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Ricci may be a “hot topic” during Sotomayor’s confirmation hearing

July 10th, 2009  |  Deborah Hammonds

>The confirmation hearing for Judge Sonia Sotomayor’s nomination to the U.S. Supreme Court is scheduled to begin on Monday morning (July 13, 2009). If confirmed, she will be the first Hispanic, and the third woman, to be an Associate Justice on the High Court. Judge Sotomayor currently sits on the U.S. Court of Appeals for the Second Circuit.

While Sotomayor has received significant support in favor of her nomination, what should really spark interest in Monday’s hearing will be the appearance of two witnesses who were part of the Ricci v DeStefano litigation. Ricci is the reverse race discrimination case decided by the Supreme Court last week (07-1428). In that decision, the High Court held that the city’s refusal to certify firefighters’ promotion exams to avoid a potential race discrimination lawsuit from minority firefighters was discriminatory. A divided Supreme Court (5-4) reversed the Second Circuit’s affirmation of the district court’s grant of summary judgment to the city.

On the list of witnesses invited to appear before the Senate Judiciary Committee (http://judiciary.senate.gov) were the names Frank Ricci and Lieutenant Ben Vargas. Both Ricci (Director of Fire Services, ConnectiCOSH (Connecticut Council on Occupational Safety and Health)) and Vargas (New Haven Fire Department) were plaintiffs in Ricci v DeStefano. Vargas has the distinction of being the lone Hispanic plaintiff.

One of the reasons Ricci was so closely watched was Sotomayor’s participation as part of the Second Circuit’s panel that affirmed the district court in an unpublished order that was later withdrawn and replaced with a per curiam opinion and an order denying a rehearing and rehearing en banc with written concurrences and a dissent. Will these men be a roadblock in Sotomayor’s path to the High Court? What can they say about her legal analysis and/or performance in a case that was ultimately decided so closely? Particularly when the now-retired Justice Souter (who’s seat she is slotted to fill) voted to affirm the circuit court? Will there be any fallout from Ricci for Sotomayor?

Hartmarx and beyond

July 8th, 2009  |  Connie Eyer

>Hart Schaffner Marx, an Illinois-based maker of men’s apparel that boasts President Obama as one of its regular customers, recently averted liquidation after it was purchased by Emerisque, a London-based private equity firm. Hartmarx employs nearly 4,000 people nationwide. Here is a look back at the struggle displayed by its workers and supporters over the last six months:

January 2009: Only a few days after President Obama wore one of their suits to his inauguration, Hartmarx, Inc. declared bankruptcy, citing lower borrowing capacity under Wells Fargo, a senior creditor.

May 2009: By early May, Hartmarx had attracted three potential buyers, two of which, it was reported, intended to keep the company intact. Rumors flew, however, that Wells Fargo, which was a recipient of federal bailout funds, was leaning towards a third buyer that favored liquidation. This threat, however, was enough to galvanize workers, supporters, union leaders and federal lawmakers to put a little pressure on Wells Fargo. Two Congressional members at the forefront of this fight, Rep. Phil Hare (D-Ill), who spent 13 years in the employ of Hartmarx, and Rep. Jan Schakowsky (D-Ill), whose great-aunt also worked at the company, urged the bank to keep the company afloat.

During a few days in May, rallies featured labor leaders and workers, along with Rep. Hare and Illinois Treasurer Alex Giannoulias, who threatened to cut off the State of Illinois’ $8 billion in business with Wells Fargo if the company proceeded with liquidation plans. The Hartmarx workforce, in a page taken from that of the Chicago-based Republic Windows and Doors, whose employees staged a successful sit-in to secure the 60 days’ severance and unused vacation days they were lawfully owed, voted to occupy the plant if liquidation were the outcome.

On May 20, Emerisque resubmitted a substantial offer to purchase the company. Choosing not to take this for granted, the next move included a letter to Treasury Secretary Timothy Geithner, written by Schakowsky and Hare and signed by over 40 members of Congress, stressing that the liquidation of Hartmarx should not be an option. “Given the fact that American taxpayers have provided Wells Fargo/Wachovia with $25 billion,” the letter read, “we find it incomprehensible that it would continue to push for the loss of jobs in a viable company.”

Wells Fargo released a statement May 29 opposing the bid by Emerisque, contending that the company “has committed to sell Hartmarx factories in Rock Island, Ill., and Cape Girardeau, Mo., and its distribution centers in Easton, Penn., and Rector, Ark., all within three months of the acquisition.” Emerisque disputed the bank’s claim, noting that “the only factual component of the Wells Fargo statement today is that they believe they should realize a higher cash return on their claim.”

June 2009: Talks, however, continued, and a resolution was finally reached whereby Emerisque revised its cash offering from a numerical amount to a percentage of the debtor-in-possession financing provided by the lending group to keep Hartmarx operating during the bankruptcy process.

When the approval of Emerisque was finally announced on June 26, Rep. Hare noted that “today’s approval of Emerisque’s bid to buy Hart Schaffner Marx and the cooperation by Wells Fargo is good news for nearly 4,000 workers, their families, and our economy. It is proof positive that the voices of America’s working men and women still do matter, even in an era of unprecedented greed.”

Related worker uprising news: In the wake of Hartmarx’s victory, the focus now moves to Moline, Illinois, where Wells Fargo has cut off credit to the Quad City Die Casting factory. Workers at the plant, who are members of the same union that occupied Republic Windows and Doors last year, are calling for Wells Fargo to keep the plant open. As of yet, the bank has refused to even sit down with the union and negotiate.

Stay tuned.

Will federal preemption ensnare state “captive audience” measures?

July 7th, 2009  |  Lisa Milam-Perez

>To supporters, it’s the “Worker Freedom Act.” To detractors, an “Employer Gag Bill.” Call it what you will: On June 30, Oregon Governor Ted Kulongoski signed S.B. 519, a bill that prohibits an employer from holding mandatory employee meetings to convey its views on religious and political issues—including union organizing. With its passage, Oregon became the first state in the nation to bar “captive audience” meetings. It’s a win for the AFL-CIO, which had launched a campaign to enact such legislation at the state level. The victory may be short-lived, however, as the Oregon measure will surely face a legal challenge.

Captive audience bills, if enacted in the states, would have a considerable impact on traditional union-organizing campaigns. One federal government survey found employers force workers to attend captive audience meetings in 92 percent of union election campaigns and that employers, on average, held 11 such meetings during every organizing drive. Why? Because they are a particularly effective weapon in the employer’s union avoidance arsenal, and they are difficult for unions, lacking equal access, to counter.

The Oregon statute (like the AFL-CIO’s model legislation) bars employers from compelling employees to attend meetings aimed at communicating the company’s opinions on “religious or political matters.” (Notably, it bars any forced attempt by an employer to convey its views on unionization, not just the captive audience meeting.) While it does not limit the right of employers to hold these meetings or engage in such communications, it provides that attendance must be strictly voluntary; employers may not discharge or discipline employees who refuse to attend or to listen to the employer’s message. Nor may employers retaliate against employees for exercising their rights under the statute. Aggrieved employees can sue for backpay and reinstatement, among other relief. The statute provides a mandatory award of treble damages, attorney fees and costs.

(The Oregon law isn’t just about union organizing, though. Its bar on coercive political and religious speech is meant to grant more expansive protection. The Oregon AFL-CIO cites the example of a worker who was disciplined after walking out of the lunchroom after his employer began to make anti-Catholic statements. And, last year, during the presidential election campaign, Wal-Mart famously required employees to attend meetings in which they were told their jobs could be threatened if Democrats were elected. S.B. 519 would prohibit this conduct as well.)

Federal labor law does not prohibit compulsory meetings, nor does it bar employers from imposing discipline on employees who refuse to attend or leave a meeting held for the purpose of conveying the employer’s opposition to a union. In fact, Sec. 8(c) of the National Labor Relations Act (NLRA) expressly confers employer free-speech protections, so long as the speech is not coercive or threatening. However, although the National Labor Relations Board has upheld mandatory meetings, unions contend they are inherently coercive, in that they force employees to listen to anti-union speech, and that they are meant to intimidate workers. So, organized labor has endeavored to enact protections at the state level that federal law does not provide.

Thus far, such legislation has made few inroads. The Michigan and New Hampshire legislatures have passed Worker Freedom bills. The Colorado legislature passed a bill in 2006 that was ultimately vetoed by the governor. Washington’s state legislature held hearings on a measure earlier this year. The legislation has been introduced in several other states, including Connecticut and West Virginia. (New Jersey enacted the Worker Freedom from Employer Intimidation Act in 2006, a bill that protects employees from being forced to hear employer speech on religious and political matters, but it excludes discussions of labor organizations from its reach.)

The Oregon measure will go into effect on January 1, 2010—if it can withstand inevitable challenges on preemption and constitutional grounds, that is. Opponents of the bill contend that state efforts to regulate employer speech in the union-organizing context are preempted by the NLRA. They cite California’s failed attempt to do so, noting that state’s “union neutrality” law was struck down by the US Supreme Court in its 2008 ruling in Chamber of Commerce of US v Brown. In 2005, the Seventh Circuit held a similar ordinance enacted by a Wisconsin municipality was preempted by the NLRA.

Paul Secunda, a professor of law at Marquette University School of Law (and member of the Wolters Kluwer Labor and Employment Law Editorial Advisory Board), argues that such laws should not be preempted. He notes that, notwithstanding the NLRA, states retain the right to regulate employer property rights and contractual relations between employers and employees.

Will S.B. 519 pass muster? We’ll soon find out, as Oregon employers have already indicated they will challenge the statute. The legislation “saddles employers with the potential for devastating liability by creating a new protected class of employees,” noted J.L. Wilson, of the Association of Oregon Industries, a business group that opposed the measure. “[The bill] would severely inhibit an employer’s ability to communicate with its workers and, most importantly, would diminish the competitiveness of Oregon employers.”

Recap of Supreme Court’s labor & employment law decisions

July 4th, 2009  |  David Stephanides

>As reported in CCH’s WorkWeek e-Newsletter (click here to sign up), here is a recap of the Supreme Court’s labor and employment decisions handed down during the October 2008 term:

Ricci v DeStefano. By throwing out the results of an examination to determine those firefighters best qualified for a promotion, the City of New Haven, Connecticut, violated Title VII’s prohibition against discriminatory treatment based on race. A 5-4 majority of the High Court applied a new standard of statutory construction, holding that before an employer can engage in what otherwise would be prohibited discriminatory treatment in order 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 (June 29, 2009).

Atlantic Sounding Co v Townsend. An injured seaman may sue to recover punitive damages under general maritime law for the his employer’s alleged willful and wanton failure to provide a “maintenance” (wages he otherwise would have earned, food and lodging) and “cure” (medical services) for the injuries he suffered while working on the employer’s tugboat, the Supreme Court held (June 25, 2009).

Locke v Karass. A union representing Maine’s state employees may charge fee-paying nonmembers for the national, or “extra-local” litigation expenses incurred by its parent union, a unanimous Supreme Court ruled, holding that the First Amendment permits such charges (January 21, 2009).

Crawford v Metro Gov’t of Nashville. Continuing its recent trend of broadening Title VII’s anti-retaliation provision, the High Court unanimously ruled that the Act’s retaliation protections extend to employees who speak out about discrimination and harassment not of their own accord, but when answering questions during an employer-ordered internal investigation. Because the employee’s conduct was protected under Title VII’s opposition clause, the Court declined to address whether her conduct was also governed by the anti-retaliation provision’s participation clause (January 26, 2009).

Ysursa v Pocatello Educ Ass’n. An Idaho law banning public employee payroll deductions for union political activities did not violate labor unions’ free speech rights, the Supreme Court ruled, noting the distinction between state suppression of speech and instances in which states decline to promote speech (February 24, 2009).

14 Penn Plaza LLC v Pyett. Affirming its decidedly pro-arbitration policy, the Supreme Court held that courts must enforce collective bargaining agreements that “clearly and unmistakably” require union members to arbitrate their claims arising under the Age Discrimination in Employment Act. Such agreements are enforceable under the ADEA since the Act does not preclude arbitration of claims brought pursuant to the statute (April 1, 2009).

Flores-Figueroa v United States. In a case informing on federal worksite immigration enforcement operations, a unanimous Supreme Court ruled that an undocumented worker who presented false Social Security and Alien Registration numbers to obtain employment may not be convicted of identity theft under the federal “aggravated identity theft” statute unless the federal government shows that the worker had actual knowledge that the means of identification belonged to another person (May 4, 2009).

Arthur Anderson LLP v Carlisle. In an investor suit, the Supreme Court held that a litigant who was not a party to an arbitration agreement may invoke Sec. 3 of the Federal Arbitration Act to compel arbitration if applicable state law would allow enforcement of contracts by (or against) a nonsignatory through assumption or third-party beneficiary theories (May 5, 2009).

AT&T Corp v Hulteen. The Pregnancy Discrimination Act does not require employers to set current pension benefits at a level that will restore service credits to female employees for pregnancy leaves taken prior to the passage of the PDA. In one of the last opinions to be authored by Justice Souter, the High Court held that employers do not necessarily violate the PDA when paying pension benefits calculated in part under an accrual rule – applied prior to the PDA’s enactment – that gives fewer service credits for pregnancy leaves than for other medical leaves. Because AT&T’s benefit calculation rule accorded with the terms of a bona fide seniority system under Title VII, the company was insulated from a legal challenge (May 18, 2009).

Ashcroft v Iqbal. “Civil rights plaintiffs will have to be more thoughtful about how they frame their complaints to avoid pleading themselves out of court” following the Supreme Court’s ruling in an antitrust case, notes plaintiff’s lawyer Paul Mollica in his Daily Developments in EEO Law blog. Though not an employment case, the High Court’s ruling makes clear that the heightened pleading standards set forth in its 2007 decision in Bell Atlantic Corp v Twombly applies to all civil actions, not just antitrust cases, and that “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” (May 18, 2009).

Gross v FBL Fin Servs Group. Declining to import the mixed-motives burden-shifting rubric applied under Title VII, the Supreme Court ruled that an employee claiming disparate treatment under the ADEA must establish by a preponderance of evidence that age was the “but-for” cause of the adverse employment action challenged. Even when the employee has produced some evidence that age was one motivating factor in the employer’s decision, the burden of persuasion does not shift to the employer to show that it would have taken the same action regardless of age, held the Court (June 18, 2009).

“My fiancée got me fired”: The evolution of retaliation claims

July 1st, 2009  |  Deborah Hammonds

>With the Sixth Circuit’s recent pro-employer ruling on associational retaliation, and a current split on the matter unfolding among the circuits, this issue may well be headed to the Supreme Court next term…to a Court under Chief Justice Roberts that has been decisively pro-employee in its retaliation decisions. But is this case really much ado about nothing?

In Thompson v North American Stainless, LP, a male employee, who alleged that he was fired shortly after his fiancée filed an EEOC sex-bias charge against their shared employer, had no reprisal claim under Title VII. The plain and unambiguous statutory language of Title VII’s anti-retaliation provision requires employees to personally engage in protected activity, held a 10-6 en banc Sixth Circuit, affirming a district court’s grant of summary judgment for the employer. The majority observed that the plain language of Title VII will protect most close relationships because “‘[i]n most cases, the relatives and friends who are at risk of retaliation will have participated in some manner in a co-worker’s charge of discrimination.” Here, though, the employee did not claim that he engaged in any statutorily protected activity either on his own behalf or on behalf of his fiancée.

In so holding, the Sixth Circuit joined the Third, Fifth and Eighth Circuits, which have previously considered and rejected similar associational retaliation claims.

Note, however, the EEOC takes the position in its Compliance Manual that Title VII prohibits retaliation against someone so closely related to, or associated with, the person exercising his or her statutory rights that it would discourage that person from pursuing those rights. For example, “it would be unlawful for [an employer] to retaliate against an employee because his or her spouse, who is also an employee, filed an EEOC charge.” Both spouses, in such circumstances, could bring retaliation claims, said the agency. Does this mean simply having that close association to the charging party, without engaging in protected activity, is enough to also assert an associational retaliation claim? It seems that way, according to the EEOC. The Seventh and Eleventh Circuits have also interpreted Title VII’s anti-retaliation provision broadly to protect associated third parties from retaliation.

What does all this mean? Well, in its holding, the majority wrote: “[the] plaintiff and the EEOC request that we become the first circuit court to hold that Title VII creates a cause of action for third-party retaliation on behalf of friends and family members who have not engaged in protected activity.” (Emphasis added).

Personally, I think the majority got it right by not doing so. The Sixth Circuit appears not to question the legality of associational retaliation claims, but believes that merely having an “association” with the charging party, without also personally engaging in some protected activity, is not enough. The employee did not personally oppose any alleged discrimination. And we won’t get into whether “silent opposition” is opposition, even if some dissenting judges seem to think it is. If, however, the employee had engaged in some kind of participation activity, like help his fiancée complete her EEOC sex-bias charge, and participated in any interview with the agency, he likely would have been able to get past summary judgment on his retaliatory discharge claim. But, the employee admitted he did not personally oppose any alleged discrimination or participate in her charge. So, no dice.

None of this means employers should rest on their laurels. The Supreme Court seems to like retaliation cases and may take this one just to clarify the issues. Besides, there is this circuit split, a split that may have more to do with whether closely associated individuals have personally engaged in a protected activity, not with whether the reach of Title VII’s anti-retaliation provision includes associational discrimination claims. Of note, the employee’s attorney indicated that he is considering filing a cert petition.

In the meantime, a little retaliation-prevention training couldn’t hurt, since the EEOC reported that the number of retaliation claims filed with the agency jumped from 22,663 in FY 2007 to 32,690 in FY 2008, a nearly 23-percent increase. This was the second highest increase in charge filings, next to age discrimination.