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

On February 9, 2010, U.S. District Judge Linda Reade ordered the Equal Employment Opportunity Commission (link courtesy of Ross Runkel) to pay Cedar Rapids based CRST Van Expedited $4.5 million in attorney’s fees and costs it incurred to defend itself against a meritless sexual harassment lawsuit.

The action started in 2005 when a CRST employee filed an EEOC charge alleging sexual harassment. The Agency never completed its investigation, and the employee herself did not pursue an action in court. Nonetheless, in 2007, the EEOC filed suit in the Northern District of Iowa on behalf of the woman and other unspecified female employees. Ultimately, the EEOC identified 270 women it claimed were victims of sexual harassment at the company.

The court dismissed or granted summary judgment to CRST on all but 67 of the women involved, because of a lack of evidence to support the claims. Later, the court dismissed the claims involving the remaining 67 women.    The reason for the dismissals: the court found the EEOC conducted no investigation of the circumstances involving the 67 before filing the suit on their behalf, and did not make a finding there was reasonable cause to believe discrimination occurred. The EEOC’s failure to investigate, the court concluded, prejudiced CRST because it denied them the opportunity to conciliate and foreclosed the possibility that some of the claims might be settled before the necessity of defending a federal lawsuit.  According to Judge Reade, "the EEOC's actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII, and imposed an unecessary burden on CRST and the court."   She characterized the EEOC's litigation strategy as "sue first, ask questions later."     

Judge Reade’s order was striking not only in the amount of the award but in the fact that it sanctioned a federal agency because of the burden it imposed on a private company to defend itself against claims that did not really exist.   Any company that has been the target of an EEOC lawsuit is likely to cheer Judge Reade’s attorney fee award.   It seems only fair that the Agency should be subject to the same standards as a private litigant when brining a lawsuit; that is, it should be required to have a good faith belief, based upon a reasonable investigation, that its claims are supported by the facts and law.  

Not everyone agrees, however, that the sanction imposed is a good thing. Marcia McCormick at Workplace Prof Blog wonders what alternatives were available to the EEOC. She seems to take the position that the EEOC should have the right to litigate harassment claims of persons who never filed a charge and whose circumstances were never investigated.  

Jon Hyman at Ohio Employer’s Law Blog cheers the result, but warns that this sanction could be a mixed blessing for employers.    He believes it will cause the EEOC to conduct more in-depth investigations of its claims, which could in the end impose more administrative burdens than is commonly the case now.   

A very interesting case that likely is not yet over.  The EEOC believes the decision was wrong and intends to appeal. 

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On January 21, the U.S. Court of Appeals for the Eighth Circuit issued a decision that is likely to expand the frontiers of sex discrimination litigation in this circuit (which covers Arkansas, Missouri, Iowa, Minnesota, Nebraska, and North and South Dakota).   In Lewis v. Heartland Inns of America, a female plaintiff who had masculine characteristics and mannerisms was terminated from her job as a motel night auditor.   The trial court granted summary judgment to the employer on the plaintiff's sex discrimination claim because the plaintiff presented no evidence she was treated less favorably than similarly situated males, or that the employer was biased against women in favor of men.  The court of appeals reversed, and held that a decision maker's remarks  to the effect that female employees should be "pretty" and feminine was sufficient evidence to generate a jury question whether the employer was motivated by unlawful sex discrimination, even in the absence of evidence concerning the treatment of male employees. 

With this decision, the Eighth Circuit joined the First, Second, Sixth, and Ninth Circuits in holding that an employer’s expectation that an employee should act consistent with a preferred sex stereotype may constitute sex discrimination.

The plaintiff in Lewis worked part time at the front desk at various locations of the Heartland Inn.  She generally had worked the overnight shift. For two years Lewis’ managers thought she was a good employee and requested she receive pay raises. One of her managers testified that Lewis “made a good impression” , and another that she “did her job well.”   There was a record of at least one customer comment that praised Lewis.   In December 2006, Lewis’ manager requested permission from Heartland’s Director of Operations to offer Lewis a full time night auditor position on the 3 p.m. to 11 p.m. shift.   The Director of Operations, who had never seen Lewis, granted the permission.

After seeing Lewis, the Director of Operations had second thoughts. She told Lewis’ manager that Lewis was not a “good fit” for the front desk. She apparently lacked the “Midwestern girl look”. The Director of Operations, who was also female, had been heard to boast about the appearance of women staff members, and indicated that Heartland staff should be “pretty.” 

Lewis herself described her appearance as “slightly more masculine.” She preferred to wear loose fitting clothing, including men’s button down shirts and slacks. She avoided makeup and wore her hair short. Lewis has been mistaken for a male, and referred to as “tomboyish”. 

The Director of Operations ordered Lewis’ manager to move her back to the overnight shift.   About the same time, a new policy was instituted that required any employee hired for a front desk position to go through a second interview.   Heartland purchased video equipment so that the Director of Operations could view a candidate before extending an offer.   Even though Lewis had been working the 3-11 shift for a month, the Director of Operations insisted she go through a second interview. When Lewis protested and said it was illegal, she was terminated.

The district court granted summary judgment to Heartland because Lewis produced no evidence that she was treated differently than similarly situated male employees.   The Court of Appeals held, however, that the district court was wrong to require the plaintiff to present evidence concerning male employees, noting that “comparative evidences is certainly not the exclusive means by which a plaintiff may establish an inference of discrimination.”   

The critical issue, the court reasoned, is “whether members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not exposed.”   According to the court, the statements that front desk personnel should be  “pretty”,  and that Lewis lacked the “Midwestern girl look” was sufficient to generate a jury question whether her gender played a role in the decision.  In other words, it was not necessary to offer evidence that male employees were subject to a different standard because a reasonable fact finder could find that the terms by their nature apply only to women.  

While it is not clear the Lewis decision will result in a flood of new lawsuits, it nonetheless expands the boundaries for potential sex discrimination claims in a way that will make it more difficult for employers to defend.   It is important to note that stereotypical attitudes concerning how women should behave was already relevant in such cases.  However,  a plaintiff still had to show that, as a result of such attitudes, female employees were at a disadvantage compared to males.   Now, it seems, a female employee can prove unlawful sex discrimination by showing she was disadvantaged compared to other females who acted more feminine than she.  Likewise, a male employee can simply show that male employees who were more masculine were favored over those who exhibited feminine characteristics.    The difficulty is that, unlike gender itself, which is an objectively verifiable fact, many notions of femininity and masculinity are inherently subjective.  

The Lewis case is one of those decisions where bad facts make bad law.   Based upon the record presented in the court's opinion, there is little doubt Ms. Lewis was treated poorly for reasons unrelated to her performance.   Her appearance certainly put her at a disadvantage compared to other female employees.   But there simply was no basis to conclude she was at a disadvantage compared to similarly situated males.

For other perspectives on this case, see the following:

"Of Slacks and Sex Discrimination", in Work Matters Blog.

"Eighth Circuit Issues Interesting Appearance/Sex Stereotyping Case", in Workplace Prof Blog.

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The EEOC has revised its "Equal Employment Opportunity is the Law" poster.    The poster was revised to reflect new federal employment laws, including the ADA Amendments, and the Genetic Non Discrimination in Employment Act ("GINA").  Employers can either obtain a new poster, or a supplement their existing poster.   The new posting is mandatory effective November 21, 2009.  Up to ten posters can be obtained from the EEOC free of charge, or can be printed from the EEOC's website.

The FMLA Blog reports on amendments to the FMLA the president signed this week.   Among the changes: military care giver leave will now apply to for veterans of the Armed Forces under certain circumstances.  In addition, Qualifying Exigency Leave is expanded to cover members of the regular military who are deployed to a foreign county.  Under existing law, such leave applied only for covered military members in the Reserves or Guard.

The best way to avoid workplace problems--avoid bad hires in the first place.  Two posts this week on HR Daily Advisor (here and here) identify five steps for gathering critical background information about prospective employees without breaking the bank, and while respecting the privacy rights of the applicant. 

A woman in Missouri sued Wal-Mart and other establishments under the ADA for denying access to her Bonnet Macaque monkey.   The Plaintiff claimed the monkey was trained to assist her with anxiety and agoraphobia, and she could not function in public unless the monkey was with her. The U.S. District Court in the Western District of Missouri granted summary judgment  to the defendants, finding that Plaintiff was not disabled, nor was her monkey a "service animal" under the ADA for which the establishments were required to provide reasonable accommodation.

This Bud's for you.  A former Chief of Communications at Anheuser-Busch (now Anheuser Busch in Bev)  filed a lawsuit against the company for gender discrimination.   The former executive claims the company maintains gender bias in pay and promotions, excludes women from social networks, and promotes few women to top jobs and committee posts.   Most shocking to any viewer of beer commercials is this allegation:  that the company fostered a locker room and frat party atmosphere in the workplace.  

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A recent decision from the Eighth Circuit provides good training material about what "not to do" if you want to your company to avoid being liable for discrimination, and possibly punitive damages.

The EEOC filed suit against Siouxland Oral and Maxillofacial Surgery Associates, a medical clinic in Sioux Falls South Dakota.   The complaint alleged that Siouxland terminated one employee and refused to hire another because of their pregnancy.  

The first employee, Richelle Dooley, had worked for the clinic for two days when she was terminated.   She told the office manager she was pregnant at the time she was filling out health benefit forms.   The next day during a meeting with the business manager, the managing partner was informed about Dooley's pregnancy.   He reportedly responded as follows:

"the young lady we just hired is going to have a baby this summer, she isn't going to be available to work.  It doesn't make any sense to begin training her...when she won't be able to work the summer.... [W] are going to have to let her go."

The business manager and another physician in the clinic apparently told the managing partner they could not terminate Dooley because of her pregnancy.  Nonetheless, she was fired.

When Dooley asked the business manager why she had been fired after only her second day on the job, she says she was told:

"your baby is going to be due during the busy season";  the clinic "never would have hired [you] if they had known [you were] pregnant." 

A few months later, the office was seeking an employee to work in central sterilization and post-operative recovery.   Angie Gacke applied for the job.  The following is reported to have occurred in the job interview:

Applicant:  "I don't know if this is a problem or not, but I do want to let you know that I am four months pregnant."

Interviewer: "yes, it's a problem.  You are just going to end up causing more work for everybody else than you will be helping them."   

Applicant:  "my due date is in August"

Interviewer: "that's the middle of our busy season, and we don't grant any vacation or anything to anybody during the busy season."

The clinic's defense to Gacke's failure to hire claim was that she was overqualified.   The interviewer had written the following on a copy of her resume:

"overqualified for job", she "needed insurance", and she was "4 months pregnant!"

Based upon this evidence, the jury found Siouxland had discriminated against the plaintiffs because of their pregnancy.  However, the trial court refused to instruct the jury about punitive damages.    On appeal, the Eighth Circuit found there was evidence managerial employees engaged in discrimination while knowing that such discrimination was prohibited by federal law.  The Appellate Court held it was error to grant Siouxland judgment as a matter of law on the punitive damages claims, and remanded for a new trial solely on the issue of punitive damages.

Enough said.

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In a ruling issued September 3, 2009, the U.S. Court of Appeals for the Eighth Circuit held that an employer that follows an affirmative action plan in making an employment decision can be guilty of unlawful race discrimination.    The Court's decision in Humphries v. Pulaski County Special School District is the first in the Eighth Circuit to address the hot button issue of reverse discrimination since the U.S. Supreme Court's ruling on the subject in Ricci v. DeStefano last June (See post here for discussion of the Ricci case).

The plaintiff in Humphries was a white female with a doctorate degree in elementary education.  She worked as a school counselor in the Pulaski County (Arkansas) School District for nearly twenty years.  Starting in 2001, Ms. Humphries applied for virtually every assistant principal position that came open in the District, but was never selected.   She claimed she was passed over for the positions because of her race; specifically, she alleged the District had a policy of ensuring that at least one assistant principal in each school is a different race than the school's principal.   The plaintiff also argued she was not hired as an assistant principal because the School District's affirmative action plan unlawfully favored black candidates. 

The trial court granted summary judgment to the School District, finding that the plaintiff failed to present direct evidence of race discrimination.  The Court of Appeals reversed the trial court, holding that, an employer's adherence to an affirmative action policy may constitute evidence of unlawful race discrimination.   If the employer defends a hiring decision on the basis that it followed an affirmative action plan, then the question becomes whether the affirmative action plan is valid in the first place under Title VII and the Equal Protection Clause.   

The Humphries decision is an important reminder that employers should periodically revisit their affirmative action and diversity policies to ensure the policies comply with the requirements of Title VII.  Even if  plan was valid when it was put into place, does not mean it remains so today.   Some important factors to consider include the following:

1) A lawful affirmative action plan must be both remedial in purpose and narrowly tailored to meet the remedial goal.  Remedial purpose means that its purpose is  to cure a racial imbalance that exists in the organization because of past discrimination.    A "narrowly tailored" plan is one that purports to accomplish the remedial purpose without unnecessarily trammeling the rights of non-minorities. 

2) Practices the employer has implemented to comply with an affirmative action plan should actually relate to the goals of the plan.  For example, if the plan calls for the employer to take steps to attain a racially diverse applicant pool, a practice that sets hiring goals or requires certain racial balance among the workforce may not be consistent with the plan.

3) Many organizations do not have a a formal affirmative action plan, but do have policies concerning diversity in the workplace.   An employer should evaluate whether the diversity goals are merely aspirational, or are actually relied upon in making employment decisions.   If achieving or maintaining diversity in the workforce is a reason for a particular employment decision, it may constitute evidence of race discrimination.

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Last week the Iowa Supreme Court issued a ruling in a pregnancy discrimination case that decided three issues significant to employers and employment litigators.  

The first issue in DeBoom v. Raining Rose, Inc. involved whether an employee must actually be pregnant at the time of a termination to be protected by the Iowa Civil Rights Act's prohibition against pregnancy discrimination.   The Plaintiff in DeBoom was terminated one week after returning from maternity leave, allegedly because of poor performance.  The Iowa Supreme Court held in a case of first impression that the ICRA's express protection of employees disabled by pregnancy extends to women "affected by pregnancy, childbirth, and other related conditions."  This includes women who have recently returned to the workplace after maternity leave.  In so ruling,  the Court followed the interpretation by many courts of the federal Pregnancy Discrimination Act (PDA), even though the language of the ICRA is different than that of the PDA.  The Court reasoned that such a broad interpretation was "necessary to effectuate the purpose of the statute." 

The crucial issue, therefore, is not whether the employee is pregnant at the time of the termination, but whether the employer was motivated by the fact of her pregnancy.  Interestingly, however, the Court cautioned that if the employer's reason for terminating plaintiff was because she decided after returning from leave to prioritize family over work, it would not constitute discrimination because of pregnancy under the ICRA.  According to the Court, "such a decision can be made by men as well as women and, therefore, is not based on the unique capacity of women to bear children so as to fall within the scope of Iowa's statute."   This is a notable distinction, especially given the fact that, under federal law, discrimination against caregivers is sometimes viewed as discrimination on the basis of sex.   (See this post for discussion of caregiver discrimination).  Employers should not interpret this cautionary note as giving them a free reign to take adverse action against new mothers returning from leave.

The second significant issue in DeBoom was whether a plaintiff is entitled to a "pretext" instruction under the ICRA.  Such an instruction tells the jury they may find that unlawful discrimination occurred if the plaintiff proves the employer's stated reason for the adverse action was not the real reason, but merely a pretext to hide discrimination.    The Court held that a pretext instruction "is required where, as here, a rational finder of fact could reasonably find the defendant's explanation false and could infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose."

While the employer's proffered reason for an adverse action is always an important issue in employment litigation, this ruling makes it more likely courts will submit these claims to the jury, even if there is little evidence of discriminatory intent beyond the supposedly false reason.  

The third important ruling in DeBoom concerns whether the jury must find that the employer's unlawful reason was "a motivating factor" in the employment decision, or "a determining factor".   While on the surface these two terms are very similar, the key is how they are defined under Iowa law.    In cases where an employee alleges wrongful discharge against public policy, the Iowa Supreme Court requires that the wrongful reason be a "determining" factor in the discharge.    A "determining" factor is a reason that tips the scales decisively one way or the other.  However, most federal courts use the term "motivating" factor in discrimination claims, which is generally defined to mean the unlawful reason played a part in the decision, but was not necessarily the only reason.    The Iowa Supreme Court ruled that "motivating" factor is the correct standard by which to instruct the jury.  

One potential side effect of the Court's ruling on the "motivating" versus "determining" factor issue is that it will encourage age discrimination plaintiffs to file in State court under the ICRA, and avoid asserting a claim under the federal Age Discrimination in Employment Act (ADEA).  Because of the U.S. Supreme Court's decision in Gross v. FBL Financial Services (discussed in a previous post here), claims under the ADEA will no longer instruct on "a motivating factor".   Under the ADEA after Gross, plaintiffs must prove age was the determining factor in the adverse action, not merely a motivating factor.

The jury in DeBoom ruled in favor of the employer, but the Iowa Supreme Court reversed and remanded for a new trial based upon the faulty jury instructions.   It will be interesting to see if the new instructions change the result when the case is tried again.

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 The National Law Journal reports today that text messages are becoming a growing liability concern for employers.    Offensive and inappropriate texts are increasingly being used as evidence in sexual harassment cases.  According to the article, the main culprit is male bosses sending scandalous messages to female subordinates asking them on dates or making promises in return for sexual favors.    What used to be a "he said she said" case can now be proved with electronic evidence.

What is an employer to do?   First, it is important to note that a bona fide sexual harassment reporting procedure is still the best defense against these kinds of claims.   Once there is a report of harassment, it is important to conduct a thorough investigation, including obtaining copies of the offending texts in question.  Text messaging also raises e-discovery concerns.   Whether an employer has unfettered access to text messages may depend upon who owns or pays for the mobile phone where the texts were received or sent. 

[Hat Tip: Workplace Prof Blog]

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A recent post at Human Resources Executive Online, entitled "Warnings from the Top".  provides an excellent overview of some of the new challenges employers have been presented since the beginning of 2009.   "Like it or not" say the authors, changes are coming, and employers better be prepared.

According to several attorneys the authors interviewed, some of the most pressing new laws and regulations relate to the Lilly Ledbetter Fair Pay Act, the Employee Free Choice Act being debated in Congress, and Amendments to the ADA.    These new laws mean it is time to train--about labor relations issues, what managers can and cannot say about unions; about safety, and about reasonable accommodation.   Now is also a good time to conduct an audit of your company's human resources practices, especially wage and hour compliance issues and compensation practices.  

Iowa employers are not immune from these changes.  Indeed, as discussed in a prior post on Iowa Employment Law Blog, compensation fairness issues may be even more urgent in Iowa because the the State has enacted its own version of the Lilly Ledbetter Act.

We will continue to keep you posted on developments in these important areas of the law.

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On April 28, 2009, Governor Culver signed into law Senate File 137, entitled an Act "Providing that Wage Discrimination is an Unfair Employment Practice under the Iowa Civil Rights Act and Providing an Enhanced Remedy.”   This law (available here) amends the Iowa Civil Rights Act to expressly provide that pay differentials among employees are unlawful if they are based upon the employee's age, sex, disability, and several other protected characteristics.   Local media coverage of Governor Culver's signing can be found here.

You might ask, isn't pay discrimination already unlawful under the Iowa Civil Rights Act?   The answer is yes, but this amendment appears to be an attempt to make Iowa law consistent with recently enacted federal legislation governing pay discrimination, known as the "Lilly Ledbetter Fair Pay Act of 2009", which was signed into law in January.  It also incorporates provisions of the federal Equal Pay Act, first enacted in 1963.

The law amends the Iowa Civil Rights Act, Iowa Code Chapter 216, in three significant ways:

First, it makes an unfair or discriminatory employment practice to pay an employee in a protected class at a rate less than the rate paid to other employees who are employed within the same establishment for equal work on jobs, the performance of which requires equal skill, effort, and responsibility, which are performed under similar working conditions.  Protected classes under the law include age, race, creed, color, sex, sexual orientation, gender identity, national origin, religion, or disability.

Second, it provides that an unfair or discriminatory practice occurs not only at the time a discriminatory pay decision is implemented, but also each time wages, benefits, or other compensation is paid that results in whole or in part from the discriminatory decision.

Third, it provides an “enhanced” remedy. That is, an employee is entitled to recover two times the wage differential paid to another employee compared to the complainant for the time period of the discrimination, or three times the differential in the case of willful violations.

Iowa Employer should take note of several importance aspects of this law that create potential risk and exposure to employee lawsuits:

First, these Amendments actually provide greater protection than Federal law, which applies only to employers with fifteen or more employees.  The Iowa Civil Rights Act applies if an employer has four or more employees (although family members are not considered employees for this purpose). 

Second, to determine whether pay is discriminatory, the law allows an employee's pay to be compared not only to others who have similar jobs, but to those whose job functions may be very different , but require "equal skill, effort, and responsibility", or are performed under "similar working conditions".  This provision should cause employers more than ever before to have detailed and accurate job descriptions.  To the extent pay is different among different job categories, employers should develop objective rationales for such differentials.

Third, the fact that each paycheck can constitute a discriminatory practice may lead to litigation over pay decisions that were made years or even decades ago, but which are discovered only recently. 

Finally, the enhanced remedy provides not only additional damages, but also applies to the entire time the employee has been discriminated against.   This is a greater protection than available under the federal law, which limits recovery of back wages to two years. 

Given the enhanced protection provided under the Iowa Civil Rights Act as compared to federal law, employers can expect claims under this law to be filed in State instead of Federal Court.

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