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.

This week we are trying out a new feature on our Blog.  A weekly round-up of important, interesting, practical, or funny employment law information and news posted in blogs or otherwise on the world wide web during the past week.  Please contact us with any information or feedback.  Here we go for the first edition:

The Des Moines Register reports that key information was withheld from the Iowa Civil Rights Commission in connection with its investigation of racial bias by Iowa Workforce Development.    The investigation is part of a class action lawsuit alleging the Agency engaged in a pattern of failing to hire black applicants over a number of year.

New ADA Regulations coming soon.   The Washington Labor & Employment Wire notes that the EEOC voted to publish a Notice of Proposed Rule making.  Once the proposed regulations are published, there is a 60 day period for comments from the public.   The EEOC press release on the subject is here.    The EEOC has also published a Q&A document concerning the proposed rule making.

 EFCA Report discusses the many high profile politicians that have addressed the AFL-CIO constitutional convention this week.  Senator Specter (D-Pa) discussed a revised EFCA that would eliminate the controversial "card-check" feature of the bill.  However, the revised EFCA would still contain the binding arbitration provision and enhanced penalties for unfair labor practices that business interests strongly oppose.   In addition, while it eliminated card check, the proposed compromise bill shortens dramatically the time period between a petition for election and the actual election, thus reducing the time an employer would have to mount a campaign opposing the union.

Most sexual harassment cases involve female employees complaining about males, but occasionally it is the other way around.  The EEOC announced it is pursuing claims against a South Carolina Time Share resort because of alleged sexual harassment by a female supervisor of a male subordinate.  

For another example of the impact of internet social media on workplace litigation, see this post at the Delaware Employment Law Blog.

Ross Runkel’s LawMemo Employment Law Blog contains a link to a 79 page report issued by the U.S. Chamber of Commerce concerning what changes to expect the Obama NLRB. 

Finally, in light of the recent  public outbursts, tantrums, or otherwise offensive remarks Serena Williams, Rep. Joe Wilson (R., S.C.), rapper Kayne West, and other public figures, Work Matters Blog contains a thoughtful post about the art of the apology and how it can contribute to more civil behavior both in and out of the workplace. 

This post in HR Observations (Hat tip: Ohio Employer’s Law Blog) explores whether obesity could be the next characteristic to become protected under the anti-discrimination laws.   A group called the "Obesity Action Coalition" complains that discrimination against obese people is widespread.  Employer concern about rising costs associated with employee health coverage, workers’ compensation costs,  and an emphasis on employee wellness may also contribute to the perception among the overweight that they have been marginalized in the workplace.

Although obesity is not officially a protected class under the federal discrimination laws or Iowa Civil Rights Act, employers are wise to be alert to weight related conditions that might lead to discrimination claims.   Health problems associated with obesity may protect an employee under the recent amendments to the ADA.   To the extent that gender or age contribute to weight related health conditions, policies or practices that favor fit and healthy employees may adversely impact one gender or age group more than others.   Even an employer wellness program designed to combat obesity could potentially discriminate against those who do not benefit from it.    It remains to be seen whether the EEOC will address obesity in the revised ADA regulations, and whether the Courts are open to expansive interpretations that will, in effect, result in weight becoming a new protected class.

 

 

 

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.

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.

 

Late August means it’s time for the Iowa State Fair, one of the Top 100 Events in North America, home of corn dogs, the butter cow, and over one million visitors.  One of the interesting side-shows at this year’s fair involved the Des Moines Regional Transit Authority (DART), an atheist organization, and a Christian bus driver.  It all started when an organization billing itself as the "Iowa Atheists and Freethinkers" purchased advertising space on the side of buses to coincide with the Fair.  DART’s advertising manager agreed to run the ads, but was later overruled by the Board of Directors, which was concerned about offending bus riders.   Even the Governor weighed in on the controversy.  DART changed its mind and decided to run the ads after the Iowa Civil Liberties Union promised to investigate whether the atheists’ free speech rights had been violated.

Unfortunately for DART, the controversy was far from over.  When the ads were published, one of DART’s Christian bus drivers refused to drive the bus assigned to her because it contained the atheists’ ad, which offended her because of her religious beliefs.   DART promptly suspended the driver, and then gave her three options: 1) returning to her former position with the understanding that a refusal to drive whatever bus was assigned would result in termination; 2) transferring to a para-transit route, where buses do not contain as much advertising; 3) resigning her position.

As of this publication, there is no word on what the driver decided to do.   Regardless, this episode contains a lesson for Iowa employers: be careful when imposing discipline when it involves an employee’s exercise of religion.   Employees have the right to a reasonable accommodation for their sincerely held religious beliefs.  That does not mean an employer is obligated to do whatever the employee demands, but managers should listen to the employee’s concern, and make a genuine inquiry whether there is some reasonable accommodation that will permit the employee to practice her religion while at the same time resulting in minimal disruption of the business.  For more on this subject, see this post from a couple of weeks ago: Update: Religious Discrimination.

Employee Availability After Hours Comes at a Price

The Wall Street Journal reports on a potential boom in lawsuits relating to unpaid overtime.  The culprit–company issued smart phones combined with lean workforces requiring fewer employees who handle more responsibility.   With new technology, employees are capable, and often expected, to handle work related communication anytime and anywhere, whether they are off the clock, sick, or on vacation.   The article reports on two recently filed lawsuits claiming unpaid overtime under the Fair Labor Standards Act (FLSA) .  In one case, retail employees of T-Mobile USA claim they were required to use company issued smart phones to respond to messages and customer complaints after hours.  In the second case, a maintenance employee for CB Richard Ellis alleges he was not paid for after hours time spent sending and receiving messages on his cell phone.

Under the FLSA, whether an employee is who is required to carry an employer issued mobile phone, pager, or smart phone after hours remains on the clock depends upon many factors, including the nature of the job and how frequently the employee actually has to use the device for work related purposes.   Depending upon the number of employees involved, failure to comply with FLSA’s overtime requirements can result in substantial financial liability.  To avoid running afoul of these overtime requirements, prudent employers are urged to develop clear practices concerning employee’s use of company issued technology.

Company Officers May Be Held Personally Liable for Unpaid Wages

A bankrupt company does not necessarily relieve corporate officers of liability for unpaid wages under FLSA.  So held the U.S. Court of Appeals for the Ninth Circuit in Boucher v. Shaw, decided on July 27, 2009.   In Boucher, a group of former employees of the bankrupt Castaways Hotel, Casino, and Bowling Center in Las Vegas sued the CEO, Chief Financial Officer, and manager in charge of labor relations, claiming the individual officers and managers were liable for their unpaid wages.  Rather than getting in line with other creditors in the bankruptcy proceedings, the plaintiffs decided to pursue the officers individually.

The Court noted that the definition of "employer" under FLSA is not limited by the common law understanding of the term, but "is to be given an expansive interpretation in order to effect FLSA’s broad remedial purposes".    The test, according to the Court, is whether the individual exercises "control over the nature and structure of the employment relationship", or "economic control" over the relationship.   In this case, the Court noted that the CEO held 70% of the company shares, the manager in charge of labor relations owned 30%, and the CFO had responsibility for cash management.  Under these facts, the Court held the plaintiff’s stated a claim against the individuals under FLSA.   The Court rejected the defendants’ argument that any claims for unpaid wages by former employees belonged in the bankruptcy court. 

While there is no similar precedent in the Eighth Circuit, the Boucher case nonetheless should put company officials on notice that wage claims may exist against them individually, even after the corporation is bankrupt or otherwise defunct. 

 

 

A post in today’s HR Daily Advisor poses the question whether an employer is better or worse off using internet social networking sites as a means of performing background checks on  prospective employees.    On one hand, the internet is an inexpensive and easy way of getting information about a person’s background and character.  Given the risks of terminating employees, most companies would rather have such information before a person is hired in the first place.   Moreover, in the event the employee commits some act leading to a lawsuit against the company, the failure to utilize these easy sources of information could subject an employer to a claim of negligent hire.

On the other hand, there may be information about a person on the internet that is either not directly related to the job or is impermissible to consider when making a hiring decision.  An employer might learn information about the employee’s age, religion, union affiliation, or other activity that cannot be considered.   Moreover, there is no guarantee the information on the internet is completely accurate. Finally, the employee’s right to privacy should be considered.

Whether the internet is used in the first place should be based upon the importance of having the information about the prospective employee.   Once the decision has been made, the employer should be cautious to rely only upon permissible information, and utilize sources where there is not a high expectation of privacy. 

For other posts on the impact of social networking on employers, see the following:

Linked In and Lawsuits-Should You Be Concerned?

Text Harassment?

Employers and Social Networking–Contained in Mid Summer Employment Law Update

Are Social NetWorking Sites Private?

 

 

John Irving, former general counsel of the National Labor Relations Board, published a thoughtful opinion piece last week entitled "Don’t Employer’s Deserve Free Speech?" .  The article addresses  an important, but less well publicized, aspect of the proposed Employee Free Choice Act.  That is, stiff penalties and liquidated damages for employers found guilty of unfair labor practices.   

Mr. Irving is concerned about the fine and often vague line between an employer’s expression of an opinion or argument opposing a union, which is permitted under the law, and the threat of reprisal or promise of benefit, which is not protected.   Whether or not a particular statement, for example–"unions cause people to lose jobs"– is a protected statement of opinion or an unlawful threat, may depend upon who is sitting on the National Labor Relations Board at the time the case is decided.   The problem with the proposed EFCA, according to Irving, is that the penalties for being wrong have dramatically increased.  Section 4 of the proposed law, entitled "Strengthening Enforcement", permits fines up to $20,000 for each violation, permits the recovery of liquidated damages, and makes it easier for the General Counsel to obtain an injunction ordering an employer to cease and desist making certain statements.   Small employers in particular may be silent rather than run the risk of punitive fines.

 

 

Two recent cases out of the U.S. Court of Appeals for the Eighth Circuit (which includes Iowa, Nebraska, Minnesota, Missouri, Arkansas, and North and South Dakota) serve as important reminders that employers should be alert to potential claims of religious discrimination and religion based harassment occurring in their work places:

  • On July 31, the EEOC announced that AT&T, Inc. paid $1.3 million to satisfy a judgment entered in favor of two employees who were terminated after they took time off work to attend an annual conference of Jehovah’s Witnesses.    The judgment was entered after a jury trial in the U.S. District Court for the Eastern District of Arkansas, and was affirmed by the Eighth Circuit Court of Appeals. 
  • On July 29, a panel of Eighth Circuit reversed a trial judge’s ruling granting summary judgment to an employer in a religious harassment case.   The plaintiff in Winspear v. Community Development, Inc., alleged he was subject to a religiously based hostile work environment by his boss’ wife, who also worked for the company as a receptionist.   The Court of Appeals held the trial judge failed to consider whether a hostile work environment was created by the wife’s repeated comments that plaintiff’s deceased brother was suffering in Hell, and that plaintiff needed to find God to avoid the same fate.   

Claims based upon an employee’s religion are not as common as those based upon other protected characteristics, such as sex, race, age, or disability.  Nonetheless, EEOC statistics reflect an increasing number of charges alleging religious discrimination or harassment.  In response to this trend, the EEOC published the following documents to assist employers in evaluating their rights and obligations under Title VII’s prohibition against discrimination on the basis of religion:

Some important takeaways from these documents include:

  • Employers should have a well publicized and consistently applied anti-harassment policy that specifically includes harassment on the basis of religion or religious practice, including a mechanism for making complaints, allowing for investigations, and preventing retaliation;
  • Employers should permit non-disruptive and non-harassing religious expression among employees to the same extent other types of personal expression is allowed;
  • Supervisors should be permitted to engage in religious expression, but they should avoid expressing themselves in a manner that a subordinate could perceive as coercive, even if not intended that way;
  • Polices and practices concerning the reasonable accommodation of employee’s religious practices should be developed and communicated to employees.  Such practices might cover scheduling, breaks for prayer, dress, and grooming; 
  • When considering whether an employee’s requested accommodation causes undue hardship, or whether a particular religious expression is disruptive, employers should gauge the actual hardship or disruption that will result, and not speculate about what may occur.   Managers should be flexible in exploring alternatives that will permit the employee’s religious practice while also allowing the employer to operate its business.

Image: Joan of Arc (from Flickr)