RECENT DEVELOPMENTS IN
LABOR AND EMPLOYMENT LAW
2006-2007
William R. Corbett*
8 2007 Frank L. Maraist Professor of Law, Paul M. Hebert Law Center, Louisiana State
University.
TABLE OF CONTENTS
I. EMPLOYMENT LAWBTHE UNUSUAL.............................................................................................. 2
II. EMPLOYMENT DISCRIMINATION LAWS (GENERALLY) ........................................................ 5
A. Evidence of Discrimination .................................................................................... 5
B. Coverage and Jurisdiction .................................................................................... 10
C. Retaliation ............................................................................................................... 12
III. AMERICANS WITH DISABILITIES ACT ..................................................................................... 13
IV. TITLE VII/SECTION 1981 ................................................................................................................ 17
A. Sexual Harassment ................................................................................................ 17
B. Racial Discrimination ........................................................................................... 17
C. Timing/Limitations ............................................................................................... 18
D. Religious Discrimination ....................................................................................... 19
E. Pregnancy Discrimination ..................................................................................... 19
F. Caregiver/Family Responsibility Discrimination ............................................... 20
V. AGE DISCRIMINATION IN EMPLOYMENT ACT ....................................................................... 20
VI. FAMILY AND MEDICAL LEAVE ACT.......................................................................................... 21
VII. FAIR LABOR STANDARDS ACT .................................................................................................. 24
VIII. PUBLIC EMPLOYEES ................................................................................................................... 26
IX. SARBANES-OXLEY ........................................................................................................................... 27
X. UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYEMENT RIGHTS ACT
(USERRA) .................................................................................................................................................... 28
XI. EMPLOYEE RETIREMENT INCOME SECURITY ACT ............................................................ 29
XII. COMPUTERS AND PRIVACY ........................................................................................................ 31
XIII. UNDOCUMENTED WORKERS AND RICO ............................................................................... 32
XIV. NATIONAL LABOR RELATIONS ACT ...................................................................................... 33
XV. WARN ACT ........................................................................................................................................ 36
XVI. LOUISIANA LAW ............................................................................................................................ 37
I. EMPLOYMENT LAWBTHE UNUSUAL
Striking a Blow Against Discrimination
Williams v. Presidential Pavilion, No. 05-C-4917, 2007 WL 1772975 (N.D. Ill. June 14,
2007).
An emerging issue under Title VII is the issue of color-based discrimination as a form of
discrimination distinct from race-based discrimination. See, e.g., Trina Jones, Shades of
Brown: The Law of Skin Color, 49 DUKE L.J. 1487 (2000). The plaintiff in this case
raised the issue, alleging that he, a fair-skinned African American employee, was
discriminated against and harassed because of his race and color. He was suspended and
then fired when he got into an argument with an African-American co-employee and hit
him with a metal pipe. The plaintiff alleged in his complaint that lighter-skinned
employees who engaged in hostile or threatening behavior toward other employees had
not been terminated. The court concluded that the plaintiff could not establish a case
under the McDonnell Douglas analysis because 1) the plaintiff could identify no similarly
situated employee who was treated differently (no other employee cited by the plaintiff
had fought with and sent another employee to the hospital with serious injuries), and 2)
assuming arguendo he established a prima facie case, the plaintiff did not present
sufficient evidence that the employer’s given reason was a pretext for discrimination.
Striking a Blow for Civility
Touchet v. Hampton, 950 So. 2d 895 (La. App. 3d Cir. 2007).
Terminating employees is always painful, and sometimes the aftermath is even more
painful. The owner of a car dealership who terminated the plaintiff described the parting
as “amicable.” However, a few months later, the plaintiff, Touchet, allegedly called the
owner to gloat over the dealership’s business hardships. After a few more calls with
unpleasantries, the plaintiff left the defendant owner three voice mail messages on one
day filled with vile profanities and threats of physical violence (available for reading in a
footnote of the opinion but not in this paper). The owner decided to go to plaintiff’s
current place of employment to ask him to terminate the harassment. The defendant went
there, was taken to plaintiff’s office and then, after the door closed, there was some
conflict in the testimony as to what was said. There was no disagreement, however, that
defendant pummeled the seated plaintiff (defendant did not recall how many times he hit
plaintiff) until he was pulled off by one of plaintiff’s coworkers. Plaintiff sued for
battery, and defendant argued self-defense based on both the threatening voice mail
messages left by plaintiff and plaintiff’s allegedly quick and threatening movement when
defendant walked into the office. The trial court granted defendant’s motion for
involuntary dismissal based on self defense. The court of appeals reversed, holding that
repeatedly hitting someone seated in a chair does not constitute self defense. Although
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the court did not opine on the matter, former employers and former employees might
learn something from the case about post-termination behavior. Touché!
Taking Aim at Management
NetJets Aviation, Inc. v. Int’l Bhd of Teamsters, Airline Div., 486 F.3d 935 (6th Cir.
2007).
NetJets sent a DVD to all of its pilots extolling the virtues of a proposed collective
bargaining agreement. To express his opposition and displeasure, a pilot who was
chairman of the union communications team made a video of a pilot shooting a
semiautomatic rifle at the DVD. A close up showed bullets passing through the DVD
and shattering it. Finally the words appeared, “Anyone care to guess how I voted?” The
video was posted on an online bulletin board, and pilots accessed and watched the video,
most posting comments that they thought it was funny. When the video was called to
management’s attention, it was investigated, and even though the creator said he intended
it as a joke, he was fired for “openly act[ing] in an inappropriate and unprofessional
manner demonstrating a total lack of judgment which resulted in inducing fears of
workplace violence.” The union grieved the termination as being political retaliation.
The arbitral board found there was no just cause for termination and ordered the
employee reinstated. The employer filed an action to have the arbitral award vacated on
the ground that it violated public policy. The district court denied the motion, holding
that the Railway Labor Act does not permit judicial review of arbitral awards based on
public policy. The Sixth Circuit, assuming public policy review is available under the
RLA, held that the reinstatement did not violate public policy. The court said it was
bound by the board’s rejection of the company’s characterization of the video as
symbolic murder of the company officials who appeared in the DVD. The board and the
court accepted that the video was a political statement against the proposed collective
bargaining agreement and not an act of violence or threat of violence. The board had
found the making and posting of the video to be juvenile and immature behavior.
Funny Bone: Can’t Anyone Take a Joke?
Perkins v. Funny Bone Comedy Club of Omaha, Inc., No. 8:06CV44, 2007 WL
1362854 (D. Neb. Apr. 18, 2007).
The plaintiffs, three women, ages 41, 41, and 43, were former employees of a closed
Funny Bone Comedy Club. They applied for jobs as wait staff at new Funny Bone
Comedy Club. They were not hired and sued for age discrimination. Another woman
was denied a promotion that was given to a younger woman. The female general manager
admitted saying that the new club would hire only “cute 20 year olds with perky breasts
and nice butts because that’s what people want to see.” The plaintiffs alleged that she
also said, although she did not recall saying, the club might attract younger kids “if we
did not have a bunch of old moms for waitresses.” The majority shareholder was alleged
to have said that the club would not hire any old wait staff with sagging breasts and said
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he did not know why any of the “old bitches” thought he would hire them back. The club
defended, denying that some statements were made, arguing that any that were made
were in jest, and labeling all as stray comments--not made by decision makers or not
made as part of the decision making process. While the court did not necessarily see a
correlation between age and the physical attributes mentioned, it thought it fair to
presume that the speakers did believe such a correlation exists. The court denied the
defendant’s motion for summary judgment.
Sexual Harassment and Faithless Servants
Sanders v. Madison Square Garden, No. 06-589 (GEL), 2007 WL 1933933 (S.D.N.Y.
July 2, 2007).
Plaintiff, who was employed for five years as a vice president for marketing for the New
York Knicks, had signed an agreement that she would not engage in activities or have
personal or financial interests that would impair her judgment or conflict with her
responsibilities to her employer. When plaintiff was terminated, she sued for sex
discrimination and retaliation for complaining about sexual harassment. During
discovery, the defendant obtained plaintiff’s tax returns, which had schedules attached
indicating deductions for a direct marketing business. Plaintiff amended her tax returns
to delete the schedules, stating that she had conducted no direct marketing business, and
the schedules were an accountant error. The defendant employer sought leave of court to
amend its pleadings to assert a counterclaim against plaintiff based on the faithless
servant doctrine. The employer argued that the plaintiff either by secretly operating an
unauthorized direct marketing business or by committing tax fraud had breached her duty
of loyalty to her employer. The court denied leave to amend because the defendant had
not adequately explained how either activity would adversely affect the employee’s job
performance.
Visible and Invisible Tongue Studs
Piercy v. Maketa, 480 F.3d 1192 (10th Cir. 2007).
I did not make up the plaintiff’s name. Dress codes and claims of sex discrimination
have been fairly numerous in the last few years. Plaintiff was a deputy sheriff in a jail.
She alleged various acts of sex discrimination, including posting of a male-only job
vacancy. She was fired after two incidents of wearing a tongue stud in violation of the
dress code policy, which prohibited visible piercings except post-type earrings for
females. The plaintiff admitted that she had been counseled on the two occasions, but
she said the supervisor told her during the first incident that only visible piercings
violated the policy, and a transparent stud would not be a problem. After the second
incident, plaintiff contended that she had not been ordered not to wear a tongue stud, but
the supervisor who counseled her after the first incident said he had told her not to wear
one. Plaintiff was terminated after an internal affairs investigation and recommendation.
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Plaintiff lost on her retaliation claim, but was allowed to proceed on her sex
discrimination claim.
Billable Hours and Employment Law Suits Against Employment Law Firms
An associate with a Pasadena employment law law firm sued the firm for firing him for
not meeting minimum billable hour requirements during a period of time when he was
being treated for a liver disease. He sued for wrongful termination and failure to
accommodate under the California Fair Employment and Housing Act. The firm
contended that the plaintiff was fired for another reason—insubordination in taking a
vacation without asking permission and leaving no way to contact him. The plaintiff won
and was awarded $989,866 in economic damages and $105,000 for emotional distress.
See Stephanie Francis Ward, Fired Associate Wins $1.1 Million Judgment, ABA
JOURNAL E REPORT (Aug. 18, 2006).
II. EMPLOYMENT DISCRIMINATION LAWS (GENERALLY)
A. Evidence of Discrimination
The Legacy of Desert Palace Inc. v. Costa
Employment discrimination cases have long focused on how to prove
discrimination. Most of the Supreme Court=s decisions have been about analyses or
Aproof structures.@
Before 2003, it was generally accepted that intentional
discrimination cases (disparate treatment cases) were evaluated under one of two proof
structures: pretext analysis, developed in McDonnell Douglas Corp. v. Green, 411 U.S.
792 (1973), or the mixed-motives analysis developed in Price Waterhouse v. Hopkins,
490 U.S. 228 (1989) and subsequently modified (at least for Title VII) by the Civil Rights
Act of 1991. As to which proof structure applied to a particular case, the courts drew the
line between cases involving circumstantial evidence of discrimination (to which
pretext/McDonnell Douglas applied) and cases involving direct evidence (to which the
mixed-motives analysis applied). Although the definitions of direct and circumstantial
evidence and how to distinguish between them were problematic, the courts worked
within this framework until the Supreme Court decision in Desert Palace, Inc. v. Costa,
539 U.S. 90 (2003). In that case, the Court rejected the direct evidence/circumstantial
evidence dividing line, but did not explain how that decision affected the two proof
structures. The Fifth Circuit faced the question in Rachid v. Jack in the Box, Inc., 376
F.3d 305 (5th Cir. 2004), quoted infra, and announced a modified McDonnell Douglas
analysis, combining pretext and mixed motives.
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Rachid v. Jack in the Box, Inc., 376 F.3d 305 (5th Cir. 2004).
The Fifth Circuit interpreted Desert Palace as merging the McDonnell Douglas
and Price Waterhouse analyses and held that the merged analysis applies to the ADEA as
well as to Title VII cases. The court described what it called the Amodified McDonnell
Douglas approach@ as follows:
[T]he plaintiff must still demonstrate a prima facie case of
discrimination; the defendant then must articulate a
legitimate, non-discriminatory reason for its decision to
terminate the plaintiff; and, if the defendant meets its
burden of production, “the plaintiff must then offer
sufficient evidence to create a genuine issue of material fact
`either (1) that the defendant’s reason is not true, but is
instead a pretext for discrimination (pretext alternative); or
(2) that the defendant’s reason, while true, is only one of
the reasons for its conduct, and another “motivating factor”
is the plaintiff’s protected characteristic (mixed-motive[s]
alternative).’” . . . . If a plaintiff demonstrates that age was
a motivating factor in the employment decision, it then falls
to the defendant to prove Athat the same adverse
employment decision would have been made regardless of
discriminatory animus.@
Id. at 312.
As applied to the Rachid case, the Fifth Circuit held that summary judgment in
favor of the defendant was improper because disputed issues remained regarding the
reason given by the employer for plaintiff=s termination and regarding whether age was a
factor in that decision.
The Fifth Circuit=s adoption of a modified third prong of the pretext analysis in
Rachid seemed to suggest that plaintiffs might do better in defeating motions for
summary judgment than they had under the Fifth Circuit=s pre- Desert Palace
application of the pretext analysis. Indeed, the court reversed a summary judgment for a
defendant employer in Machinchick v. PB Power, Inc., 398 F.3d 345 (5th Cir. 2005).
Since that case, the Fifth Circuit has applied the Rachid analysis in several cases not
designated for publication: Bouie v. Equistar Chems. LP, No. 05-20382, 2006 WL
1736557 (June 22, 2006) (affirming summary judgment for defendant employer because
plaintiff failed to satisfy prima facie case); Staten v. New Palace Casino, LLC, No. 0560144, 2006 WL 1737438 (5th Cir. June 19, 2006) (reversing summary judgment for
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employer due to employer=s giving inconsistent reasons for action); Martin v. Bayland,
Inc., No. 05-41085, 2006 WL 1308017 (May 12, 2006) (affirming summary judgment for
defendant); Moore v. Honeywell Int=l Inc., No. 05-30483, 159 Fed. Appx. 566 (5th Cir.
2005) (affirming summary judgment for defendant); Collins v. Saia Motor Freight Lines,
Inc., No. 04-30958, 144 Fed. Appx. 368 (5th Cir. 2005) (affirming summary judgment for
defendant).
In the aftermath of Desert Palace, Inc. v. Costa, the Fifth Circuit seemed to
restore order to how to analyze disparate treatment cases in Rachid v. Jack in the Box, but
there still seems to be plenty of confusion. See, e.g., Smith v. Hewlett-Packard Co.,
No.3:05-1123-D, 2007 WL 669508 (N.D. Tex. March 6, 2007) (stating that because
plaintiff does not have direct evidence of discrimination, he can prove discrimination
using the modified McDonnell Douglas analysis set forth in Rachid); Mayeaux v. Clear
Creek Indep. Sch. Dist., G-05-CV-262, 2007 WL 1004241 (S.D. Tex. March 26, 2007)
(stating that the Rachid analysis is only applicable to mixed-motive cases).
A federal district court applied the Rachid analysis to a summary judgment
motion in Johnson v. United Furniture Indus., Inc., No. 1:05cv317, 2007 WL 1501032
(N.D. Miss. May 21, 2007). The court assessed the marked change in favor of plaintiffs
created by the Rachid analysis:
Clearly, it is the second option [motivating factor at the third stage] which
marks such a significant departure from pre-existing law. While plaintiffs
in the Fifth Circuit have traditionally focused on trying to prove that a
defendant’s stated non-discriminatory reason was false, Rachid provides
them with the option not contesting the truthfulness of the stated reason,
and instead attempting to demonstrate that discrimination was also a
motivating factor behind the adverse employment action.
Johnson, 2007 WL 1501032, at *4.
It was predictable that as courts throughout the nation faced the question of how
Desert Palace changed the analyses, the Fifth Circuit=s creative approach in Rachid
would attract attention. However, it has not attracted much notice outside the Fifth
Circuit. The Eighth Circuit has said that Desert Palace did not change anything about
that circuit=s application of the McDonnell Douglas pretext analysis to evaluate
summary judgment cases. See Johnson v. AT&T Corp., 422 F.3d 756, 760 n.4 (8th Cir.
2005); see also Tysinger v. Police Dept. of the City of Zanesville, 463 F.3d 569, 577 (6th
Cir. 2006) (“. . . Desert Palace, dealing with a jury instruction issue, does not purport to
alter application of the McDonnell Douglas framework to pretrial analysis of
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discrimination claims based on circumstantial evidence at the summary judgment
stage.”). The D.C. Circuit rejected the argument that all discrimination cases are to be
evaluated under the statutory analysis of §2000e-2(m). See Fogg v. Gonzales, Nos. 055439, 05-5440, ___ F.3d ___, 2007 WL 1855062 (June 29, 2007) (“[T]here are
alternative ways of establishing liability under Title VII and . . . the `same action’
showing is a defense to damage liability only under the mixed motive theory of §2000e2(m).”) .
Burrell v. Dr. Pepper/Seven Up Bottling Group, Inc., 482 F.3d 408 (5th Cir. 2007).
Facts: Black male employee sued for race discrimination in failure to promote and
termination. The district court granted summary judgment in favor of the defendant
employer.
Issue: Whether employment discrimination claim could survive motion for summary
judgment evaluated under Rachid analysis.
Holding and Rationale: Applying the modified McDonnell Douglas analysis of Rachid,
the court held that plaintiff satisfied the prima facie case, and defendant responded with a
legitimate, nondiscriminatory reason. The court explained that plaintiff could prove the
reason to be pretextual by showing either 1) that the reason given for not promoting—that
the person promoted was better qualified—was unworthy of belief, or 2) that plaintiff
was “clearly better qualified” than the person selected. Reviewing the evidence, the court
pointed out that the defendant had been somewhat inconsistent in its statement of the
reason for its promotion decision, and, looking at the experience of the plaintiff and the
person promoted, a reasonable factfinder could find the employer’s reason unworthy of
credence and a pretext for discrimination. Applying the Supreme Court’s decision in
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000), the Fifth Circuit stated
that there are rare instances when proof of pretext is insufficient to support a jury finding
of discrimination: 1) the record conclusively reveals some other nondiscriminatory
reason; or 2) plaintiff creates only a weak issue of fact that the employer’s reason is
untrue, and there is much uncontroverted evidence of no discrimination. Because the
defendant offered no other nondiscriminatory reason and the record did not present
uncontroverted evidence that no discrimination occurred, the jury could reasonably
disbelieve the defendant’s proffered reason and infer intentional discrimination.
Accordingly, the summary judgment for the defendant was reversed. The court affirmed
the summary judgment for the employer on the termination claim, however, because
there was substantial evidence supporting the employer’s reason—insubordination. The
court found that all evidence supported a bad working relationship between the plaintiff
and his supervisor, but no evidence supported a racial or retaliatory basis for the
disagreements between the two.
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Wright v. Murray Guard Inc., 455 F.3d 702 (6th Cir. 2006).
The Sixth Circuit refused to adopt a new or modified analysis for mixed-motives claims
at the summary judgment stage. In a concurring opinion, one of the judges criticized the
Rachid modified McDonnell Douglas analysis and proposed a post-Desert Palace
framework for mixed-motive claims.
Noyes v. Kelly Servs., Inc., No. 04-17050, ___ F.3d ___, 2007 WL 1531824 (9th Cir.
May 29, 2007).
Facts: Plaintiff alleged that her supervisor was a member of a small religious group, the
Fellowship of Friends (about 2000 members in the nation and most living in or near a
compound in Apollo, California), and that he denied her a promotion and promoted
another employee because that employee was a member of the Fellowship. The district
court dismissed plaintiff’s claim on summary judgment.
Issue: How to evaluate a reverse religious discrimination case.
Holding and Rationale: The Ninth Circuit noted that the elements of the prima facie case
under the McDonnell Douglas analysis must be modified; rather than proving that she is a
member of a protected class, the plaintiff must prove that the employer has religious
beliefs which the plaintiff does not share. The Ninth Circuit agreed with the district court
that the plaintiff had satisfied the prima facie case. The Ninth Circuit explained that the
district court’s error was a misapplication of the pretext stage of the analysis. To survive
summary judgment at the third stage of the McDonnell Douglas analysis, the district
court required the plaintiff to prove that the employer’s proffered legitimate,
nondiscriminatory reason was pretextual and that discrimination was the real reason for
the employer’s decision. The Ninth Circuit characterized this as a misreading of St.
Mary’s Honor Center v. Hicks, 509 U.S. 502 (1993), pursuant to which the district court
erroneously required the plaintiff to prove the ultimate issue of discrimination to defeat a
motion for summary judgment. The Ninth Circuit explained that a plaintiff may raise a
genuine issue of material fact on the issue of pretext by either 1) direct evidence of the
employer’s discriminatory motive, or 2) indirect evidence that calls into question the
credibility of the employer’s proffered reason. ____ F.3d at ____. The Ninth Circuit
discussed evidence that undermined the credibility of the employer’s stated reason for the
promotion and thus rendered summary judgment inappropriate. In addition to presenting
evidence that undermined the credibility of the employer’s reason, the plaintiff also
presented statistical evidence regarding favoritism of Fellowship members as temporary
contractors and the promotion of Fellowship members to management jobs in which a
primary duty was selection of contractors. The court explained that although the
statistical evidence standing alone was insufficient to create a triable issue of fact, it did
not stand alone but instead buttressed and supported the pretext evidence.
Rodriguez v. FedEx Freight East, Inc., No. 06-1988, ___ F.3d ___, 2007 WL 1827284
(6th Cir. June 27, 2007).
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Facts: Plaintiff, an employee of defendant employer, enrolled in defendant’s leadership
apprentice program. Plaintiff applied for, was interviewed for, and was passed over for
supervisory positions. Plaintiff sued under Michigan’s state discrimination law.
Issue: Whether plaintiff presented direct evidence of national origin discrimination when
he presented statements of a supervisor that plaintiff would not be permitted to become a
supervisor because of his Hispanic speech pattern and accent.
Holding and Rationale: Yes. The court noted that cases under the Michigan
discrimination law are analyzed in the same way as Title VII cases. The employer argued
that plaintiff could not establish a prima facie case under the McDonnell Douglas
analysis. The district court had granted summary judgment in favor of the employer on
that basis. The Sixth Circuit reversed, holding that the supervisor’s comments regarding
plaintiff’s accent were direct evidence of national origin discrimination, and thus the case
was not to be analyzed under McDonnell Douglas. Rather, once the plaintiff presented
direct evidence of discrimination, the defendant had to prove that it would have made the
same decision for nondiscriminatory reasons.
B. Coverage and Jurisdiction
EEOC v. Sidley Austin Brown & Wood, No. 05-C-0208 (N.D. Ill. filed Jan. 13, 2005),
It generally has been assumed that partners in corporations and firms are not
employees for purposes of the federal employment discrimination laws. The EEOC filed
a class action on behalf of two groups of former Sidley Austin partners: 31 former
partners who were either demoted or forced out of the firm during a restructuring six
years ago; and potentially hundreds of partners forced out pursuant to a mandatory
retirement policy implemented in 1978. John Hendrickson, the EEOC regional attorney
told BNA in an interview: “They were not partners in the true sense. . . . They were never
given opportunities to vote on issues . . . [such as] who becomes a partner; who is
removed from the partnership; how the money pie is split up; and, who serves on the
management committee.” The EEOC takes the position that the firm is not a partnership
in the true sense; it concentrates all power in a seven-member management committee.
The EEOC contends that its position is supported by the Supreme Court’s 2003 decision,
Clackamas v. Wells, 538 U.S. 440, in which the Court discussed the test for determining
whether one is an employee covered by the employment discrimination laws or a partner
who is not covered. The Court did not find labels applied by the employer to be
dispositive of the issue.
The defendant law firm filed a motion for summary judgment on the issue of its
liability to the individuals, arguing that the EEOC could not seek relief for individuals
because its lawsuit stemmed not from individual charges filed, but from the EEOC=s
investigation prompted by the firm=s comments in newspapers and magazines about
demotions and forced retirements. See EEOC Can Seek Damages for Individuals in
Sidley Austin Age Case, Court Decides, DAILY LAB. REP. (BNA) No. 111, at A-12 (June
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10, 2005). The district court denied the motion, relying upon the Supreme Court=s
decision in EEOC v. Wafflehouse, Inc., 534 U.S. 279 (2002), in which the court held that
the EEOC could seek individual relief in its action notwithstanding the employees=
signing of arbitration agreements. The judge wrote that A[t]he [Supreme] Court makes it
clear that the EEOC=s right to bring suit seeking individual relief goes beyond that of the
individual and reaches the territory of public interest, thereby allowing EEOC to seek
relief for individuals, . . . who could not, for any variety of reasons, do so themselves.@
See EEOC Can Seek Damages for Individuals in Sidley Austin Age Case, Court Decides,
supra. On interlocutory appeal to the Seventh Circuit, the Seventh Circuit affirmed based
on Wafflehouse. EEOC v. Sidley Austin LLP, 437 F.3d 695 (7th Cir.), cert. denied, 127
S. Ct. 76 (2006).
The judge gave the defendant law firm eight weeks to provide the EEOC with a
report summarizing its reasons for demoting or expelling 34 partners. After filing a
motion to compel Sidley to produce a 30(b)(6) witness to give reasons for the demotions
and expulsions, the EEOC withdrew the motion based on an agreement that the defendant
would provide the list of reasons. See Judge Orders Sidley Austin to Justify Personnel
Decisions in Age Bias Suit, DAILY LAB. REP. (BNA) No. 142, at A-8 (July 25, 2006).
The judge entered a protective order in the case to ensure the confidentiality of
documents regarding the subsequent job performance of the former Sidley partners. See
Protective Order Issued on Some Documents In EEOC Age Bias Case Against Sidley
Austin, DAILY LAB. REP. (BNA) No. 21 (Feb. 1, 2007).
Smith v. Castaways Family Diner, 453 F.3d 971 (7th Cir. 2006).
Diner managers who worked under direction of largely absentee owner did not have
adequate control to be removed from “employee” status under the test of Clackamas.
The fact that the managers were the husband and mother of the owner did not change the
analysis.
Price v. Choctaw Glove & Safety Co., 459 F.3d 595 (5th Cir. 2006).
Facts: One plaintiff filed a charge of discrimination with the EEOC, alleging that the
employer discriminated on the basis of sex by relegating women to lower paying
positions. The charge was filed on behalf of all present and future female employees.
The EEOC issued a right to sue letter to the plaintiff, and she commenced a class action
in federal district court. The district court denied class certification. Another plaintiff
and 35 others filed a lawsuit based largely on the same facts as those in the attempted
class action. None of the plaintiffs in the second lawsuit had filed a charge of
discrimination with the EEOC.
Issue: Whether plaintiffs who did not file a charge with the EEOC can invoke the “single
filing rule” to “piggyback on the EEOC charge filed by the plaintiff in the lead case with
which [plaintiff’s] case has been consolidated.”
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Holding and Rationale: No. Under the single filing rule, “certain eligible parties [are]
excused from filing an EEOC charge when they [are] permitted to join or intervene in a
lawsuit in which the original, similarly situated plaintiff had fully exhausted the
administrative requirements.” Id. at 598. Plaintiffs in this case were arguing for
extension of the single filing rule from cases involving joining or intervening in an action
to a case involving filing an independent lawsuit. The court explained that this would
require overruling a Fifth Circuit panel decision in Bettcher v. Brown Schools, Inc., 262
F.3d 492 (5th Cir. 2001). Bettcher required three conditions: 1) plaintiff must be
similarly situated to person who filed EEOC charge; 2) charge must have provided notice
of class-wide nature; and 3) individual who filed EEOC charge must actually file suit that
piggybacking plaintiff may join. Because a panel cannot overrule another panel’s
precedent, the court declined. The court noted that the refusal to extend the single filing
rule to independent actions is consistent with decisions in the 2nd and 4th Circuits.
C. Retaliation
Lemaire v. Louisiana DOTD, 480 F.3d 383 (5th Cir. 2007).
Issue: Whether two-day suspension without pay is an adverse employment action for
purposes of a Title VII retaliation claim.
Holding and Rationale: Yes, because such an action might dissuade a reasonable
employee from making a charge of discrimination—the new standard articulated in
Burlington Northern & Santa Fe Railway Co. v. White, 126 S. Ct. 2405 (2006). As to the
granting of summary judgment on the assignment of “numerous unpleasant duties”
outside the plaintiff’s job description, the court cited the vagueness of the evidence and
the new standard of Burlington Northern, and reversed the summary judgment.
Richard v. Board of Supervisors of LSU, No. 2006-0927, __ So.2d ___, 2007 WL
914204 (La. App. 1st Cir. March 28, 2007).
State court applies new retaliation standard of Burlington Northern & Santa Fe Railway
Co. v. White retroactively to Title VII retaliation claim to hold that employer’s officer
calling other academies to notify them that plaintiff had filed charges against another
academy and thus effectively “blackballing” plaintiff with those academies satisfied the
new adverse employment action standard. The court noted the shift effected by the
Supreme Court from the more onerous “ultimate employment decision” standard applied
by the federal Fifth Circuit before Burlington Northern.
Strong v. University Healthcare Sys., Inc., 482 F.3d 802 (5th Cir. 2007).
Issue: Whether temporal proximity alone is sufficient to establish a causal link between
protected conduct and an adverse employment action.
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Holding and Rationale: No. Plaintiff had no evidence of retaliation except temporal
proximity. “[T]emporal proximity alone is insufficient to prove but for causation.” 482
F.3d at 808. The court discussed the Supreme Court’s decision in Clark County School
Dist. v. Breeden, 532 U.S. 268 (2001). The Fifth Circuit explained that it rejected
permitting but for causation to be to be established based on timing alone because “[s]uch
a rule would unnecessarily tie the hands of employers” who are “sometimes forced to
remove employees who are performing poorly, engaging in improper work conduct, or
severely disrupting the workplace.” 482 F.3d at 808. The court noted that this is
particularly true for hospitals that render medical care to patients. The plaintiff’s attempt
to use the 2006 Supreme Court decision in Burlington Northern, setting forth a more
lenient adverse employment action standard, was unavailing, as she did not have
sufficient evidence of causation.
Slagle v. County of Clarion, 435 F.3d 262 (3d Cir.), cert. denied, 126 S. Ct. 2891 (2006).
Facts: Plaintiff filed a complaint with the EEOC alleging that his employer discriminated
against him for whistleblowing, in violation of his civil rights, and invasion of privacy.
The EEOC dismissed the charge because the facts alleged did not come under any
statutes enforced by the EEOC. Soon thereafter, plaintiff was discharged. Plaintiff filed
a new charge alleging retaliation.
Issue: Whether filing a facially invalid charge with the EEOC is protected conduct under
the participation clause of the retaliation provision in Title VII.
Holding and Rationale: No. The court interpreted the statutory language as requiring
that a charge must allege discrimination on the basis of grounds covered by the statute in
order for the conduct to come within the participation clause.
III. AMERICANS WITH DISABILITIES ACT
E.E.O.C. v. E.I. Du Pont De Nemours & Co., 480 F.3d 724 (5th Cir. 2007).
Facts: Plaintiff had severe scoliosis and other impairments and had difficulty walking.
After plaintiff had worked for defendant for sixteen years, she was transferred from lab
trainer/operator to lab clerk, a sedentary position, and she was placed under a number of
medical restrictions, including not climbing stairs or ladders and standing for more than
ten minutes at a time. Two years later, the defendant required plaintiff to undergo a
functional capacity evaluation. When the results were considered, plaintiff was restricted
from walking anywhere on the plant site and then placed on total and permanent disability.
The EEOC sued, contending that plaintiff was terminated because of her disability in
walking. The district court granted partial summary judgment in favor of plaintiff, and the
case went to trial, with a jury finding termination in violation of the ADA, and awarding
backpay, frontpay, and punitive damages ($1,000,000 reduced by the trial court to the
statutory cap of $300,000). In a Fifth Circuit opinion addressing many issues, only the
award of frontpay was overturned.
13
Issue 1: Whether the employee was regarded as disabled by her employer.
Holding and Rationale: The trial court had granted summary judgment in favor of the
EEOC, holding that regardless of whether plaintiff was actually disabled, her employer
regarded her as disabled. The district court concluded that the employer=s medical
restrictions on the employee prohibiting her from walking in the plant, the employer=s
putting her on total and permanent disability under its disability plan, and the employer=s
statements in pleadings and discovery proved that the employer Acorrectly or incorrectly .
. . treated [the employee=s] impairment as a substantial limitation on her ability to walk.
The Fifth Circuit affirmed, rejecting the employer’s reliance on two Fifth Circuit cases in
which employers regarded employees as impaired or restricted from one position or a
narrow range of jobs. Distinguishing the cases on which the employer relied, the court
stated that the employer in this case regarded the employee as restricted from all jobs at its
plant because all jobs require walking. Furthermore, the employer’s physicians also
believed her impairment restricted her from walking safely at home or anywhere else.
Thus, the evidence established that the employer regarded the employee as substantially
limited in the major life activity of walking.
Issue 2: Whether the employee was qualified.
Holding and Rationale: The district court held that she was qualifiedBable to perform the
essential functions of the job. The employer=s argument was that she was not qualified
because she could not perform the essential function of evacuating the facility because of
her limitations in walking. On this point, the Fifth Circuit stated that it did not doubt that
safety measures are an important part of work in a chemical refinery, but the court
concluded that the jury was entitled to find that the employee was qualified to perform the
essential functions.
Issue 3: Whether the employer established the direct threat defense.
Holding and Rationale: The employer argued that the employee posed a direct threat to
herself because she could not safely walk on the plant premises and thus could not
evacuate in an emergency. The district court found genuine issues of material fact, noting
the following: 1) there was no written policy requiring that all employees be able to
evacuate; 2) there were several employees more limited in their ability to walk, and they
were not disqualified from their work; and 3) the risk posed seemed small (few
evacuations had occurred). Additionally, the ADA requires that direct threat be evaluated
by taking into account reasonable accommodations the employer could make to eliminate
the threat. The Fifth Circuit found that there was sufficient evidence for the jury to
conclude that the employee did not pose a direct threat to herself or others in the
workplace.
Issue 4: Whether award of frontpay based on working until age 65 and the infeasibility of
reinstatement was supported
14
Holding and Rationale: No. The evidence regarding the employee’s deteriorating medical
condition made a finding that she would have been able to work ten more years until age
65 an abuse of discretion as it “defies reality.” 480 F.3d at 732.
Issue 5: Whether punitive damages could be recovered.
Holding and Rationale: Yes. Looking to the statutory language, that a defendant must act
“with malice or with reckless indifference to the federally protected rights of an aggrieved
individual,” 42 U.S.C. § 1981a(b)(1), the court stated that the availability of punitive
damages turns on the state of the defendant’s mind, not the egregious conduct. The Fifth
Circuit found sufficient evidence that the employer knew of its obligations under the ADA
but made the employee’s job harder. The court labeled as the “crowning evidentiary blow
against [the employer]” the statement by a supervisor that he no longer wanted to see the
employee’s “crippled crooked self, going down the hall hugging the walls.” Although the
supervisor denied making the statement, the jury could disbelieve him. Regarding the
defendant’s argument that punitive damages could not be awarded absent an award of
compensatory damages, the court stated that it was an issue of first impression in the Fifth
Circuit. The Fifth Circuit agreed with the district court that nothing in the text of the
statute limited a punitive damages award to cases in which there is an award of
compensatory damages, and other circuits have permitted awards of punitive damages
without compensatory damages.
Jenkins v. Cleco Power, LLC, 487 F.3d 309 (5th Cir. 2007).
Facts: Plaintiff was injured when a utility pole on which he was climbing broke, and he
fell and broke his leg. The fracture required surgery and resulted in some deformity and
several limitations, including limiting his ability to sit for extended periods of time. After
a number of job changes and retraining efforts, Cleco terminated plaintiff when he
declined a call center specialist job for which he had been retrained because he did not
think he could sit at a desk for extended periods of time. Plaintiff used under the ADA
and Louisiana Employment Discrimination Law (as well as asserting a retaliation claim
and an ERISA claim). The court granted involuntary dismissal, holding that plaintiff
could not establish that he was disabled or that the employer had failed to reasonably
accommodate him.
Issue: Whether plaintiff could establish that he was disabled under the ADA and that the
employer failed to reasonably accommodate him.
Holding and Rationale: The Fifth Circuit concluded that the district court erred in finding
that plaintiff was not disabled. Sitting is a major life activity, and because plaintiff could
not sit for more than three hours per day, he was “significantly more restricted than the
average person.” Plaintiff attempted to prove that his employer failed to reasonably
accommodate him by showing that it failed to engage in an interactive process to find a
reasonable accommodation. Viewing evidence of all the efforts made by the employer to
15
place plaintiff in a job, the court held that the employer had not failed to engage in an
interactive process.
Berry v. T-Mobile USA, Inc., No. 05-1533, ____F.3d ____, 2007 WL 1830755 (10th Cir.
June 27, 2007).
Facts: Plaintiff was having difficulties in her job as team manager, not employing the
proper “coaching” methods and techniques with her team. After her supervisor
determined that she was again failing to hold her teams accountable and she was refusing
to work with her peers, plaintiff advised her supervisor that she was suffering extreme
fatigue caused by multiple sclerosis, with which she was diagnosed twelve years earlier.
The supervisor told her that she must apply for leave under the Family and Medical Leave
Act (FMLA). She filed such an application, which was approved, and plaintiff was
terminated the next day. Plaintiff sued, alleging discrimination on the basis of disability,
age, and gender. The district court granted summary judgment for the defendant on
plaintiff’s disability discrimination claim, reasoning that the employer’s granting of
FMLA was insufficient to prove that the employer regarded plaintiff as disabled.
Issue: Whether plaintiff could establish a prima facie case that she was “regarded as”
disabled based on the employer’s approval of her application for FMLA leave.
Holding and Rationale: The applicable regulations state that “disability” under the ADA
and “serious health condition” under the FMLA are “different concepts, and must be
analyzed separately.” Berry, ___ F.3d at ___. “Given the very different focus of the two
statutory protections, [approval of FMLA leave] does not demonstrate an issue of fact as
to whether [plaintiff] was considered disabled under the ADA.” Id. at ____.
Plaintiff also failed to establish a prima face case by establishing that she actually had
a disability. Although plaintiff’s MS was an impairment, she could not establish that the
impairment substantially limited a major life activity. Although plaintiff suffered from
extreme fatigue, medical records indicated that it did not substantially limit her activities,
and medication could address many symptoms. The court concluded that “mak[ing] some
adjustments in her daily routine” did not establish that she was substantially limited in a
major life activity.
Albra v. Advan, Inc., No. 06-15969, ____ F.3d ____, 2007 WL 1814677 (11th Cir. June
26, 2007).
Issue: Whether individuals can be held liable for retaliation under the ADA’s employment
discrimination part-Subchapter 1.
Holding and Rationale: No. The court looked to the language of the anti-retaliation
provision, 42 U.S.C. § 1203(a) and concluded that even though the statute uses the word
“person,” use of that word is not dispositive of the issue. The court turned to the remedies
provision in the ADA, and finding that 42 U.S.C. § 12117 incorporated the remedies
available under Title VII, the court noted that Title VII has been interpreted as not
providing remedies against individuals. Accordingly, the court adhered to its conclusion
16
in prior case law that there is no sound reason to interpret the ADA differently than Title
VII.
EEOC v. Heartway Corp., 466 F.3d 1156 (10th Cir. 2006).
Employee with Hepatitis C was regarded as disabled by his employer. The burden was on
the EEOC to prove that the employer treated the employee as restricted in his ability to
perform either a class of jobs or a broad range of jobs.
IV. TITLE VII/SECTION 1981
A. Sexual Harassment
Lemaire v. Louisiana DOTD, 480 F.3d 383 (5th Cir. 2007).
Facts: Plaintiff alleged that a male supervisor made sexually explicit comments to him on
several occasions. Plaintiff reported the conduct to another supervisor. Eventually
plaintiff was terminated for other stated reasons. When plaintiff sued for sexual
harassment and retaliation, defendant moved for summary judgment, and the district court
granted the motion
Issue: Whether plaintiff presented sufficient evidence to survive a motion for summary
judgment on the sexual harassment claim in view of the fact that the defendant filed a
“bare bones” motion that did not cite standards or precedent on specific issues.
Holding and Rationale: Yes. The district court never issued written reasons for its
decision. Defendant argued, on appeal, that plaintiff’s submission of evidence in the form
of affidavits of himself and one other person detailing the sexually explicit statements
made by the supervisor, was insufficient because it denied the statement and it had a
workplace harassment policy. The dissent in the case argued that the district court should
be affirmed because there was no evidence that the harassment was because of sex under
the standard for same-sex sexual harassment announced in Oncale v. Sundowner Offshore
Servs., 523 U.S. 75 (1998), and there was no evidence that the conduct was severe and
pervasive enough to constitute a hostile environment. The majority pointed out that the
defendant did not mention either “same-sex harassment” or “hostile work environment” in
its motion for summary judgment. The defendant’s “bare bones” motion did not cite any
legal precedent or standards, and thus did not put the plaintiff on notice of the need to
produce evidence on specific issues. Accordingly, the Fifth Circuit reversed the summary
judgment.
B. Racial Discrimination
Ofori-Tenkorang v. American Int’l Group, Inc., 460 F.3d 296 (2d Cir. 2006).
The Second Circuit held that 42 U.S.C. § 1981 does not apply extraterritorially. Courts
presume that Congress intends statutes to have only domestic application unless there is
clear evidence to the contrary, and the court found no such evidence in Section 1981.
17
C. Timing/Limitations
Ledbetter v. Goodyear Tire & Rubber Co.,127 S. Ct. 2162 (2007) (5-4).
Facts: Plaintiff alleged sex discrimination in setting pay scales over a 19-year period of
employment. She alleged that during her period of employment, several supervisors had
given her poor evaluations because she was female, that her pay increases were smaller
than they would have been if she had been evaluated in a nondiscriminatory fashion, and
that these past pay decisions affected her level of pay throughout the period of her
employment. The employer argued that only pay decisions made within the 180-day
charge filing period could be considered by the EEOC and the courts.
Issue: In a claim alleging sex discrimination in pay, how far back may a plaintiff go in
challenging her employer’s actions?
Holding and Rationale:
The Eleventh Circuit (421 F.3d 1169) determined that it could consider only the
last salary decision made that affected the plaintiff’s pay during the 180-day period for
filing a discrimination charge. The district court, in contrast, had considered evidence
spanning plaintiff’s 19-year career with the company.
The Supreme Court granted certiorari to resolve the disagreement among the
circuits on the issue of the proper application of the Title VII limitations period to
disparate treatment pay cases. The Court explained that disparate treatment requires proof
of discriminatory intent, and that discriminatory intent is associated with a discrete act.
The Court rejected as unsound the plaintiff’s theory of taking the discriminatory intent
associated with past pay decisions and shifting it forward to another act that was done
without discriminatory intent. 127 S. Ct. at 2170. The Court rejected the plaintiff’s and
the dissent’s characterization of plaintiff’s claim as a single wrong consisting of a
succession of acts, and instead characterized it as series of discrete discriminatory acts—
each paycheck constituting a separate discriminatory act with a 180-day charge filing
period associated with each act. The Court thus held “that any unlawful employment
practice, including those involving compensation, must be presented to the EEOC within
the period prescribed by statute.” Id. at 2177.
The Court’s Ledbetter decision drew a quick response from some members of
Congress. See House Democrats Vow to Introduce Bill to Overturn High Court’s
Ledbetter Decision, 21 LAB. REL. WEEK (BNA) at 853 (June 14, 2007); Susan J.
McGolrick, House Committee Approves “Ledbetter” Bill Intended to Overturn Supreme
Court Ruling, DAILY LAB. REP. (BNA) No. 125, at A-1 (June 29, 2007).
For commentary on Ledbetter, see Lynne Bernabei & Alan R. Kabat, Improper
Hurdles, NAT’L L.J., June 11, 2007, at 23; Susan J. McGolrick, Plaintiffs’ Attorneys
Predict Ledbetter Will Spur Earlier Filings, More EEOC Charges, DAILY LAB. REP.
18
(BNA) No. 110, at C-1 (June 8, 2007); James Kilpatrick, Law Not Always About Fairness
Top Court Shows, Syndicated Column (June 9, 2007).
Holowecki v. Federal Express Corp., 440 F.3d 558 (2d Cir. 2006), cert. granted, 127 S.
Ct. 2914 (2007) (No. 06-1322).
Issue: Whether filing an intake questionnaire and a sworn and notarized affidavit with the
EEOC is the equivalent of filing a timely charge.
The Second Circuit held that it was the equivalent of filing a charge.
D. Religious Discrimination
EEOC v. Razzoo’s, No. 3:06-CV-1781-L (N.D. Tex., consent decree filed June 18, 2007),
reported in Texas Restaurant Agrees to Pay $38,750 to Server Who Didn’t Sing Happy
Birthday, DAILY LAB. REP. (BNA) No. 119, at A-8 (June 21, 2007).
A Texas restaurant chain agreed to settle religious discrimination claim of a server, a
Jehovah’s Witness, who refused to sing “Happy Birthday” to customers because it is
prohibited by her religion. The restaurant denied any wrong and described the settlement
as a business decision.
See Jury Awards Muslim Employee $287,640 in EEOC’s First Post-Sept. 11 Backlash
Case, Daily Lab Rep. (BNA) No. 107, at A-7 (June 5, 2007). Alamo Rent-A-Car
employee who was Muslim was fired for refusing to remove the head scarf she was
wearing at work during Ramadan (EEOC v. Alamo Rent-A-Car, CIV-02-1908-PHX-ROS,
(D. Ariz., verdict June 1, 2007)). This was the first “post-9/11 backlash suit” filed by the
EEOC. The award included $250,000 in punitive damages.
E. Pregnancy Discrimination
Griffin v. Sisters of St. Francis, Inc., No. 06-3312, ____ F.3d ___, 2007 WL 1611752 (7th
Cir. 2007).
Facts: Plaintiffs were a man and woman who were employed by a farm owned and run by
an order of Catholic nuns. The man and woman had a sexual relationship which resulted
in two pregnancies and miscarriages. The farm director had warned the two about being
discrete and investigated a rumor that the woman was pregnant, only to be told that she
was not. Eventually the two were fired. They sued, alleging discrimination on the basis
of religion, sex, and pregnancy. The district court granted summary judgment on the
pregnancy discrimination claim.
Issue: Whether a male can bring a claim under the PDA based on an adverse employment
action allegedly taken because of a partner’s pregnancy.
Holing and Rationale: The court acknowledged that males may make claims under the
PDA, but they must prove discrimination because of sex. In this case, the male plaintiff
19
claimed discrimination based on reproductive rights. The court explained that pregnancy
discrimination is defined in Title VII as a type of sex discrimination, not discrimination
because of sexual activity or reproductive capacity. The court concluded that the male
plaintiff had not alleged discrimination based on sex.
Tysinger v. Police Dept. of Zanesville, 463 F.3d 569 (6th Cir. 2006).
Facts: Pregnant police officer was involved in a physical altercation with a suspect and
was given a light-duty restriction by her doctor. The police chief responded that there
were no light-duty jobs and placed her on leave until she was able to return to full active
duty. Plaintiff sued for pregnancy discrimination, claiming that she was denied
accommodation of her pregnancy while similarly situated non-pregnant (male) employees
were granted accommodations when they were disabled.
Issue: Whether plaintiff established a prima facie case of pregnancy discrimination by
comparing her treatment with that of similarly situated non-pregnant employees.
Holding and Rationale: The Sixth Circuit held that the plaintiff had not established a
prima facie case because the two males, although injured and unable to perform some
duties of their job, presented themselves to the employer as willing and able to do their
jobs. Thus, the court held that the putative comparable employees were not similarly
situated. The dissenting judge viewed the situation differently: “Just because [the male
officers] failed explicitly to request light duty does not change the fact that their superiors
were aware of their limitations and silently agreed with the two employees to ignore those
limitations and have them ‘bear with it.’” Id. at 582 (Martin, J., dissenting).
F. Caregiver/Family Responsibility Discrimination
The EEOC approved an Enforcement Guidance: Unlawful Disparate Treatment of
Workers with Caregiving Responsibilities (No. 915.002, May 23, 2007). See Kevin P.
McGowan, EEOC Adopts Guidance on Potential Bias Against Employees with Caregiver
Roles, DAILY LAB. REP. (BNA) No. 100, at AA-1 (May 24, 2007). The guidance does not
purport to create a new protected class; instead, it explains how different treatment of
employees who care for children, parents or disabled family members can constitute
unlawful discrimination based on sex, race, or disability. The Enforcement Guidance is
available on the EEOC website at http://www.eeoc.gov/policy/docs/caregiving.html.
See Joan C. Williams & Consuela A. Pinto, Family Responsibilities Discrimination:
Don’t Get Caught Off Guard, 22 LABOR LAW. 293 (2007).
V. AGE DISCRIMINATION IN EMPLOYMENT ACT
The EEOC issued revised regulations on age discrimination based on the U.S.
Supreme Court decision in General Dynamics Land Sys. Inc. v. Cline, 540 U.S. 581
20
(2004). The amendment of 29 C.F.R. § 1625 provides that the ADEA does not prohibit
employers from favoring older employees over younger ones who are covered by the
ADEA, although the ADEA does not require employers to prefer older individuals.
AARP v EEOC, No. 05-4594, __ F.3d ___, 2007 WL 1584385 (3d Cir. 2007).
The Third Circuit upheld the EEOC regulation that exempts from ADEA coverage
employer coordination of retiree health benefits with Medicare benefits.
Meacham v. Knolls Atomic Power Lab., 461 F.3d 134 (2d Cir. 2006), petition for cert.
filed, 75 U.S.L.W. 3623 (May 9, 2007) (No. 06-1505).
This case applies the disparate impact analysis under the ADEA in light of the Supreme
Court’s decision in Smith v. City of Jackson, 544 U.S. 228 (2005). The employer had
instituted an involuntary reduction in force. The Second Circuit had held in its first
decision, before remand by the Supreme Court, that the employer had offered a legitimate
business justification for its reduction in force, but also that the employer lost because the
plaintiffs demonstrated that an alternative practice would achieve the same result at a
comparable cost without producing a disparate impact on the protected group. On remand
in light of City of Jackson, the court said its prior analysis was untenable because the
Supreme Court explained that the business necessity defense does not apply under the
ADEA. Under the ADEA, the issue is “reasonable factor other than age,” and “the
employer is not liable under the ADEA so long as the challenged employment action, in
relying on specific non-age factors, constitutes a reasonable means to employer’s
legitimate goals.” 461 F.3d at 141. The court stated that RFOA is not an affirmative
defense; the burden is on the plaintiff to prove that the employer’s justification is
unreasonable. Judge Pooler, dissenting, explained that the court was conflating the RFOA
analysis with the business justification analysis; in the Ward’s Cove analysis of disparate
impact, the burden of persuasion is on the plaintiff at all stages of the analysis.
VI. FAMILY AND MEDICAL LEAVE ACT
The DOL published a report analyzing comments it received on problems with the FMLA
in the June 28 Federal Register. See DOL Issues Report Detailing FMLA Comments But
Proposed Regulatory Fix Not on Horizon, DAILY LAB. REP. (BNA) No. 123, at A-1 (June
27, 2007). The Labor Department reports that over 15,000 comments were received in
response to the information request. The report does not propose any regulatory changes,
but is intended to be a basis for more discussion about the law.
Greenwell v. State Farm Auto. Ins. Co., 486 F.3d 840 (5th Cir. 2007).
Facts: Employee who had record of excessive absences and who had her “permission
absences” suspended by her employer missed work after calling in and telling a supervisor
that she would miss work because her son had been involved in an accident which
21
aggravated his asthma and she must stay home with him. When plaintiff returned to work,
she decided not to request FMLA protection for the absence, and she was terminated.
Issue: Whether employee who refused to fill out an FMLA leave form because she had no
doctor’s excuse gave sufficient notice to invoke FMLA protection.
Holding and Rationale: No. The court explained first that the communications of the
employee did not connect her absence from work to a “medical condition rising to the level
of seriousness protected under the FMLA. 486 F.3d at 843. Moreover, assuming that the
son’s asthma condition qualified as a serious health condition under the FMLA, the
employee failed to give her employer sufficient notice. The plaintiff had availed herself of
her employer’s FMLA leave procedures on other occasions, and she offered no good
reason for not obtaining the required medical documentation in this instance. Without
sufficient notice, the employer lacked the information it needed to determine whether the
absence from work qualified for FMLA protection. An alleged statement by the supervisor
whom plaintiff called that the absence would be okay does not obviate plaintiff’s
complying with her employer’s FMLA procedures.
Taylor v. Progress Energy, Inc., No. 04-1525, ___ F.3d ___, 2007 WL 1893362 (4th Cir.
July 3, 2007).
Issue: Whether 29 C.F.R. § 825.220(d) prohibits both prospective and retrospective
waivers of FMLA rights or only prospective waivers.
Holding and Rationale: The regulation states as follows: “Employees cannot waive, nor
may employers induce employees to waive, their rights under FMLA.” On rehearing, the
Fourth Circuit adhered to its earlier ruling that FMLA regulation 29 C.F.R. § 825.220(d)
prohibits both prospective and retrospective waivers of FMLA rights—thus employees
cannot waive a claim or right of action for a past violation of the FMLA. The Department
of Labor argued that the regulation prohibited only prospective waivers. The Fourth Circuit
observed that an agency’s interpretation of its own regulation is “controlling unless plainly
erroneous or inconsistent with the regulation.” Id. at ___ (quoting Auer v. Robbins, 519
U.S. 452 (1997)). The court interpreted the regulation’s use of “rights under FMLA” as
including substantive, proscriptive, and remedial rights. The court responded to the DOL’s
argument that prospective waivers are disfavored, but settlement of claims is favored in
employment law with the exception in the FLSA by which courts have prohibited
unsupervised waiver or settlement of claims. The court reasoned that the FMLA, like the
FLSA, is an effort by Congress to impose uniform minimum standards on employers.
Because the FMLA requirements increase the cost of labor, employers
would have an incentive to deny FMLA benefits if they could settle
violation claims for less than the cost of complying with the statute.
Further, employers settling claims at a discount would gain a competitive
advantage over employers complying with the FMLA’s minimum
standards. . . . To avoid thes problems, [the regulation] follows the FLSA
22
model and prohibits the waiver of all FMLA right. All employers are held
to providing the minimum leave specified, without the option to deny it and
buy out claims at a later date.
Id. at ___. Although settlement of discrimination claims is permitted under Title VII and
the ADEA, they are not labor standard laws like the FMLA and the FLSA. Whereas
private settlements impose a cost on discrimination and encourage compliance, that is not
true of the FMLA and FLSA; settlements that are cheaper than compliance encourage
noncompliance. Thus, the court concluded that the regulation permits waiver or release of
FMLA claims only with prior DOL or court approval.
Hackworth v. Progressive Cas. Ins. Co., 468 F.3d 722 (10th Cir. 2006), cert. denied, 127 S.
Ct. 2883 (May 29, 2007) (No. 06-1300).
Facts: Employer’s worksite that would give it the required 50 or more employees within a
75-mile radius was 75.6 surface miles from plaintiff’s worksite and 67 linear miles from
that worksite.
Issue: Whether provision in FMLA requiring that employer employ 50 or more employees
within 75-mile radius for an employee to be eligible for FMLA leave means surface miles
using surface transportation routes, as provided by the DOL in 29 C.F.R. § 825.111(b) or
instead means linear miles.
Holding and Rationale: Applying the Chevron [U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984) analysis, the Tenth Circuit held that the regulation was
consistent with the FMLA and entitled to deference. The Tenth Circuit cited in support the
Fifth Circuit’s decision in Bellum v. PCE Constructors, Inc., 407 F.3d 734 (5th Cir. 2005),
cert. denied, 126 S.Ct. 1150 (2006).
Toeller v. Wisconsin Dept. of Corrections, 461 F.3d 871 (7th Cir. 2006).
Issue: Whether Congress abrogated states’ Eleventh Amendment immunity by passing the
self-care provisions of the FMLA (29 U.S.C. §2612(a)(1)(D)).
Holding and Rationale: No. The court surveyed the numerous Supreme Court decisions
over the past decade on the abrogation of Eleventh Amendment immunity. The court
noted that the Supreme Court had found abrogation of the immunity with respect to the
family-leave provision of the FMLA (29 U.S.C. §2612(a)(1)(C)) in Nevada Dept. of
Human Res. v. Hibbs, 538 U.S. 721 (2003). In Hibbs, the Court had focused on the
gender-based aspects of the family-care provision. The court observed that the Tenth and
Sixth Circuits had held, based on Hibbs, that state sovereign immunity applied to the selfcare provision of the FMLA. Like the Tenth Circuit, the Seventh Circuit rejected the
argument that the FMLA must be viewed as a whole for the purpose of determining
Eleventh Amendment immunity: “The message that we derive from the many Supreme
Court decisions in this area is that we should—indeed must—look at each provision of the
law separately, even though we should also evaluate each provision in context.” 461 F.3d
23
at 879. The court recognized that a self-care request for leave could implicate gender if it
involved pregnancy. The court observed that pregnancy discrimination implicates a
higher level of constitutional scrutiny and thus a different analysis, but it did not express
an opinion on how the immunity analysis would be resolved in such a case. The court
guessed that most self-care leave does not involve pregnancy, and thus does not implicate
the higher scrutiny of gender.
VII. FAIR LABOR STANDARDS ACT
The law increasing the minimum wage was signed by the President. See President Bush
Signs Spending Bill That Raises Federal Minimum Wage, 21 Lab. Rel. Week. (BNA) No.
21 (May 31, 2007). The minimum wage will increase in three steps to $7.25 per hour in
2009.
Long Island Care at Home. Ltd. v. Coke, 127 S. Ct. 2339 (2007) (unanimous).
Facts: Home health care attendant sued her employer for violations of the FLSA, claiming
that she was not paid overtime and that her hourly wage was below the minimum wage.
To make the claim, she challenged the Department of Labor’s regulation on the
“companionship services” exemption, which extends the exemption to companionship
workers “who are employed by an employer or agency other than the family or household
using their services. . . .” even if the worker is assigned to work for more than one
household or family in the same workweek. 29 C.F.R. § 552.109(a).
Issue: Whether to enforce the DOL’s 30-year-old regulation exempting from FLSA
coverage persons who are employed to provide home health care by third parties rather
than by the family of the care recipient.
Holding: The Second Circuit concluded that the regulation was entitled to only Skidmore
(rather than Chevron) deference, and held it unenforceable as inconsistent with the plain
language of the FLSA. 462 F.3d 48 (2d Cir. 2006).
The Supreme Court held that the DOL’s regulation was entitled to deference and
upheld the regulation, reversing the decision of the Second Circuit. The Court stated that
when an agency fills a gap in a congressionally created program, and the gap filler is
reasonable, courts accept the result as legally binding. The Court turned its attention to
arguments that the regulation was unreasonable or otherwise unlawful. First, the Court
rejected plaintiff’s argument that Congress’ delegation to the DOL to define “domestic
service employment” excluded workers employed by third parties. Second, the Court
rejected the argument that the regulation at issue conflicted with the definition of
“domestic service employment” in 29 C.F.R. § 552.3. Finally, the Court rejected
plaintiff’s argument that, even if the regulation was within Congress’s delegation to the
DOL, was reasonable, and complied with law, courts should not consider it legally
binding because it was merely an interpretive regulation—not a gap filler, but instead an
agency’s view of what a statute means. Thus, the issue was whether the regulation was an
24
interpretive regulation entitled to only Skidmore [v. Swift & Co, 323 U.S. 134 (1944)]
deference, pursuant to which the regulation may be persuasive but not binding, or a gapfiller regulation entitled to Chevron [U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984)], deference pursuant to which the regulation can be binding.
On the issue of whether the regulation was gap-filling, the Court stated that
“[w]here an agency rule sets forth important individual rights and duties,
where the agency focuses fully and directly upon the issue, where the
agency uses full notice-and-comment procedures to promulgate a rule,
where the resulting rule falls within the statutory grant of authority, and
where the rule itself is reasonable, then a court ordinarily assumes that
Congress intended it to defer to the agency’s determination.”
127 S. Ct. at 2350-51. The Court also rejected the plaintiff’s attack on the DOL’s
notice-and-comment procedure in 1974 which led to promulgation of the thirdparty regulation.
Chao v. Hotel Oasis, Inc., No. 06-1021, ____ F.3d ___, 2007 WL 1843089 (1st
Cir. June 28, 2007).
Issues:
1) Whether the annual dollar value (ADV) requirement of “not less than
$500,000,” 29 U.S.C. § 203(s)(1)(A)(ii), is jurisdictional.
2) Whether an individual can be personally liable for FLSA violations.
Holdings and Rationales:
1) No, it is not a matter of subject matter jurisdiction, but instead is an element of
the claim, and thus an objection based thereon is waivable. The court relied upon
the Supreme Court’s recent decision regarding the number-of-employees
requirement under Title VII in Arbaugh v. Y & H Corp., 546 U.S. 500 (2006).
2) Yes, an individual can be an employer subject to liability under the FLSA. The
Court reasserted an earlier First Circuit decision in which the court held that an
officer with operational control is an employer that is jointly and severally liable
for unpaid wages under the FLSA. Not every supervisory employee can be
personally liable, and factors to consider include the following: the individual’s
ownership interest; the individual’s degree of control over the corporation’s
financial affairs and compensation practices; and the individual’s role in causing
the corporation to compensate or fail to compensate employees in compliance with
the FLSA. In this case, the court held that the president of the corporation, who
was in charge of the day-to-day operations, including hiring and firing, requiring
employees to attend meetings without pay, and setting employee’s wages and
schedules, was instrumental in causing the corporation to violate the FLSA, and he
25
could be held personally liable, jointly and severally with the corporation.
Johnson v. Martin, 473 F.3d 220 (5th Cir. 2006).
Issue: Whether an award of wages in an FLSA retaliation claim is to be offset by wages
earned by the plaintiffs after their termination.
Holding and Rationale: Yes. Although the FLSA does not expressly address the issue,
cases under the ADEA have required offset, and the remedies provisions of the ADEA,
FLSA, and FMLA are the same, and the cases interpreting the remedies under the statutes
should be consistent.
VIII. PUBLIC EMPLOYEES
Communications Workers of America v. Ector County Hosp. Dist., 467 F.3d 427 (5th
Cir. 2006).
Facts: Public hospital employee who was disciplined for wearing and refusing to remove
“Union Yes” button sued under Section 1983, claiming violation of his First Amendment
rights.
Holding and Rationale:
[T]he Pickering balance favors the Hospital, which may legitimately
conclude that its uniform non-adornment policy furthers its mission by
neutrally fostering a tranquil and peaceful, as well as a neat, clean and care
focused, atmosphere for its patients and visitors.
Id. at 442
Spiegla v. Hull, 481 F.3d 961 (7th Cir. 2007) (reh’g and reh’g en banc denied May 30,
2007).
Facts: State correctional officer reported suspicious activity of police officers in the
parking lots and that she was not permitted to search their bags in accordance with policy.
After reporting the conduct, she was transferred. She sued, asserting that the transfer was
in retaliation for her protected speech under the First Amendment.
Issue: Whether the public employee’s speech was protected First Amendment speech
under the Supreme Court’s recent decision in Garcetti v. Ceballos, 126 S. Ct. 1951 (2006).
Holding and Rationale: The court stated that after Garcetti, the threshold question is
whether the employee was speaking as a citizen. The court concluded that the plaintiff
was speaking pursuant to her official duties and not as a citizen in reporting the conduct,
and thus she did not have a First Amendment claim under §1983.
See also Attorneys Debate Impact of Garcetti In Bringing, Defending Whistleblower
Claims, DAILY LAB. REP. (BNA) No. 78, at C-1 (Apr. 24, 2007).
26
Blackman v. New York City Transit Auth., No. 06-4714-CV, ___ F.3d ___, 2007 WL
1774638 (2d Cir. June 21, 2007).
Facts: Public employee took photos of equipment that he considered unsafe to his
supervisor. When the supervisor instructed him to use the equipment, he refused and was
told by the supervisor that he should leave the work area. The employee responded with
what seemed to be at least implied threats about wishing that something bad would happen
to the supervisor and his kids, that he had a union card and a .38 and he could call his
brother. The employer did not fire him then, but filed a disciplinary action notice
recommending a 30-day suspension, which was grieved. While the grievance proceedings
were pending, a Transit Authority employee who had been fired shot and killed two of his
former supervisors. In response to another employee’s statement that the murders were a
bad or sad situation, plaintiff said that the supervisors got what they deserved. An
arbitrator decided that the comments were not a matter of public concern and thus not
protected by the First Amendment. Accordingly, the employer could terminate him.
Plaintiff filed a lawsuit, claiming violation of his First Amendment rights. The district
court granted summary judgment for the employer, finding that the speech was not a
matter of public concern.
Issue: Whether plaintiff could establish a First Amendment violation under the Connick
and Pickering analysis.
Holding and Rationale: The court assumed that the speech might minimally touch on
matters of public concern, but held that under the Pickering balancing test the
government’s interest in a safe workplace prevailed in view of the plaintiff’s statements,
which revealed plaintiff to be “a person of violent disposition, who was potentially deeply
disruptive of the workplace.” Id. at ___.
IX. SARBANES-OXLEY
The main employment law issue under the Sarbanes-Oxley Act is the whistleblower
protection of '806 (18 U.S.C. '1514A(b)(1)(A)). The dissent in the Bechtel case,
summarized the enactment of Sarbanes-Oxley as follows:
Congress enacted the Sarbanes-Oxley Act of 2002 (AAct@) in response to an acute
crisis: Revelations of mass corporate fraud, most vividly in connection with the
Enron Corporation, threatened to destroy investors' faith in the American financial
markets and, in so doing, to jeopardize those markets and the American economy.
Congress recognized that the problem was an intractable one, and that a number of
strong enforcement tools would be necessary-from new regulations and reporting
requirements, to expanded oversight, to new criminal provisions. Congress also
recognized that for any of these tools to work, the law had to protect
whistleblowers from retaliation, because Aoften, in complex fraud prosecutions, . .
27
. . insiders are the only firsthand witnesses to the fraud.@ S.Rep. No. 107-146, at 10
(2002). Congress therefore made whistleblower protection central to the Act,
creating a procedure whereby wrongfully discharged employees can seek redress .
. . , first through the Department of Labor and then through the courts.
Bechtel v. Competitive Techs., Inc., 448 F.3d 469, 484 (2d Cir. 2006) (Straub, J.,
dissenting).
Riedell v. Verizon Communications, DOL ALJ, No. 2005-SOX-00077 (Aug. 14, 2006),
reported in Employee’s Erratic Behavior Undermines SOX Whistleblower Claim, DOL
ALJ Says, DAILY LAB. REP. (BNA) No. 159, at A-8 (Aug. 17, 2006).
ALJ determined that it was not whistleblowing under OSHA, but his odd behavior, such
as posting signs about the consequences of evil in his cubicle and installing a motion
detector, that caused employer to fire employee.
Welch v. Cardinal Bankshares Corp. DOL ARB No. 05-064 (May 31, 2007).
Bank executive who complained about financial reporting and was terminated was not
engaged in activity protected by SOX because he could not have reasonably believed that
the conduct he reported violated federal securities laws. See ARB Denies Banker’s
Sarbanes-Oxley Claim; No Reasonable Belief Stock Fraud Occurred, DAILY LAB. REP.
(BNA) No. 109, at A-1 (June 7, 2007). The Board stated that for SOX protection to apply,
an employee’s communication must “definitively and specifically” relate to one of the
statutes enumerated in SOX. Regarding Welch’s claim that reporting of violations of
general accounting standards was covered by SOX, the Board rejected that argument,
stating that Congress specifically listed the federal statutes and SEC rules regarding
shareholder fraud that are covered by SOX.
A study by University of Nebraska Law Professor Richard Moberly indicates that
employees seldom win relief: 3.6% of the time (13 of 361) after investigations by OSHA
and 6.5% of the time (6 out of 93) in cases heard by ALJs. See Michael R. Triplett, SOX
Whistleblowers Fare Poorly When Claims Are Reviewed by OSHA, ALJs, Professor Says,
DAILY LAB. REP. (BNA) No. 96, at C-1 (May 18, 2007)
X. UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYEMENT
RIGHTS ACT (USERRA)
Patton v. Target Corp., No. 03-1722 ( D. Or. jury verdict June 15, 2007); reported in Jury
Awards $1 Million to Guardsman Fired After Army Calls Target on Demotion, DAILY
LAB. REP. (BNA) No. 121, at A-7 (June 25, 2007) (decision on summary judgment
reported at 2007 WL 894560).
28
Facts: National guardsman who alleged he experienced anti-military bias in his company
was demoted. He sought the assistance of Employer Support for the Guard and Reserves
(ESGR) to help him obtain reinstatement to his former job. Plaintiff was terminated after
a representative from ESGR contacted the employer. Plaintiff sued under USERRA and
Oregon’s tort of wrongful discharge.
Verdict: The case proceeded to trial on theories of demotion and termination in violation
of USERRA and wrongful discharge. The jury found that the demotion was not illegal but
found an illegal termination and awarded about $85,000 in economic and compensatory
damages and $900,000 in punitive damages.
XI. EMPLOYEE RETIREMENT INCOME SECURITY ACT
Sereboff v. Mid Atlantic Med. Servcs., Inc., 126 S. Ct. 1869 (2006).
Facts: Employee of employer providing health insurance coverage was involved in
automobile accident. Health plan paid for medical expenses of employee and her
husband. Health insurance company asserted lien on anticipated tort recovery of
employee. Employee recovered a tort judgment, but sent no money to health insurer.
Health insurer sued under ERISA for recovery of medical expenses paid.
Issue: Whether § 502(a)(3) authorizes recovery of medical expenses paid to beneficiary
by plan from beneficiary’s recovery against third party.
Holding: Fiduciary of health plan may sue for reimbursement of medical expenses paid
by the ERISA plan when the beneficiary recovers for injuries from third party because it
constitutes equitable relief within the meaning of §502 (a)(3).
Beck v. PACE Int’l Union, 127 S. Ct. 2310 (2007).
Facts: Companies filed for Chapter 11 bankruptcy. During bankruptcy proceedings,
companies sought to terminate pension plans by consolidating them and terminated them
by purchasing an annuity rather than considering the union’s proposal that they merge the
plans into the union’s multiemployer pension fund. The bankruptcy court determined that
this action constituted a breach of fiduciary duties under ERISA and issued a preliminary
injunction ordering the companies to maintain the residual assets of the plan in an interestbearing account. The parties then submitted a plan for distribution of the residual assets,
and the bankruptcy court approved the plan. The companies argued that the bankruptcy
court improperly imposed a constructive trust over the residual assets. The Ninth Circuit
affirmed the bankruptcy court’s rulings in all respects. 427 F.3d 668 (9th Cir. 2005).
Issue: Whether the employer breached its fiduciary duty under ERISA by not considering
the union’s proposal to terminate a pension plan by merging it into the union’s
multiemployer pension fund.
Holding and Rationale: No, it did not breach its fiduciary duty because the proposed
merger was not a permissible form of plan termination under ERISA. ERISA sets forth
the exclusive procedures for single-employer pension plan termination and distribution of
29
plan assets to participants and beneficiaries in 29 U.S.C. § 1341(b)(3)(A). Purchase of
annuity contracts and lump-sum distributions are the most common distribution methods.
The Court decided that merger is not a permissible means of plan termination under §
1341(b)(3)(A); indeed, [merger] represents a continuation rather than a cessation of the
ERISA regime.” 127 S. Ct. at 2319. Merger is covered by ERISA in other statutory
sections which set forth rules and procedures different than those set forth for plan
terminations. The Court held that “merger is not a permissible method of terminating a
single-employer defined-benefit pension plan.” Id. at 2321. The Court also harshly
described the union’s theory: “[B]y diligently funding its pension plans, [the employer]
became the bait for a union bent on obtaining a surplus that was rightfully [the
employer’s]. All this after [the employer] purchased an annuity that none dispute was
sufficient to satisfy it commitments to plan participants and beneficiaries.” Id.
LaRue v. DeWolff, Boberg & Assocs. , Inc., 450 F.3d 570 (4th Cir. 2006), cert. granted,
127 S. Ct. 2791 (2007) (No. 06-856).
Facts: Plaintiff was employee who participated in his employer’s 401(k) plan, which the
employer administered. He alleges that he directed the employer to make specified
changes to the investments in his account, and that they were not made. Plaintiff brought
suit under ERISA, alleging a breach of fiduciary duty. The district court dismissed the
case, reasoning that the remedy sought by plaintiff is not available under 29 U.S.C. §1132
(a)(3).
Issue: Whether ERISA provides for make whole compensatory relief to an individual
participant.
Holding and Rationale: The Fourth Circuit held that the claim did not come under §1132
because it is not in the nature of equitable relief, for which the section provides. Plaintiff
attempted to circumvent that result by characterizing his claim as something different
from what the Supreme Court and the Fourth Circuit had recognized to that point—
participant or beneficiary suing a fiduciary for breach of a fiduciary duty. The Fourth
Circuit rejected the analogy to a common law breach of trust action, relying primarily on
Mertens v. Hewitt Assocs., 508 U.S. 248 (1993). The Fourth Circuit noted that its decision
was consistent with the Sixth Circuit’s decision in Helfrich v. PNC Bank, Kentucky, Inc.,
267 F.3d 477 (6th Cir. 2001), cert. denied, 535 U.S. 928 (2002).
Cooper v. IBM Personal Pension Plan, 457 F.3d 636 (7th Cir. 2006), cert. denied, 127 S.
Ct. 1143 (2007) (No. 06-760).
The Seventh Circuit held that IBM’s cash balance plan did not violate ERISA by
discriminating against older workers because it was age-neutral. The Seventh Circuit
explained that the district court had treated the time value of money as age discrimination.
30
Langbecker v. Electronic Data Sys. Corp., 476 F.3d 299 (5th Cir. 2007).
The Fifth Circuit vacated a class certification on claim of breach of fiduciary duty by
employer’s offering company stock as retirement plan investment option. In part, the
court held that the district court incorrectly interpreted the Section 404(c) defense
(relieving fiduciaries of liability where loss results from participant’s exercise of control
over own plan) as being inapplicable to claims on behalf of the retirement plan.
XII. COMPUTERS AND PRIVACY
United States v. Ziegler, 474 F.3d 1184 (9th Cir. 2007), superseding, 456 F.3d 1138 (9th
Cir. 2006), reh’g en banc denied, 2007 WL 1775194 (9th Cir. June 21, 2007)..
Facts: Employer’s IT department monitored employees’ Internet activities. Employees
were aware of the monitoring capabilities of the company. IT department uncovered child
pornography accessed and downloaded by an employee. After meeting with an FBI agent,
IT employees obtained a key to the employee’s office, entered the office after hours,
removed the computer’s outer casing, and made two copies of the computer’s hard drive.
The IT employees believed that the FBI agent instructed them to copy the hard drive, but
the agent said he did not, and he understood them as saying they already had done it prior
to his meeting with them. The employer’s corporate counsel informed the FBI that it
would cooperate fully with the investigation and, without a warrant, turned over to the FBI
the computer tower with the hard drive and one copy of the hard drive. A federal grand
jury returned a three-count child pornography indictment. In a pretrial motion, the
defendant sought to suppress the evidence from the computer search, contending that the
FBI agent violated the Fourth Amendment by, without a warrant, directing the IT
employees to search defendant’s workplace computer. The district court denied the
motion to suppress, finding that the employee had no expectation of privacy in the files he
accessed via his workplace computer.
Issue: Whether employee had “an expectation of privacy in his workplace computer
sufficient to suppress images of child pornography sought to be admitted into evidence in
a criminal prosecution.”
Holding and Rationale: No. The Ninth Circuit explained that to invoke Fourth
Amendment protection against unreasonable search and seizure, one must have both a
subjective expectation of privacy and an objectively reasonable expectation of privacy.
Because the government did not contest the subjective expectation of the defendant, the
court analyzed whether he had an objectively reasonable expectation. The court discussed
Mancusi v. DeForte, 392 U.S. 364 (1968), concluding that “Mancusi compels us to
recognize that in the private employer context, employees retain at least some expectation
of privacy in their offices.” 474 F.3d at 1189. The court then concluded that the
defendant had a reasonable expectation of privacy in his office because it was not shared
by co-workers, and it was kept locked. Because he had a reasonable expectation of
privacy, the search had to comply with the Fourth Amendment. The court first noted that
31
there clearly was a search or seizure. The court then explained that warrantless searches
or seizures are unreasonable within the meaning of the Fourth Amendment unless they
come within a narrow class of exceptional cases. One such exception is cases in which
valid consent is obtained by the government. The consent need not be by the defendant,
but also can be given by one who has “`common authority over or other sufficient
relationship to the premises or effects sought to be inspected.’” Id. at 1191 (quoting
United States v. Matlock, 415 U.S. 164, 171 (1974)). The court held that the employer
“could give valid consent to a search of the contents of the hard drive of [the employee’s]
workplace computer because the computer is the type of workplace property that remains
within the control of the employer ‘even if the employee has placed personal items in
[it].’” Id. at 1191 (quoting O’Connor v. Ortega, 480 U.S. 709, 716 (1987)). The court
also examined whether the employer, which could consent to the search, did consent.
Because an officer of the company (chief financial officer) authorized the copying of the
hard drive and gave his key to the IT employees, the court concluded that the employer
did consent to the search. The court summarized its analysis: 1) the employee had a
legitimate expectation of privacy in his work office; 2) the employer retained a right to
consent to a search of the office and the computer; and 3) the employer gave valid thirdparty consent to the search of the office and computer.
Denial of Rehearing En Banc: There are apparently several different views among the
Ninth Circuit about issues raised by this case, as the denial of rehearing produced a
concurring opinion and two dissenting opinions.
An emerging issue to watch is the use of biometrics by employers, meaning that
employers use biological samples, such as hand or iris prints and/or behavioral samples, to
identify employees. See Joyce E. Cutler, Tracking Systems Raise Privacy, Contractual
Concerns, Speakers Say, DAILY LAB. REP. (BNA) No. 103, at C-1 (May 30, 2007). The
use of biometrics and tracking devices like global positioning technology has spawned a
new phrase—“geoslavery.” The article details a panel discussing the issues at the annual
meeting of the National Academy of Arbitrators. The panelists pointed out that use of
tracking and biometric technology by employers is likely to result in the filing of unfair
labor practice charges regarding employers implementing such technology without first
bargaining about it with the representative unions.
XIII. UNDOCUMENTED WORKERS AND RICO
32
Williams v. Mohawk Indus., Inc., 411 F.3d 1252 (11th Cir. 2005), vacated, 126 S. Ct.
2016 (2006), on remand to 465 F.3d 1277 (11th Cir. 2006), cert. denied, 127 S.Ct. 1381
(2007) (No. 06-873).
Facts: Former and current employees of defendant employer filed a class action
contending that the employer=s conspiracy with recruiting agencies to hire and harbor
illegal aliens enabled the employer to reduce labor costs by suppressing wages and
workers= compensation claims. The plaintiffs brought this claim under the federal and
state RICO statutes. The employer moved pursuant to 12(b)(6) to dismiss the RICO
claim. The district court denied the motion to dismiss.
Issue: Whether an employer and third-party temp agencies/recruiters can be an enterprise
within the meaning of the federal RICO statute.
11th Circuit’s Decision: The Eleventh Circuit held that the plaintiffs had pled enough to
survive a motion to dismiss. All that the Eleventh Circuit has required to satisfy enterprise
is a Aloose or informal@ association of distinct entities. Id. at 1258. The members of the
enterprise also must have a common purpose. The Eleventh Circuit held that the common
purpose of making money was sufficient under RICO. Finally, the employer Amust
participate in the operation or management of the enterprise itself.@ The plaintiffs did
allege such participation. Thus, the Eleventh Circuit concluded that the plaintiffs had
sufficiently pled the existence of an enterprise. The court recognized that its decision was
in conflict with Baker v. IBP, Inc., 357 F.3d 685 (7th Cir. 2004), cert. denied, 125 S. Ct.
412 (2004), in which the Seventh Circuit, considering almost identical allegations, found
no common purpose among the entities in the enterprise.
Supreme Court Decision: The Court vacated and remanded for reconsideration in light of
Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991 (2006), in which the Court held that a
plaintiff must establish proximate causation between the alleged injury suffered by the
plaintiff and the alleged RICO violation. The direction to consider the effect of Anza, did
not seem to bode well for the plaintiff class in Mohawk. See Justices Remand Illegal
Worker RICO Case for Review Under New Causation Ruling, DAILY LAB. REP. (BNA)
No. 108, at AA-2 (June 6, 2006).
On remand to the Eleventh Circuit (465 F.3d 1277): The Eleventh Circuit held that the
plaintiffs “have sufficiently alleged that Mohawk’s illegal conduct was aimed primarily at
them,” and had pled enough to survive a 12(b)(6) motion on the federal RICO claim.
XIV. NATIONAL LABOR RELATIONS ACT
See Supporters of Card Check Bill Fall Short of Votes Needed to Limit Senate Debate, 21
LAB. REL. WEEK (BNA) 925 (June 28, 2007) (Employee Free Choice Act stymied before
reaching Senate floor after being passed by the House).
33
Oakwood Healthcare, Inc., 348 N.L.R.B. No. 37, 180 L.R.R.M. (BNA) 1257, 2006 WL
2842124 (Sept. 29, 2006).
The “Kentucky River Cases,” Oakwood Healthcare, Inc., Golden Crest Healthcare
Center, and Croft Metals Inc. addressed the issue of the test for supervisor in the context
of charge nurses at nursing homes and lead persons at a plant. The cases are named for
the Court’s decision in NRLB v. Kentucky River Community Care, Inc., 532 U.S. 706
(2001). See Marcia Coyle, Hearing Urged in Vital NLRB Cases, NAT’L L.J. at 1 (July 31,
2006); Labor Movement Rallies Around Pending NLRB Rulings Defining Supervisors,
DAILY LAB. REP. (BNA) No. 135, at A-11 (July 14, 2006). In Oakwood Healthcare, the
Board announced a refined analysis for evaluation of supervisory status under §2(11) of
the NLRA. The test is as follows:
[I]individuals are statutory supervisors if (1) they hold the
authority to engage in any 1 of the 12 supervisory functions
(e.g., "assign" and "responsibly to direct") listed in Section
2(11); (2) their "exercise of such authority is not of a merely
routine or clerical nature, but requires the use of
independent judgment;" and (3) their authority is held "in
the interest of the employer." Supervisory status may be
shown if the putative supervisor has the authority either to
perform a supervisory function or to effectively recommend
the same. The burden to prove supervisory authority is on
the party asserting it.
The Board’s refinement in Oakwood Healthcare was in its adoption of broader definitions
of “assign,” “responsibly direct,” and “independent judgment.”
Davenport v. Washington Educ. Ass’n, 127 S. Ct. 2372 (2007).
Facts: Union was sued for violating Washington statute that requires unions to obtain
affirmative authorization from nonunion members paying agency fees before using any
portion of such fees for political purposes. The union argued that the statue was
unconstitutional in that it violates the First Amendment. The Washington Supreme Court
held that the statute was an unconstitutional restriction on the political speech of the union
because the opt-in provision was not narrowly tailored to protect the state’s interest in
protecting dissenters’ rights; an opt-out procedure would be less restrictive and
constitutionally permissible.
Issue: Whether a statute limiting unions’ rights to use agency fees violated the First
Amendment.
Holding and Rationale: No. The Court stated that the Washington Supreme Court had
misinterpreted the U.S. Supreme Court’s cases on agency fees. The Court explained that
“our repeated affirmation that courts have an obligation to interfere with a union’s
34
statutory entitlement no more than is necessary to vindicate the rights of nonmembers does
not imply that legislatures (or voters) themselves cannot limit the scope of that
entitlement.” 127 S. Ct. at 2379. The defendant argued a different basis for upholding the
judgment from that espoused by the Washington Supreme Court: It argued that the under
the Supreme Court’s campaign-finance cases, the Washington law could not survive First
Amendment analysis because it applies to ballot propositions and did not limit equivalent
election-related expenditures by corporations. The Court explained that the statute’s
restriction is not on how the union spends its money, but on how it spends other people’s
money. The Court held that “given the unique context of public-sector agency-shop
arrangements, the content-based nature of [the statute] does not violate the First
Amendment.” Id. at 2382. The Court noted that although the statute applied on its face to
both public-sector and private-sector unions, the Court was not addressing the
constitutionality of the statute with respect to private-sector unions. While not addressing
the issue, the Court noted a difference between the two situations: “private-sector unions
collect agency fees through contractually required action taken by private employers
rather than by government agencies, [and] Washington’s regulation of those private
arrangements presents a somewhat different constitutional question.” Id. at 2382.
The Court provided a succinct statement of its holding:
We hold that it does not violate the First Amendment for a State to require
that its public-sector unions receive affirmative authorization from a
nonmember before spending that nonmember’s agency fees for electionrelated purposes.
Id. at 2383.
Media Gen. Operations Inc. v. NLRB, Nos. 06-1023, 06-1061 & 06-1213, 2007 WL
806023 (4th Cir. 2007).
Employer had e-mail policy that restricted use of the e-mail system to company purposes,
but the company made no effort to enforce the policy except with respect to union
messages. Employees had sent e-mail messages about their personal lives, arranged social
events, and informed others about charities with no intervention or enforcement efforts by
the company. The court agreed with the NLRB that restricting union access while
allowing others “unfettered access” was an unfair labor practice.
Planned Bldg. Servs. Inc., 347 N.L.R.B. No. 64 (July 31, 2006).
The Board announced the appropriate standard to apply in a case to determine whether an
employer committed an unfair labor practice when it refuses to hire employees of its
predecessor to avoid an obligation to bargain. The Board held that the analysis of Wright
35
Line, 251 N.L.R.B. 1083 (1980), applies rather than that of FES, a Div. of Thermo Power,
331 N.L.R.B. 9 (2000).
Randell Warehouse of Ariz., Inc., 347 N.L.R.B. No. 56 (July 26, 2006).
The Board reversed its prior decision and held that “in the absence of a valid explanation
conveyed to employees in a timely manner, photographing employees engaged in Section
7 activity constitutes objectionable conduct whether engaged in by a union or an
employer.” The prior Board decision had set different standards for unions and
employers.
Guard Publishing Co. d/b/a The Register Guard, No. 36-CA-8743-1.
The Board heard oral argument on March 27, 2007 in this case raising the issue whether
employees have a right protected by Section 7 of the NLRA to use their employer’s e-mail
system for communications about unions and other concerted, protected matters. See
Susan J. McGolrick, NLRB Hears Oral Argument in Important Case On Workers' Use of
Employer's E-Mail System DAILY LAB. REP. (BNA) No. 59, at AA-1 (March 28, 2007).
The employer had a rule barring employees from using the e-mail system “to solicit or
proselytize for commercial ventures, religious or political causes, outside organizations, or
other non-job-related solicitations.” Id. The union filed unfair labor practice charges,
challenging maintenance of such a policy.
Dynasteel v. NLRB, No. 06-60006 ____F.3d ___, 2007 WL 94968, 181 LRRM (BNA)
2201 (5th Cir. Jan. 16, 2007).
Fifth Circuit held that substantial evidence supported Board’s findings of unfair labor
practices during union organizing.
XV. WARN ACT
Wilson v. Airtherm Prods. Inc., 436 F.3d 906 (8th Cir. 2006), cert. denied, 127 S. Ct. 182
(2006) (No. 05-1653).
Facts: Employer entered into an agreement to sell business that also provided that the
buyer would offer jobs to most of the employer’s employees. In a letter to a union
representing some of its employees, employer stated it was closing the plant and
terminating the bargaining unit employees. It also explained in the letter its understanding
that the buyer would rehire employees. Some of the employer-seller’s workers sued for
failure to give WARN Act notice.
Issue: Whether the seller was required to give WARN Act notice.
Holding and Rationale: No. The transaction came under the WARN Act’s sale-ofbusiness exclusion in 29 U.S.C.§ 2101(b)(1).
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Phason v. Meridian Rail Corp., 479 F.3d 527 (7th Cir. 2007) (reh’g and reh’g en banc
denied Apr. 9, 2007).
Facts: Business announced to its employees that it was closing operations immediately
and invited them to apply for jobs with the company which had agreed to purchase the
assets. The transaction (sale of assets) did not close, however, until more than a week
later. The asset purchaser eventually hired all but about 50 of the former owner’s
employees. Plaintiffs used under the WARN Act for not receiving the required notice.
The district court concluded that the WARN Act did not apply because only 40 to 50 were
not employed by the purchaser.
Issue: Whether the close of a business followed by a purchase of assets by another
business is a qualifying event under the WARN Act.
Holding and Rationale: There was a triggering event under the WARN Act when the
business closed. The defendant relied upon the following sentence: “[A]ny person who is
an employee of the seller (other than a part-time employee) as of the effective date of the
sale shall be considered an employee of the purchaser immediately after the effective date
of the sale.” 29 U.S.C. § 2101(b)(1). That provision was inapplicable, however, because
a plant closing took place, and the sale occurred about a week later. The court held that
the closing resulted in a statutory “employment loss” via terminations under 29 U.S.C. §
2101(a)(6)(A). Telling the employees that they were fired but that they might get jobs
with the asset purchaser is a termination. The court said it understood the defendant’s
dissatisfaction with the “literal application of the statute” in which a delay of a few days in
the sale of assets resulted in a violation of the Act. Id. at 530. The court went on to
explain the WARN Act as follows: “The statute draws a lot of bright lines; it is really
nothing but lines. . . . Delayed closing put [the employer] on the wrong side of one.” Id. at
530-31.
Deveraturda v. Globe Aviation Sec. Servs., 454 F.3d 1043 (9th Cir. 2006).
The Ninth Circuit held that the WARN Act requirement of notice was not triggered by the
federal government takeover of airport screening because it was not the employers of
screeners, but the government, that initiated the layoffs.
Allen v. Sybase, Inc., 468 F.3d 642 (10th Cir. 2006).
Employer carried out three layoffs of employees. In order to be a covered mass layoff,
requiring WARN notice, at least 50 employees would have to be laid off. The court
considered the layoffs of 56 employees in a 58-day period to be an aggregated layoff
under the WARN Act because the employer could not establish that the job losses were
for separate and distinct causes and not an attempt to evade the requirements of the
WARN Act under § 2102(d).
XVI. LOUISIANA LAW
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CBD Docusource, Inc. v. Franks, 934 So. 2d 307 (La. App. 5th Cir. 2006).
The court held that a noncompetition clause with an overly broad geographic restriction
could not be reformed without a severability clause, which it did not include.
Vartech Sys, Inc. v. Hayden, 951 So. 2d 247 (La. App. 1st Cir. 2006).
Louisiana First Circuit held the following regarding noncompete agreement: 1) prohibiting
competition in all 64 parishes does not automatically render clause overly broad and null;
defendants have burden to show that plaintiff does not actually have customers or business
location in some named parishes; 2) La. R.S. 23:921 does not require a noncompete to
contain a definition of the employer’s business, but if it does include one, the definition
cannot be overly broad; 3) if noncompete agreement has both a restriction on carrying on
or engaging in business and a restriction on soliciting clients, each must have geographical
restrictions that comply with the statute; and 4) language exceeding permissible limitation
on engaging in another business could be severed pursuant to a severability clause.
Beard v. Seacoast Electronics, 951 So. 2d 1168 (La. App. 4th Cir.), writ denied, 955 So.
2d 686 (La. 2007).
La. R.S. 23:967 (A)(3) protects against reprisal an employee who, in good faith and after
advising the employer of the violation, “[o]bject to or refuses to participate in an
employment act or practice that is in violation of law.” Paragraph (A)(3), unlike the
whistleblower provision of (A)(1), does not include the limiting term “state” law. Still,
the Fourth Circuit interpreted (A)(3) as being limited to only violations of state law.
Accardo v. Louisiana Health Servs. & Indem. Co, 943 So. 2d 381 (La. App. 1st Cir.
2006).
Agreeing with the Fourth and Fifth Circuits, the First Circuit interpreted La. R.S. 23:967
as requiring that the employer conduct that the employee is reporting or refusing to
participate in actually be illegal; a good faith and reasonable belief in the illegality is
insufficient to establish a claim for reprisal under the statute.
Baldwin v. Board of Supervisors of Louisiana Sys., No. 2006-0961, ___ So. 2d ___, 2007
WL 1299861 (La. App. 1st Cir. May 4, 2007).
Facts: After three seasons, football coach at university was relieved of duties but paid for
remainder of his contract term. The coach sued alleging racial discrimination and state
tort claims. The district court granted partial summary judgment, dismissing the race
discrimination claim.
Issue: Whether plaintiff presented sufficient evidence of pretext to survive summary
judgment.
Holding and Rationale: Yes. The court first noted that because of the “commonality
between federal and state anti-discrimination laws,” the federal courts’ interpretation of
the federal statutes, including the proof structures, may be applied to courts’ analysis of
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the state statutes. The court applied the three-part McDonnell Douglas analysis to
determine whether summary judgment should have been granted for the defendant on
plaintiff’s state law race discrimination claim. The court found that plaintiff satisfied the
prima facie case, and defendant, at stage two, gave three legitimate, nondiscriminatory
reasons for relieving the plaintiff of his duties: three losing seasons; a significant drop in
game attendance with looming NCAA attendance requirements to maintain division
status; and a budget crisis, owing in part to decreased game attendance. Plaintiff
presented evidence on each point: regarding the three losing seasons, evidence that school
administrators were aware that it would take time “to turn the program around,” and his
replacement, despite two losing seasons, was given a contact extension; regarding the
decline in attendance, the vacancy in the position of marketing director in his second and
third seasons had contributed to the problem; and regarding the budget crisis, plaintiff
produced evidence that it was a longstanding problem, and that it was worsened by the
school’s decision not to schedule “money games” against better known and higher caliber
opponents. Plaintiff also produced evidence that he was treated differently than his
predecessor and his successor. The court found sufficient evidence of pretext, noting that
there were questions of motive and intent and credibility determinations that were not
appropriate for summary judgment.
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