After the EEOC has found reasonable cause to believe that an employee’s charge of discrimination is true, and before the agency files suit, the EEOC is required to attempt, in good faith, to resolve the dispute with the employer. According to the EEOC, there are many advantages to conciliation: the process is voluntary; it can remove the uncertainty, cost, and animosity of litigation; and such discussions are “negotiations” where “counter-offers may be presented.” But what happens when it doesn’t work that way? What if the agency presents an all-or-nothing settlement offer with little time to think it over?
Good faith required.
A federal district court in Pennsylvania recently wrestled with just that scenario (EEOC v Ruby Tuesday, Inc, WDPa 2013). A restaurant employee filed an EEOC charge alleging sex discrimination and retaliation. On August 25, 2009 the agency issued its finding of reasonable cause to believe the restaurant discriminated against the employee based on sex and engaged in a pattern and practice of age discrimination in six restaurants. The restaurant was given a proposed conciliation agreement and 13 days to respond. It asked for 30 days but the EEOC refused and, on September 9, demanded the restaurant’s “best offer” by September 18. The EEOC also for the first time demanded $6,458,375 to settle. On September 15, the restaurant counter-offered on the charging party’s claim and asked to engage in further conciliation discussions on the broader claims. The EEOC responded by issuing a notice of failure to conciliate. The agency filed suit on September 30.
After nearly three years of discovery, the employer filed a motion for summary judgment based on the EEOC’s failure to conciliate in good faith. The court was displeased with the EEOC’s failure to pass the “low bar” of good faith conciliation. To the court, “a demand for the payment of more than $6 million, coupled with nine (9) days to either say ‘yes’ or to make a ‘best and final’ response,” was “devoid of reasonableness.” Further, the EEOC provided no reason why it needed an answer in the form demanded (unqualified acceptance or best offer) or why the “line in the sand” approach could be deemed conciliation. Staying the proceedings, the court ordered the parties to engage in the conciliation that should have occurred much sooner.
Hold the EEOC to its mandate.
As illustrated in Ruby Tuesday, the “good faith” obligation presents a fairly low bar for the EEOC with respect to conciliation; however, the bar does exist. Employers presented with all-or-nothing offers or given an unreasonably short time to consider a conciliation agreement should object, and should do so sooner rather than later. Indeed, the failure to timely plead the defense of a lack of good faith conciliation can waive the defense (e.g., EEOC v Service Temps, Inc, 5thCir 2012). Employers should consider the following:
- Factual basis: Ask for a minimal factual basis for an EEOC determination of reasonable cause and for any settlement amount demanded by the agency. Note, however, that with respect to class claims, courts do not typically expect the agency to specifically identify, investigate, and conciliate as to each individual claimant (EEOC v Evans Fruit Co, Inc, EDWash 2012).
- Time: Ask for reasonable time to consider the facts and the offer.
- Pleadings: If the agency files suit without good faith conciliation; plead the defense and file a motion to dismiss. Watch your deadlines (in the Ruby Tuesday case, the court also found that the EEOC failed to meet minimum pleading requirements but declined to grant the employer’s untimely motion to dismiss and merely ordered the EEOC to file a more definitive statement).
- Confidentiality: Be aware that you can waive the confidentiality of communications exchanged during conciliation by making them public (e.g., by using them as an exhibit in court proceedings and citing terms). However, simply pleading the defense in an answer is generally not a waiver (EEOC v Mach Mining, LLC, SDIll 2012).
Whatever efforts employers make to hold the EEOC to its good faith obligations should be documented, including any requests to meet face-to-face. Employers should also keep in mind that they are unlikely to completely dispense with a discrimination suit due to the agency’s lack of good faith. Instead, courts typically stay the proceedings and order the parties to make further attempts at conciliation. Additional information with respect to resolving an EEOC charge is available on the agency’s website at: http://www.eeoc.gov/employers/resolving.cfm
When California FEHA plaintiff shows unlawful bias was substantial factor in termination, mixed motive defense, if proven, will preclude damages, but employer may not completely escape liability
Under California’s Fair Employment and Housing Act (FEHA), when a jury finds that unlawful discrimination was a substantial factor motivating a termination of employment, and when the employer proves it would have made the same decision absent such discrimination, a court may not award damages, backpay, or an order of reinstatement, ruled a unanimous California Supreme Court, with Justice Marvin R. Baxter having recused himself from the case. (Harris v City of Santa Monica, February 7, 2013, 96 EPD ¶44749). However, a same-decision showing does not allow an employer to completely escape liability. Where such a showing is made, plaintiffs may still be awarded, where appropriate, declaratory relief or injunctive relief to stop discriminatory practices. In addition, the plaintiff may be eligible for reasonable attorney‘s fees and costs.
A bus driver alleged that she was fired by the City of Santa Monica because of her pregnancy in violation of the prohibition on sex discrimination in the FEHA. The city claimed that she had been fired for poor job performance. The trial court gave the jury an instruction which required the jury to determine whether discrimination was “a motivating factor/reason” for the bus driver’s termination. The city asked the court to instruct the jury that if it found a mix of discriminatory and legitimate motives, the city could avoid liability by proving that a legitimate motive alone would have led it to make the same decision to fire her. The trial court refused the instruction, and the jury returned a substantial verdict for the employee. A California Court of Appeal reversed, holding that the requested instruction was an accurate statement of California law and that refusal to give it was prejudicial error.
The state supreme court affirmed the portion of court of appeal‘s judgment that overturned the damages verdict, but the supreme court, after clarifying the appropriate standard of proof for the mixed motive/same decision defense, ruled that a same-decision showing does not allow an employer to completely escape liability.
Meaning of “because of” in FEHA. The FEHA prohibits an employer from taking an employment action against a person because of the person‘s race, sex, disability, sexual orientation, or other protected characteristic. The phrase “because of” means there must be a causal link between the employer‘s consideration of a protected characteristic and the action taken by the employer, the court explained. However, the court noted that the kind or degree of causation that is required by the “because of” language is unclear. Faced with this textual ambiguity, the court looked to the legislative history of the statute, but its review uncovered nothing that cast light on the kind or degree of causation required.
Therefore, the court looked to Title VII law prior to, and as amended by the Civil Rights Restoration Act of 1991 (including Price Waterhouse). Yet, it found no help there, either, noting that the definition of “because of” in federal antidiscrimination law (including the U.S. Supreme Court’s ADEA decision in Gross) contained both temporal and cross-statutory variation. Thus, the California Supreme Court found it must ultimately focus its attention on what the state legislature said it sought to accomplish in enacting the FEHA.
Same decision defense. In light of the FEHA’s purposes, especially its goal of preventing and deterring unlawful discrimination, the court concluded that when a plaintiff has shown by a preponderance of the evidence that discrimination was a substantial factor motivating his or her termination, the employer is entitled to demonstrate that legitimate, nondiscriminatory reasons would have led it to make the same decision at the time. However, while a same-decision defense is permitted under the FEHA, such a showing by an employer is not a complete defense to liability when the plaintiff has proven that discrimination on the basis of a protected characteristic was a substantial factor motivating the adverse employment action.
Standard of proof. The employee argued that if any type of same-decision showing were to be permitted, the court should hold the employer to a higher standard of proof – by requiring clear and convincing evidence rather than a preponderance of the evidence. But the court disagreed, pointing out that it has not applied a heightened proof standard to cases with ordinary civil remedies, and it was not aware of any mixed-motive case since Price Waterhouse and the 1991 amendments to Title VII (which also declined to adopt a clear and convincing evidence standard) that has applied anything but a preponderance of the evidence to an employer‘s same-decision showing. Thus, because employment discrimination litigation does not resemble the kind of cases in the California Supreme Court has applied the clear and convincing standard, it held that preponderance of the evidence is the standard of proof applicable to an employer‘s same-decision showing.
Remedies. The court next held that, if the employer proves by a preponderance of the evidence that it would have made the same decision for lawful reasons, the plaintiff cannot be awarded damages, backpay, or an order of reinstatement. However, it would tend to defeat the preventive and deterrent purposes of the FEHA to hold that a same-decision showing entirely absolves an employer of liability when its employment decision was substantially motivated by discrimination. Thus, in light of the FEHA‘s express purpose of not only redressing but also preventing and deterring unlawful discrimination in the workplace, the plaintiff, following a same-decision showing by the employer, could still be awarded, where appropriate, declaratory relief or injunctive relief to stop discriminatory practices. In addition, the plaintiff may be eligible for reasonable attorney‘s fees and costs.
Same decision instruction in this case. The bus driver contended that even if the court concluded that a jury should receive some type of same-decision instruction in cases potentially involving mixed motives, the instruction should not have been given in her case because the same-decision showing was an affirmative defense that the city did not plead in its answer to her complaint. However, the court held that the city‘s failure to plead this defense did not bar such an instruction. The city’s pleading in its answer, that any alleged adverse employment action was not based on discriminatory practice, but rather on one or more legitimate nondiscriminatory reasons was sufficient to put the bus driver on notice that the city intended to defend on the basis that it had not discriminated against her and had a legitimate reason for discharging her. Further, the city‘s defense at trial was consistent with that intention. Thus, the fact that the city did not plead a same-decision defense did not adversely affect the bus driver’s substantial rights, and the omission did not bar the trial court from giving a same-decision instruction.
Remand instructions. Finally, the court stated that in light of its decision, a jury in a FEHA mixed-motive case alleging unlawful termination should be instructed that it must find the employer‘s action was substantially motivated by discrimination before the burden shifts to the employer to make a same-decision showing, and that a same-decision showing precludes an award of reinstatement, backpay, or damages. In this case, the state supreme court instructed the trial court on remand to determine, in the event of a retrial, whether the evidence of discrimination in the bus driver’s case warranted a mixed motive instruction.
Most employers know it is unlawful to retaliate (take an adverse employment action) against an employee who engages in an activity protected by Title VII. Protected activities include opposing discriminatory practices and/or participating in an investigation, proceeding, or hearing under Title VII. Activities falling within the participation clause are fairly easy to spot and include things like filing an EEOC charge, cooperating with an internal investigation, or serving as a witness in an investigation. What is less clear is what constitutes a protected activity under the opposition clause.
Opposition activities. An EEOC Guidance provides these examples of “opposition:”
- Complaining to anyone about alleged discrimination against oneself or others;
- Threatening to file a charge of discrimination;
- Picketing in opposition to discrimination; or
- Refusing to obey an order reasonably believed to be discriminatory.
In practice, the list of activities protected under the opposition clause is growing as courts tend to define the term broadly. In a January 24, 2013 decision for example, a federal district court found that an employee’s act of forwarding, without comment, a male subordinate’s email complaint about coworkers could be protected “opposition” activity (Hiter v Multiband EC Inc, CDIll, 2013). The subordinate’s email complained about female coworkers’ flirting and lewd comments. To the court, while simply forwarding an email may not always constitute opposition, it could here because the employee’s prior attempt to discipline a subordinate was thwarted. A jury could thus find that she felt she could do no more than make upper management aware of problems by forwarding emails. The court noted that it was not necessary to use “magic words” such as “sex discrimination” if the opposition was based on a subjectively sincere and objectively reasonable belief that the employee was opposing conduct made unlawful by Title VII.
Likewise, the court found that the employee’s own email complaint to a supervisor that she had heard that one of her female subordinates (with whom she had a contentious history) was spreading rumors that the employee slept with a coworker could be opposition to the subordinate’s attempt to demean her in a sexual way. This was particularly true where it was disputed whether the employee had the authority to discipline the subordinate without approval from higher level managers.
Use caution. There are limits to what is considered oppositional activity and the EEOC provides examples of activities that are not protected, such as threats or acts of violence. However, given that whether an activity is protected under Title VII is a fact-sensitive inquiry, employers are well-advised to adopt a broad interpretation of what constitutes opposition to unlawful practices and caution managers to act (or refrain from acting) accordingly. If there is an argument that can be made that an employee’s comment or action (including a passive action like forwarding an email) communicates an allegation of unlawful conduct, consider it a protected activity. Additional information about protected activities is provided in the EEOC Compliance Manual, Section 8, Chapter II, Parts B and C.
Performance improvement plan: (a) valuable tool for correcting performance problems, or (b) obligatory pre-discharge formality? If you answered (a), you know that a PIP can help a faltering employee meet job expectations—an important goal given the costs of employee training and turnover. If you answered (b), try again. In the at-will employment setting, a PIP is not a legal prerequisite to termination (of course not) and it won’t insulate your organization from liability if a discharged employee files suit.
For many private-sector employers, the PIP serves a genuine “due process” function of sorts, a fair warning and last chance for an employee to avoid discharge. But when a PIP is used for the sake of appearances or implemented in half-hearted fashion, courts and juries tend to see right through the subterfuge.
Cases in point
In Brock-Chapman v National Care Network, LLC, a sales executive filed FMLA claims after she was placed on a PIP and then discharged within a month of returning from leave to care for her cancer-stricken (now deceased) husband. Under the PIP, which was implemented because of her purported “lack of urgency” for her work, the employee was required to make “significant improvement” within 30 days. Unsure how to meet this vague mandate, she asked for more specific performance goals, but her request was denied. In fact, when forwarding one such request to the employee’s supervisor, the HR director referred to the employee as “exhausting,” evidencing animus, the court noted.
By objective measures, the employee was performing quite well—she was 43 percent ahead of her sales target for the year. But the PIP required her to “improve sales.” The employee was supposed to have regular calls with her supervisor to monitor her progress toward meeting the PIP goals, but her boss skipped five of the eight calls and did not reschedule them. Moreover, while employees were usually given 90 days to meet PIP objectives (as clearly noted on the employer’s standard PIP form), the employee was granted only 30 days. Under these facts, a federal court in Texas let stand a jury verdict in the employee’s favor, noting that the questionable intent and execution of the PIP demonstrated pretext.
In Trickey v Kaman Indus Tech Corp, a federal district court in Missouri found sufficient evidence that an employer actively thwarted a branch manager’s attempts to comply with a PIP. While on the PIP, his superior undermined his efforts to reestablish his authority as branch manager by publicly congratulating another employee—who was being groomed for the branch manager position—for the branch’s excellent performance. An HR manager testified that the PIP process had been manipulated by a supervisor who had asked her to create a PIP for the branch manager when it was inappropriate to do so. A coworker testified that considerable attention was paid to finding the branch manager’s mistakes.
When the branch manager asked for additional customer accounts in an effort to meet the sales goals set forth in his PIP, his boss refused the request. Only 58 days into the 90-day PIP, the branch manager was demoted and given a gross sales target of $1.2 million. However, he was assigned customer accounts that had netted for only $200,000 in combined sales during the previous year. A jury found the branch manager had deliberately been set up to fail by a sales requirement that was practically impossible. The district court agreed, upholding a jury verdict in his favor on his age bias and retaliation claims.
Finally, in Burnsed v Pasco Regional Medical Center, a hospital placed a respiratory therapist on a PIP. Then the employer removed her from the schedule. Despite the employee’s frequent calls to her supervisor and the director of nursing, she was not given any shifts. Ultimately, the employee was terminated, allegedly because she failed to fulfill the conditions of her PIP. The evidence indicated that the employer interfered with the employee’s attempts to work enough shifts to satisfy the requirements set forth in the PIP. Thus, a reasonable jury could find that the hospital issued the PIP, removed her from the schedule, and ultimately terminated her because it did not want to deal with her intermittent FMLA absences for asthma and colitis, the federal district court in Florida held.
The right way to PIP
A bona fide PIP is a good-faith effort to help an employee correct performance deficiencies and succeed. To that end, the organization seeks to remove impediments, rather than put obstacles in the employee’s way:
• A PIP is implemented in conjunction with HR to control for any unfair bias on the supervisor’s part in assessing whether the employee has met stated goals.
• Stated goals are SMART—specific, measurable, attainable, relevant, and timely. Meaningful criteria are provided in order for an employee to gauge progress. Instead of “improve poor attitude,” for example, an employee is expected to “reduce customer complaints to zero.”
• The employee is given regular feedback. Weekly or semi-weekly meetings with the supervisor are built into the PIP schedule so that more formal feedback can be provided.
• Additional training, mentoring, “scaffolding” are given as needed or requested.
• A fair amount of time is allowed in which to meet the stated criteria. If a standard PIP is 90 days, then an employee is given the full 90 days in which to meet PIP goals. If business needs require a reduced time frame (the employee is in a key policy position, for example), the PIP states at the outset the specific time to be allotted, and why.
• Employees are given a sufficient number of shifts or meaningful work assignments during the PIP period in which to demonstrate improvement and satisfy the PIP criteria.
• The consequences of failure to meet PIP goals—usually termination, perhaps demotion—are clearly articulated at the outset.
When to PIP
A PIP should be imposed for objective, clearly documented reasons. The decision to place an employee on a PIP must be consistent with his or her recent performance evaluations and merit pay decisions. A PIP is not to be imposed in retaliation for filing a complaint, or out of a discriminatory belief that an older employee “can’t hack it” anymore. An employee should not be placed on a PIP if similarly situated younger workers (or male workers, or white workers, for example) would not have been placed on a PIP based on the performance at issue.
Know when not to PIP. A PIP works best to correct performance deficiencies, rather than significant misconduct or behavioral issues. In one instance, an assistant principal was placed on a PIP after she strip-searched an 8-year old male student without calling his parents. However, a PIP is hardly appropriate for situations like these, which call for more severe disciplinary measures.
Employment discrimination based on sexual orientation and/or gender identity continues to be an emerging area of the law with the trend toward added protection. Employers that have not already done so should consider adding antidiscrimination coverage on those bases to their internal employment policies.
EEOC targeting LGBT bias. Although Title VII of the Civil Rights Act of 1964 has not been interpreted to expressly provide protection from employment discrimination to lesbian, gay, bisexual, and transgender (LGBT) individuals as a protected category, the EEOC in 2012 crystallized its view that these individuals may be afforded protection under a sex stereotyping theory, or whenever intentional discrimination against such an individual is due to his or her LGBT status. In its Macy v Holder decision, the commission stated that “intentional discrimination against a transgender individual because that person is transgender is, by definition, discrimination ‘based on …sex,’ and such discrimination therefore violates Title VII.”
EEOC Commissioner Chai Feldblum (who was integral to the Macy decision) has characterized the decision as clarifying what courts have not always done as clearly: that a Title VII claim for discrimination because a person is transgender can be brought based on gender stereotyping or because “gender was on the brain” and clearly taken into account. When gender is taken into account, Title VII is violated, according to Feldblum. The EEOC has also formed a LGBT work group to advise its General Counsel on how to make sure that LGBT individuals are not being carved out and receiving less protection under statutes enforced by the EEOC. The work group is looking at federal districts and circuits around the country in an effort to identify areas where a case may be brought to apply Macy, or theories of sex-plus or associational discrimination. In its Strategic Enforcement Plan for fiscal years 2013-2016, the EEOC has formally declared its intent to target coverage of LGBT individuals under Title VII’s sex discrimination provisions, as they may apply.
Washington and the courts. Some federal district courts have found employment discrimination based on sexual orientation unlawful via a sex stereotyping theory or have found a hostile work environment based on sex. President Barack Obama has declined to sign an executive order that would ban workplace discrimination by federal contractors on the basis of sexual orientation, preferring instead to encourage passage of “inclusive” legislation that would prohibit all employers from discriminating based on sexual orientation and gender identity. The president has hung his hopes on the Employment Non-Discrimination Act, a “legislative solution to LGBT employment discrimination” that has so far failed to pass.
State coverage progressing. There are, however, explicit emerging state laws protecting LGBT employees, including many with gender identity protections. Twenty-one states plus the District of Columbia have laws that prohibit both private and public sector employers from discriminating based on sexual orientation, and in some cases, gender identity. An additional ten states prohibit such discrimination only by state and/or public employers. Similarly, more states are legislatively, judicially, or by voter initiative approving same-sex marriage protections. In the national election on November 6, voters in Maine, Maryland, and Washington endorsed same-sex marriage. Six other states and the District of Columbia permit such marriages. These laws have a broad impact in the employment context in areas such as employee leave and benefits. That these issues will continue to be at the forefront is signaled by the U.S. Supreme Court’s willingness to take up the Defense of Marriage Act (which nullifies gay and lesbian marriages for all purposes of federal law) and California’s Proposition 8 (a constitutional ban on marriage equality) this March.
Businesses adding protection. Meanwhile, the business community, perhaps because it must be more forward-looking than the Congress and the federal government in order to thrive, has continued to carve out protections for the LGBT community through internal employment policymaking. The Human Rights Campaign Foundation’s Corporate Equality Index (CEI), the national benchmarking tool on corporate policies and practices related to LGBT employees, rated the entire Fortune 500 list, and found that for the first time, the majority have nondiscrimination policies that cover gender identity (57 percent). Eighty-eight percent of Fortune 500 companies cover sexual orientation discrimination in their nondiscrimination policies.
Looking ahead. The trend is clearly building toward coverage of sexual orientation and gender identity discrimination in antidiscrimination protections that apply to businesses. Employers may be wise to follow the lead of the Fortune 500 and ensure that LGBT employees and applicants are protected from employment discrimination through internal policies before the EEOC — or its state counterparts — come knocking on their doors.