Gender, race, disability, and age discrimination cases, which are bread and butter for many employment lawyers, do not garner the attention from mainstream media that is afforded to what is considered “trendy.” In the past weeks, for example, the focus has been on LGBT rights due to pending Supreme Court cases. Even religious discrimination stories of late focus mainly on bias against Muslims. This narrow focus is a problem because, as my astute, twenty-something niece informed me, her generation, which largely lacks a broad range of experiences, tends to form beliefs based on sound bites and Google research. Curious, I Googled “discrimination modern day” and the top two results were from 2007 – one asked “Can anyone give me an example of modern day racial discrimination” and the other, “Is racial discrimination a thing of the past?”
Doing my part, as an employment law attorney who thinks the younger generation needs more than sound bites, I am going to answer: no, racial discrimination is not a thing of the past. And, by the way, here are some examples of very recent cases that show the continuing importance of Title VII of the Civil Rights Act of 1964 (For you non-lawyers, this law prohibits employment discrimination based on race, color, religion, sex, and national origin).
Race discrimination. A federal court in Texas ruled that seven African-American freight terminal employees who were subjected to racist graffiti, epithets, property damage, and the presence of nooses at work could proceed on their Title VII hostile work environment claims (Brooks v Yellow Transportation, Inc c/o The Frick Co, March 18, 2013, No. 3:06-CV-1566-D). The graffiti involved frequent use of the n-word and drawings of monkeys and swastikas and the comments included “Get a rope,” “Boy,” and “Fat monkey.” Management knew of the incidents but did next to nothing. Meanwhile, in Maryland, a white employee who submitted evidence that his African-American supervisors resented his being singled out for commendation and subsequently referred to him as “that stupid White boy” and made false allegations that he was performing his job poorly, was allowed to proceed on his Title VII discrimination claim (Shank v Baltimore City Board of School Commissioners, March 19, 2013, No. WMN-11-1067).
Sex discrimination. A female mortgage loan officer in Tennessee who was fired despite being the top sales performer survived the employer’s attempts to get her gender bias case tossed by providing evidence that her supervisor made comments showing discriminatory intent (Arnold v Reliant Bank, March 21, 2013, No. 3:11-cv-1083). He called her the “woman that makes all the money” and said that men should “take back” the mortgage department. He also said, at one point that he was going to use his “man power” to take her down. At first she thought he was joking, but it soon became apparent that he was not. As for sexual harassment, which continues to be prevalent, a Texas employee sued her supervisor (and the employer) after the supervisor sexually harassed her by making offensive comments, touching her, exposing himself both at work and in pictures he put on her cell phone, and threatening to fire her if she failed to perform sexual acts (Calvert v Brachfeld Law Group, PC, d/b/a Law Offices of Brachfeld & Associates, March 36, 2013, No. H-12-3683). She fulfilled his sexual demand on one occasion when he threatened that either she or her coworker would be fired. The coworker was fired the next day.
Age and disability. Sadly, these examples of discrimination prohibited by Title VII are not unique. There are also many cases involving discrimination against individuals with disabilities (prohibited by the ADA) and against older individuals (prohibited by the ADEA). For example, a deaf teacher’s aide, who was passed over for a position in a “deaf classroom environment” in favor of an aide who was “able to communicate as a hearing person” due to a cochlear implant, was allowed to go forward on her ADA discrimination claim (Golembeski v Moorestown Township Public Schools, March 13, 2013, No. 11-02784 (RBK/JS).
In the age column, a 60-year-old project manager at a Pennsylvania dental school, who was replaced by the dean’s 30-year-old research assistant when his job was eliminated and a new position encompassing his duties was created, was allowed to go to trial on his ADEA and state law age discrimination claims (Sullivan v Temple University, March 5, 2013, No. 11-7305). He applied for the new position but was not interviewed. There was evidence that the qualifications required for the position were changed to fit more closely to the younger assistant’s resume and some of the interview questions written by the dean asked about skills that she had, but that were never actually used by the assistant after she took the new position.
Level playing field. As this meager sample of cases illustrates, notwithstanding the relative lack of media coverage and Google presence, unlawful discrimination of all sorts remains prevalent in the workplace and anti-discrimination laws are still exceedingly relevant. At the end of the day, in addition to prohibiting harassment, these laws are mostly about leveling the playing field. Employment decisions should not be made based on someone’s race, color, gender, religion, age, disability, or other protected characteristic.
All eyes on the Supremes as they wrestle with laws against same-sex marriage in the face of changing times
The Supreme Court this week heard oral arguments in a pair of cases that call into question the constitutionality of laws that refuse to recognize same-sex marriage and thereby withhold the benefits of state-sanctioned marriages between men and women from those whose sexual orientation renders members of the opposite sex inappropriate marital partners. It’s an understatement to say that the cases are controversial and have drawn much attention — they have at once galvanized those on both sides of the political aisle, and underscored the shift of the American public toward acceptance of same-sex couples.
Back-to-back arguments. Hearing oral argument on March 26, in Hollingsworth v Perry (Dkt No 12-144), the Court faced the question of whether California’s Proposition 8, which bans same-sex marriage, is constitutional. The Ninth Circuit struck down the controversial law. The question the Justices must answer is: “Whether the Equal Protection Clause of the Fourteenth Amendment prohibits the State of California from defining marriage as the union of a man and a woman.” There is also a jurisdictional issue as to whether the proponents of Proposition 8 have standing to defend it.
The very next day, the High Court heard arguments challenging the constitutionality of the Defense of Marriage Act (DOMA), which also precludes marriage between same-sex couples. In United States v Windsor (Dkt No 12-307), the petitioner contends that DOMA has denied gays and lesbians who have been allowed to marry lawfully in certain states all of the benefits and protections that married couples enjoy under federal law.
The questions to be resolved by the Court in this case are a bit more complex: (1) whether Section 3 of DOMA violates the Fifth Amendment’s guarantee of equal protection of the laws as applied to persons of the same sex who are legally married under the laws of their state; (2) whether the executive branch’s agreement with the court below that DOMA is unconstitutional deprives the High Court of jurisdiction to decide this case; and (3) whether the Bipartisan Legal Advisory Group of the United States House of Representatives (BLAG) has Article III standing in the case.
Tipping point? Perhaps it’s a sign of the times that the executive branch of our federal government has refused to defend a federal law that would preclude same-sex couples from garnering the many benefits of being a married individual under federal law. Maybe we’re at or approaching the tipping point. Many experts believe the tide of public opinion has shifted toward giving same-sex couples the rights and benefits of marriage. Some states already permit either same-sex marriage or civil unions.
Moreover, many employers have already extended health insurance and other benefits to domestic partners — both same-sex and opposite-sex couples — perhaps because they recognize that good benefits attract good employees. Or, perhaps, they feel that withholding such benefits based on marital status is unfair when some couples may not lawfully marry.
The question on the mind of many was asked by Justice Ginsburg early on in the Proposition 8 case, namely, whether the issue before the Court could be treated as a gender-based classification. Justice Kennedy interposed that he had been wrestling with the same difficult question. If same-sex couples are considered a gender-based classification, they receive greater protection in the form of heightened scrutiny on review of alleged discriminatory actions. Although the federal government has yet to ban discrimination based on sexual orientation, many states have already done so. The EEOC has also expressly begun targeting discrimination against lesbian, gay, bisexual, and transgender (LGBT) individuals.
Employers take heed. Although the decisions may be very close, several commentators have predicted the Supreme Court will find both Proposition 8 and DOMA unconstitutional. Even if the predictions are incorrect, or only partly correct, it is clear that the current White House Administration favors the extension of antidiscrimination protections to LGBT individuals. As a result, workplace policies that do not already protect LGBT applicants and employees from harassment and other types of discrimination based on sexual orientation or transgender status, may pose an unnecessary risk. Now is a good time to consider an update. Likewise, benefits policies that may exclude or provide fewer benefits to same-sex couples who cannot be married under state law may also pose a risk that can be avoided by revision.
An employee who lied about his criminal and educational background on his employment application, to the EEOC, and during discovery was sanctioned by a federal court in Oklahoma with the dismissal of his race discrimination and retaliation claims (Jones v Warren Power & Machinery, Inc, WDOkla, 2013). When prompted by his employment application to reveal felony convictions from the prior seven years, the employee only disclosed a single DUI. He later testified that he could not remember any other felony convictions and didn’t “keep up with” his past life. Not fooled, the employer’s attorney searched public records and found two additional felony convictions including one for carrying a firearm and another DUI.
But wait, there’s more. The employee’s discovery responses stated that he had not been involved in a legal action, lawsuit or court proceeding in the last 10 years. But, in fact, he was divorced, plead guilty to a public intoxication charge, filed for bankruptcy, filed a personal injury suit against Dollar General, and was sued by healthcare provider. His bankruptcy schedules, filled out under penalty of perjury, stated his income at $18,000 for a year that his application, deposition testimony, and a W-2 form listed it as $30,000.
And more. In both his employment application and EEOC charge, the employee stated that he had a bachelor’s degree in business management. His EEOC charge claimed that a white technician with lesser qualifications was promoted ahead of him. Likewise, his complaint also stated that he had a degree and had more tenure than the white employee promoted over him. In fact, he did not have a degree and admitted as much in deposition. Notwithstanding, he later again testified that he did. Moreover, he claimed to have attended another college full-time but school records proved otherwise.
Dismissal as sanction. In light of the foregoing, the employer filed a motion to dismiss the employee’s race discrimination and retaliation claims as a sanction for his lies, some of which were under oath. Granting that motion, the court explained that it was plain the employer suffered actual prejudice because the lies cast doubt on all of the employee’s submissions, requiring time and money to corroborate information. Nor was this an isolated incident of confusion or misstatement; it was a pattern of dishonesty. Moreover, the lie about his educational history went to the merits of his claim that the employer promoted a white employee over him despite his “bachelor’s degree.”
In addition, his false testimony and discovery responses constituted interference with the judicial process despite his claim that he testified “to the best of his recollection.” The explanations rang “hollow” to the court based on the sheer number and breadth of his falsehoods. As to culpability, the employee claimed that when he responded to discovery, he had just been diagnosed with a serious kidney condition and it “weighed heavily” on his mind. In the face of the many misstatements of fact, the court viewed this self-serving claim with “a great deal of skepticism.” In the court’s view, his “unsatisfactory after-the-fact attempts to minimize the egregiousness of his behavior cannot protect him from the consequences of his own actions.” Accordingly, the case was dismissed.
Whether due to unfamiliarity with procedural rules, being misled by clients, or their own misconduct or negligence, attorneys are often called to task by courts for questionable litigation tactics. On March 4, 2013 for example, even though an employment discrimination case settled days earlier, a federal district court in Alabama sanctioned defense counsel for an “ignominious” trail of “surprise documents” that were not disclosed in discovery but materialized at trial “as if conjured out of thin air” when the defense needed to support its contentions (Moore v J&M Tank Lines, Inc). The court cautioned that litigation should not be a game of hide-the-ball and invited the employee’s counsel to seek the costs incurred in responding to surprise documents, preparing motions for discovery and sanctions, and making other efforts to obtain discovery.
Attorneys should note illustrative cases like Moore and take measures to ensure their litigation tactics pass muster. Paying the other side’s attorneys’ fees or other sanctions can be costly. Indeed, in an EEOC harassment suit, a federal judge ordered Fry’s Electronics, Inc. to pay a $100,000 penalty for withholding evidence, raising a “fallacious” argument and demonstrating a “disturbing lack of candor” to the court. As the following cases show, sanctions often involve more than money, and can include formal reprimands, denial of pending motions, adverse inference jury instructions, and more.
In February 2013, a federal court in Ohio granted the EEOC’s motion for Rule 37 sanctions against JP Morgan, finding that the bank purged data relevant to claims that it discriminated against a class of female mortgage consultants by directing lucrative phone calls to male employees (EEOC v JP Morgan Chase Bank, NA 2013). The lost data would have reflected what skills were assigned to mortgage consultants and thus what calls they would be given. The bank argued the destruction was the result of routine purging of electronic records; however, it was on notice that it should have stopped any such purging and that the claims involved a class of individuals rather than a single person, as the bank also argued. Finding the failure to establish a litigation hold “inexcusable,” the court concluded the conduct deserved “more than a slap on the wrist.” Accordingly, it denied JP Morgan’s separate motion for summary judgment and ruled that an adverse inference jury instruction was necessary regarding the destroyed data.
In a March 14 opinion from the same case, the court scolded the parties that the “case has gone off the rails.” After summarizing the “odd circumstances” that have “infected” the case, such as the parties’ failure to get all of the evidence before the court necessary to resolve pending motions (they merely asked if chambers needed anything beyond their substantial exhibits, which included uncertified deposition excerpts), the court decided that a “partial reset” was in the interests of justice and denied the EEOC’s motion for summary judgment as well as both parties’ motions to strike. The court also set deadlines for expert disclosures and other pre-trial issues, and precluded the parties from filing additional motions to compel, to strike, or for sanctions without first conferring with the court.
Also beware of making questionable arguments. For example, in Muhammad v Wal-Mart Stores East, LP, a federal court sua sponte sanctioned an employee’s attorney who tried to avoid summary judgment by “disingenuously” arguing that an unpleaded gender bias claim had merit and could be pursued simply because the employee checked the Title VII box on his form complaint (WDNY 2012). Allegations of discrimination were plainly absent from the complaint but the attorney, who was retained a month after the employee filed suit, never amended it. Nonetheless, she argued that the employee “clearly” pleaded gender discrimination and it was “unclear” to her why the defendant argued otherwise. To the court, it was “bad enough” to raise unpleaded claims, but it was even worse that the claims were frivolous. The attorney was sanctioned with a formal reprimand and a fine of $7,500.
In another case, after granting summary judgment to an employer on a sexual harassment claim, the court sanctioned the employee’s attorney under Rules 11 and 37 for failing to advise her to preserve data on her laptop before she deleted pornography and for making a “legal contention” not “warranted by existing law” (Cajamarca v Regal Entertainment Group, EDNY 2013). The attorney had asserted, in response to the employer’s motion for sanctions, that the court ruled in its summary judgment decision that there was no dispute the employee was sexually harassed. To the contrary, the court only assumed the fact “for the purposes of this motion.”
While preserving evidence and advancing arguments that have merit will go a long way toward avoiding sanctions, attorneys should also simply put their best foot forward in dealing with opposing counsel or the court. For example, a federal court in Colorado sanctioned the EEOC for “dilatory” and “cavalier” behavior towards an employer and the court with respect to discovery of electronically stored information related to sexual harassment claims asserted on behalf of a class of female employees (EEOC v The Original HoneyBaked Ham Company of Georgia, Inc, 2013). Counsel “prematurely made promises about agreed-upon discovery methodology and procedure when they apparently had no authority to do so” and, as a result, backed out of plans made in case management conferences with the court.
The HoneyBaked decision is notable not only for novel issues on discovery of Facebook and other social networking information, but also because of the court’s efforts to find a basis for sanctions. They were not available under Rule 11, Rule 37, or 28 USC Sec. 1927 because the conduct, while “inappropriate and obstreperous,” did not show bad motives (it was obvious to the court that “the powers that be” in the agency kept interfering with commitments made by the trial attorneys). The court therefore imposed sanctions under the lesser-used Rule 16(f), which applies to conduct in scheduling or pretrial conferences, reasoning that the agency repeatedly “caused unnecessary expense and delay” and was “dilatory in cooperating with defense counsel.”
School your clients
Most attorneys know their ethical and other obligations but that does not mean clients or subordinates are equally informed. At the end of the day, it is the attorney’s reputation on the line and judges will not forget misconduct. For this reason (and to avoid sanctions), attorneys should very early on have a conversation with clients, explaining the duty to preserve evidence and to otherwise conduct themselves properly. Some general suggestions include:
- Make certain your subordinates know and follow procedural rules, including local rules and standing orders (courts usually make standing orders available online).
- Confirm you have authority to enter a discovery agreement or take other actions that might be called for in judicial conferences; written confirmation for your records is advisable.
- Educate clients on the need to retain relevant documents through a litigation hold or other means; explain the sanctions available under Rules 11, 16, and 37.
- Fully review all relevant documents in your client’s possession or control and supplement discovery responses as new evidence or information becomes available.
- Document attempts to resolve discovery disputes before seeking judicial intervention.
Successor liability attaches to satellite-TV provider for unpaid overtime claims of installation technicians
March 19, 2013| Ronald Miller
Cable and satellite-TV providers frequently use independent contractors tp provide installation and repair services to large portions of their service areas. The business relationships between these entities are understandably close. This is an industry that has seen more than its fair share of litigation attacking its business model..
A DirecTV satellite installer went belly-up. To avoid any interruption in service to its customers, the satellite provider stepped in and took control of the defunct company. Satellite installers filed a collective action suit seeking unpaid overtime owed by the contractor. Their claim presents the question of whether successor liability exists under the Fair Labor Standards Act (FLSA). This question is important because it affects whether DirectTV’s coffers may eventually be tapped to satisfy any judgment in this action. However, the Sixth Circuit, where the federal district court hearing the matter, has not answered this question.
In Thompson v Bruister and Associates, Inc, a federal district court in Tennessee found that successor liability was appropriate under the FLSA, and further found that DirectTV was a successor employer to a satellite installer Bruister and Associates (BAI) for purposes of this litigation. Here, the court noted that the undisputed evidence established that DirectTV continued to use the same facilities as BAI; continued to employ the majority of its rank-and-file employees in the same jobs and under substantially the same working conditions; continued to use the same equipment and infrastructure; and continued to provide the same service to the same customer base.
Financial difficulties. DirecTV entered in home service provider agreements pursuant to which BAI, an independent installation contractor, installed and serviced satellite systems for DirecTV customers. After BAI encountered financial difficulties, DirecTV advanced payments to the contractor and began investigating taking control of the business to avoid disruptions of service to its customers. Ultimately, DirecTV worked with BAI and its bank to work out a loan compromise, and took over the BAI’s assets in a foreclosure sale.
After the foreclosure sale, DirecTV subsidiaries conducted business out of the former BAI locations, and the former BAI employees were subsequently hired by DirecTV. Most of BAI’s satellite installers where hired by DirecTV and continued to perform substantially the same jobs. Further, DirecTV honored vacation time and other benefits employees had accrued during their employment, and retained their hire dates for tenure and benefit purposes.
By separate contract, DirecTV assumed leases for BAI’s vehicle fleet, and continued to use the same installation equipment. It also assumed various service contracts, including inventory and personnel services, and security monitoring, among others. BAI also assigned to DirecTV its rights under various insurance policies. Following the foreclosure, there was no interruption of the installation and repair services to DirecTV customers.
Successor liability. Although the Sixth Circuit has not decided the precise issue before the district court, it has adopted the federal common law of successor liability in employment law cases. Consequently, the appeal court’s silence on this issue hardly speaks volumes about its position with respect to successor liability under the FLSA, as suggested by DirecTV. Rather, Sixth Circuit’s ruling in EEOC v MacMillan Bloedel Containers, Inc, laid the framework for a multi-factor approach that was subsequently adopted by several other circuits and codified in the FMLA’s regulations. The court rejected DirecTV’s assertion that if Congress thought successor liability was appropriate under the FLSA, it would have adopted implementing regulations along that line. However, the court noted that the Sixth Circuit has repeatedly observed that Congress intended similar remedies for both the FLSA and the FMLA.
Most the cases that have found successor liability under the FLSA have relied upon the Ninth Circuit’s decision in Steinbach v Hubbard, which appears to be the only circuit court to have directly addressed the issue. Interestingly, the Ninth Circuit cited MacMillan for the proposition that the extension of liability to successors may be necessary to fulfill a statute’s intention to protect employees.
Given that the Sixth Circuit has recognized successor liability in the employment context, that courts that have directly addressed the issue unanimously appear to hold that successor liability can be appropriate in FLSA cases, the fact that the remedial purposes of the FLSA require the courts to define ‘employer’ more broadly than the term would be interpreted in traditional common law applications, and given the absence of any convincing arguments or authority to the contrary, the court found that the doctrine of successor liability should be applied in FLSA cases.