A recent OSHA development, while not yet tested by further litigation, should nonetheless be on the radar of employers that operate at more than one site. In what OSHA called an administrative precedent-setting decision, an administrative law judge determined that the Occupational Safety and Health Review Commission may have authority under the OSH Act to order abatement measures against Central Transport LLC that extend beyond the specific violations that OSHA identified in its citations. The privately owned, full-service, asset-based transportation provider offers supply chain solutions across North America. Depending on how the rest of the litigation pans out, employers could be subjected enterprise-wide abatement that includes sites not initially inspected by OSHA.
Citations and litigation. In November 2014, OSHA cited the company for 14 violations of workplace safety and health standards at the freight hauler’s Billerica, Massachusetts, shipping terminal and proposed a total of $330,800 in fines. The following month, Central Transport filed a notice of contest with the Occupational Safety and Health Review Commission and litigation commenced. In its complaint to the commission, the Labor Department alleged that Central Transport failed to comply with the OSHA standards for the safety of powered industrial trucks at locations other than the inspected worksite, and it requested an order compelling the company to comply with the standard at all of its locations.
In response, Central Transport filed a motion asking the commission to strike the DOL’s claim for enterprise-wide abatement, arguing that that relief is not permitted under the OSH Act. The company argued that Section 10(c) of the OSHA Act and Commission Rule 34, read together, preclude entry of an order for enterprise-wide abatement that would apply to sites never inspected by OSHA and that the commission’s authority is limited to remedying specific violations at individual sites based on findings of fact. The company relied on Delta Elevator Service Corp., No 12-1446, 20143 in support of its contention.
ALJ’s ruling. ALJ Carol A. Baumerich denied Central Transport’s motion, holding that the OSH Act’s provision authorizing “other appropriate relief” provides the basis for permitting the Labor Department’s claim for enterprise-wide abatement at all locations where like violations exist to proceed to trial. The administrative judge also denied Central Transport’s request for a discovery and litigation stay of the claim for enterprise-wide abatement, finding that it would jeopardize the litigation of the claim.
The ALJ refused to read the Delta case to authorize the extreme sanction of striking the DOL’s claim for enterprise-wide relief at this early stage of the proceeding. The parties in Delta had both had an opportunity to present evidence, and the case was fact-specific. Although it has precedential value as an unreviewed judge’s decision, it was not controlling. Here, where there had been no discovery or hearings, and a novel legal theory is advanced, the decision about that claim should be made on a complete record following discovery by both parties, the judge concluded.
Said Kim Stille, OSHA’s regional administrator for New England: “When an employer has hazards occurring at multiple locations, common sense and reasonable worker protection law enforcement both dictate that the employer take corrective action to safeguard the health and well-being of employees at all its worksites.”
The case, Secretary of Labor v. Central Transport LLC, was brought before the U.S. Occupational Safety and Health Review Commission; the docket numbers are 14-1452; 14-1612; and 14-1934.
If an employee who was fired for insubordination claims the termination constituted retaliation, discrimination, or other unlawful action, a successful defense (hopefully dismissal before trial) depends largely on context. For example, courts are more likely to doubt that insubordination was the real reason for the termination if the employee had a pristine disciplinary history, or recently had engaged in protected activity by complaining about harassment or other unlawful conduct. On the other hand, employers are more likely to win if the employee’s conduct violated a clear company policy, if he or she had been warned in the past, and if the company investigated the reasons underlying the insubordination.
Context matters. In one case from the federal district court in Connecticut, an employee with an excellent work record had evidence that the supervisor who fired him made multiple, derogatory age-related remarks. Nonetheless, his age discrimination claim failed on summary judgment because he had explicitly defied a direct order from his supervisor in two successive emails, in violation of a clearly articulated policy forbidding that behavior. Evidence that younger employees were not subject to discipline after telling the same supervisor they could not perform assignments was of little help to the employee because he did not show that they had repeatedly defied orders, and the evidence concerning what they actually said was vague (Chapman v. Sikorsky Aircraft Corp., December 3, 2015).
Conversely, an employee’s emails to a supervisor and coworkers evidencing her insubordination, combined with evidence that she had received a warning for poor performance, were not enough to convince a federal court in the District of Columbia to grant the employer summary judgment because there was evidence that the employer did not follow its own disciplinary policy when she was stripped of her supervisory duties, suspended, and constructively terminated. Plus, the adverse actions happened in close temporal proximity to her complaints of discrimination. Thus, her race discrimination and retaliation claims could proceed as to those actions and summary judgment was denied in part (Richardson v. Petasis, December 7, 2015).
Context was also key in a recent Seventh Circuit decision, in which the appeals court affirmed summary judgment for a defense contractor on claims that it fired employees for raising concerns that it falsely represented to the government that helicopter engine parts were safe. The employer’s stated reason for the termination was that the employees had insubordinately refused to work on the part as instructed. To the court, it was significant that the company thoroughly investigated their safety concerns and found them baseless. That evidence showed that the employees were “terminated because of their insubordination, not protected activity,” the appeals court declared, rejecting their retaliation claims under the False Claims Act (U.S. ex rel. Marshall v. Woodward Inc., December 11, 2015).
Five key questions. The examples could go on and on, but even just these three cases from December highlight five questions employers should ask themselves before firing (or taking another adverse action) against an employee for insubordination:
- Was the conduct prohibited by a policy or practice of which the employee was aware?
- Has the policy been consistently enforced with respect to all employees and over time?
- Does the employee have a history of insubordination, including prior warnings?
- Was the employee given a chance to tell his or her side of the story (and did the employer look into his or her allegations, as appropriate)?
- Was the employer following its own progressive disciplinary policy or following the requirements of an applicable collective bargaining agreement in meting out the discipline?
If the answer to each of these questions is “yes,” then the employer should have little or no problem defending against a subsequent claim by the employee that the termination was unlawful. If the answer to any of the questions is “no,” then the employer should dig a bit further to make sure termination is the appropriate response to the employee’s insubordination.
Punishment should fit the crime. As one final thought, keep in mind that the punishment should fit the “crime.” The best example of that may be a case from the Fifth Circuit, in which a long-time employee, who had an otherwise pristine disciplinary history, was fired because he shrugged his shoulders in response to a supervisor’s routine question. According to the employee, his mouth was full of coffee at the time and he could not form a vocal response. Given the apparent overreaction in immediately firing the employee, the court found a triable question on whether this was pretext for age discrimination (Salazar v. Cargill Meat Solutions Corp., October 8, 2015).
In what it says is the first publically available government-run testing project in the nation to analyze how employers respond to resumes from applicants perceived as transgender compared with resumes of applicants not so perceived, the D.C. Office of Human Rights (OHR) found that transgender individuals face substantial challenges in their efforts to obtain employment in the District of Columbia. Regarding the agency’s November 2015 report, OHR Director Mónica Palacio observed that “Statistical and anecdotal evidence tells us transgender and gender nonconforming people are experiencing employment discrimination at very high rates, and this testing project confirms that unfortunate truth.”
So how have transgender employees fared in the courts over the past year? A look back at cases decided in 2015 reveals the following:
Wrong pronoun. In December, a federal district court in Florida dismissed on summary judgment the gender identity bias and hostile work environment claims of a transgender employee who alleged she was called “sir” on multiple occasions and ultimately fired. The long-time on-call server provided legal documentation in 2005 showing her identification as a female.
While she alleged in her HWE claim that she was misgendered every day since the day she presented the court order legally changing her name, she only provided specifics as to three incidents, which were relatively minor and did not amount to frequent conduct. The conduct may have been upsetting but the use of the wrong pronoun was not profane, said the court. She also failed to identify a similarly situated comparator or produce other evidence from which discriminatory intent could be inferred; thus, her gender identity bias claim also failed.
“What is that?” That same month, the Fifth Circuit affirmed summary judgment against a retaliation claim by an employee who allegedly was threatened with a 50-percent pay cut because she hired a transgender truck driver. The employee claimed that when a visiting regional director saw the transgender driver, she asked the employee, “What is that and who hired that?” The appeals court, however, found that a reasonable person in the employee’s shoes would not have been dissuaded from protected activity by the threat because it was made by someone outside her chain of command. The high-level employee should have waited to receive confirmation as to whether the threat was official before resigning, said the court.
Tried not to act like a girl. In October, a federal district court in Maryland granted summary judgment against a transgender employee’s gender-based claims. A few years before his termination, the long-tenured employee was diagnosed as being transgender. Although he continued to dress like a man, use the men’s room, and “tried not to act like a girl,” he grew out his hair. He claimed a coworker threatened him because he was transgender, said he would rape him, and poked various parts of his body.
The employee was fired after he asked the coworker whether he “wanted to take the argument outside,” raised his middle finger, and used profanity toward him. Because the employee’s actions and word choice could have been perceived as threatening and consequently violated his employer’s policies, the court found he was not meeting his employer’s legitimate expectations. Further, he failed to show that his employer’s real reason for terminating him was his transgender status.
“Don’t rock the boat.” Just a month earlier, a federal district court in Arkansas ruled that a jury could hear gender stereotyping claims by a transgender woman who was fired within months of informing her supervisor of her transition status and legal name change, and within weeks of beginning to wear female attire at work. The court cited contradictory deposition testimony inferring that the stated reason for the firing—she had threatened to sue the site at which she was performing electrical work—was pretext for sex discrimination.
Although the employer argued that transsexuals may not claim protection under Title VII from discrimination based solely on their status as a transsexual, the court pointed out that the employee’s theory of discrimination was that she was terminated because of her gender transition and her failure to conform to gender stereotypes, a theory it found well settled under Title VII precedent.
As to the employer’s contention that the employee could not establish a prima facie case of sex discrimination, the court noted that the employee presented evidence that when she told her supervisor about her transgender status, he instructed her not to “rock the boat” and repeatedly forbade her to use her legal name, talk about her transgender status, or wear feminine clothes at work. Soon after she began wearing feminine attire at work, he allegedly told her she was too much of a distraction and fired her. That was ample evidence from which a jury could find she was fired because of her sex.
“Came on pretty strong.” In June, a federal court in Maryland granted summary judgment against a transgender female’s Title VII and state law claims asserting she was not selected for a position with a police department’s volunteer mounted patrol because of her gender identification and nonconforming gender conduct. A single email from six months earlier, in which a decisionmaker commented to a fellow officer “Hope not promoting the idea??!!” was a stray remark and too far removed. Moreover, she failed to refute the county’s asserted reasons for its actions.
The employee transitioned her gender identity from male to female in 2002, the same year she retired from her 25-year career as a sergeant for the U.S. Capitol Police. In 2011, she applied for a position with the volunteer mounted patrol. Ultimately, she was rejected based in part on the fact that she “came on pretty strong” during her interview.
A magistrate judge first clarified that her gender bias claim was being considered both as to transgender status and as to her nonconformance with gender stereotypes. However, the magistrate found no direct evidence that she was denied the position because she was transgender or because of her self-identified nonconformance with gender stereotypes. She only pointed to the one email, made months prior to the hiring decision. Even if this isolated instance reflected directly on the decisionmaker’s allegedly discriminatory attitude towards transgender persons, it had no relation to the selection process or the selecting officers’ decision to not offer her a position. In fact, the selection process did not begin until six months after the email, and decisions were not made until nine months after.
Nor did the employee provide any evidence that she was rejected for the position in favor of someone not in her protected class or from which bias could be inferred. Only one of the three decisionmakers knew she was transgender and there was nothing to suggest her “nonconforming gender conduct” was even considered. To the extent that their discussion of her “commanding” behavior and tendency to “take over” in her interview had any relation to “nonconforming gender conduct,” the only comments the selecting officers made in this regard related to her past experience as a commanding law enforcement officer, not her status as a transgender woman.
Protected class. Denying a university’s motion to dismiss a transgender female professor’s Title VII hostile work environment claim, a federal district court in Oklahoma rejected the argument that transgender employees are not in a protected class. The argument was inapposite because she alleged the discriminatory actions were based on the university’s dislike of her presented gender, and gender stereotyping falls within Title VII’s purview.
While the university argued that the Tenth Circuit, in Etsitty v. Utah Transit Auth., held that “transsexuals may not claim protection under Title VII . . . based solely on their status as a transsexual,” it went on to clarify that “like all other employees, such protection extends to transsexual employees only if they are discriminated against because they are male or because they are female.”
Here, the court found it clear the employee claimed the university’s actions occurred because she was female but they regarded her as male. Thus, the actions she alleged it took against her were based upon dislike of her presented gender. This distinction, explained the court, was recognized in Etsitty in a footnote citing to the Sixth Circuit case, Smith v. City of Salem, in which the appeals court stated: “Sex stereotyping based on a person’s gender non-conforming behavior is impermissible discrimination, irrespective of the cause of that behavior; a label, such as ‘transsexual,’ is not fatal to a sex discrimination claim where the victim has suffered discrimination because of his or her gender nonconformity.” The employee’s allegations here brought her claim squarely within the Sixth Circuit’s reasoning, as adopted by the Tenth Circuit in Etsitty.
Unacceptable. In April, a federal district court in Michigan found that in alleging a transgender funeral home director’s failure to conform to sex stereotypes was the driving force behind the decision to terminate her, the EEOC sufficiently pleaded a sex-stereotyping gender discrimination claim under Title VII. Accordingly, the court declined to dismiss the agency’s Title VII claim against the funeral home.
Approximately two weeks after the employee informed her employer and coworkers that she was undergoing a gender transition from male to female and intended to dress in appropriate business attire as a woman from then on, her employer allegedly told her what she was “proposing to do” was unacceptable and fired her. Bringing suit on behalf of the employee, the EEOC argued that the termination decision was motivated by sex-based considerations. Specifically, it alleged that the funeral home fired the employee because she was transgender, because of her transition from male to female, and/or because she did not conform to the employer’s sex- or gender-based preferences, expectations, or stereotypes.
Acknowledging that transgender status is not a protected class, the court observed that if the agency had alleged that the funeral home fired the employee based solely on her status as a transgender person, it would have failed to state a claim under Title VII. But, the EEOC also asserted that the funeral home fired the employee because she did not conform to its sex- or gender-based preferences, expectations, or stereotypes. Although the court noted that the agency, in its brief, appeared to seek a more expansive interpretation of sex under Title VII that would include transgender persons as a protected class (arguing that the EEOC’s “complaint states a claim of sex discrimination under Title VII because [the employee] is transgender and [the funeral home] fired her for that reason,” there was no Sixth Circuit or Supreme Court authority to support this position.
Citing to the Sixth Circuit’s decision in Smith v. City of Salem and the Supreme Court’s decision in Price Waterhouse, the court explained that even though transgender/transsexual status is currently not a protected class under Title VII, the statute nevertheless “protects transsexual persons from discrimination for failing to act in accordance and/or identify with their perceived sex or gender.”
And while the funeral home argued that “[t]o the extent the EEOC’s claim is that [the employee] was terminated due to his gender identity disorder, the claim must be dismissed,” the court pointed out that the complaint never used the term Gender Identity Disorder or asserted that Gender Identity Disorder is a protected class under Title VII. Moreover, to the extent the EEOC asked the court to rule that transgender status was a protected class under Title VII, it declined to do so.
Intimate and private. In a decision several months later addressing discovery issues in the case, a federal magistrate judge ruled that information regarding the transgender employee’s sexual anatomy, her familial background and relationships, and any medical or psychological records related to her gender transition was of the most intimate and private nature. Finding that it would be harassing and oppressive to require its disclosure at this time where the employer failed to show its relevance to the disposition of the gender-stereotyping claim brought by the EEOC on the employee’s behalf, the court granted the agency’s motion for a protective order in part.
Transsexual status not sexual orientation. Because sexual orientation and gender identity, specifically transsexual status, are two different things, a federal district court in North Carolina declined in January to dismiss a transsexual CNA’s Title VII refusal-to-hire claim based on precedent that Title VII did not protect sexual orientation.
The CNA, who was transitioning from male to female, interviewed for three positions at the hospital. At her third interview, a group of CNAs allegedly harassed and ridiculed her about being transsexual. She returned a fourth time for an interview conducted by a department manager and unit charge nurse, whom she alleged was now aware that she was transsexual. After that interview, she was told the charge nurse wanted someone with “more experience.”
Although the hospital argued that neither the Supreme Court nor the Fourth Circuit has recognized Title VII as protecting individuals because of their sexual orientation, the court explained that transgender status differs from sexual orientation. Noting instead that sexual orientation and gender identity are separate issues, and that the CNA never alleged discrimination on the basis of sexual orientation, the court denied the motion to dismiss.
Employer take-away. What does this mean for employers? As these decisions illustrate, while Title VII does not explicitly protect sexual orientation or gender identity, the agency and some courts have found that sex discrimination includes discrimination based on nonconformance to traditional gender stereotypes. Employers should consider updating their antidiscrimination policies to include prohibitions on sex stereotyping. In its Gender Stereotyping: Preventing Employment Discrimination of Lesbian, Gay, Bisexual or Transgender Workers brochure, the EEOC notes that it is illegal for an employer to deny employment opportunities or permit harassment because a woman does not dress or talk in a feminine manner; a man dresses in an effeminate manner or enjoys a pastime (like crocheting) that is associated with women; a female employee dates women instead of men; a male employee plans to marry a man; an employee transitions from female to male or male to female. Employers should also consider training its workforce to use the name and pronouns appropriate to a transgender employee’s new gender.
In addition, OSHA has published a guide to help employers in dealing with the issue of providing appropriate restroom access to transgender workers. Although it includes best practices and discusses federal, state, and local laws pertaining to restroom access by transgender employees, OSHA made clear in a disclaimer that the guide is not a standard or regulation, and it creates no new legal obligations.
Finally, employers should be aware that state laws may also protect against gender identity discrimination.
By Lisa Milam-Perez, J.D.
Continuing to chip away at California’s “outlier” arbitration jurisprudence, the Supreme Court ruled this week that a state appeals court erred when it upheld a decision refusing to enforce an arbitration agreement that included a class waiver. In DirecTV v. Imburgia, the High Court reaffirmed the preemptive supremacy of the Federal Arbitration Act in a consumer arbitration case with important implications for class arbitration of labor and employment disputes.
Class arbitration waiver. DirecTV’s service agreement included a mandatory arbitration clause, and a provision waiving the right to class arbitration. The agreement would be unenforceable in its entirety, though, if class arbitration waivers were impermissible under “the law of your state.” In other words, DirecTV’s contract provided, if your state would force us into class arbitration, we won’t arbitrate at all.
At the time the agreement was drafted, controlling law in California was a 2005 state supreme court decision that rendered class arbitration waivers unenforceable. The wrinkle here: the U.S. Supreme Court subsequently issued AT&T Mobility LLC v. Concepcion, invalidating the state high court case as preempted under the FAA—and leaving the legal status of DirecTV’s contract clause uncertain.
Did the parties intend to apply now-invalid California law to its arbitration agreement? That would be “nonsensical,” DirecTV insisted in its petition for Supreme Court review. But a state court took DirecTV at its word and refused to compel arbitration in a dispute brought by consumers over early termination fees. Hewing to the specific terms of the contract, the court found that since the class waiver was unenforceable in California when drafted, the agreement itself should not be enforced. A state appeals court affirmed. Notwithstanding the 2011 Concepcion decision, and the fact that the FAA preempted California law, the parties were still free, in drafting their contract, to reference state law as it stood at the time, the appeals court reasoned, concluding the parties did just that.
“Considerable latitude.” But… The FAA gives parties “considerable latitude” to decide what law will govern their arbitration agreements, including class arbitration waivers embodied within those agreements. “In principle,” Justice Breyer supposed (writing for the majority), “they might choose to have portions of their contract governed by the law of Tibet, the law of prerevolutionary Russia, or (as is relevant here) the law of California… and irrespective of [its] invalidation in Concepcion.” In this instance, the state appeals court determined that the parties intended for the latter to apply. And deference is normally due state court interpretations of a contract, which is typically a matter of state law.
Having said all that, the High Court said the state appeals court simply would not have construed a contract outside the arbitration context in such a fashion—i.e., as including an invalid provision of law. As such, the appeals court failed to place arbitration contracts “on equal footing with all other contracts,” which the High Court could not abide.
“We can find nothing in that opinion (nor in any other California case) suggesting that California would generally interpret words such as ‘law of your state’ to include state laws held invalid because they conflict with, say, federal labor statutes, federal pension statutes, federal antidiscrimination laws, the Equal Protection Clause, or the like,” wrote the Court. The state appeals court seems to have based its reasoning on the fact that the specific contract before it was an arbitration agreement, “rather than a general principle that would apply to contracts using similar language but involving state statutes invalidated by other federal law.”
Notably, the “equal footing” argument appeared neither in the petition for cert nor at oral argument. Was it the majority’s sua sponte means of dodging an unsavory choice in a case that threatened to pit “the sanctity of contract” against undying devotion to arbitration? At any rate, it was the approach that won the day for DirecTV.
“Insulating” the powerful? Justice Ginsburg (joined by Justice Sotomayor) dissented on policy grounds, decrying the increasing prevalence of mandatory arbitration with no-class arbitration clauses in both the consumer and employment realms. Indeed, the now-routine use of such agreements, in Ginsburg’s view, is “in large part due to this Court’s decisions.” The High Court’s expansion of the FAA in this manner is “further degrading the rights of consumers and further insulating already powerful economic entities from liability for unlawful acts,” she lamented. “Acknowledging the precedent so far set by the Court, I would take no further step to disarm consumers, leaving them without effective access to justice.”
“Not once” in over 25 years had the Supreme Court reversed a state court ruling because it ostensibly misapplied state contract law in construing the meaning of a term in an arbitration agreement, Ginsburg pointed out. “Today’s decision is a dangerous first.”
California: we’re talking to you. The case sent “a strong message to California courts”—where most of these cases are coming from—“to pay more than lip service to the FAA’s general presumption of arbitrability of a dispute,” said Wendy A. Sugg, Of Counsel in Troutman Sanders’ Orange County office. The Supreme Court took the opportunity to emphasize once again that Concepcion is the law of the land and that “attempts to work around that decision will not be looked upon favorably,” she noted.
The head-scratcher, though, is that on the same day, the High Court declined an invitation to strike down as wrongheaded the state’s continued insistence that individuals cannot waive, via arbitration agreement, the right to bring claims under California’s Private Attorney General Act (PAGA). It was in fact the second time the Court refused to impose the long arm of the FAA on these representative actions, leaving intact the California Supreme Court’s 2014 decision in Iskanian v CLS Transportation Los Angeles, LLC, even as several federal court judges in the state have refused to follow it. Yet a third petitioner will likely step up, to seek the Court’s review of the September 2015 decision in Sakkab v. Luxottica Retail North America, Inc. (assuming that a pending request for en banc Ninth Circuit review provides no recourse). In that case, the federal appeals court held the FAA did not preempt the Iskanian rule barring waiver of PAGA claims through arbitration agreements. Since this latest decision falls right in line with the other cases that have failed to lure the Justices, though, there is little reason to expect that the third time’s the charm.
What does that mean for employers? If Iskanian continues to stand, “employers are likely going to face a two-track process in the future for resolution of employment disputes, with individual claims heard in arbitration and representative actions seeking PAGA penalties going forward in the courts,” Sugg cautioned. “This leads to inevitable fears of conflicting outcomes and uncertainty.”
Earlier this week, the federal government announced the publication of a new guidance intended to help employers ensure their I-9 practices don’t result in discrimination against their employees. The publication, “Guidance for Employers Conducting Internal Employment Eligibility Verification Form I-9 Audits,” was issued by the Department of Justice’s Civil Rights Division and the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE).
Under the Immigration and Nationality Act (INA), employers are required to verify the work-authorization of their employees using the Form I-9 and are prohibited from knowingly hiring unauthorized workers. Employers seeking to ensure their Form I-9 practices comply with federal law are increasingly conducting internal audits of their Forms I-9. To ensure that these audits are conducted properly and do not discriminate against employees, ICE and the Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) collaborated to issue formal guidance on the topic.
Among other things, the guidance provides employers with information about the scope and purpose of audits; considerations before conducting internal audits; details regarding how to correct errors, omissions or other deficiencies found on Forms I-9 and how to cure deficiencies related to E-Verify queries; and guidance regarding the anti-discrimination mandate. The joint guidance is available on the DHS’s website and on OSC’s website.
The agencies developed the joint guidance with significant input from the Department of Homeland Security’s Office of Civil Rights and Civil Liberties, the U.S. Citizenship and Immigration Services, the Department of Labor, the National Labor Relations Board, the Equal Employment Opportunity Commission and stakeholders around the country. The guidance is part of the six-month action plan of the Interagency Working Group for the Consistent Enforcement of Federal Labor, Employment and Immigration Laws.