By Lisa Milam-Perez, J.D.
The Department of Labor on Tuesday, June 30 unofficially released its long-anticipated proposed rule to amend the FLSA’s overtime regulation (specifically, 29 CFR Part 541, the “white-collar” regulation, which defines the executive, administrative, professional, outside sales, and computer employee exemptions from overtime). The most significant change: The rule would more than double—from $23,660 to $50,440, as projected for 2016—the current floor below which the white-collar exemptions from overtime would not apply. It also would increase from $100,000 to $122,148 the pay required for Part 541’s “highly compensated employee” exemption to apply.
According to the White House, in a statement announcing the impending release of the Notice of Proposed Rulemaking, 5 million additional workers will be entitled to overtime within the first year alone, just by virtue of the increased salary threshold.
The value of the FLSA has “atrophied,” said Labor Secretary Thomas Perez in a press call Tuesday morning with reporters. “The FLSA has lost some of its luster. This rule is meant to restore that luster.”
SCOTUS will once again review application of strict scrutiny in university admissions case, but plaintiff’s alleged injury also merits discussion
Granting cert for the second time in the case, the U.S. Supreme Court has agreed to review a 2014 decision in which the Fifth Circuit, following the High Court’s instructions to apply a more exacting standard on remand, determined that the University of Texas at Austin’s (UT Austin) consideration of race in a portion of its admissions decisions withstands strict scrutiny (Fisher v University of Texas at Austin, Dkt No 14-981, cert granted June 29, 2015). In a 2013 ruling, the High Court found that lower courts had erred in giving deference to the university’s assertion that its consideration of race in the admissions process satisfied the narrow tailoring prong of strict scrutiny. On remand, a Fifth Circuit panel ruled, 2-1, that UT Austin presented sufficient evidence to prove that its admissions program is narrowly tailored to achieve the compelling state interest of the educational benefits of diversity. The Supreme Court has granted to cert again to determine whether the Fifth Circuit majority correctly followed the High Court’s instructions in reaching its conclusion.
Given that the precise injury for which the plaintiff in Fisher is seeking redress seems to extend beyond the denial of her specific application to UT Austin, it appears she, along with those groups that have filed amicus briefs on her behalf, are seeking a broad ruling from the High Court holding that any consideration of race in university admissions is unconstitutional – even though that consideration may not have been the reason the plaintiff herself was denied admission. Depending on the specific foundation, such a ruling could be useful in attacking affirmative action in other areas, including employment and government contracting.
Relevant precedent. The issue in this case is whether the Supreme Court’s decisions that interpret the Equal Protection Clause of the Fourteenth Amendment permit UT Austin’s consideration of race in some of its undergraduate admissions decisions. Under the standard set forth by the US Supreme Court in Adarand Constructors Inc v Pena (65 EPD ¶43,366 (1995)), to survive constitutional review, a government entity’s consideration of race has to meet strict scrutiny standards; thus, it must: (1) serve a compelling state interest; and (2) be narrowly tailored to achieve that interest.
Prior to its 2013 decision in the present case, the last time the High Court addressed the issue of affirmative action in higher education admissions was in June 2003 when it upheld, by a 5-4 vote, the University of Michigan’s consideration of race as one of many “plus factors” in its law school admissions policy that considered the overall individual contribution of each candidate (Grutter v Bollinger, 84 EPD ¶41,415). In contrast, on that same day in a 6-3 decision, the Court held that the university’s undergraduate admissions policy, which automatically awarded points to applicants from certain racial minority groups, violated the Equal Protection Clause (Gratz v Bollinger, 84 EPD ¶41,416). Previously in Regents of Univ of Cal v Bakke (17 EPD ¶8402 (1978)), Justice Powell wrote in his solo opinion that the attainment of a “diverse student body” is a compelling state interest for an institution of higher education. The Court endorsed this position in Grutter, and found that the law school’s policy was narrowly tailored to achieve the compelling state interest of a diverse student body, but found in Gratz that the undergraduate policy was not.
Texas policy. In 1997, the Texas legislature enacted the Top Ten Percent Law which is designed to increase diversity without taking race into account. The law, which is still in effect, mandates that Texas high school seniors in the top ten percent of their class be automatically admitted to any Texas state university. In 2004, with the Grutter ruling in mind, Texas added the consideration of race among many factors, including achievements and experiences, to fill remaining slots at public universities. In the present ruling, the Fifth Circuit refers to this aspect of the admissions process as “the holistic review program.” Along with the consideration of race and these other factors, which are used to assign each applicant a Personal Achievement Index (PAI) score, the holistic program also takes into account an applicant’s Academic Index (AI) score, which is calculated based on the applicant’s standardized test scores, class rank, and high school coursework.
Abigail Fisher, a white Texas resident, sued the university after being denied a spot in 2008. Because she did not graduate in the top ten percent of her high school class, she did not qualify for automatic admission under the Top Ten Percent Plan, which that year took 81 percent of the seats available for Texas residents. Rather, she was considered under the holistic review program, and consequently, was one of 17,131 applicants for the remaining 1,216 seats for Texas residents. However, in the year that Fisher applied, her AI score was too low to get in even if she had a perfect PAI score; thus, she would not have been admitted under the holistic program even if she was a minority, the Fifth Circuit pointed out in its 2014 decision.
Previous rulings. A federal district court granted summary judgment to UT Austin. Affirming, the Fifth Circuit held that Grutter required courts to give substantial deference to the university, both in the definition of the compelling interest in diversity’s benefits and in deciding whether its specific plan was narrowly tailored to achieve its stated goal. Applying that standard, the appeals court upheld the university’s admissions plan (98 EPD ¶45,109).
However, in its June 24, 2013 decision, the Supreme Court held, 7-1, that, in applying the narrow tailoring aspect of strict scrutiny as articulated in Grutter and Bakke, the Fifth Circuit erred by giving deference to UT Austin’s assertion that the university’s way of considering race in its admissions process is constitutionally permissible. Strict scrutiny does not permit a court to accept a school’s assertion that its admissions process uses race in a permissible way without closely examining how the process works in practice, yet that is what the lower courts did in their rulings, the High Court observed in the majority opinion written by Justice Kennedy (97 EPD ¶44,850).
Thus, the Supreme Court remanded the case back to the Fifth Circuit for a more exacting analysis of the university’s admissions process. In so doing, the Court instructed the Fifth Circuit to assess whether the university has offered sufficient evidence to prove that its admissions program is narrowly tailored to obtain the educational benefits of diversity.
Fifth Circuit decision on remand. On remand, the appeals court, once again, found in favor of the university. “To reject the UT Austin plan is to confound developing principles of neutral affirmative action, looking away from Bakke and Grutter, leaving them in uniform but without command—due only a courtesy salute in passing,” a majority of the Fifth Circuit panel wrote in a July 15, 2014 decision. Specifically, the majority found that UT Austin presented sufficient evidence to prove that its admissions program is narrowly tailored to achieve the compelling state interest of the educational benefits of diversity.
“[T]he backdrop of our efforts here includes the reality that accepting as permissible policies whose purpose is to achieve a desired racial effect taxes the line between quotas and holistic use of race towards a critical mass,” the Fifth Circuit majority wrote. “We have hewed this line here, persuaded by UT Austin from this record of its necessary use of race in a holistic process and the want of workable alternatives that would not require even greater use of race, faithful to the content given to it by the Supreme Court.”
In a dissenting opinion, Judge Garza asserted that the majority did not correctly follow the High Court’s instructions and that UT Austin failed to show its actions were narrowly tailored to meet its stated goal. The majority’s ruling is “at odds with the central lesson” of the Supreme Court’s ruling, according to Garza, because it defers impermissibly to the university’s assertions regarding narrow tailoring. Under the Supreme Court’s ruling in this case, “a state actor’s diversity goals must be sufficiently clear and definite such that a reviewing court can assess, without deference, whether its particular use of racial classifications is necessary and narrowly tailored to those goals,” he explained.
“Although the University has articulated its diversity goal as a ‘critical mass,’ surprisingly, it has failed to define this term in any objective manner,” Garza wrote. “Accordingly, it is impossible to determine whether the University’s use of racial classifications in its admissions process is narrowly tailored to its stated goal—essentially, its ends remain unknown.”
On November 12, 2014, the Fifth Circuit denied Fisher’s request for an en banc rehearing. Fisher filed her petition for cert with the High Court on February 10, 2015. On June 29, 2015, the High Court granted the petition. Justice Kagan took no part in the consideration or decision of either the most recent petition or the Court’s June 2013 decision in this case.
Question presented. In her petition, Fisher states the question presented to the Court as follows:
“Whether the Fifth Circuit’s re-endorsement of the University of Texas at Austin’s use of racial preferences in undergraduate admissions decisions can be sustained under this Court’s decisions interpreting the Equal Protection Clause of the Fourteenth Amendment,” including the Court’s earlier decision in this case. Fisher argued that, on remand, the Fifth Circuit once again failed to properly apply strict scrutiny.
“Essentially ignoring the Court’s admonition to hold UT to the demanding burden articulated in its Equal Protection Clause precedent, the Fifth Circuit approved UT’s program under what amounts to a rational-basis analysis,” Fisher asserts in her petition.
Respondents’ arguments. In their response, UT Austin and the other respondents asserted that, “[t]he narrow, fact-specific question remaining in this case is whether the Fifth Circuit properly followed,” the Supreme Court’s instructions, in determining whether the UT Austin has offered sufficient evidence that would prove that its admissions program is narrowly tailored to obtain the educational benefits of diversity. “Presumably [the Supreme Court] would not have remanded the case for the Fifth Circuit to undertake that inquiry if it believed (as petitioner apparently does) that the answer was preordained,” the respondents wrote. “And despite the caricature that petitioner attacks, the Fifth Circuit’s actual opinion establishes that the court conscientiously followed this Court’s instructions in [its earlier decision].”
What is the exact injury alleged by Fisher? In the Fifth Circuit decision now at issue before the Supreme Court, the appeals court found it could not consider the university’s arguments that Fisher lacked standing – despite their apparent merit – due to the Supreme Court’s failure to address the issue in the 2013 Fisher decision. As the Fifth Circuit explained in a footnote, the well-established law is that, in order to establish standing, a plaintiff must show that (1) she has suffered an injury in fact, (2) a causal connection exists between the injury and challenged conduct, and (3) a favorable decision is likely to redress the injury.
In challenging Fisher’s standing on remand, the university pointed out that Fisher graduated from another university in May 2012, thus rendering her claims for injunctive and declaratory relief moot. UT Austin also argued that there was no causal relationship between any use of race in the decision to deny her admission and the $100 application fee – a non-refundable expense faced by all applicants – thus, putting into doubt whether Fisher in fact suffered any monetary injury.
Moreover, as explained above, the Fifth Circuit also noted that, in the year that Fisher applied, her credentials would not have qualified her for admission even if she was a minority. A piece authored by Slate staff writer Jamelle Bouie and published on the day the High Court granted cert in this case for the second time, provides further detail on Fisher’s credentials as they related to UT’s consideration of her application for a spot at the university.
“What’s striking about this case—and what makes it frustrating to some observers—is the curious question of Fisher’s academic record. Put simply, as Nikole Hannah-Jones documented for ProPublica, affirmative action wasn’t her problem,” Bouie observes.
“Neither special circumstances nor grades were determinative. Of the 841 students admitted under these criteria, 47 had worse grades than Fisher, and 42 of them were white. On the other end, UT rejected 168 black and Latino students with scores equal to or better than Fisher’s,” he notes. According to Bouie, “[t]o call this discrimination is to say that Fisher was entitled to a space at the UT Austin, despite grades that didn’t make the cut. It’s worth pointing out that the university gave her the choice of transferring from a satellite school, which she rejected.”
In another footnote, the Fifth Circuit noted that “in her supplemental briefing Fisher argues only that she had suffered an ‘injury in fact.’ Instead of addressing redressability, she argues only that the question of remedies is a separate inquiry.” (citations omitted)
Although, in the Fifth Circuit’s view, the issue of standing “was squarely presented” to the Supreme Court, the High Court curiously failed to address it, and instead, remanded the case for a decision on the merits, having affirmed all of the Fifth Circuit’s previous decision except the appellate court’s application of strict scrutiny. As such, the Supreme Court implicitly found standing existed. Given that there were no changes in jurisdictional facts occurring since briefing in the Supreme Court, Fisher’s standing is “limited to challenging the injury she alleges she suffered — the use of race in UT Austin’s admissions program for the entering freshman class of Fall 2008,” the Fifth Circuit concluded.
This conclusion begs the question, “For what exactly is Fisher seeking redress?” Given the evidence that she would not have received an offer of admission regardless of her race, and her failure to address the issue of redressability before the Fifth Circuit, it appears that Fisher is claiming some sort of injury from that fact that race was considered at all in any aspect of the overall admissions process, regardless of whether the use of race was a factor/consideration in the specific admissions decision regarding her.
If this is an accurate assessment of Fisher’s claimed injury, it would seem that the main goal of this litigation is not to provide Fisher equitable relief in the form of her getting a spot, merited or not, as a student at UT Austin, but rather to get a Supreme Court ruling ending any use of race as a consideration – i.e. affirmative action – in state university admissions altogether. Indeed, the ProPublica article cited by Bouie (which has been updated to reflect the second Supreme Court grant of cert) asserts just that. And, if that’s the case, one wonders why the advocacy groups supporting this litigation couldn’t have found a plaintiff with a stronger individual injury claim to take up this cause.
Employee fired for reporting child pornography activities of employer stated wrongful discharge claim
You’ve been hired as a personal assistant. You live and work in the employer’s home. The job entails cooking, serving meals, housecleaning, laundry, pet care, yard work, grocery shopping, and organizing the defendant’s personal affairs—including reviewing his email. And therein lies the problem. While reviewing your employer’s email, you find an email that was linked to a child-pornography website. When you report your findings to the employer his attitude is rather cavalier.
Child pornography. In the weeks following that discovery, you frequently encountered sexual depictions of children. The employer also begins to view slideshows of nude underage boys engaged in sex acts in your presence, and he even requests that you view the images. On other occasions, the employer would view child pornography with friends, upload pictures of young boys taken by him and acquaintances, and received packaging that contained child pornography. As a victim of childhood sexual abuse you protest to the employer that the display of child of pornography was upsetting. The final straw, you discover that the employer used an internet account in your name, and naturally fear that you might get caught up in the employer’s criminal activities. Still, your complaints to the employer go unheeded.
That was the predicament that the employee in McManus v. Auchincloss found himself. Several weeks after his discovery, the employee took all the child pornography he could find to his attorney, who sent the employer a cease and desist demand, and threatened to go to the police if his behavior persisted. Ultimately, the employee reported the employer’s activities to the police, and assisted in an investigation. The employer was indicted and arrested. When he learned of the employee’s role in the investigation he terminated his employment and barred him from the property.
Police investigation. Several weeks later, the employee took all the child pornography he could find to his attorney who then sent the defendant a cease and desist demand, and threatened to go to the police if the employer’s behavior persisted. Ultimately, the employee reported the defendant’s activities to the police, and assisted in an investigation. The employer was indicted and arrested. When he learned of the employee’s role in the investigation he terminated his employment and barred him from the property. The employee was prevented from retrieving possessions from the residence.
Wrongful discharge. After the employee filed suit, a trial court granted summary judgment in favor of the employer against the employee’s claim of wrongful discharge. Specifically, the trial court concluded that the employee could not prevail under the public-duty exception to at-will employment because he could not prove one element of his common-law wrongful discharge claim, namely the public duty element. This appeal followed.
The trial court reached its conclusion based on the statutory definition of employee in ORS 659A.001(3), which excludes domestic service workers. On appeal, the employee did not dispute that he worked in the domestic service of the employer. Rather, he argued that the statutory definition did not apply to his wrongful discharge claim because he brought his claim under the important-public-duty exception, not the private-employee whistleblower statute.
Possession of child pornography. Citing the private-employee whistleblower statute, ORS 659A.230, the employee argued that the public policy of Oregon encouraged his good-faith report of the employer’s possession and display of child pornography and, consequently, that his actions fulfilled an important public duty protected by the common-law public-duty exception to at-will employment.
The appeals court agreed with the employee that the legislative history of the private-employee-whistleblower statute was useful to its analysis. It concluded that the legislative history of ORS 659A.230 intended the term “employee” to include all employees. Thus, the legislation was to encourage all employees to report crime, to cooperate with law enforcement, and to testify in judicial proceedings, and the defendant identified no contrary legislative history.
Public duty. As a result, the appeals court determined that the legislature expressed a public policy to encourage all employees with a good-faith belief that their employer had committed a crime involving child abuse to report that belief to law enforcement. Thus, because the employee alleged his wrongful discharge claim under the common-law public duty exception to at-will employment, the trial court erred when it granted summary judgment in the employer’s favor on the basis that the employee did not meet the statutory definition of “employee” contained in ORS 659A.001(3).
OK, so I don’t know whether they do or not, but I bet that if they do, it’s not a particularly popular rotation for med students. Health care professionals in general likely are not delighted to be handed an FMLA medical certification form.
Employers certainly have their problems with the FMLA, too, and the Third Circuit took an employer to task this week about its failure to give an employee notice that the medical certification she supplied was “incomplete or insufficient” and to give her an opportunity to cure it rather than simply firing her, as it did without first telling her it had denied her FMLA request two days before because her “condition presently [did] not qualify as a serious health condition under the criteria set forth” by the FMLA.
(1) Certification; (2) firing; (3) FMLA denial—in that order. The employee’s doctor completed an FMLA request form on March 13 seeking intermittent leave twice a week starting March 1 “for a probable duration of one month or until about April 1, 2013.” The employee was absent March 13-14 and 23-25. On March 28, she was fired for those absences. Shortly after she was fired, the employee was diagnosed with diabetes and high blood pressure, which were found to be the cause of her symptoms the month before; these were chronic and permanent, requiring continuing medical treatment.
Negative or insufficient certification? In her subsequent FMLA interference suit, the district court concluded that her medical certification was “invalid” and “negative on its face” because it requested only one month of intermittent leave and did not show a chronic serious health condition. It rejected her argument that the certification was simply insufficient and that she should have been given seven days to cure its deficiencies under the FMLA regulations.
What is sufficient certification? Pointing out that Congress passed the FMLA so that employees could “take reasonable leave for medical reasons,” the Third Circuit explained that an employer may require “sufficient” certification from a health care provider that states: (1) the date on which the condition began, (2) the probable duration, (3) relevant medical facts, (4) that the employee is unable to perform the functions of her position, (5) the dates and duration of any planned medical treatment, and (6) the expected duration of intermittent leave.
Regs say what to do. DOL regulations govern how employers are to respond to perceived deficiencies in medical certifications. An employer “shall advise an employee” when it finds a certification incomplete or insufficient, and “shall state in writing what additional information is necessary to make the certification complete and sufficient.” A certification is “insufficient” if the information provided is “vague, ambiguous, or nonresponsive.” If the employer finds the certification incomplete or insufficient, it may deny the leave request, but only if it “provide[d] the employee with seven calendar days (unless not practicable under the particular circumstances despite the employee’s diligent good faith efforts) to cure any such deficiency.”
Certification here was “insufficient,” not negative. Although the district court said the employee’s certification was “invalid” and “negative on its face” so that she was not entitled to attempt to cure it, the regulations say nothing about a “negative certification,” which is a judicially created concept that refers to certifications that say an employee is not incapacitated and can perform his or her job. Here, the employee’s certification did not say she would not need to miss work; it said she needed intermittent leave. (The court declined to decide whether the certification established the “extended period of time” required for chronic serious health conditions.) Besides, said the Third Circuit, even though the First, Sixth, and Seventh Circuits appear to agree that “employers have no responsibility to conduct further investigation when a certification is invalid on its face,” cases about negative certifications offer little guidance about how to deal with ambiguous or non-responsive certifications.
The employee’s certification here was “insufficient” under DOL regulations because it was “vague, ambiguous, or non-responsive.” It stated that the employee “request[s] intermittent leave at a frequency of 2 times weekly . . . and lasting for a probable duration of one month.” To the appeals court, that was vague because it failed to specify whether the one month duration referred only to the length of her leave request or to the duration of her condition. In fact, the certification never even mentioned her “condition.”
Seven days to cure. Because the employee’s certification was insufficient, under the regulations her employer was required, upon receiving it, to advise her that it was insufficient, to state in writing what additional information was necessary to make it sufficient, and to provide her an opportunity to cure the deficiency—within seven days—all before denying her request for leave. It did none of those things. Instead it fired her without first notifying her that her leave had been denied.
No clairvoyance required. Both the employer and the dissent seemed to believe that because the appeals found this medical certification was “insufficient,” someone could now bring an FMLA interference claim against an employer, regardless of his or her condition when leave was requested, by claiming the diagnosis had “changed or was not finalized” until after the request was made. The employer said that because of the short duration of the employee’s symptoms before she sought leave it had no way of knowing she had a chronic serious illness.
But the issue wasn’t notice here, since she provided a medical certification that asked for leave. The appeals court specifically said it was not burdening employers “with the troublesome task of predicting, on their own, the nature and trajectory of their employees’ illnesses.” The question was not whether the employer could have known she was suffering from a chronic condition at the time she requested leave; instead, it was whether the certification was insufficient and/or incomplete, and what to do about it. “Receipt of an insufficient or incomplete certification triggers certain regulatory obligations on an employer that are unrelated to its understanding of the employee’s health condition.”
Seven days could have avoided this. Curious about how physicians feel about FMLA certification requirements? Last year Jeff Nowak, of Franczek Radelet’s FMLA Insights blog fame, posted a blog about what employers can learn from physicians in the context of the FMLA. One of his points was that health care professionals often can’t be precise when it comes to frequency and duration; what they can provide is their “best educated guess”—and sometimes they can’t even be precise as to a diagnosis.
The Third Circuit here called the certification insufficient (I might have gone so far as to say it was incomplete, since it lacked even a “condition”). If you get a certification like that, the regulations say you must advise the employee that it is insufficient, state in writing what additional information is necessary to make it sufficient, and provide an opportunity to cure the deficiency within seven days. Here, the employer spent a couple of years and no doubt significant resources explaining to the district court, and then the appeals court, just what was deficient about the employee’s medical certification. What would have happened if it had explained to the employee instead what was wrong with her certification and waited seven days?
The Third Circuit decision is Hansler v. Lehigh Valley Hospital Network, June 22, 2015.
Republican lawmakers are calling on the EEOC to change its proposed rule on workplace wellness programs out of concern that the agency is creating further “confusion” for employers who want to offer these programs in order to lower employees’ health insurance costs. According to the 17 GOP lawmakers who signed on to the comments submitted to the EEOC, the proposed rule on workplace wellness programs “is inconsistent with both current law and the bipartisan intent of Congress.” They have asked agency to make changes around seven issues before the regulatory proposal is finalized.
Specifically, the lawmakers, led by Senate health and labor committee Chairman Alexander, have urged that the EEOC make changes and clarifications to the proposed rule regarding:
- The cap on premium reward for wellness programs, which they say the EEOC lacks jurisdiction to impose;
- The 30-percent cap on premium reward for tobacco cessation, which is purportedly in inconsistent with current law;
- The definition of “reward,” which they contend would expand the statutory definition of “reward” to include “in-kind” rewards—a definition that is inconsistent with current law and Congressional intent;
- Employee-only coverage, arguing that the proposal significantly reduces the reward available to employees if a dependent or spouse participates in the wellness program by applying the 30-percent reward cap to the cost of the employee-only coverage, and failing to extend it to the cost of dependent and spousal coverage;
- The affordability standard, complaining that effectively the EEOC would require that all health insurance plans, plus wellness plans an employer offers each employee, must meet the affordability standard, which is “far beyond the affordability standard contemplated” in the Patient Protection and Affordable Care Act (ACA);
- The ADA’s safe harbor provision for insurance plans, arguing that the EEOC its trying to nullify the safe harbor provision for bona fide benefits plans through a footnote in the proposed rule’s preamble; and
- The final rule’s effective date, requesting that the final rule include an effective date that would be no sooner than plan-year 2018, so that employers will have time to come into compliance.
The lawmakers also pointed out that the ACA’s workplace wellness programs provision was one of the only provisions in the new health care law that had bipartisan support.
“Congress was clear in its support of workplace wellness programs in the health care law—just about the only provision in the law with bipartisan support,” Alexander said in a statement that includes the full text of the comment letter submitted by the GOP lawmakers. “The Departments of Health and Human Services, Labor, and Treasury were clear in their regulations implementing the law. Unfortunately, the EEOC continues to cause confusion for employers who want to offer these programs that reward employees for making healthy lifestyle choices. Even the White House has expressed concern about this confusion. The agency should listen to Congress before taking any action on its proposed rule, so employers won’t be discouraged from helping employees lower their insurance costs and lead longer, healthier lives.”