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

On November 30, 2009, the U.S. Court of Appeals for the Eighth Circuit issued an opinion on the remand of  Gross v. FBL Financial Group, Inc.   We have discussed the Gross case in several previous posts (here, here, and here).  The case has particular local interest because it was tried in the Southern District of Iowa, appealed to the U.S. Court of Appeals for the Eighth Circuit, and ultimately to the U.S. Supreme Court. 

In a decision that surprised many in the employment law community, the Supreme Court  held that an age discrimination plaintiff always has the burden of proving that age was the "but for" cause of the adverse employment action, regardless whether the employer had a "mixed motive", and regardless whether there is "direct evidence" of discrimination.  Under Gross,  the burden of persuasion never shifts to the defendant.  The trial judge's instructions were in error, the Court concluded, because FBL was required to prove it would have made the same decision regardless of Gross' age.  The case was remanded for a new trial.

Despite the Supreme Court's ruling, Gross argued to the Eighth Circuit on remand that his original jury verdict should stand because the jury was correctly instructed under the Iowa Civil Rights Act (ICRA).  Notably, this was the first time the ICRA issue had come up in the case.  The reason: between the date of the U.S. Supreme Court's decision in Gross and the Eighth Circuit's remand opinion, the Iowa Supreme Court issued an opinion in the case of DeBoom v. Raining Rose, Inc.   One of the significant issues decided in DeBoom was that an employer is liable under the ICRA if the jury finds unlawful discrimination was "a motivating factor" in the employment decision.   Gross argued that it did not matter under the ICRA whether the burden shifted to FBL to prove the "same decision" defense, because liability attaches once the jury concludes discrimination was "a motivating factor."

We predicted back in September that DeBoom would have a significant impact on the litigation of age discrimination cases in Iowa, because the standard under the ICRA was different than under the ADEA.   We did not realize at the time, however, that the issue would come up in the Gross case itself.  

Interestingly, Judge Colloton, writing for the Court, did not agree with Gross' contention that the jury was instructed consistent with the Iowa Civil Rights Act, and thus remanded for a trial on both the ICRA and ADEA claims.  Why? The primary reason was that DeBoom was a "pretext" case, and not a "mixed motive" case.   In mixed motive cases, the Eighth Circuit concluded that Iowa precedent requires the same approach as the Eighth Circuit did pre-Gross.  That is, the defendant has the burden of proving the same decision defense only if there is direct evidence of discrimination.  Thus, the jury instruction was still in error, despite DeBoom. 

This matter is far from settled,and will likely result in further litigation in the Iowa Courts for years to come.   It is not clear the Iowa Supreme Court intended the DeBoom case to be as limiting as the Eighth Circuit purported to make it.

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Des Moines Register columnist Marc Hansen writes about an interview he had with Jack Gross, the plaintiff in Gross v. FBL Financial, Inc., decided by the U.S. Supreme Court last June.   Mr. Gross was in Washinton, DC last week to testify before the Senate Judiciary committee that is considering amendments to the ADEA that would effectively overrule the Gross decision.   

Lawyers and judges think and talk about cases in terms of how the "law" applies to the "facts."  It is easy to forget these controversies involve real people with interesting backgrounds, stories, and motives.   Any good trial lawyer knows the likelihood of success in a lawsuit often depends more on the people involved and how they present themselves, rather than obscure legal rules or abstract "facts."   

Jack Gross' case is now back in the Southern District of Iowa, waiting for a new trial.   The jury instructions will be slightly different this time around (assuming Congress has not changed the law by then).  It will be interesting to see if it makes any difference in the outcome. 

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Between a busy trial schedule and the other distractions of summer, we have been a little delinquent in keeping you up to date during the past couple of weeks.  We apologize for the inactivity on the blog, as there have been many developments in the employment law world since our last posting at the end of June.   The following is a brief summary of four of the more interesting and important current events:

1.  Ricci v. DeStefano. 

The Supreme Court issued its opinion on June 29.   This is a significant case dealing with the sensitive and controversial issue of reverse discrimination.   The case is notable not only for the subject matter, but because Sonia Sotomayor, whose Senate confirmation hearings are now underway, was one of the judges on the Second Circuit Court of Appeals who decided the case below.  

The case was about firefighers in New Haven, Connecticut who applied to be on the promotion list for captain and lieutenant positions.   A candidate's rank on the list was determined by process that included written and oral exams.    After the testing process, only white and Hispanic candidates qualified for a promotion to captain, and only white candidates for lieutenant.   The City's Civil Service Board refused to certify the test results because it would result in no black candidates being eligible for promotion. 

The Ricci case presents a clash between two types of discrimination, disparate treatment and disparate impact.  Disparate treatment is intentional discrimination based upon race or some other legally protected classification.  Disparate impact, on the other hand, is not necessarily intentional discrimination, but occurs when job criteria that are neutral on their face have an adverse impact on certain groups.   In this case, the black firefighters contended the testing process was discriminatory because it resulted in no black candidates qualifying for the promotions list.     The City's defense in the lawsuit brought by the white firefighters was that it could not certify the list because if it did, it would be subject to disparate impact liability.   In other words, the City did not believe it could promote only white candidates because it would be sued by the non-white candidates who did not qualify for promotion.

The Supreme Court held it was unlawful for the City to refuse to certify the results of the promotional exam based solely upon the relative racial make-up of the candidates who qualified versus those who did not qualify.  The Court sympathzed with the City's position that it would be liable for disparate impact discrimination if the test results had been certified.  However, Justice Kennedy, writing for a 5-4 majority, held that, at least in this case, such concerns did not justify denying promotions to candiates who had the highest scores because no black candidates were in that group.   

Is is ever permissible to make an employment decision based upon an employee's race because of the fear of disparate impact liability to persons of another race?  The Court concluded such a decision would be permissible only if there is a  "strong basis in evidence" it would be subject to disparate impact liability.  In the Ricci case, the Court concluded, the evidence showed the City had taken great care to ensure its testing process was free from discriminatory impact and reasonably related to the jobs for which it tested.  Therefore, there was insufficient basis for the City to conclude its tests had an unlawful disparate impact.

For detailed discussion, analysis, and contrasting arguments on the Ricci case, I recommend the following posts:  First, for a local flavor, Connecticut Employment Law Blog provides a good summary of the lessons to be learned from the case.   Employee rights attorney Ellen Simon opines at Employee Rights Post that the Ricci decision was not only wrongly decided, but is bad for both employers and employees.  Finally, for an analysis without the rhetoric, try SCOTUSblog.

2.   Employers and Social Networking

Facebook, Linked In, and other social networking sites have exploded in popularity in recent years.  Are employers entitled to make employment decisions based upon information an employee posts on the internet outside of work time?  Should an employer allow or even encourage employees to use the social networking on the internet? 

For a detailed analysis of some of the issues surrounding social networking, I recommend the following:

• In "The Voice", a weekly publication of the Defense Research Institute, attorney Helen Adams writes about the employment implications of "Doocing", a new slang word to describe terminations based upon an employee's activities on the internet. 
• The Delaware Employment Law Blog discusses reasons employers should have a policy covering social networking sites.   
•   The National Law Journal reports that some management side lawyers have warned about the use of Linked In to make recommendations of employees, for fear it will be used against the employee in the event  of a termination.
• Locally, The Des Moines Register reported on the case of a police officer who was asked to resign because of photographs she posted on Myspace. 

Suffice it to say that social networking is not going away any time soon, and employers would be well advised to develop practices and policies for dealing with its impact on the workplace. 

3.  Al Franken Certified as the Winner of the Senate Race in Minnesota

This is imporant because Mr. Franken becomes the 60th Democratic Senator, giving the party a filibuster proof majority.   The Senate thus constituted is in a better position to pass EFCA, or the so-called "Employee Free Choice Act."  EFCA would have a substantial impact on labor law in the United States and present many challenges for employers.  I recommend the the blog at Laborpains.org to keep track of the latest developments on EFCA and other labor union matters.

4.  WARN Act

The WSJ Law Blog notes that litigation relating to layoffs is heating up, particularly under the heretofore seldom utilized WARN Act.  WARN requires employers under certain circumstances to provide at least 60 days notice of plant shutdowns or significant layoffs.   A violation means the employer has to pay wages to the laid off employees for the sixty period, plus other potential penalties.   However, the fact that the downturn occurred so swiftly and is protracted  may provide a defense to a WARN Act claims.

Stay Cool!

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On June 18 the United States Supreme Court issued its opinion in the case of Gross v. FBL Financial Services, an age discrimination case arising out of Iowa.   We first reported on the Gross case when the Court heard arguments a couple of months ago.   Since the decision was issued, many commentators have opined that the ruling was a "win" for employers because it will make it more difficult for employees to prove age bias. 

This case presents a fairly typical age discrimination claim: the plaintiff, Jack Gross, was a 54 old middle manager who reassigned as part of a reorganization and replaced by a younger employee he used to supervise.  Although his pay was not reduced, Gross nonetheless believed his new assignment was a demotion, and filed a lawsuit alleging age discrimination.  The case was tried in the U.S. District Court for the Southern District of Iowa.  The jury found Gross was a victim of age discrimination and awarded him $47,000 in damages.

The trial judge gave the jury a "mixed motive" instruction.  That means there was evidence the employment decision was motivated by both permissible and impermissible factors.   If the plaintiff proved that age was a motivating factor in the decision to demote him, the burden shifted to the employer to prove it would have taken the same action "regardless of age"; that is, the other factors that motivated the decision would have resulted in the same action despite the plaintiff's age.

FBL appealed the verdict to the U.S. Court of Appeals for the Eighth Circuit.  The Circuit Court decided that the trial judged erred in his instructions to the jury, and returned the case for a new trial.   The Eighth Circuit held the court should not have imposed upon FBL the burden of proving the "same decision", because Gross did not have "direct evidence" of discrimination.  "Direct evidence" generally means statements or actions by the relevant decision makers that tend to show in a direct way the decision maker is biased.  In Gross' case, he had no such direct evidence of discrimination, and so relied entirely upon circumstantial evidence.  In a case lacking direct evidence of discrimination, the Circuit court held that, the burden of proving age discrimination should have remained with the plaintiff, rather than shifting the burden to the employer to prove that factors other than age prevailed in the decision making process.

The issue presented to the Supreme Court was whether a plaintiff must present direct evidence of discrimination in order to obtain a mixed motive instruction in an age discrimination case.    However, Justice Thomas, writing for a 5-4 majority, did not ever address that particular question.  Rather, the Court concluded the text of the Age Discrimination in Employment Act (ADEA)  does not permit an employer to be liable based upon a "mixed motive".   In other words, it is never sufficient for a plaintiff to prove simply that age was a motivating factor; rather the plaintiff in an ADEA claim must prove the adverse action occurred "because of" age-it must be the motivating factor.   Moreover, the burden of proving discrimination always rests with the plaintiff; it does not shift to the employer.

 The case will now return to the U.S. District Court for the Southern District of Iowa for another trial.  This time, the jury will be instructed consistent with the standard articulated by the U.S. Supreme Court.    It may be more difficult for Jack Gross to prove his age was the motivating factor his his new assignment, rather than simply a motivating factor.  This one word change in the jury instruction, combined with the employer having no burden to prove the same decision defense, should make it easier for employers to prevail in age cases, particularly at trial, but perhaps also at the summary judgment stage.  Trial courts are likely to require plaintiffs to present both more and stronger proof of discrimination to clear the summary judgment hurdle.

What doe the future hold for ADEA cases?   It is possible Congress will step in an amend the ADEA to bring back the mixed motive instruction.   That is precisely what Congress has done in the past to remedy Court decisions it deemed unfair to employees.   As noted in prior posts, the present Congress and President have been particularly active in enacting new employment laws to protect employees, and thus it would not be surprising to see Congressional action in the wake of the Gross decision.  

We will continue to monitor developments in this area and keep you posted. 

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Much ink has been spilled over the last week analyzing the background and record of Judge Sonia Sotomayor, the nominee to replace Justice David Souter on the United States Supreme Court.    Given that the Supreme Court's docket has included a large number of employment related cases in recent years, a record which is likely to continue given the many changes to the federal employment laws under the Obama administration, how will a Justice Sotomayor potentially affect the jurisprudence in this area?

Judge Sotomayor has served as a judge on the U.S. Court of Appeals for the Second Circuit since 1998, and before that was a U.S. District Court judge in New York.   In one of her most notable cases as a trial court judge, Judge Sotomayor issued an injunction which prevented the Major League Baseball owners from using replacement players during the 1995 season.   

More recently, Judge Sotomayor was part of a three judge panel of the Second Circuit that issued a controversial opinion in the case of Ricci v. DeStefano ,a case which ultimately was appealed to the U.S Supreme Court.    Ricci involves a claim of reverse discrimination by a group of firefighters in New Haven, Connecticut, seventeen of whom are white and one who is Hispanic.    Based upon the results of written and oral promotional exams, only white and Hispanic candidates qualified for promotion to the position of Captain, and only white candidates qualified for promotion to Lieutenant.   Because no black candidate had a high enough score to be considered for the available captain and lieutenant positions, the City's Civil Service Board refused to certify the results of the exam, which prevented the promotions from occurring.  The trial court found that the City's refusal to allow the promotions did not constitute race discrimination, and granted summary judgment to the City (a thorough discussion of the decision is reported at Connecticut Employment Law Blog). 

The three judge panel on which Judge Sotomayor sat issued a short opinion affirming the trial court, but did not analyze any of the substantive issues.    Notably, another judge on the Second Circuit was critical of the panel for failing to address the important constitutional claims at issue in the case, stating that "this perfunctory disposition rests uneasily with the weighty issues presented by this appeal."    At least one critic has opined that Judge Sotomayor's apparent refusal to weigh in on this important issue of civil rights law does not make her a jurist worthy of serious consideration for the Supreme Court. 

Judge Sotomayor certainly has a compelling personal story, and she may have empathy, but it remains to be seen whether she will make positive contributions to the development of employment law.   Stay tuned.

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