the FLSA. The court found that it could be reasonably inferred from the evidence that the employer knew, or should have known, that the employee was working on the blogs and wanted to be paid for that work. The court pointed out that, while it might be the case that many of the hours the employee claimed were overtime were not actually hours spent performing work for the employer’s benefit, the record was disputed as to at least some of her claim.
Further, although the employer might be able to prove that it did not have notice of the overtime hours claimed by the employee, the record was not clear on this issue. There was evidence that the employee complained to the U.S. Department of Labor regarding the employer’s failure to pay for hours worked several months before her termination. And there was evidence that could lead to an inference that the employer knew, or should have known, that she was working on blogs and wanted to be paid for it. Thus, the court concluded that summary judgment was not appropriate on this claim.
As widely expected, a divided NLRB has loosened its standard for determining joint-employer status under the NLRA. In a press statement announcing the release of the long-awaited decision, the Board said its newly adopted standard serves “to better effectuate the purposes of the Act in the current economic landscape,” noting that more than 2.87 million U.S. workers were employed through temporary staffing agencies as of August 2014, and that the previous standard has failed to keep up with the changing employment relationship, “particularly the recent dramatic growth in contingent employment relationships,” the decision notes. Member Miscimarra and (outgoing) Member Johnson dissented (Browning-Ferris Industries of California, Inc., dba BFI Newby Island Recyclery, August 27, 2015).
The new test. The Board said that, applying “long-established principles,” it held that two or more entities are joint employers of a single workforce if (1) they are both “employers” within the meaning of the common law; and (2) they share or codetermine those matters governing the essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board will consider, among other factors, whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.
Certification to issue. Applying the restated joint-employer standard retroactively here, the Board found that Browning-Ferris, the respondent company, was a joint employer along with its labor supplier, relying on the fact that the company had indirect and direct control over the leased workers’ essential terms and conditions of employment, and also that it had reserved the authority to control those terms and conditions. Thus, it reversed the regional director and held the union established that the two entities were joint employers of the petitioned-for bargaining unit. Accordingly, the Board ordered the currently impounded representation election ballots to be counted within 14 days, and the appropriate certification issued.
Dissent. “[N]o bargaining table is big enough to seat all of the entities that will be potential joint employers under the majority’s new standards,” Members Miscimarra and Johnson asserted, in dissent. “We believe that the Board should adhere to the ‘joint-employer’ test that has existed for 30 years without a single note of judicial criticism.”
So what are folks saying about the widely expected ruling? The usual suspects are saying the usual things:
- House Education and the Workforce Committee Chairman John Kline (R-MN) and Health, Employment, Labor, and Pensions Subcommittee Chairman Phil Roe (R-TN) said in a joint statement that the Board’s decision overturns established labor policy and will disrupt the operations of small businesses across the country. “The Board has set a dangerous precedent that will lead to higher costs for consumers and fewer jobs for workers. … This decision is as bad as we feared, and it extends the board’s long track record of siding with union leaders instead of America’s workers and job creators. … we will work to roll back this flawed decision and the damaging effects it will impose on families and small business owners.”
- Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) agreed. “Today’s ruling seems intended to destroy a small business opportunity for more than 780,000 Americans in our country working 12 hours a day and facing the pressure of meeting payroll, paying taxes, and providing for their families–all as franchisees. It will also harm the millions of small businesses that provide work as subcontractors. …The board’s decision will greatly reduce any incentive for a corporation to sell franchises or parcel out business to subcontractors, suppliers or subsidiaries, and so may knock the ladder out from under millions of small business owners, some of whom have never been subject to NLRB jurisdiction before. I will be introducing a bill to invalidate this harmful ruling and restore an appropriate legal standard for determining who is a joint employer.”
- Meanwhile, the Congressional Progressive Caucus described the opinion on Twitter as a “HUGE win for workers w/ #NLRB decision holding corporations accountable 4 working conditions. We will oppose any #GOP effort 2 undermine.”
- Writing for thehill.com, Tim Devaney said “The Obama administration is redefining what it means to be an employer,” calling out franchise companies in general and the restaurant industry in particular as likely to see broad repercussions. “The NLRB ruling is a sharp departure from previous decisions that stated companies were only responsible for employees who were under their direct control. … The NLRB is seeking to end that situation by holding that both companies responsible as joint employers, because they “share or co-determine those matters governing the essential terms and conditions of employment.”
- And the U.S. Chamber of Commerce expressed “strong opposition” and said the opinion “radically upsets the NLRB’s longstanding ‘joint employer’ standard.” Randy Johnson, senior vice president for Labor, Immigration and Employee Benefits at the Chamber, saw “broad implications” from the Board’s action because “the array of obligations and liabilities that attach with a finding of joint employer status … could lead many employers to significantly alter or limit the contractual agreements into which they enter.”
- Echoing that view, the International Franchise Association criticized the decision, saying it “ignores nearly 50 years of bipartisan policy and decades of court and regulatory rulings and will ultimately harm our national economy.” It also called the Board action “proof that the NLRB may target parties to any business contract in pursuit of their ideological agenda of promoting unions above all else.” IFA President & CEO Steve Caldeira, CFE, said that the ruling jeopardizes small employers in numerous sectors and the future viability of the franchise model of doing business. He also predicted that the courts will ultimately reject the Board’s view.
- The Teamsters called it a “Huge victory for millions of temp & contracted workers! #NLRB decision holds joint employers accountable,” it said on Twitter. In a released statement, the union applauded the Board ruling “as an additional step to protect and provide a voice to millions of American workers by holding employers that rely on temporary or contracted workers accountable.”
- AFL-CIO President Richard Trumka said the decision “may very well signal the beginning of the end of outdated laws that fail to address an economic structure tilted against working people. It means more working people can engage in meaningful collective bargaining by bringing all parties who control their wages and other conditions of employment to the table.”
A more reflective view from practitioners
Mark G. Kisicki, shareholder in the Ogletree Deakins Phoenix office, also noted that the Board had overturned decades of precedent commonly apply to establish a joint employment relationship, not just under the NLRA, but for all purposes—that one company must be directly or immediately involved in controlling the terms of another’s workers. That precedent has been that “you are not a joint employer simply because you contract out to another employer for services you need rendered, even if you are having those services performed on your property,” he said.
Now the NRLB is focused on the indirect or potential right to control—which happens “any time a business uses or contracts out to a third party some services that it needs,” stressed Kisicki. He offered the example of janitorial services, and pointed out that when a company puts limits on the services it has contracted for, the Board now would consider this as “exerting indirect control,” as would requiring background checks or requiring confidentiality agreements.
Finally, Kisicki said it was important to understand the context of this case, which did not involve an employer that brought in temporary employees whom it supervised; “this was a true subcontracting relationship,” he emphasized, noting that the labor supplier here did its own hiring and provided its own onsite HR and supervisory staff.
Rebecca Bernhard, Of Counsel at Dorsey & Whitney in Minneapolis, raised similar concerns. She says the new standard comes with a price for employers. “This has serious implications for all businesses–those that typically work with contractors and subcontractors, those that operate in a franchise environment, and even those that simply hire contingent workers from a staffing agency. Departing from 30 years of precedent, the Board has set a new standard which requires that the two employers (whether franchisor or franchisee, contractor and subcontractor or recipient and provider of temporary employees) simply possess sufficient control over terms and conditions of employment.
“Before, the two employers had to both exercise control, but now they can exercise that control ‘indirectly.’ Unfortunately for employers, indirectly is a difficult test to define – and under the case at issue today, was found to be exercised through what have been standard terms in an agreement between a recipient employer and a staffing agency: terms such as the requirement for the staffing agency’s employees to meet standard selection tests. How can an employer now legitimately rely on a staffing agency for supplemental labor if it cannot require the agency to screen its employees according to the same standards the recipient-employer uses for its own employees?” Bernhard asked.
At any rate, it’s only the beginning
- Jonathan A. Segal, Partner at Duane Morris LLP and Managing Principal, Duane Morris Institute, quipped on Twitter that “#NLRB is as likely to find joint employer under “refined” test as #DOL is to find employee rather than contractor.”
- Seth Bordon, Partner at McGuireWoods and editor of LaborRelationsToday.com, tweeted “#NLRB’s new Joint Employer test: ‘We’ll know it when we want to see it.’”
- Finally, Steptoe & Johnson’s Employment Essentials blog team reassured us this is only the beginning: “Rest assured, #NLRB decision in Browning-Ferris 2day only 1st battle in longer fight about whether there should be new #JointEmployment std.”
By Lorene D. Park, J.D.
Good lawyers identify sound arguments and counterarguments. Great lawyers avoid hollow victories too—they know how to choose their battles. Even the best attorneys may miss something, though—some indication that they might win a battle but lose the war. It may simply be that a statute is being tested for the first time and an attorney went too far afield in guessing how it will be interpreted. In other cases, at least to a mere observer, it seems the lawyer should have seen it coming. In both types of cases, as shown by recent decisions, even seasoned attorneys should go back to basic considerations, repeatedly, as the case unfolds.
New laws not always open to interpretation. Consider a Fifth Circuit decision on Mississippi’s parking lot gun law, which states: “[a] private employer may not establish, maintain, or enforce any policy or rule that has the effect of prohibiting a person from transporting or storing a firearm in a locked vehicle in any parking lot . . .” The plaintiff, who was fired over a firearm stored in his vehicle and sued under the law, might have won—had he not pursued damages as his only remedy. The law also states: “[a] private employer shall not be liable in a civil action for damages resulting from or arising out of an occurrence involving the transportation, storage, possession or use of a firearm.” His attorney made some good points on the legislative purpose of the limit on liability (to avoid civil damages from workplace shootings), but these failed because the statute’s text was clear.
The Fifth Circuit made a point of explaining that a court’s “function is not to decide what a statute should provide, but to determine what it does provide.” When it comes to choosing your battles, shouldn’t that be the attorney’s function as well? Granted, this Mississippi law was relatively new, but it’s long been established that courts will not resort to other rules of statutory interpretation when the language of the statute is unambiguous. So perhaps the Mississippi lawyer should have seen this one coming.
Watch existing laws too. Don’t get too comfortable in thinking that your library of research and legal memos is complete, even as to the most common employment law issues. For example, most practitioners should know that, after Mach Mining, the remedy for the EEOC’s failure to conciliate is likely being sent back to conciliation (so think twice before bothering to make this challenge). But attorneys in the Northeast should also know that, in three recent cases, the Second Circuit rejected the DOL test for whether interns are employees; held that a demotion is not a “compensation decision” under Ledbetter; and broadened the scope of the FLSA retaliation provision to cover oral complaints to an employer. And when it comes to identifying all possible defendants (the hunt for deep pockets), the Fourth Circuit adopted the “hybrid” test for joint employers; and the Seventh Circuit clarified the right-to-control test. Court decisions like these can affect strategy and attorneys miss them at their own (and their clients’) peril.
Know the rules, especially where the bottom line’s concerned. There are so many procedural and evidentiary rules it is arguably impossible to retain them all. But when choosing battles, some rules stand out. For example, a few discovery disputes can be expected in any suit, but too many and a court will lose patience. A federal court in Colorado awarded $241,000 in attorneys’ fees to a plaintiff who only recovered $19,000 for compensatory damages and emotional distress. The court pointed to Rule 1, the spirit of which obligates attorneys to seek the just, speedy and inexpensive determination of the proceedings. In the court’s view, the attorneys lost their objectivity in assessing their positions and disregarded their Rule 1 duties when they “flooded the court with motions.”
The receipt of a Rule 68 offer is another moment to pause and reassess strategy. In one FLSA case, a complete offer of judgment that fully satisfied a plaintiff’s individual claims rendered the FLSA claims moot and deprived the court of jurisdiction. What happened after the offer expired (without being accepted) was of “no consequence.” Certain states have similar rules. Some provide that if an offer of judgment is rejected (by either side), and the party making the offer obtains a more favorable result, that party may recover attorneys’ fees and costs accrued after the offer was rejected. In these states, continued litigation may not be worth it.
When it comes to bottom lines, one attorney missed the boat when he sought injunctive relief only after judgment was entered and he realized he risked losing out on attorneys’ fees. The jury had found that age was a motivating factor in his client’s termination but that he would have been fired anyway. Even though the complaint’s prayer for relief requested “[a]ny further legal and equitable relief,” the Fifth Circuit was having none of it. Noting that for the entirety of the litigation the employer defended only against money damages, the appeals court reversed the grant of injunctive relief and, because that was the only relief on which the plaintiff “prevailed,” he lost the $340,000 in attorneys’ fees that were awarded below.
When you mess up, don’t compound your error. Speaking of bottom lines, attorneys need to recognize when a course of action is going to be wasted effort, even if the hope is to rectify the attorney’s earlier mistake. In another case where an attorney missed an opportunity but did not realize it until too late, a court found that an employer improperly used a Rule 45 subpoena, five months after discovery closed, to obtain documents from the plaintiff’s other employer. But the documents were on the list of trial exhibits, so this was not “trial by ambush,” and plaintiff’s counsel failed to object until weeks after the jury found for the defense. Despite the Rule 45 violation, the motion for a new trial or other sanctions was denied.
Another (all too frequent) wasted effort is raising an argument on appeal that was not raised below. Appellate courts simply won’t consider improperly raised arguments and attorneys should know that—begging the question, who pays for the time spent researching and asserting an argument doomed from the start?
The list could go on, but suffice it to say that attorneys who do not heed procedural rules are more likely to have a winning argument but no true victory.
Know your judge. You know those pesky rules mentioned above? Don’t forget standing orders, which often appear on a court’s or individual judge’s website. It’s also a good idea to review similar cases decided by the judge, and those where sanctions were imposed. For example, a federal magistrate judge in California resolving a discovery dispute pointed to his Chambers Rules, which prohibited boilerplate objections and conditional responses. Because the employer’s responses to discovery requests were the nonspecific, boilerplate, and conditional responses the court expressly warned against, the judge found that the employer waived its objections and ordered it to respond in full.
Courts also don’t like “kitchen sink” pleadings, which throw every possible claim or defense that an attorney can think of, regardless of whether it fits the case. Judges will sanction attorneys and their clients for asserting claims the attorney has not found have a basis in law or fact. The EEOC was recently ordered to pay $90,541 in fees for asserting a discrimination claim when it should have known by the pretrial conference that it lacked evidence of a prima facie case. In other cases, the fact that many claims were asserted but most failed led courts to significantly reduce a prevailing plaintiff’s recovery of attorneys’ fees.
Know the parties. How often is an attorney sandbagged by his or her own client? Hard to tell, obviously, but I’m guessing it happens more than you think because clients do not know what’s relevant and do not like to cast themselves in a bad light. So, you know that first real conversation you have where you explain the attorney-client privilege and tell them you need to know everything? Repeat it. It is better than being surprised. In one case, after-acquired evidence that an employee’s falsified job application precluded her from recovering front pay or being reinstated. Damages will also be reduced where a client failed to mitigate them, or in the case of emotional distress damages, where the client didn’t seek medical or psychological treatment.
Obviously, you should know your opponent as well. For example, Plaintiffs’ counsel can help avoid hollow victories by investigating whether the company can pay any judgment, whether there are other companies that could be considered a joint or integrated employer, and so on.
Return to the basics for each case. If there is one thing these cases show, it is that attorneys can better avoid hollow victories by returning to basic considerations. A lawyer who has a full load and has become extremely familiar with the typical arguments and precedent might easily fail to see new developments in the law. And it is too easy to take a “canned” pleading and fill in the blanks, without really considering whether the claims or defenses really apply to the case at hand. This is the path not only to missing a chance for a win, but perhaps to sanctions and a reputation among peers for sloppiness.
Best practice to maximize outcome? For each case, freshen up on the law and procedural rules, and know the key players.
A recent arbitration hearing concerning the termination of a Minnesota state court employee surfaced what is hopefully not a disturbing trend among government workers – the misuse of government databases to uncover scandalous events. Though the employee’s termination was reduced to a 15-day suspension, the surrounding facts are illuminating.
A judicial branch internal audit revealed that employees at several judicial districts were misusing their access to a Driver and Vehicle Services database by looking up the records for celebrities, local officials, and family members; a violation of policy that could result in termination.
The audit identified 26 employees who had made suspicious lookups. The employer then administered discipline to those determined to have violated the policy, and it terminated the three employees with the highest number of violations. The employee with the highest number of alleged violations (approximately 1,410 questionable lookups) filed a grievance contesting her termination.
The arbitrator sustained the grievance in part and reduced her termination to a 15-day suspension. First, the practice of misusing the database was common in the workplace, and the penalty did not fit the violation. In essence, she was terminated for the act of looking up people for non-business reasons. She was a long-term employee with an unblemished record, and the arbitrator was convinced that she would not commit similar violations in the future.
In deciding the appropriate penalty, the arbitrator looked to an arbitration decision involving one of the other terminated employees, who had 478 inappropriate lookups. In that case, the arbitrator overturned the termination and assessed a 10-day suspension. AFSCME Council 65 and Minnesota Judicial Branch, Third Judicial District. June 1, 2015. Harley M. Ogata, Arbitrator.