Iowa Employment Law Blog : Iowa Employment Lawyer & Attorney : Patrick Smith : Bradshaw Fowler Proctor & Fairgrave Law Firm : Des Moines, Central IA Discrimination & Labor Law

In a unanimous decision yesterday, the U.S. Supreme Court expanded the universe of employees who might be protected from retaliation under Title VII and other federal employment laws.

A retaliation claim is based upon an employer’s adverse action taken in response to an employee’s “protected activity”. Typically, protected activity includes things such as making a complaint of discrimination or harassment, or giving information in connection with a harassment investigation. Any adverse action against an employee (or even a former employee) because he engaged in “protected activity” subjects an employer to liability for damages and attorney’s fees.  

In Thompson v. North American Stainless, LP, the Supreme Court held that Title VII’s anti-retaliation protection extends to the fiancée of an employee who filed a charge of discrimination with the EEOC. Even though the fiancée himself engaged in no “protected activity”, the Court reasoned the company’s conduct could well dissuade a reasonable employee from herself filing a charge. In other words, if an employee knew her fiancée would be fired in response to her EEOC charge, she might not file the charge. 

The practical challenge this case presents for employers is identifying the zone of persons who might be affiliated with a complainant.   While acknowledging this difficulty, the Court nonetheless declined to establish a bright line to determine which relationships are protected and which are not. Justice Scalia, writing for a unanimous Court, stated:

We must also decline to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.

Two immediate takeaways from this case:

First, when going down the road of termination, employers need to inquire whether there is anyone affiliated with the employee to be terminated who has filed a charge of discrimination.  Who is affiliated? Certainly a spouse or other close family member; definitely a fiancée. After that, who knows?

Second, just because there is some affiliation does not mean the termination should not occur.   The terminated employee is still required to prove a connection between his termination and the protected activity of the other employee with whom he is affiliated.

For other commentary on this decision, I recommend the following:

Daniel Schwartz's Connecticut Employment Law Blog

Eric Meyer, at The Employer Handbook

IIyse Schuman at Washington DC Employment Law Update

Russell Cawyer, Texas Employment Law Update

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An Article in Sunday’s Des Moines Register pointed to an increase in the hiring of temps as an early sign of economic recovery.    One of the benefits to employers of temporary workers, the article noted, is that they provide a company with flexibility when market conditions are uncertain. “Companies feel more comfortable using temporary work forces” in these conditions; they can better ramp up-or down-to meet production needs.  

While not disputing the benefits of leased workers, employers should also be aware of the potential downside of using temporary employees—particularly those who are employed for longer term assignments of one year or more.

First, it is critical to do due diligence on the staffing agency that is used.   Make sure the agency is financially sound and meeting its obligations for payroll withholding, workers’ compensation, and benefits. If the agency goes out of business and did not handle those issues, the employer may be responsible.   One client had a leased worker injured on the job, and it turned out the staffing agency had not procured workers’ compensation coverage for the state in which the employee worked. The employer ended up being responsible for the injury, and had no workers’ compensation coverage available to cover the costs.

A second important issue relates to employee benefits.   If a leased employee works for an employer for more than one year, that employee may have to be included in non-discrimination testing for employee benefit plans.  In addition, there are some circumstances where a long term leased employee could become eligible for benefits under the employer’s benefit plans.

Finally, using a staffing agency for hiring will not necessarily protect a company from liability under the anti-discrimination laws.    This post at the Wisconsin Labor & Employment Blog discusses certain staffing agency practices deliberately designed to avoid the anti-discrimination laws.   See paragraph above about due diligence. 

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A federal judge in the Eastern District of Pennsylvania recently waded into this thorny subject. The case is Burlington v. News Corp., in which a white television reporter for the Fox affiliate in Philadelphia alleges he was terminated for using the “n-word”.  The suit claims black employees who also had uttered the word were not even disciplined.

It all started during a discussion of another reporter’s coverage of a “symbolic burial” of the n-word, conducted by the Philadelphia NAACP Youth Council. The other reporter said the participants in the burial used the “n-word” “at least a hundred times or more during the course of the proceedings.” In response, the plaintiff asked, “does this mean we can finally use the word n_____”. Plaintiff said he was not intending to be offensive or provocative, but only want to suggest that using the actual word in the story would give the story more credence.  

Despite the context, other employees were offended and complained to management.   One person who was offended and complained, even though she had not been present at the newsroom meeting, was the plaintiff’s co-anchor, who was African American. The event apparently caused tension between the plaintiff and his co-anchor, which affected their on-air chemistry.   To complicate matters further, someone leaked to other media outlets that plaintiff had used the “n-word”, and stories were published about it in the local papers. 

The plaintiff presented evidence that three different black employees had used the “n-word” in the past, but had not been subject even to discipline.   The employer’s defense for treating plaintiff differently was the statements by the black employees had not incited complaints or resulted in negative publicity. Plaintiff contended the complaints and resulting publicity were the result of race discrimination that ultimately influenced management’s decision to terminate him. 

Ultimately, the court denied the employer’s request to dismiss the lawsuit, holding that the jury should decide the question whether the plaintiff was treated differently because of his race. In its conclusion, the court stated:

This case presents unique issues regarding an employer's liability under Title VII for cultural assumptions about a word that is considered by many to be the most offensive in the English language. Plaintiff portrays himself as a victim of political correctness run amok, while Defendants portray themselves as employers who made the only choice they could in response to an employee who repeatedly uttered "the most noxious racial epithet in the contemporary American lexicon…resulting in problems in the workplace and significant adverse publicity.” Whether Plaintiff was a victim of discrimination or his own poor judgment is for a jury to decide….

Setting aside the troubling cultural and social implications this case presents, the management of Fox 29 faced a difficult and tenuous legal decision. Regardless of how they handled the case, there was no good outcome. If they terminated the white reporter, as they did, they face a race discrimination lawsuit. If they don’t discipline or terminate, they face a potential complaint from other employees for allowing a racially hostile work environment to exist.  

In these situations, often the best approach is to make what you think is the least worst decision…and get ready for the inevitable fallout.   The real lesson, however, is that employers need to be proactive in ensuring that the use of offensive language is always subject to discipline, regardless of the person's race.

For additional discussion of this case, I recommend the following:

Jon Hyman, at Ohio Employer’s Law Blog

Peter Thompson, at Maine Employment Law Blog

Jottings by an Employer’s Lawyer 

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We have discussed in this blog before the migration of discrimination claims to Iowa state courts rather than federal courts.   The trend is driven by a number of factors, including the recognition in 2005 of the right to a jury trial under the Iowa Civil Rights Act (ICRA) and the greater propensity of federal courts to grant summary judgment.

Another important factor in a plaintiff’s decision to choose state or federal court will be the type of discrimination alleged.    For example, as a result of the ADA Amendments, disability claims are more likely to end up in federal court.   Just the opposite is true, however, with respect to age discrimination claims. The Eighth Circuit’s recent decision in Clark v. Matthews International Corporation confirms that assessment.

The Plaintiff in Clark alleged age discrimination under both the federal Age Discrimination in Employment Act (ADEA) and the Missouri Human Rights Act (MHRA).   The trial court granted summary judgment to the employer on both claims. The Eighth Circuit affirmed the grant of summary judgment on the ADEA claim, but reversed on the MHRA claim.   The Court found the plaintiff’s evidence was not sufficient to generate a genuine dispute under the ADEA’s “but for” standard. However, the court declined to rule as a matter of law on the MHRA claim.    Under the MHRA, a plaintiff must prove age was a “contributing factor” in the decision, which the court concluded was less demanding than the ADEA’s standard.

The evidence in question included the following:

• Plaintiff’s supervisor asked him if he was “just trying to make it to retirement.”
• The same supervisor suggested to another employee that he could “always become a Wal-Mart greeter.”
• The company sent unsolicited mailings from the AARP to employees when they turned 56 years old

The test under the ICRA is whether age was “a motivating factor” in the employment decision. This is similar to the standard under the Missouri law, and certainly less demanding that the “but for” test under the ADEA.   If Clark is any indication, it will not take much less evidence to survive summary judgment for an ICRA claim than an ADEA claim.  

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Remember Jack Gross? Back in 2003 he claimed a demotion from his management job at West Des Moines based FBL Financial Services constituted age discrimination.   A federal jury in the Southern District of Iowa agreed and awarded him $47,000 in damages. From there his case had a remarkable journey: first stopping in St. Louis at the Eighth Circuit, then to Washington, D.C. and the U.S. Supreme Court, back to St. Louis for another stop at the Eighth Circuit, and ultimately back to Des Moines for another jury trial. In the meantime, Gross became moderately famous, testifying before Congress about his case and inspiring legislation to change the law.

About two weeks ago Gross presented his case to a second jury. This time, however, Gross ran out of luck.  The jury found in favor of FBL Financial Services.  

Why the long journey with all the stops along the way? Because of two phrases: “a motivating factor” and “but for”.    In the first trial, the court instructed the jury that, under the federal Age Discrimination in Employment Act (ADEA), they must find for Gross if his age was “a motivating factor” in the demotion decision.   The Supreme Court ruled that was the wrong instruction. In the second trial, the jury was instructed to find for Gross on his ADEA claim if FBL would have not demoted him “but for” his age. 

Did a few words in the jury instructions result in a different outcome in the second trial?  While it is impossible to know for certain, there probably is more to it than that.   What has generally gone unreported about the Gross case is that he also claimed his demotion violated the Iowa Civil Rights Act.    In both the first and second trials, the jury was instructed they must find for Gross on the ICRA claim if his age was "a motivating factor" in the decision.    Thus, the same question was presented to both juries, but with a different result.

The case may not be over yet.   It appears grounds may exist to appeal this decision as well.   In particular, the instruction incorporated a version of the “same decision” defense for the ICRA claim.  In other words, not only did Gross have to prove his age was “a motivating factor”, but also had to prove “the adverse action would not have otherwise occurred.”    As we have discussed  here previously, it is far from clear that the "same decision" defense is available under the ICRA. 

We will be watching to see what happens...

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One of the best ways to predict this year's trends in discrimination litigation is to examine last year’s charge statistics from the EEOC and the Iowa Civil Rights Commission.    Any person who claims a violation of the state or federal anti-discrimination laws must first file an administrative charge with one or the other of these agencies.    While each agency has its own procedures, generally they will issue a “right to sue” letter after conducting a preliminary investigation of the complaint. Last year’s administrative charges become this year’s lawsuits.

In fiscal year 2010, EEOC received a record 99,922  charges, a 7% increase over 2009.   Despite the increase in charges, EEOC reports that its case inventory has decreased, which means more charges are actually being investigated, settled, or otherwise disposed.    

Other evidence that EEOC is becoming more aggressive is its emphasis on what it calls “systemic enforcement.”   As part of its systemic initiative, EEOC identifies common employer practices that impact a large number of persons in the workforce.   In 2010, 465 systemic investigations were undertaken, and the agency filed 20 class action lawsuits involving systemic type claims, the most ever. One of EEOC's focus in this area involves employer’s use of credit histories as part of the application process, which EEOC claims can have a racially discriminatory impact. 

EEOC is also focusing of the area of disability discrimination.  The final regulations interpreting the ADA Amendments Act are expected to be published shortly.    As more disability charges continue to be filed and processed, employers can expect more disability discrimination claims to end up in court.

The silver lining in all these statistics comes from the Iowa Civil Rights Commission, which actually saw a decrease in the number of employment discrimination charges between 2009 and 2010.   It must be noted, however, that the ICRC is itself becoming more aggressive in its investigation and settlement of discrimination charges.  In 2009-10, the total value of mediated settlements with ICRC total $606,486, an increase of 62% over the prior year. 

For additional information and analysis on these issues, I recommend the following:

From Washington D.C. Employment Law Update: Year End Roundup of EEOC Developments, and Upcoming EEOC Regulatory Agenda. 

From Overlawyered: The New (and very activist) Obama EEOC

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