Publisher’s Note:  Today’s guest post is provided by Brandon Underwood, one of my colleagues at Fredrikson & Byron, P.A.   Hopefully Brandon will catch the blogging bug and continue to post….

The Americans with Disabilities Act (ADA) forbids medical examinations and inquiries in employment.  But not all of them.  Instead, an examination or inquiry’s permissibility, and scope, turns primarily on when it occurs.  Too early, and the examination violates the ADA.  Too late, and it may as well.

Continue Reading Court Finds Employer’s Inquiry about Health Conditions of New Employees Absorbed in Merger Complies with ADA

In the last two sessions, the Iowa legislature has amended Iowa’s private sector drug testing law to give employers additional tools to combat employee substance abuse.   In last year’s session, the legislature amended the law to allow employers to use hair follicle testing for pre-employment drug screens.  Prior to the amendment, the law allowed only testing using urine, blood, or oral fluid.

In the 2018 session, the legislature again amended the law to lower the threshold at which an employer may take action based upon an employee’s positive alcohol test.    Effective July 1, an employer may take action if the employee has a blood alcohol concentration of at least .02% .  The existing standard is .04%.

Continue Reading Iowa Legislature Toughens Drug Testing Law, But Legal Risks for Employers Remain

In the recent case of Jahnke v. Deere & Co. (May 18, 2018), the Iowa Supreme Court ruled that a Deere employee who was repatriated to the United States as discipline for engaging in sexual misconduct while on assignment at a Deere factory in China did not state a claim for discrimination under the Iowa Civil Rights Act (ICRA)

Jahnke sued Deere in Iowa State Court, alleging the decision to repatriate him from China to a lower paying job in Waterloo, Iowa was based on his age, sex, and national origin.    While on assignment as the manager of a Deere factory in China, Jahnke engaged in sexual relationships with two younger, Chinese women who were in his “span of control”, which violated Deere’s policies.   Jahnke claimed Deere violated the Iowa Civil Rights Act because his discipline was harsher than that imposed on the female employees with whom he had the relationships.

Continue Reading Iowa Civil Rights Act Protections Do Not Apply to Ex-Pat Employee

It is a truism that employers prefer to win discrimination cases on summary judgment rather than go to trial.    In most cases, winning on summary judgment means convincing the judge there is not enough evidence that would allow the plaintiff to prove “pretext.”   (Pretext: “a purpose or motive alleged or an appearance assumed in order to cloak the real intention or state of affairs.” Merriam-Webster Online Dictionary).    With pretext, the plaintiff goes to trial; without pretext, the plaintiff goes home and the employer wins.

Continue Reading Recent Ruling from Eighth Circuit Shows an Employer’s Shifting Reasons for Decision May Not Be Evidence of Pretext

As we have written here many times, summary judgment is an important tool for defendants in employment discrimination cases.   Studies have shown that in federal court, summary judgment is granted to defendants in employment discrimination cases more than in any other type of case.  These studies confirm the experience of most employment lawyers who try cases, whether they represent mostly plaintiffs or mostly defendants.

Continue Reading Summary Judgement in Employment Discrimination Cases May Be Making a Comeback in Iowa State Court

Employers that accommodate employees’ temporary disabilities should consider extending the practice to nursing mothers returning to work following maternity leave.   That’s the lesson of a recent opinion from the U.S. Court of Appeals for the Eleventh Circuit  (Hicks v. City of Tuscaloosa, Alabama, 11th Cir., 9/7/2017)    In Hicks, a City police department’s insistence that an officer return to the beat rather than to allowing her work a temporary desk job resulted in a substantial plaintiff verdict.

Continue Reading Court Affirms Six-Figure Verdict to Nursing Mother Who Quit Because of Employer’s Failure to Provide Suitable Breastfeeding Accommodation

On August 31, 2017, Judge Amos Mazzant in the Eastern District of Texas issued a final ruling invalidating the Obama Department of Labor’s increase in the minimum salary for exempt employees under the Fair Labor Standards Act.  This is the same judge that issued the preliminary injunction on November 22, 2016 that prevented the rule from going into effect as scheduled on December 1, 2016.  Even though the DOL appealed the preliminary injunction to the Fifth Circuit, the Court of Appeals did not stay the proceedings in the trial court while the appeal was pending.  Thus, Judge Mazzant issued his final ruling before the Court of Appeals had the opportunity to weigh in on the validity of his preliminary injunction.

You may recall the Trump DOL took the surprising position on appeal that Judge Mazzant erred in issuing the preliminary injunction, and requested that it be reversed.  If the DOL had succeeded it obtaining the relief it requested, the new overtime rules could have gone into effect, which would have caused all kinds of havoc.  Fortunately, on September 5, after Judge Mazzant’s ruling, the Department withdrew its appeal of the preliminary injunction.  At least for the moment, the uncertainty surrounding the status of the minimum salary has been settled.    The fanfare with which the DOL announced the rule last year, the thousands of lawyers hours spent educating our clients about it, and the dread with which employers anticipated its effective date, ended with a relative whimper.

For now, the minimum salary an employer must pay to exempt employees remains $455 per week.   But, it may not stay that way for very long.   The Department of Labor recently requested comments from the public whether it should raise the minimum salary to something more than $455 per week, but less than $913 per week in the now invalid rule.  As of today, the DOL has received over 138,000 comments in response to its request, so there is obviously significant interest in further changes.  The comment period remains open until September 25, so you still have the chance to weigh in if you haven’t already.

All the controversy about the new overtime rule raised an important question that warrants more attention:  that is, should there even be a minimum salary as part of the test for determining whether an employee is exempt from overtime?    In the ruling on the preliminary injunction, Judge Mazzant questioned whether the DOL has the legal authority to establish a salary basis test.   He reasoned the FLSA itself defines Executive, Administrative, and Professional exemptions only with respect to duties, and says nothing about the employee’s salary.  Therefore, he ruled, Congress did not intend that the amount of an employee’s salary be a factor in determining whether the employee was exempt; only the duties are relevant.   By including a salary basis test in addition to a duties test, Judge Mazzant concluded, at least preliminarily, that the DOL likely exceeded its statutory authority.

In his final ruling, Judge Mazzant again cited Congress’ intent that only duties matter.  But, he backed off his preliminary ruling that the DOL lacked legal authority to use salary test at all.  Instead, he concluded merely that the minimum salary in the Obama era rule was too high because it likely would have the effect in many cases of eclipsing the duties test, essentially rendering the duties irrelevant.   In other words, the salary was so high that many employees who satisfied the duties test for one of the executive, administrative, or professional exemptions would still be classified as non-exempt because their salary was less than $913 per week.    So, in the end, the concept of some minimum salary apparently satisfies Congress’ intent, but the amount must still pass Judge Mazzant’s (or some other judge’s) sensibilities to be valid.

Notably, the reason the Department requested the Court of Appeals to reverse Judge Mazzant’s preliminary injunction was this very issue: the DOL did not want to lose the right to establish a minimum salary as part of the test for determining who is an exempt employee.   It appears Judge Mazzant read the Department’s brief and perhaps decided to back off of what seemed to be the logical conclusion of his preliminary injunction ruling.   On the other hand, it appears the Department may still be open to an exemption test that does not include a minimum salary.   One of the questions (No. 7) on which the DOL is seeking public comment is whether an exemption test that relies solely on duties without regard to the employee’s salary be preferable to the current test, and if so, what elements should be included in such a test.

What do you think?  Would exempt employees be harmed if there was no minimum salary as part of the test for determining who is exempt from overtime?   If a minimum salary is essential, what should it be, who should make the determination, and by what criteria?   Is it appropriate that federal judges are the final arbiter of what is or is not an acceptable minimum salary?  Hopefully the Department will be thoughtful in its considerations of these important questions.  Stay tuned…

It’s been a difficult three months for central Iowa employers.   May, June, and July each saw a million dollar plus plaintiff verdict in an employment discrimination lawsuit.    One such verdict in these parts is notable, but three in three months is unheard of until now.  Back in January, we noticed juries in other parts of the country had returned some substantial plaintiff verdicts, and wondered then whether more and larger plaintiff verdicts were becoming a trend.     It remains uncertain whether the recent Iowa verdicts are evidence of a continuing pattern, or if it was simply a coincidence these particular cases were tried in three consecutive months.   But, whether this is the new normal or not, these types of verdicts have a significant impact on how lawyers and clients perceive the risk of employment claims.  Perception effectively becomes reality when clients settle cases that otherwise might be tried, or pay more than they otherwise would, to avoid the risk of being a victim of a headline grabbing and ruinous jury verdict.

The first verdict was issued May 4.   The plaintiff was a former athletic administrator at the University of Iowa who alleged she was discriminated against on the basis of sex and sexual orientation, and was subject to retaliation when she was reassigned to a position outside the athletic department and then had her position eliminated.   Verdict:  $1.4 million, including past and future emotional distress of $1.056 million.

The second was returned June 18.   The plaintiff was the former communications director for the Iowa Republican Senate Caucus who alleged she was subject to years of sexual harassment and then terminated when she complained about it.  Verdict: $2.195 million, which consisted entirely of damages for past and future emotional distress.

The third was just a couple of weeks ago, on July 25.    The plaintiff was a 40 year employee of the Grinnell Regional Medical Center who claimed he was terminated because of age and disability.  Verdict:  $4.5 million, including $4.28 million in emotional distress.

What is most eye-opening about these verdicts is not necessarily the total dollar amount, but that the lion’s share of the damages awarded in all three was because of emotional distress.    In the suit against the Republican Caucus, there were no economic damages awarded at all; the verdict consisted entirely of damage for past and future emotional distress.   In the other two cases, the ratio of emotional distress to back pay was 3 to 1 (U of I Athletic Dept.) and 19 to 1 (Grinnell Medical Center).

What should we make of these stunning awards for emotional distress?    The value of discrimination cases used to be driven by hard numbers like lost wages or back pay.   That certainly made it easier to assess the risk of employment claims.  Back pay or other economic damage is fairly objective and calculable.  Emotional distress, on the other hand, is almost entirely subjective and quite unpredictable.   It is possible that increased emotional distress verdicts simply reflect the modern cultural attitude of greater sensitivity to emotional and mental distress resulting from traumatic events in life, and a willingness to put a dollar value on it.

Unfortunately, the knee jerk reaction among many is to panic and think runaway verdicts are more common than they really are.   We lawyers often contribute to the problem by using these big verdicts as examples of “what might happen to you” if you don’t follow the policies and practices we recommend in our client seminars.   Not that the standard advice is bad, but we should also not ignore the data that shows most employment discrimination cases that are tried result in an employer win.

The response I propose to these out-sized verdicts seems like common sense but is not very common:  employers should try more and settle fewer employment lawsuits.   So few cases are tried nowadays, we really don’t have a benchmark on how to reliably value the claims.   Instead, we look to the few outliers that are being tried and those verdicts are used to place settlement values on future cases.   Is this approach risky?  Sure.  Would you lose some cases?  Naturally.  Would it be expensive? Of course, at least in the short term.   But, over time, the defense bar would get better at responding to and countering claims of emotional damage.    Perhaps we would find out whether most of these cases are defensible like we think they are.    If we are right, it just might discourage the filing of cases just because the plaintiff expects to get a settlement.

 

This time last year many employers were anxious about the new Department of Labor Rule that raised the minimum salary for exempt employees to $913 per week, more than double the existing minimum of $455.   The Rule was scheduled to become effective December 1, 2016.   Then, in a surprising stroke of fortune, on November 22, a federal district court in Texas issued a nationwide preliminary injunction barring the new rule from going into effect.

On December 1, 2016, the then Obama administration Department of Labor appealed the district court’s ruling.   With a new administration arriving January 20, 2017, and an anticipated new Secretary of Labor, the DOL asked the court of appeals to delay the briefing on the appeal.    I and many others expected at that time that the new rule was effectively dead.   Either the DOL would withdraw the appeal, the new Congress would override it, or the Department would take action to rescind the rule.

As it has turned out, none of those three things have happened, at least not yet.   In the meantime, the Department chose not to request further extensions of the briefing schedule beyond the June 30 deadline the court of appeals had established.

Then, in yet another surprise twist in this saga, in its brief filed on June 30, the Department asked the court to reverse the judgment of the district court.   You read that correctly.   The Trump DOL seemingly took the same position on the preliminary injunction you would have expected the Obama DOL to take.   What gives?

It seems the DOL’s position is driven by a concern about the legal basis of the district court’s injunction.   In granting the preliminary injunction, the district court ruled the DOL did not have the legal authority to establish a salary basis test.   The court reasoned section 213(a)(1) of the FLSA defines Executive, Administrative, and Professional exemptions only with respect to duties; the law says nothing about a minimum salary.   As such, the Department exceeded its statutory authority in making a minimum salary a part of the test for determining whether an employee is exempt.  If the injunction stays in place based upon the district court’s reasoning, it will set a precedent the DOL cannot set a salary test at all, regardless of the amount of the salary.

The new Secretary of Labor obviously wants to retain the authority to set a minimum salary for exempt employees, but would prefer a different amount to the $913 per week proposed in the new rule.  The Department has, in fact, commenced the process to revise the overtime rule to set the minimum salary at a different level.   The DOL requested the court not to address the validity of the $913 per week salary in its ruling.

So, what happens if the court of appeals actually grants the relief the Department requested?  In a typical case, reversing the district court’s grant of a preliminary injunction means the injunction is vacated.   But, what if that happens before the Department has issued a new rule modifying the salary basis test?  The agency has not withdrawn the new rule that was scheduled to go into effect December 1, 2016, so in theory the rules goes into effect if the injunction goes away.    If that actually were to happen, another complicating factor is the effective date of the rule.  Would it be effective retroactive to December 1, 2016, or would it take effect on the date the injunction was vacated?  Retroactive effect would be devastating to those employers that relied on the injunction to avoid implementing changes to salaries or re-classifying employees as non-exempt.   An effective date that is only prospective would not be much better, because employers are not expecting it and will have little if any notice.  Even if the Department does not take action to enforce the rule, there are certainly plenty of plaintiff side-lawyers willing to bring private wage and hour suits.

It’s possible the court of appeals could find other grounds to leave the injunction in place, or delay the effect of its ruling pending the DOL’s new rule making efforts.  But there’s no guarantee that will happen.    Given the potentially high stakes impact of the DOL’s approach on employers, it is surprising hardly anyone is talking about it.   Attorney Jim Coleman published an excellent analysis of these issues, but otherwise I have not seen much discussion.

I’m interested to know what others think about the potential for the OT rule being resurrected from the dead.   Could the sky really be falling, or am I just another Chicken Little?

Image Credits: From Google; Alexander Acosta official photo; From flickr, Creative Commons license, Chicken Little/Dave Walker

Whether Title VII protects employees from discrimination based upon sexual orientation is one of the most contentious employment law issues being litigated in the federal courts today.    EEOC contends Title VII covers sexual orientation, and a handful of district courts have agreed.  But, as of today, every U.S. Court of Appeal to consider the question has ruled that sexual orientation is not a protected status under Title VII.

The Eleventh Circuit is the most recent to weigh in, with a new opinion issued March 10. (Evans v. Georgia Regional Hospital, No. 15-15234).    In a 2-1 ruling, the court held that a female security officer who alleged she was discriminated against because she was a lesbian could not sue for sex discrimination under Title VII.   District Court Judge Martinez, sitting by designation, wrote the opinion of the court, which is not particularly noteworthy and breaks no new ground in its analysis of the issue.   What makes this ruling interesting, however, is the other two judges on the panel wrote separate opinions: Judge Pryor a special concurrence, and Judge Rosenbaum a dissent.  Both the special concurrence and the dissent articulate in a fairly clear way the legal analysis supporting the competing arguments for and against extending Title VII coverage to include sexual orientation.   In so doing, these judges have drawn a map for other circuits and perhaps the Supreme Court to follow, regardless on which side those other courts will rule.

Approximately twenty one states, including Iowa, have amended their civil rights statutes to cover sexual orientation as a protected status.   The language of Title VII, on the other hand, remains essentially the same as when Congress passed the law in 1964.  It prohibits an employer from discrimination in employment because of a person’s “race, color, religion, sex, or national origin.”    Even though Congress has not amended Title VII to include sexual orientation as one of the protected statuses, proponents of broader coverage contend sexual orientation discrimination is a form of sex discrimination, and is therefore already covered under the law.

How does discrimination because of “sex” include “sexual orientation”?   The argument traces its origins to a 1989 Supreme Court decision, Price Waterhouse v. Hopkins.  The Supreme Court ruled Price Waterhouse violated Title VII when it refused to offer partnership to a female senior manager, based in part on the male partners’ beliefs that she was too aggressive and did not act sufficiently feminine.   Price Waterhouse established the rule that an employer may not make employment decisions based upon “sex stereotypes.”  (A more thorough discussion and analysis of the expanding notions of sex discrimination under Title VII is contained in my article published in the January 2017 edition of DRI’s For The Defense, “Pushing the Boundaries of Sex Discrimination Under Title VII: Does Discrimination “Because of Sex” Cover Gender Identity and Sexual Orientation”).

In her dissent in the Evans case, Judge Rosenbaum contends Price Waterhouse “substantially broadened the scope of actionable discriminatory stereotyping under Title VII.   Before Price Waterhouse, Judge Rosenbaum noted that liability for sex stereotyping was “ascriptive”.  That means an employer could violate Title VII by ascribing certain characteristics to individual women based upon a stereotype, without considering whether any individual woman actually possessed the characteristics.   For example, an employer may assume women employees with young children have more family care obligations than men with young children, and as a result give more or better opportunities to men.

Price Waterhouse, however, recognized for the first time a form of what the judge calls “prescriptive” stereotyping.  Judge Rosenbaum explained that, under the prescriptive type, Title VII imposes liability if an employee does not satisfy the discriminator’s stereotyped “prescription” of “what the employee of that protected group should be or how the employee should act.” (emphasis added).   Unlike ascriptive,which attributes stereotyped characteristics to a female employee which she may or may not possess, prescriptive stereotyping treats the female employee less favorably because she fails to conform to the group’s prescribed stereotype.

As it relates to sexual orientation, Judge Rosenbaum contends one of the prescribed stereotypes of a woman is that she is sexually attracted only to men.   Therefore, if an employer terminates a lesbian because she is sexually attracted to women, the employer has acted based upon her failing to conform to the prescribed gender stereotype.  In this view, sexual orientation discrimination is by definition discrimination based upon a gender stereotype, which under Price Waterhouse is discrimination based upon sex.

Not surprisingly, Judge Pryor holds a more limited view of the doctrine of gender non-conformity.    The concurrence distinguishes between an employee’s gender-based “behavior” and her gender “status”.   Claims based upon gender non-conformity focus only on whether the employee’s behavior failed to conform to how the employer believes someone of that gender should act.  Judge Pryor rejects the dissent’s view that Title VII liability exists when an employee’s status deviates from the stereotype of what a person should be.     A person who experiences sexual orientation discrimination may also experience discrimination based upon the failure to conform to a gender stereotype.  But, it is also true one can occur without the other, and as such the concepts must be treated as legally distinct.    To treat the concepts as equivalent, Judge Pryor argues, imposes a false stereotype on gay individuals; namely, that their behavior always deviates from a certain prescribed gender stereotype.

Judge Pryor also rejects the dissent’s view that gender non-conformity, in and of itself, results in Title VII liability.    In the concurrence’s view, gender non-conformity under Price Waterhouse is not a revolutionary new doctrine, but is simply an evidentiary approach to proving sex discrimination.  In other words, an employer’s reliance on gender stereotypes is evidence the employer holds males and females to different standards of behavior.   Discrimination based upon gender non-conforming behavior is used as a proxy for discrimination because of sex.   But, a Title VII plaintiff must always prove that one of the enumerated statuses, in this case sex, is the basis for the employment decision.   Sexual orientation is not a protected status under Title VII; therefore, sexual orientation alone, without evidence the person’s behavior failed to conform to gender stereotypes, does not result in liability.

The competing approaches of the concurrence and dissent are ultimately based competing judicial philosophies.  Specifically, is establishing a new protected status under Title VII the role of Congress or the Courts?   Judge Pryor contends that, because Congress has not made sexual orientation a protected class, the arguments the dissent makes should be made to Congress and not the court.   Judge Rosenbaum disagrees.  During the fifty years since Title VII was enacted, the courts have expanded the meaning of discrimination because of sex more broadly that the law’s sponsors probably intended.  Based on this view, extending its meaning to cover sexual orientation is the next logical step.

The Eleventh Circuit’s opinion is not the last word on this subject.  There are similar cases pending in the Second and Seventh Circuits, and it is likely those courts will issue opinions later this year.  As Congress is not likely to amend Title VII any time soon, there is little doubt the Supreme Court will be asked to take up this issue soon.