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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.

GM bankruptcy hints at risks to non-unionized employees

June 30th, 2009  |  Matt Pavich

>The judge presiding over the General Motors bankruptcy last week denied an application by the General Motors Retirees Association (GMRA) to form a benefits committee that would advocate for the beleaguered car manufacturer’s salaried retirees in the bankruptcy proceedings. The company, ruled the judge, had the right, pre-bankruptcy, to modify or terminate the retirees’ health and life insurance benefits and the retirees cannot now challenge that right.

“While I do understand the importance of this to the retirees,” said U.S. Judge Robert Gerber, “I can’t guarantee the retirees rights that they don’t have outside of bankruptcy.”

But not all the GM retirees have been left to fend for themselves. The hourly retirees who comprise the majority of GM’s retirees have been, and continue to be, represented by the United Auto Workers. Those employees will have a voice in the future of the auto company and their benefits; indeed, the UAW is now one of the largest shareholders in the “new” GM. The salaried retirees, who worked as engineers, clerks and project managers, stand to lose two-thirds of their benefits, including the total elimination of dental, vision and long-term disability coverage. These retirees are not guaranteed any input whatsoever and have been forced to turn to Congress for protection.

This ruling raises several issues. Is it just that one group of retirees will disproportionately sacrifice? What, if anything, can Congress do to protect these retirees? Would offering anything beyond basic protections to the retirees only feed the perception among big industry that the government will step in to correct their mistakes? And why would unions not use this as an example in their organizing drives?

Proponents of the Employee Free Choice Act have long argued that employers take extraordinary means to thwart organizing. They further argue that now, more than ever, employees need the strength of a union to protect them. Whatever the reasons for the non-unionized nature of the GMRA retirees, it is indisputable that they are receiving poorer treatment than their unionized counterparts.

Retirees were always going to have to make sacrifices in order for GM to eventually emerge as a profitable company. All retirees will, in fact, experience cuts to their benefits. But the non-unionized retirees will, by far, have the worst of it. To paraphrase George Orwell, all retirees will suffer equally, but some will suffer more equally than others.

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?