In 1990 Congress enacted the Older Workers Benefit Protection Act (OWBPA) out of concern that employees terminated as part of a Reduction in Force (RIF) did not fully understand the rights they were giving up in exchange for the payment of severance benefits. Under OWBPA, a severance agreement entered into with a terminated employee over age 40 is not valid unless the agreement contains certain provisions. Among other things, the release is supposed to be written in easy to understand language rather than legal jargon; it must advise the employee to seek advice from an attorney; it must allows the employee adequate time to consider whether to sign the release (21 to 45 days, depending upon how many employees are part of the RIF); and, in the event the employee changes his mind after signing, the employee has seven days to revoke the agreement. If the release does not comply in every respect, it is not valid, and an employee who signed and accepted the severance payments may still sue for age discrimination under the federal Age Discrimination is Employment Act (ADEA). An employee who sues may not even have to return the money received as part of the severance agreement.
Unfortunately, the UI law school is learning this maxim the hard way. After securing a defense verdict last February in an age discrimination lawsuit an aspiring law professor filed, the same person has sued again. This time, Donald Dobkin alleges the UI refused to hire him because of his age and because of his prior lawsuit. Adding insult to injury, the second suit is based upon information the UI disclosed in discovery during the first lawsuit.
Dobkin filed his first lawsuit in 2009. Despite his pending claim, he again applied to the UI during the 2010 hiring cycle, and documents concerning the hiring decisions in 2010 were part of the discovery in the 2009 case. According to Dobkin’s attorney, the faculty committee interviewed a candidate in 2010 that scored 40 points below Dobkin on the law school’s preliminary screening tool that it uses to rank candidates. In the 2009 case, however, the UI claimed that Dobkin was not interviewed because the law school school interviews only the best candidates as shown by the preliminary screening. Whoops.
There was also evidence that a member of the hiring committee considered in deciding not to interview Dobkin that he had a pending discrimination case against the law school. Whoops again.
While a lawsuit contains only allegations, it should present a teachable moment to the professors on the faculty hiring committee.
First, it is important to remember that the stated reason you give for an adverse employment decision must be the real reason, and not appear to be a reason made up after the fact to justify the decision.
Second, when relying upon screening tools, it is important to apply them consistently. If there is a deviation from a standard practice in the case of a particular candidate, there should be a stated and documented rationale for the deviation.
Lastly, employers must remember that a pending discrimination claim creates an genuine risk of a subsequent retaliation complaint if the pending claims plays a role in an adverse hiring decision. Decision makers must remember that everything they write or put in a e-mail that refers to the pending claim, even if innocent or innocuous, is potential evidence in the next case. Even if you win the first case, it does not mean you are forever out of the woods.
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.
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…
Age discrimination cases tried in the Southern District of Iowa continue to generate controversy over how juries should be instructed about the plaintiff’s burden of proof. First it was Gross v. FBL Financial Services, Inc., tried in the Southern District and ultimately decided by the U.S. Supreme Court in June 2009. Then it was the Eighth Circuit’s remand decision in Gross, and now a third case from the Eighth Circuit (via the Southern District of Iowa), Newberry v. Burlington Basket Co., issued September 28, 2010.
Even though Newberry was tried in federal court, the issue involved the proper jury instructions for age discrimination claims under the Iowa Civil Rights Act (ICRA). The plaintiff alleged her termination violated both the federal Age Discrimination in Employment Act (ADEA) as well as the ICRA. As is typical in cases alleging violations of both federal and state law, the federal court assumed jurisdiction over the state law claims as well as the federal claims.
The trial court in Newberry instructed the jury the plaintiff had the burden to prove her age was “a determining factor” in the employer’s decision to terminate her. After a verdict for the plaintiff, the employer appealed on the ground that the instruction was not consistent with the new standard of proof the U.S. Supreme Court articulated in Gross (coincidentally, the verdict was returned the day the Gross decision was issued). In Gross, the Court held that a plaintiff alleging discrimination under the ADEA must prove that age was the "but-for" reason for the employment action, a more rigorous test than "a determining factor."
Despite the erroneous instruction under the ADEA, the Eighth Circuit affirmed the jury verdict because, the court concluded, the "a determining factor" instruction was proper under the ICRA. The Circuit Court relied upon the Iowa Supreme Court’s decision in DeBoom v. Raining Rose, which expressly adopted the Eighth Circuit’s model jury instruction for sex discrimination claims under Title VII for such claims arising under the ICRA. The model jury instruction provides that liability is imposed if sex was "a motivating factor" in the employment decision ("a motivating factor" was deemed to be substantially equivalent to "a determining factor"). Because prohibitions on age and sex discrimination are both contained in the ICRA (unlike federal law, where prohibitions against age and sex discrimination are contained in two different laws), the court held that DeBoom also controlled the instructions for an age claim under ICRA.
Notably, the court in Newberry was presented with what seemed to be precisely the same question it was presented with in the Gross remand, but reached a different result. The plaintiff is Gross also asked the court to affirm his jury verdict because the "a motivating factor" instruction complied with the ICRA, even though it was error under the ADEA based upon the Supreme Court’s ruling. However, Judge Colloton, who also wrote the opinion in Newberry, rejected the plaintiff’s request and granted a new trial.
Why the different result? It appears the difference lies in the fact that the Gross jury was also instructed on a version of the "same decision" defense. The "same decision" defense requires the employer to prove it would have made the "same decision" even with the presence of unlawful discrimination. Before the U.S. Supreme Court’s decision in Gross, this was part of the so-called "mixed motive" instruction. Newberry, on the other hand, was tried and instructed as a "pretext" case, so no burden was placed upon the employer to prove the same decision defense.
Unfortunately, Newberry raises more questions than it provides answers. One certainty lawyers can take from Newberry is that, so long as the case is a "pretext" case and is being tried in federal court, "a motivating factor" is the proper instruction under the ICRA for any type of protected characteristic. But, many other questions remain. What happens in a "mixed motives" case? Does the same decision defense apply, as Iowa Appellate court precedent seems to suggest? Or, like age claims under the ADEA, is the same decision defense no longer available? Moreover, the different standards that apply to age claims under the ADEA and ICRA will make it very difficult to instruct the jury if both claims are presented.
The source of the confusion is that, until now, courts have always treated claims under the ICRA and federal law as if they were identical. While that made it easier to try cases and instruct juries, it overlooks many important differences in statutory language between the ICRA and its federal counterparts. For example, unlike Title VII, the ICRA contains no same decision defense. Moreover, the ICRA, like the ADEA, prohibits discrimination "because of" a protected characteristic, which seems to be a higher burden that the "a motivating factor" jury instruction the Iowa Supreme Court has approved. Judge Colloton alluded to this inconsistency in the Newberry opinion, but noted he was bound to apply the Iowa Supreme Court’s then existing interpretation of state law. Perhaps these recent cases will provide an opportunity for the Iowa Supreme Court to look more closely at the statutory language of the ICRA and develop jury instructions that are more consistent with what the law actually says. In the meantime, there is bound to be further litigation on these issues in the years to come.
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.
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.
More signs this week that the federal government is ramping up enforcement of employment laws. The Department of Justice Civil Rights Division is seeking a $22 million budget increase for 2010, and is seeking to hire 50 new attorneys. Law Memo Employment Law Blog reports that the EEOC has been very active recently in filing lawsuits. The Agency filed 32 lawsuits against employers during one seven day period in September. Add to that 13 new lawsuits filed or announced on September 29 alone. The Department of Labor is in the process of hiring 250 new investigators to look for wage and hour violations, particularly in the areas of overtime requirements, minimum wage, and employee breaks. If you have not done so already, now would be a good time to conduct an audit of your employment practices and procedures.
This post on HR Daily Advisor offers practical advice on how to avoid retaliation claims. The first rule: don’t let managers or supervisors take adverse action against employees who have complained without first checking with HR.
Washington DC Employment Law Update reports that Senate Judiciary Committee Chairman Patrick Leahy (D, VT) announced his committee is going to hold a hearing to investigate whether the Supreme Court has been misinterpreting laws designed to protect workers from discrimination. On the witness list, Jack Gross, the plaintiff from Des Moines in the case Gross v. FBL Financial Services, Inc. (See our related post on this subject here, as well as this one from Workplace Prof Blog). Gross held that an age discrimination plaintiff must prove that age was the "but-for" reason for the adverse employment action; in other words, the employment action would not have been taken "but-for" the employee’s age. Before Gross, most courts required the plaintiff to prove only that age was "a motivating factor". Amending the ADEA to lower the burden of proof for employees may be added to Congress’ list of pending employment legislation.
Are lawyers giving bad advice about the impact of new technology in the workplace? In this post on the Fistful of Talent blog, Kris Dunn complains that lawyers too often advise clients only about the perils of social networking and other cutting edge communication tools. She contends this type of legal advice only scares HR professionals away from modern technology, rather than empowering them to use it effectively. Attorney Anthony Zaller of California Employment Law Report proposes this solution: if you want practical legal advice about social networking technology, make sure your employment lawyer uses Facebook, LinkedIn or Twitter, or at least uses a Blackberry or iPhone. I’m not sure a lawyer’s own use of social networking technology will allow them to give better advice on the subject; but, the point is well taken that clients need solutions to the legal issues this technology presents, not merely warnings about the inevitable lawsuits.
Next Friday (October 9) I will be presenting a talk entitled "the Brave New World of Employment Law: What’s New in 2009 and What to Expect in the Year Ahead" at the 3rd Annual American Corporate Counsel Association (Iowa Chapter) Annual Seminar in Iowa City. This has become a marquee event for corporate counsel in Iowa, and I look forward to seeing many of you there.
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.
Conventional wisdom in the world of layoffs and reductions in force has held that older workers are more at risk for layoff because they generally earn higher salaries than their younger colleagues. However, in this downturn, employers’ concern about the high cost of age bias claims may have put the jobs of younger workers more at risk. According to recent Department of Labor figures, the unemployment rate among the 24-35 age group was 9.7% in April 2009, compared with a rate of 6.4% for workers over age 55. One year ago, those figures were 5.1% and 3.1% respectively.
The federal Age Discrimination in Employment Act (ADEA) prohibits an employer from treating employees over the age of forty less favorably than younger employees because of their age. To effectively defend against a claim of age bias, an employer making a lay off decision must rely upon non-age related criteria. Using compensation as a factor is generally not advisable because pay selecting higher paid employees for lay off will generally result in more workers over forty being in the lay off pool. For better or for worse, it appears many employers have concluded it is easier to defend an age bias claim when the last employees hired are the first ones who are let go as part of a reduction in force.
Age bias claims are little more complicated under Iowa law. The Iowa Civil Rights Act protects any employee from age discrimination who is 18 or older. Therefore, under Iowa law, employers must be especially vigilant to avoid using factors that are related to age when making lay off decisions–whether the age is younger or older.
According to a recent Wall Street Journal Article ("With Jobs Scarce, Age Becomes an Issue"), older employees might also be favored because of personal circumstances that are not likely to affect as many younger, single employees, such as children in college or a spouse’s health problems. Another potential factor favoring older employees, as discussed in a a recent post here, is that the EEOC has recently issued guidelines for avoiding discrimination against employees who are caregivers.
To avoid age bias claims, or at least make them more defensible, employers may want to consider some of the following criteria when identifying employees for lay off:
1. Use as many objective criteria as possible when evaluating employees;
2. Avoid using salary or benefit levels as a criteria; some courts have held that the use of such criteria creates an inference of age discrimination;
3. If performance criteria are used, determine whether existing performance data is current and relevant; consider risks and benefits of updating performance evaluations (e.g., a sudden downward change in performance might be viewed as a pretext for age discrimination)
4. If performance reviews are updated prior to the RIF, it is better if the reviewing manager has little or no knowledge concerning the RIF;
5. Consider who will make the decisions based upon the established criteria;
6. Stick to the criteria;
7. Be aware of the presence in the RIF group of “whistle-blowers” or persons about to vest pension or retiree health benefits;
8. Consider obligations under collective bargaining agreement or seniority system;
9. Consider whether “bumping” will be permitted, and if so, how it will be administered.