Iowa Employment Law Blog

Facebook Firings and Social Media A Top Priority for NLRB Enforcement

Patrick Smith — Tue, 31 Jan 2012 06:00:46 -0600

Last August the National Labor Relations Board Acting General Counsel issued a report detailing the outcome of investigations into 14 cases involving employee use of social media and social media policies.

A second report issued January 24 on the same subject underscores that social media remains a top NLRB enforcement priority. In the preface of this most recent report, acting General Counsel Lafe Solomon writes that, “ these issues and their continued treatment by the NLRB continue to be a 'hot topic' among practitioners, human resource professionals, the media, and the public."

The case summaries contained in the report deal primarily with two subjects: 1) whether an employer’s social media policy is overly broad, in that it subjects employees to adverse action for activity that is protected by the NLRA; and 2) whether a particular termination of an employee because of social media postings violates an employee’s right to engage in protected and concerted activity. I won't go into detail here, but can only echo Jon Hyman when he describes the NLRB's latest foray into social media as "a mess".

Although it has been stated many times, it bears repeating because it is often forgotten: all employers, not just those with a unionized work force, are subject to the jurisdiction of the NLRB. An employee’s involvement in social media adds one more area of inquiry before discipline or discharge of an employee. Even though there are no lawsuits in court or jury trials for NLRA violations, being subject to a NLRB investigation is no picnic. It takes time, energy, and money to respond to these investigations. If your case goes to a hearing, potential remedies include reinstatement of the terminated employee, with back pay, and continued NLRB involvement in policing your employment policies.

Unfortunately for employers, the social media enforcement is one of the ways the NLRB is trying to remain relevant in the face of long standing and continued declines in private sector union activity.

Supreme Court, Executive Branch Take Opposite Approach on Religious Accomodation

Patrick Smith — Mon, 30 Jan 2012 06:57:15 -0600

We have written many times here about an employer’s obligation to reasonably accommodate an employee’s sincerely held religious beliefs, so as not to unlawfully discriminate on the basis of their religion. Indeed, according to EEOC statistics, claims of religious discrimination by employees are increasing at a higher rate than most other forms of discrimination.

Much less discussed, however, is an employer’s right to the free exercise of religion in the face of employment laws that conflict with religious tenets. There are countless institutions in the U.S., including hospitals, schools, charities, fraternal organizations, and colleges and universities, that are affiliated with a religious organization. Collectively, these institutions employ hundreds of thousands (if not more) people. Not all of these employees practice the religion with which their employer is affiliated, and many of them serve people of all backgrounds and faiths. Thus, there can be tension when the law grants rights to employees that conflict with the rights of their religiously affiliated employers to adhere to religious teachings. Jesus famously declared that we should “render unto Ceasar what belongs to Caesar, and to God what belongs to God." But how are these conflicts worked out in light of modern day employment laws?

Just this month, a pair of significant government decisions spotlight the potential conflicts between religious employers and secular laws. On January 12, the Supreme Court held in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, that a Lutheran School’s decision to terminate a teacher cannot be challenged under the Americans with Disabilities Act (ADA). The Court unanimously ruled the Lutheran School was exempt from the ADA under what is known as the “ministerial exception”. In essence, a religious institution has a First Amendment right to decide who is or is not suitable to serve its ministerial functions without court interference.

Just as the Supreme Court’s decision was sinking in, on January 20, the U.S. Department of Health and Human Services issued a final rule mandating that employer provided health insurance cover abortion, sterilization, and contraception, all with no co-pay or other out-of-pocket cost to the employee. The HHS rule contains an exception for religious institutions, but defines that term very narrowly. The only religiously affiliated employers who can opt out of the mandatory coverage are those primarily employ and serve people of the same faith. As a practical matter, this rule does not accommodate religiously affiliated hospitals, charities, and educational institutions. Indeed, one commentator complained the exception is so narrow that Jesus himself would not qualify for it.

In a thoughtful piece, law professor David Skeel writes that while the HHS rule flouts the spirit of Hosanna-Tabor, it may very well comply with its letter, if narrowly construed. In other words, while the Court's ruling was on the side of greater religious accommodation, it is possible to interpret the opinion as applying only to those religious organizations whose purpose is the “inculcation of religious values”. Such a construction would apply to churches and some Catholic schools, but would leave out hospitals and other institutions that serve the general public. Unfortunately, the administration's decision to draw the religious exemption in the HHS rule as narrowly as possible only invites litigation, and ensures these issues will be battled in the courts for years to come. Professor Skeel believe the courts are the worst place to resolve these difficult accommodation issues. He proposes that the better approach is to hash them out legislatively, or even better, allow the affected groups to work out in good faith practical accommodations. Amen.

Political Discrimination Case Involving UI Law School is Making Waves

Patrick Smith — Wed, 18 Jan 2012 10:14:45 -0600

In my practice I frequently represent counties, municipalities, school districts and other public entities. Just like their counterparts in the private sector, public employees are protected against discrimination because of race, sex, age, religion, disability, and other protected statuses. However, public employees have one important right their private sector brethren do not share: the right under the First Amendment to be free of discrimination based upon their political speech and associations.

Most First Amendment employment lawsuits involve claims of retaliatory discharge. A typical case is the newly elected public official who wants to purge the ranks of employees who supported his political opponent in the election and fill the positions with his political supporters. While political affiliation is a legitimate consideration for positions that involve policy making, employees holding jobs that do not involve policy functions are protected from retaliation based upon their political beliefs, even if they conflict with those of the boss.

A recent ruling from Eighth Circuit presented the more unusual case of refusal to hire based upon a person’s political beliefs. Indeed, the case was the first time the Eighth Circuit has addressed the question. Even more intriguing is that the plaintiff is a conservative law professor who claims she was blackballed by the predominantly liberal faculty at the University of Iowa College of Law. The Court’s ruling reinstating the lawsuit that the trial court dismissed on summary judgment has sent shock waves through the legal and higher education communities, as reflected by the widespread national media coverage (WSJ; Fox News; New York Times; Chronicle of Higher Education).

Teresa Wagner alleged she was not hired as a Legal Analysis, Research, and Writing (LAWR) Instructor because of her conservative political views. Wagner, who is a graduate of the UI College of Law, had spent several years working with the National Right to Life Committee, a pro life advocacy group, and the Family Research Council, which advocates for conservative social policy. Unlike the other candidates who applied for the position, Wagner had prior experience teaching Legal Analysis and Writing at another law school. Wagner received many positive comments from both faculty and students who were involved in the interview process, and several recommended that she be hired. Ultimately, the Dean chose to hire another applicant who had no prior successful teaching experience, had never practiced law, and had no legal publications, but who presented himself as a political liberal.

Most interesting about the case was evidence showing that a particular faculty member’s views on abortion may have impacted the decision making. The Court noted that Professor Randall Bezanson had been the primary, vocal opponent to hiring Wagner. Bezanson, as it turned out, served as a law clerk to Justice Blackmun during the term Roe v. Wade was written, had written tributes to Justice Blackmun and his abortion jurisprudence, and published legal articles advocating support for abortion rights. In contrast, part of Wagner’s legal career focused on pro-life advocacy.

Even though Wagner was not offered the full time LAWR position, she was encourage to apply for adjunct openings in the same department. The faculty hiring committee recommended her for an adjunct position, but the Dean chose to hire two others instead. According to one member of the law faculty, the Dean had always followed the faculty’s recommendations in the past when hiring for adjunct positions. The others persons hired for the adjunct positions had no prior law school teaching experience, and one had just graduated from law school.

The legal question the court addressed was whether the Dean’s decision to offer the LAWR position to another applicant was protected by qualified immunity. The Court analyzed the claim under the burden shifting approach adopted by the First Circuit. The Court held Wagner must first show that political affiliation was a “substantial or motivating factor” behind the hiring decision. At that point, the employer must articulate a non-discriminatory basis for the decision and prove the decision would have been taken without regard to the candidate’s political affiliation. Next, the Defendant is required to show the constitutional right that was allegedly violated was “clearly established” at the time of the violation.

The Court concluded that the evidence showed there was a genuine factual dispute whether the Dean would have made the same hiring decision in the absence of Wagner’s political beliefs. The Court also found that the right to be considered for a non-policy making and non-confidential position without regard to one’s political beliefs was clearly established. The question is whether Dean Jones, given the information available to her about Wagner’s political beliefs, and the relative qualifications of the other candidates, reasonably could have believed that not hiring Wagner was lawful.

The Court of Appeals reversed the grant of summary judgment and ordered the case to trial. Notably, on January 10, 2012, the Dean filed a Petition for re-hearing en banc. The Court has not yet ruled on the en banc request. Regardless whether the Court of Appeals agrees to a re-hearing or the case goes to trial, it appears this dispute is far from over. Stay tuned.

Iowa Supreme Court Stems the Tide of Public Policy Wrongful Discharge Claims (At Least for Now)

Patrick Smith — Wed, 14 Sep 2011 09:29:53 -0600

Almost twenty-five years ago, the Iowa Supreme Court recognized a new cause of action for the benefit of terminated employees: wrongful discharge in violation of public policy. (See Springer v. Weeks & Leo Co.). What it means is that an employee cannot be terminated if the employer is motivated by reasons that would frustrate a well-recognized public policy. Springer involved an employee who was terminated because she sought workers’ compensation benefits for an on-the-job injury. The rationale is that terminating an employee because of work injury would deter employees from pursuing legitimate workers’ compensation claims, and thereby frustrate the public policy underlying the workers’ compensation laws.

Since Springer, the Iowa Supreme Court has recognized myriad other types of employee conduct that is protected by public policy. Despite the many court decisions addressing the subject, however, the concept of what is and is not protected by public policy remains vague. Courts can look to the Iowa Constitution, statutes, and regulations as a basis for public policy claims, regardless whether the law or regulation in question was intended to give employees the right to sue. Given the countless number of laws and regulations that govern this state, public policy “exceptions” have the potential to swallow the general rule of at-will employment. Some might say that has already occurred.

Another practical concern is that the Court’s approach to these cases has encouraged more litigation. Even an employer that is careful to comply with known employment laws and rules can be sued for wrongful discharge based upon conduct that has not yet been recognized as unlawful. Most of the time, defendants settle these cases to avoid the costs, risk, and uncertainties associated with litigation, which in turn encourages even more claims.

Given the trend of expanding public policy claims, the Iowa Supreme Court’s decision last week in Berry v. Liberty Holdings, Inc. was a refreshing exception. Berry claimed he was terminated because he filed a personal injury lawsuit against Premier Concrete Holdings, Inc., which was owned by the same person as his employer, Liberty Holdings, Inc. Berry had been involved in a motor vehicle collision with one of Premiere’s concrete pumping trucks. He ultimately settled the case with Premiere’s insurance carrier, but soon after was terminated by Liberty Holdings.

The trial court dismissed the wrongful termination case on the grounds that suing a sister company of your employer was not conduct protected by public policy. However, in a 2010 decision, the Iowa Court of Appeals reversed the dismissal, holding that Iowa’s Comparative Fault Statute (Chapter 668) “does codify the state’s expressed policy that its citizens may seek legal redress for an injury caused by another’s negligence.”

The employer sought further review in the Iowa Supreme Court, and in a decision issued September 9, 2011, the Court reversed the judgment of the Court of Appeals and dismissed the suit. The supreme court rejected the court of appeals’ view that Iowa’s Comparative Fault Act contained a policy supporting an employee’s right to seek compensation for injuries. Rather, the court concluded Chapter 668 simply created a framework courts and juries use to allocate fault to one or more parties claimed to have caused a person’s injuries.

While Berry represents a victory for employers, it does little to stem the tide of more lawsuits based upon violations of public policy. The supreme court was careful to decide the case on narrow grounds. In a footnote, the court made clear it decided only whether Chapter 668 supported an employee’s protection from discharge if he files a lawsuit. The court specifically left unanswered the question whether the Iowa Constitution, other statutes, rules, or precedent would support Berry’s wrongful discharge claim.

What You Don't Know About the NLRA Might Hurt You

Patrick Smith — Tue, 30 Aug 2011 09:24:55 -0600

The vast majority of private sector employers in Iowa do not have a unionized workforce. Many employers (and employees for that matter) don’t understand that the National Labor Relations Act (NLRA) still applies to them. Section 7 of the NLRA grants employees the rights to engage in various kinds of “concerted activities” for the purpose of collective bargaining or “other mutual aid or protection.” Employers are often surprised to learn that conduct prohibited in their employee handbooks—things like discussing compensation among employees, posting notices in the break room, or using social media to complain about wages or working conditions—may actually be protected by section 7. Unfortunately, ignorance is seldom bliss, particularly if you find yourself the target of a National Labor Relations Board (NLRB) unfair labor practice charge.

Although employees have had section 7 rights for decades, many non-union employers in Iowa never used to worry about the NLRB. That could and should change, given the agency's more activist agenda in recent years. Two recent announcements in particular highlight the importance of becoming more educated about your rights (yes, employers have rights under the NLRA) and those of your employees, so as to avoid ending up at the wrong end of an expensive and time consuming investigation, or worse.

First, the NLRB’s Acting General Counsel recently released a report detailing its investigation into cases involving employer’s social media policies and employee’s use of social media. The report focuses on employee terminations related to Facebook postings, blogs, and Tweets, as well as social media policies generally that the Board contends are overly broad. The U.S. Chamber of Commerce also issued a survey on the NLRB’s social media activity. Both of these reports are a must-read.

Second is the NLRB’s announcement of a new Rule requiring most private sector employers to post notices informing employees about their rights under the NLRA. The New York Labor and Employment Law Report has a good summary of the requirements. While there is some debate whether the NLRB has legal authority to require such postings, the rule nonetheless goes into effect November 14. Employers are encouraged to find out between now and then your rights and responsibilities under this new rule, and especially the consequences for failing to follow it.

Judge's Pregnancy Discrimination Ruling Prompts Debate About Work-Life Balance

Patrick Smith — Fri, 26 Aug 2011 09:00:55 -0600

Last week a federal judge in the Southern District of New York Judge dismissed the EEOC’s long running sex and pregnancy discrimination lawsuit against financial media company Bloomberg, LP. EEOC claimed Bloomberg engaged in a “pattern and practice” of discrimination against pregnant women and mothers returning from maternity leave by reducing their pay, demoting them in title, removing responsibilities, and subjecting them to stereotypes about female caregivers.

What is notable about the case is not the judge’s conclusion based upon the evidence, but the fact that she took the unusual step of offering some “concluding remarks” highly critical of the EEOC’s approach to the case. Judge Preska wrote: “[a]t bottom, the EEOC’s theory of this case is about so-called “work-life balance”…"It amounts to a judgment that Bloomberg, as a company policy, does not provide its employee mothers with a sufficient work-life balance." But, she noted, despite the fact that it may be desirable, the law does not mandate “work-life balance”. “The law simply requires fair treatment of all employees. It requires holding employees to the same standards.” In a company like Bloomberg, which explicitly makes all-out dedication to the company its expectation, “making a decision that preferences family over work comes with consequences. But those consequences occur for anyone who takes significant time away from Bloomberg, not just for pregnant women and mothers….” As a final bombshell, the judge concluded:

Whether one thinks those consequences are intrinsically fair, whether one agrees with the roles traditionally assumed by the different genders in raising children in the United States, or whether one agrees with the monetary value society places on working versus childrearing is not at issue here. Neither is whether Bloomberg is the most “family-friendly” company. The fact remains that the law requires only equal treatment in the workplace. Employment consequences for making choices that elevate non-work activities (for whatever reason) over work activities are not illegal.

Predictably, Judge Preska’s opinion unleashed a firestorm of both support and criticism. One commentator claimed the judge has “contempt for women with kids who have ambition”, while others recognized the fact that the balance between work and family is ultimately a personal decision that all employees make, regardless of gender.

Coincidentally, the Bloomberg decision follows closely on the heels of an announcement by the Iowa Attorney General that the State paid $180,000 to settle a sex discrimination lawsuit by employee who alleged she was terminated because of family care obligations. The plaintiff alleged her boss (also a woman) made unfavorable comments about the work commitment of mothers with children. The reasons given for the termination was that the plaintiff lacked dedication to her job because she was unwilling to work the necessary long hours. She claimed she was replaced by a man who worked the number of hours she did without complaint from the supervisor.

These two cases illustrate the increasing trend of family care discrimination claims. Indeed, EEOC has made such claims an important part of its enforcement agenda. Bloomberg is an important reminder, however, that equal treatment does not impose on employers the obligation to accommodate an employee's personal life choices. At the same time employers must ensure they avoid making decisions based upon gender stereotypes, and hold all employees, regardless of gender, to the same standards.

Wal-Mart v. Dukes May Bar Class Action Race Discrimination Suit Against the State of Iowa

Patrick Smith — Mon, 15 Aug 2011 16:34:56 -0600

Wal-Mart v. Dukes, decided by the U.S. Supreme Court in June, could derail a class action race discrimination case against the State of Iowa that has been pending since 2007 (See our posts here and here on the Wal-Mart case). The Iowa case involves 32 named plaintiffs who claim the State maintained hiring and promotion practices that discriminated against African American applicants and employees. The suit was certified as a class action in 2010 to include class all African Americans who sought appointment to or held a merit based position in the Executive branch since July 1, 2003. The class claims could potentially involve up to 6,000 persons in addition to the named plaintiffs.

The court held a hearing last week concerning the potential application of the Dukes case. The holding in Dukes that potentially applies to the Iowa case involves the question of “commonality”. That is, are the circumstances of the class members sufficiently common that their discrimination claims can be addressed as a group rather than individually. In Dukes, the Court held that claims of 1.6 million female employees alleging gender discrimination at thousands of Wal-Mart stores across the United States could not, as a practical matter, be adjudicated as a class. The essential question in a discrimination claim—“why was I disfavored”-involved too many individual circumstances.

According to coverage of the hearing in the Des Moines Register, the Iowa Plaintiffs are trying to overcome the Dukes decision by showing the State of Iowa’s hiring and promotion practices were centralized and applied to each African American applicant and employee. At Wal-Mart, on the other hand, the evidence showed the hiring and promotion decisions occurred at the store level and therefore were highly decentralized. The Plaintiffs’ evidence against the State of Iowa relies to a great extent on statistics purporting to show African Americans were less likely to survive an initial round of applicant screening, less likely to be interviewed, and less likely to be hired.

Another important difference in the Iowa case is that it is pending in Iowa state court rather than federal court. Although similar, Iowa courts and federal courts have two different sets of rules governing these types of proceedings.

The Dukes case is a powerful weapon for employers defending class actions, and it will be interesting to see whether it will allow the State to avoid a trial in this case.

Wal-Mart v. Dukes: What Impact?

Patrick Smith — Tue, 21 Jun 2011 15:24:23 -0600

Yesterday the U.S. Supreme Court issued an opinion Wal-Mart v. Dukes, an important case addressing issues involving both employment law and class actions. There has been an incredible amount of coverage and analysis of this opinion in both regular and legal media outlets and blogs (including our own summary in the DRI Publication, The Court Reporter). Rather than repeating any of it here, the following are a few of the sources where you can find both good background information as well as helpful analysis about the potential impact of this case from both a business and legal perspective:

What Does Wal-Mart Ruling Mean for Class Actions: from WSJ Law Blog

Supreme Court Rejects Class Action Against Wal-Mart: Connecticut Employment Law Blog

Justices Curbs Class Actions, from WSJ.com

Supreme Court Erects Major Barriers to Class Actions...: National Law Journal's Law.com

Seven Key Points for Employers from the Wal-Mart v. Dukes Opinion: from Ohio Employer's Law Blog;

What Wal-Mart's High Court Win Means for Employers, Large and Small, from The Employer Handbook Blog

Employment Law Myths

Patrick Smith — Tue, 10 May 2011 08:00:09 -0600

Robin Shea at Employment and Labor Insider had a great post a couple of days ago on common misconceptions about employment laws that trip up employers.

It is surprising how often employers think the law allows freedom to act without risk of bad consequences when precisely the opposite is true. I call them “employment law myths”.

Robin's post lists her top five misconceptions, and invites others to contribute theirs. Here are three of the most common myths I see on a regular basis:

1) Employment “at will”. In theory, this is still the law in Iowa. The reality is that exceptions to employment at will have become so numerous that they swallow the rule. Discrimination because of race, gender, disability, age, etc., retaliation, and violation of public policy are some of the typical exceptions, but there are others.

2) Probationary Employment. Many employers designate the first 3-6 months of employment as a "probationary period", and sometimes think they can terminate an employee at any time for any reason during that period without consequence (see employment at will, above).

3) Employees are Prohibited from Discussing Compensation. There is a little law called the National Labor Relations Act (NLRA). Most of us think about the NLRA only in connection with unions, but it applies to non-union employers as well. Among other things, the NLRA allows employees to engage in “protected” and “concerted" activity, which includes communicating information about wages and benefits. Although an employer can't be sued in court for violating this law, there is an administrative complaint procedure under the NLRA that can be almost as cumbersome.

The best advice before making termination decision or taking other serious action aganist an employee: pause, take a deep breath, and consider consulting with your lawyer first.

Supreme Court Expands (Again) the Universe of Employees Protected From Retaliation

Patrick Smith — Tue, 25 Jan 2011 10:08:08 -0600

In a unanimous decision yesterday, the U.S. Supreme Court expanded the universe of employees who might be protected from retaliation under Title VII and other federal employment laws.

A retaliation claim is based upon an employer’s adverse action taken in response to an employee’s “protected activity”. Typically, protected activity includes things such as making a complaint of discrimination or harassment, or giving information in connection with a harassment investigation. Any adverse action against an employee (or even a former employee) because he engaged in “protected activity” subjects an employer to liability for damages and attorney’s fees.

In Thompson v. North American Stainless, LP, the Supreme Court held that Title VII’s anti-retaliation protection extends to the fiancée of an employee who filed a charge of discrimination with the EEOC. Even though the fiancée himself engaged in no “protected activity”, the Court reasoned the company’s conduct could well dissuade a reasonable employee from herself filing a charge. In other words, if an employee knew her fiancée would be fired in response to her EEOC charge, she might not file the charge.

The practical challenge this case presents for employers is identifying the zone of persons who might be affiliated with a complainant. While acknowledging this difficulty, the Court nonetheless declined to establish a bright line to determine which relationships are protected and which are not. Justice Scalia, writing for a unanimous Court, stated:

We must also decline to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.

Two immediate takeaways from this case:

First, when going down the road of termination, employers need to inquire whether there is anyone affiliated with the employee to be terminated who has filed a charge of discrimination. Who is affiliated? Certainly a spouse or other close family member; definitely a fiancée. After that, who knows?

Second, just because there is some affiliation does not mean the termination should not occur. The terminated employee is still required to prove a connection between his termination and the protected activity of the other employee with whom he is affiliated.

For other commentary on this decision, I recommend the following:

Daniel Schwartz's Connecticut Employment Law Blog

Eric Meyer, at The Employer Handbook

IIyse Schuman at Washington DC Employment Law Update

Russell Cawyer, Texas Employment Law Update

Employers Should be Aware of the Risks, as well as the Benefits, of Using Leased Workers

Patrick Smith — Mon, 17 Jan 2011 09:47:40 -0600

An Article in Sunday’s Des Moines Register pointed to an increase in the hiring of temps as an early sign of economic recovery. One of the benefits to employers of temporary workers, the article noted, is that they provide a company with flexibility when market conditions are uncertain. “Companies feel more comfortable using temporary work forces” in these conditions; they can better ramp up-or down-to meet production needs.

While not disputing the benefits of leased workers, employers should also be aware of the potential downside of using temporary employees—particularly those who are employed for longer term assignments of one year or more.

First, it is critical to do due diligence on the staffing agency that is used. Make sure the agency is financially sound and meeting its obligations for payroll withholding, workers’ compensation, and benefits. If the agency goes out of business and did not handle those issues, the employer may be responsible. One client had a leased worker injured on the job, and it turned out the staffing agency had not procured workers’ compensation coverage for the state in which the employee worked. The employer ended up being responsible for the injury, and had no workers’ compensation coverage available to cover the costs.

A second important issue relates to employee benefits. If a leased employee works for an employer for more than one year, that employee may have to be included in non-discrimination testing for employee benefit plans. In addition, there are some circumstances where a long term leased employee could become eligible for benefits under the employer’s benefit plans.

Finally, using a staffing agency for hiring will not necessarily protect a company from liability under the anti-discrimination laws. This post at the Wisconsin Labor & Employment Blog discusses certain staffing agency practices deliberately designed to avoid the anti-discrimination laws. See paragraph above about due diligence.

Should the Decision to Terminate an Employee Who Uses the "N-word" Depend Upon the Employee's Race?

Patrick Smith — Wed, 12 Jan 2011 10:05:50 -0600

A federal judge in the Eastern District of Pennsylvania recently waded into this thorny subject. The case is Burlington v. News Corp., in which a white television reporter for the Fox affiliate in Philadelphia alleges he was terminated for using the “n-word”. The suit claims black employees who also had uttered the word were not even disciplined.

It all started during a discussion of another reporter’s coverage of a “symbolic burial” of the n-word, conducted by the Philadelphia NAACP Youth Council. The other reporter said the participants in the burial used the “n-word” “at least a hundred times or more during the course of the proceedings.” In response, the plaintiff asked, “does this mean we can finally use the word n_____”. Plaintiff said he was not intending to be offensive or provocative, but only want to suggest that using the actual word in the story would give the story more credence.

Despite the context, other employees were offended and complained to management. One person who was offended and complained, even though she had not been present at the newsroom meeting, was the plaintiff’s co-anchor, who was African American. The event apparently caused tension between the plaintiff and his co-anchor, which affected their on-air chemistry. To complicate matters further, someone leaked to other media outlets that plaintiff had used the “n-word”, and stories were published about it in the local papers.

The plaintiff presented evidence that three different black employees had used the “n-word” in the past, but had not been subject even to discipline. The employer’s defense for treating plaintiff differently was the statements by the black employees had not incited complaints or resulted in negative publicity. Plaintiff contended the complaints and resulting publicity were the result of race discrimination that ultimately influenced management’s decision to terminate him.

Ultimately, the court denied the employer’s request to dismiss the lawsuit, holding that the jury should decide the question whether the plaintiff was treated differently because of his race. In its conclusion, the court stated:

This case presents unique issues regarding an employer's liability under Title VII for cultural assumptions about a word that is considered by many to be the most offensive in the English language. Plaintiff portrays himself as a victim of political correctness run amok, while Defendants portray themselves as employers who made the only choice they could in response to an employee who repeatedly uttered "the most noxious racial epithet in the contemporary American lexicon…resulting in problems in the workplace and significant adverse publicity.” Whether Plaintiff was a victim of discrimination or his own poor judgment is for a jury to decide….

Setting aside the troubling cultural and social implications this case presents, the management of Fox 29 faced a difficult and tenuous legal decision. Regardless of how they handled the case, there was no good outcome. If they terminated the white reporter, as they did, they face a race discrimination lawsuit. If they don’t discipline or terminate, they face a potential complaint from other employees for allowing a racially hostile work environment to exist.

In these situations, often the best approach is to make what you think is the least worst decision…and get ready for the inevitable fallout. The real lesson, however, is that employers need to be proactive in ensuring that the use of offensive language is always subject to discipline, regardless of the person's race.

For additional discussion of this case, I recommend the following:

Jon Hyman, at Ohio Employer’s Law Blog

Peter Thompson, at Maine Employment Law Blog

Jottings by an Employer’s Lawyer

Recent 8th Circuit Case Likely to Encourage Continued Migration of Age Discrimination Claims to State Court

Patrick Smith — Fri, 07 Jan 2011 10:58:53 -0600

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.

Whatever Happened to...Jack Gross?

Patrick Smith — Tue, 04 Jan 2011 09:37:19 -0600

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...

What's Ahead in Discrimination Litigation for 2011?

Patrick Smith — Mon, 03 Jan 2011 09:57:06 -0600

One of the best ways to predict this year's trends in discrimination litigation is to examine last year’s charge statistics from the EEOC and the Iowa Civil Rights Commission. Any person who claims a violation of the state or federal anti-discrimination laws must first file an administrative charge with one or the other of these agencies. While each agency has its own procedures, generally they will issue a “right to sue” letter after conducting a preliminary investigation of the complaint. Last year’s administrative charges become this year’s lawsuits.

In fiscal year 2010, EEOC received a record 99,922 charges, a 7% increase over 2009. Despite the increase in charges, EEOC reports that its case inventory has decreased, which means more charges are actually being investigated, settled, or otherwise disposed.

Other evidence that EEOC is becoming more aggressive is its emphasis on what it calls “systemic enforcement.” As part of its systemic initiative, EEOC identifies common employer practices that impact a large number of persons in the workforce. In 2010, 465 systemic investigations were undertaken, and the agency filed 20 class action lawsuits involving systemic type claims, the most ever. One of EEOC's focus in this area involves employer’s use of credit histories as part of the application process, which EEOC claims can have a racially discriminatory impact.

EEOC is also focusing of the area of disability discrimination. The final regulations interpreting the ADA Amendments Act are expected to be published shortly. As more disability charges continue to be filed and processed, employers can expect more disability discrimination claims to end up in court.

The silver lining in all these statistics comes from the Iowa Civil Rights Commission, which actually saw a decrease in the number of employment discrimination charges between 2009 and 2010. It must be noted, however, that the ICRC is itself becoming more aggressive in its investigation and settlement of discrimination charges. In 2009-10, the total value of mediated settlements with ICRC total $606,486, an increase of 62% over the prior year.

For additional information and analysis on these issues, I recommend the following:

From Washington D.C. Employment Law Update: Year End Roundup of EEOC Developments, and Upcoming EEOC Regulatory Agenda.

From Overlawyered: The New (and very activist) Obama EEOC

The DOL's Lawyer Referral Arrangement with ABA Not Likely to Help Employers or Employees

Patrick Smith — Mon, 29 Nov 2010 10:51:46 -0600

On the Friday before Thanksgiving, Vice-President Biden announced at a Middle Class Task Force event the creation of a collaboration between the U.S. Department of Labor and the American Bar Association. According to the press release associated with the event, the purpose the collaboration is to “help workers resolve complaints received by DOL’s wage and hour division.

Beginning December 13, 2010, people with unresolved complaints under the Fair Labor Standards Act (FLSA) or Family and Medical Leave Act (FMLA) will be sent a letter explaining their rights, and providing a toll-fee number that will connect them with an ABA approved lawyer referral service in their area. These are complaints that the Department of Labor is otherwise charged with investigating but apparently cannot because of what the Secretary of Labor described as the Department’s “limited capacity.”

While this collaboration may be good for the business of lawyers, it is doubtful it will be good for anyone else, most especially the business community and the middle class employees the program purports to help. The unspoken assumption of programs like this one is that lots of employers are violating employment laws and short changing their employees. Indeed, Labor Secretary Solis’ statement that “our nation’s workers deserve full and fair compensation” implies that they are not.

Contrary to the assumptions underlying this program, in my experience and that of other employer side lawyers I know, the lion’s share of companies are conscientious about complying with the employment laws. The high cost of defending employee claims and the risk of an adverse outcome, regardless of the merits of the suit, give employers an economic incentive to comply with the law. Nor is the federal government and the ABA encouraging more employment litigation likely increase the income of middle class employees. In fact, it may have the opposite result, as more and more resources are devoted to defending and settling these cases rather than increasing wages and benefits of employees generally. In a 2008 study by Estreicher and Yost, the median gross settlement in 179 collective or class action employment lawsuits studied was $8,500,000. This does not include the thousands of individual claims and settlements every year.

Remarkably, the ABA touts this program as an opportunity to improve the image of lawyers. I don’t know who the ABA thinks this will impress, but it is not likely to be the business community or the majority of the general public who are cynical about lawyers. If the Department of Labor believes employer compliance with FLSA and FMLA is lacking, there are more constructive ways to address the problem than increasing their litigation risk.

For a thoughtful view on the other side of this issue, see Dan Schwartz’s post at the Connecticut Employment Law Blog.

Iowa Jury Finds for Plaintiff in Gender Sterotyping Case

Patrick Smith — Sat, 27 Nov 2010 15:50:15 -0600

A jury in the U.S. District Court, Southern District of Iowa recently returned a verdict in excess of $50,000 to a female plaintiff alleging sex discrimination based upon gender stereotypes. The plaintiff, who was a night auditor at a hotel, claimed she was terminated because she was more masculine than a typical female employee. She described herself as “slightly more masculine”; she preferred to wear loose fitting clothing as well as men’s button down shirts and slacks.

There was evidence a manager for the employer made statements that its front desk staff should be “pretty” and have a “Midwestern” girl look.

The trial court had previously granted summary judgment to the defendant on the grounds that the plaintiff presented no evidence she was treated differently than similarly situated male employees. However, the Eighth Circuit reversed and remanded for a new trial, holding that it was wrong to require a sex discrimination plaintiff to rely solely upon evidence showing the treatment of similarly situated male employees. (See our post here discussing the Eighth Circuit opinion).

Notably, the jury found for the plaintiff only on her claim of retaliation, not gender discrimination. Thus, even though the case was remanded to the trial court because of the gender discrimination claim, that is not how the plaintiff established liability. We noted in our previous post that the Eighth Circuit’s decision expanded the boundaries of gender discrimination liability for employers. Even though the jury did not find gender discrimination, the fact that the plaintiff prevailed on any ground is likely to encourage more gender stereotyping claims of this type.

Supreme Court to Hear Three Employment Cases This Term.

Patrick Smith — Mon, 11 Oct 2010 11:00:14 -0600

Last week the U.S. Supreme Court kicked off its 2010-2011 term. There are at least three cases this term of interest to employment lawyers. The Delaware Employment Law Blog had three excellent postings (here, here, and here) analyzing the cases in some detail. All three cases address important questions concerning the scope of an employer’s liability under the anti-discrimination laws.

The first case is from the Seventh Circuit, Kasten v. Saint-Gobain Performance Plastics Corp. Kasten addresses whether an employee’s verbal complaints to his superiors about issues with a time clock is protected activity under the Fair Labor Standards Act, so as to protect the employee from retaliation. The Circuit Court held that verbal complaints were not enough to protect an employee from retaliation; they had to be written.

The second case, Staub v. Proctor Hospital,(also from the Seventh Circuit) will decide the viability of the so-called “cat’s paw” theory of liability. “Cat’s paw” applies when there is no evidence the decision maker had discriminatory motives, but others in the organization did. The issue involves the extent to which those with discriminatory motives influenced the decision maker.

The third case is Thompson v. North American Stainless, from the Sixth Circuit. The issue in Thompson involves so called "associational retaliation". That is, to what extent is an employee is protected from retaliation not because of his own protected activity, but the protected activity of others. Specifically, the case involved an engaged couple who worked for the same employer. The male employee claimed he was fired because his fiancee filed an EEOC charge alleging she was discriminated against. The Sixth Circuit affirmed the trial court's grant of summary judgment to the employer, holding that the male employee was not protected because his fiancee filed a charge of discrimination.

The opinions will most likely be issued in 2011.

Is There More to the Story About the New Mom Who Quit Her Job Because She Was Denied Access to a Lactation Room?

Patrick Smith — Sat, 09 Oct 2010 09:51:57 -0600

Last week a mother quit her job soon after returning from maternity leave because she claims her employer denied her access to a lactation room for three days (See Des Moines Register story here). Apparently, the employer had a lactation room on the premises as required by federal law. But, according to a complaint filed with the Iowa Civil Rights Commission, a company nurse told the employee she had to fill out paperwork and then wait three days before she could access the room.

The health care law signed into law on March 23, 2010 contained the requirement that employers provide nursing mothers with reasonable unpaid breaks to express breast milk, and a location other than a bathroom where they can so. Such breaks must be provided for up to one year after their child’s birth. Employers with fewer than fifty employees are exempt if the requirements “would impose an undue hardship by causing the employer significant difficulty or expense.”

With due respect to the late Paul Harvey, what is most striking about this claim is there must be a “rest of the story” out there. Most notably, the publicity relating to this event was generated by a complaint filed with the Iowa Civil Rights Commission. However, the requirements governing breaks and locations for breastfeeding mothers are contained in the federal Fair Labor Standards Act (FLSA). If an employee is seeking to enforce the FLSA, there is no need to file a complaint with the ICRC. In fact, that state agency has no jurisdiction over FLSA claims. Perhaps there are other issues involves with this employee, but these allegations were simply the most sensational and likely to generate publicity. It did not take too long for this story to circulate on the internet.

The other interesting aspect of the story is the publicity itself. Normally, Iowa Civil Rights Act complaints are not made public at the time they are filed, unless the filing complainant issues a press release or otherwise takes action to make it public. This is obviously an important concern for new mothers returning to work, given the large number of comments posted about the story on the Register's website. Indeed, the employer , Nationwide Advantage Mortgage, had a spokeperson issue a statement to refute the former employee's claims.

Sometimes, plaintiff's attorneys use adverse publicity about a tangential issue as a hammer to persuade an employer to resolve a case quickly rather than defend it on the merits. Obviously, we don't know if that is what is going on here, but the newspaper story certainly left many unanswered questions.

Eighth Circuit Once Again Reviews Age Discrimination Burden of Proof--This Time Under ICRA

Patrick Smith — Mon, 04 Oct 2010 01:00:43 -0600

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.