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Refusal to certify exams in order to avoid race-bias claims was discriminatory, High Court rules

June 29th, 2009  |  Deborah Hammonds

>The City of New Haven, Connecticut, violated Title VII when it tossed the results of firefighters’ promotion exams on the premise that certifying the results would lead to disparate impact litigation, ruled the US Supreme Court. The case has been even more closely watched because of the role that Judge Sonia Sotomayor, the Obama Administration’s nominee for the announced Supreme Court vacancy, played in the appeals court’s decision below that upheld the city’s actions. (Ricci v DeStefano, Dkt Nos 07-1428, 08-328, June 29, 2009, to be reported at 92 EPD ¶43,602)

Background. The city refused to certify the exam results when it appeared no black or Hispanic applicants would be eligible for promotion to the rank of Lieutenant and no black applicants and, at most, two Hispanic applicants would be eligible for promotion to the rank of Captain. Expressing a fear of possible litigation from nonpromoted, nonwhite applicants if the results were certified, the city refused to certify the exams and no promotions were made. Eighteen candidates, 17 white and one Hispanic, filed suit under Title VII and other federal and state laws alleging the refusal to certify was racially discriminatory.

A federal district court granted the defendants’ motion for summary judgment, holding the defendants’ motivation to avoid making promotions based on a test with a racially disparate impact, even in a political context, does not, as a matter of law, constitute discriminatory intent, and, therefore, such evidence is insufficient for plaintiffs to prevail on their Title VII claim.”

The Second Circuit Court of Appeals affirmed the decision in an unpublished order that was later withdrawn and replaced with a per curiam opinion (91 EPD ¶43,235) and an order denying a rehearing and rehearing en banc with written concurrences and a dissent (91 EPD ¶43,236). The Supreme Court granted cert on January 9, 2009.

Supreme Court ruling. The High Court noted that under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying 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. Here, all the evidence showed the city rejected the test results because the higher scoring candidates were white, wrote the Court. “Whatever the city’s ultimate aim – however well intentioned or benevolent it might have seemed – the city made its employment decision because of race. The city rejected the test results solely because the higher scoring candidates were white. The question is not whether that conduct was discriminatory but whether the city had a lawful justification for its race-based action.”

Using the strong-basis-in-evidence standard, the Court found no substantial basis in evidence that the exams were deficient. After laying out the detailed steps taken to develop and administer the exams, the Court rejected the city’s claims that the exams were not job-related and consistent with business necessity, noting the assertions were “blatantly contradicted” by the record that also included “painstaking analyses of the questions asked to assure their relevance to the captain and lieutenant positions.” The city “turned a blind eye to evidence that supported the exams’ validity,” wrote the Court.

The city could not disregard the exams solely because it feared litigation from black or Hispanic applicants. “Fear of litigation alone” cannot justify an employer’s “reliance on race to the detriment of individuals who passed the examinations and qualified for promotions,” concluded the Court. Such action was impermissible under Title VII and the petitioners were entitled to summary judgment. The High Court determined it “need not” decide the underlying constitutional question. Accordingly, the Second Circuit’s opinion was reversed and the cases were remanded for further proceedings consistent with this opinion.

The 5-4 decision was written by Justice Kennedy, who was joined by Chief Justice Roberts and Justices Scalia, Thomas and Alito. Justice Scalia filed a concurring opinion. Justice Alito filed concurring opinion joined by Justices Scalia and Thomas. Justice Ginsburg filed a dissent joined by Justices Stevens, Souter and Breyer.

Monitoring “keystrokes” a privacy issue, or just good business practice?

June 26th, 2009  |  Lucas Otto

>Interested in monitoring your employees’ computer-related movements? Worried your employer might be watching “too closely” while you are sitting in front of your computer? In Brahmana v Lembo, N.D. Cal. May 20, 2009, one employee, one employer and a federal trial court in California are about to at least decide if monitoring down to the very keystroke violates privacy rights, or at least those rights under the Electronic Communications Privacy Act (ECPA). This law sets out the stipulations for the access, use, disclosure, interception and privacy protections of electronic communications.

The employee in the case alleged that his employer unlawfully monitored his computer keystrokes in order to obtain the password to his personal email account, and the employee bolstered this argument by alleging that the employer knew information that was never shared and could have only been known by reading his personal emails. According to the employee, his employer used monitoring tools such as local area network analyzers and key loggers to record his keystrokes when he entered his email password, in violation of the ECPA. The employer sought a dismissal of this claim

The Ninth Circuit Court noted that gaining access to stored electronic information does not violate the ECPA; however, the Act is implicated when electronic communications are “intercepted” during transmission. The court therefore reasoned that the employee’s allegations were “… sufficient to render plausible the claim that [the employee’s] communications were monitored in some way, but they do not specify whether the particular means of monitoring might monitor keystrokes that had actually affected interstate commerce,” as required by the statute. Because some means of the alleged monitoring may constitute a violation of federal law, the employee’s complaint was not dismissed.

As this case proceeds, the impact its final decision delivers will most certainly prove to have a powerful effect on both employer and employee. On the one hand, employees today often rely heavily on their workplace computer, and the Internet has proven to be both a valuable working tool, as well as an “escape” during the workday. On the other hand, while employers know a happy employee is a productive employee, “productivity” is always the key, and most employers want employees working, not surfing, and so the use of monitoring software seems to be one way to curb excessive Internet use.

Moving forward, the employer’s defense will provide an idea of what it did or did not do, and whether it actually monitored keystrokes and intercepted private information, and whether this was a violation of the ECPA. But a question that may not get posed, but is certainly on the minds of both employer and employee is: If this type of monitoring is legal, does an employer have carte blanche to monitor an employee’s computer use, and if so, how will that impact the workplace?

The latest lesson on the “ordinary meaning” of a critical preposition

June 24th, 2009  |  Pamela Wolf

>The US Supreme Court on June 18, 2009 gave us a new lesson on the “ordinary meaning” of the words “because of.” Construing this critical preposition in the text of the Age Discrimination in Employment Act (ADEA), a five-Justice majority concluded the statute’s requirement that an adverse employment action was taken “because of” age means that “age was the ‘reason’ that the employer decided to act.” (Gross v FBL Fin Servs, Inc, USSCt, Dkt 08-441). Thus, held the majority, to establish a disparate treatment claim under “the plain language” of the ADEA, “a plaintiff must prove that age was the ‘but-for’ cause of the employer’s adverse decision.” Age bias must be the sole cause, not just one cause.

Of course, as we all know, reasonable minds can differ. And in this case, four Justices had an entirely different take on the meaning of those two little words: “The most natural reading of this statutory text prohibits adverse employment actions motivated in whole or in part by the age of the employee,” wrote Justice Stevens, joined by Justices Souter, Ginsburg and Breyer, dissenting. Acknowledging the majority’s correct citation of the dictionary definition of the controversial preposition – “‘by reason of’ or ‘on account of,’” – Justice Stevens emphasized in a footnote that the dictionary does not define “because of” as “‘solely by reason of’ or ‘exclusively on account of.’”

In a separate dissent authored by Justice Breyer and joined by Justices Souter and Ginsburg, the Justices declare: “The words ‘because of’ do not inherently require a showing of ‘but-for’ causation.” These three dissenting Justices found no reason to read the disputed preposition to require “but-for” causation.

Then there’s the matter of the meaning ascribed to the same two words in the High Court’s Price Waterhouse v Hopkins decision (49 EPD ¶38,936). Justice Stevens reminded the Gross Court that the words “because of” in the earlier plurality opinion concerning a Title VII sex-bias claim meant “that gender must be irrelevant to employment decisions.” “As we made clear, when ‘an employer considers both gender and legitimate factors at the time of making a decision, that decision was because of sex,’” Justice Stevens wrote.

I know– different Court, different Justices – only three of the Court’s current Justices were on the Court in 1989 when Price Waterhouse was decided. Still, it seems that the “ordinary meaning” of the words “because of” would not have changed so much in the ensuing 20 years. After all, the majority in Gross relied on definitions obtained from dictionaries published in 1966 and 1933.

In any event, I suspect the confusion over this recent lesson on the “ordinary meaning” of this critical preposition will soon be irrelevant. Relying on its narrow construction of the words “because of,” the High Court closed off to age-bias plaintiffs the mixed-motives route (available in Title VII cases) that would enable proof of employment discrimination when the prohibited bias was at least one, but not the only, motive for an adverse action. With so many older individuals in the workforce and the increased incidence of age-bias claims, I don’t think this higher standard for age-bias claims will remain the law for long. The 29-percent increase in EEOC age bias charges filed in 2008 over those filed in 2007 – a 48-percent jump from the number filed in 2005 – should provide enough momentum for Congress to take action.

Hospitals were subcontractors subject to OFCCP jurisdiction

June 22nd, 2009  |  Cynthia L. Hackerott

>The Department of Labor’s Administrative Review Board (ARB) has recently held that three hospitals were federal subcontractors subject to the equal employment opportunity and affirmative action obligations enforced by the Office of Federal Contract Compliance Programs (OFCCP), rejecting the hospitals’ assertion that the ARB’s 2003 decision in OFCCP v Bridgeport Hospital (ARB Case No 00-034; CCH OFCCP FEDERAL CONTRACT COMPLIANCE MANUAL ¶21,603) required a contrary ruling. In OFCCP v UPMC Braddock (DOL ARB, No 08-048, May 29, 2009), the US Office of Personnel Management (OPM) had a contract with UPMC Health Plan to provide medical coverage to US government employees. In turn, each of the three hospitals had an agreement with UPMC Health Plan to provide medical products and services covered by UPMC Health Plan. 

In Bridgeport Hospital, the Blue Cross/Blue Shield Association (Blue Cross) entered into a contract with OPM to provide health insurance to federal employees; Blue Cross then entered into a contract with Blue Cross of Connecticut to provide health insurance for federal employees in Connecticut, thus making Blue Cross of Connecticut a federal subcontractor. Subsequently, Bridgeport Hospital entered into a contract with Blue Cross of Connecticut to provide medical services and supplies to members of Blue Cross of Connecticut for a one-year period. The ARB found that Bridgeport Hospital was not a subcontractor because Blue Cross’ contract with OPM did not require Blue Cross to provide its policy holders with medical care. 

Following Bridgeport Hospital, many experts thought that hospitals would not generally qualify as subcontractors subject to OFCCP jurisdiction (see e.g. “NELI experts Fox, Biermann discuss recent OFCCP developments” in CCH OFCCP FEDERAL CONTRACT COMPLIANCE MANUAL Newsletter, December 5, 2003). But, in UPMC Braddock, the ARB distinguished Bridgeport Hospital:

“Unlike Blue Cross, the UPMC [Health Plan] is more than an insurer,” the ARB stated, noting that the UPMC Health Plan is an HMO that contracts with individual physicians, medical groups, and hospitals to provide benefits including medical services and supplies and surgical and anesthesia services, emergency services, mental health and substance abuse services, prescription drug benefits, and dental benefits. “Unlike Bridgeport Hospital, [the hospitals in the present case] contracted to provide ‘a portion of the [the UPMC Health Plan's] obligation’ to provide medical services and supplies under its contract with OPM,” the ARB wrote. 

Another Circuit Court rules on validity of two-member NLRB decisions

June 19th, 2009  |  David Stephanides

>This week, the Second Circuit ruled in support of well over 100 two-member NLRB decisions. The tally now stands at 3-1. The issue: whether a quorum of the Board can be constituted with just two of five members under Section 3(b) of the NLRA.

Joining the First and Seventh Circuits, the court, in Snell Island SNF v NLRB, believed the Board’s view “is a reasonable interpretation of the statute. Indeed, we commend the NLRB for its conscientious efforts to stay ‘open for business’ in the face of vacancies that it did not create and for which it lacked the authority to fill.”

As noted in Workplace Prof Blog, a decision from the Eighth Circuit will be forthcoming, making the issue even more destined for the Supreme Court. A Petition of Certiorari has already been filed in New Process Steel by the law firm Greenberg Traurig, P.A. “The D.C. Circuit [in Laurel Baye Healthcare v NLRB] correctly held that the NLRA does not permit the board to function with only two members. We believe that the Seventh Circuit’s decision is an incorrect interpretation of the act,” said Joseph W. Ambash, one of the attorneys representing New Process.

Here is a rundown of the cases on the matter to date.

For the Board:

And against: