Rod Satterwhite and David Greenspan are members of the Labor & Employment group at McGuireWoods LLP. Both handle employment litigation on behalf of employers, and advise companies on employment issues regularly.

Monday, June 23, 2008 - Posts

Age Discrimination Gets Easier to Prove

    The Supreme Court recently made its contribution to what will likely be an increasing trend -- class action age discrimination lawsuits.  With an aging workforce and economic downturn, companies are going to find themselves laying off employees or adjusting their workforce to conform to the new economic realities of tighter credit and higher energy prices. 
    In the latest pronouncement by the Supremes, the Court looked at a reduction in force occurring in a nuclear power company.  Specifically, Knolls Atomic Power Laboratory ("KAPL") was ordered to reduce the size of its workforce that the government uses to service nuclear reactors on warships.  The company tailored its reduction by having managers score subordinates on their job performance (as measured in their annual evaluations), "flexibility", and "critical skills", and points for each of these three criteria, along with points for years of service were used to rank order the employees.  KAPL faced a particular problem in that it had a fairly senior workforce -- 1203 of the 2063 salaried employees were at least 40 years old, and 179 of the 245 at risk of involuntary lay-off were 40 or over.  Of the 31 employees selected for lay off, all but one were 40 or over.  Twenty-eight of them sued, alleging that the company's use of such subjective factors as flexibility and critical skills was either a pretext for covering up age discrimination, or resulted in a disproportionately high termination rate for older employees. 
    I might note here that one factor that the Supreme Court was not considering was the issue of age-banding.  I don't know whether there was a cluster of older employees in the the forty-and-over group.  This could be significant, because a cluster of employees selected for termination between the ages of 45 and 50 would seem to indicate that the age issue was simply coincidental.  But the court was not looking at the reliability of the statistical evidence here. 
    The plaintiff's expert determined that flexibility and critical skills were the two most important factors that caused individuals to be selected for lay off.  In other words, those with the lowest scores in those two areas were the most likely to be laid off.  The company asserted that the two factors were so-called "reasonable factors other than age" ("RFOA") that provided an exception to a disparate impact age discrimination claim.  At the initial trial of the case, the jury rejected this (no surprise here, jurors are almost universally sympathetic to age discrimination claimants, especially in a lay off situation like this) and the case moved through several different layers of appeal before finally reaching the Supreme Court last year. 
    Most of the employers in this audience are thinking, "Those factors seem to be pretty reasonable to me."  In fact, the company defined these factors for the managers, and it is clear from these definitions and the process that what the company was trying to do was select people who would be best qualified for the work that remained after the government altered the nature of its contract with the company.
    The Supreme Court determined first of all that the burden of producing evidence and persuading a jury that RFOA were the basis for the layoff decision falls squarely on the employer.  This is not really a surprising result given the EEOC's similar position and the court's decisions in recent years.  The court's discussion of the RFOA argument is extremely useful because it distinguishes the RFOA factors from the so-called "bona fide occupational qualification" ("BFOQ") factor so familiar to Title VII practitioners.  In an RFOA case, the employer just has to establish that its choice of criteria (which must be age neutral on their face) is "reasonable".  There is no obligation to show that an alternative practice or evaluation standard might have a smaller impact on older employees; the employer simply must have a logical justification for its position that is consistent with its business evidence.  I was somewhat skeptical of the effect of such a requirement since jurors will rarely find a practice that puts Grandpa out on the street to be reasonable, but I was heartened to read that the lower court of appeals here showed no hesitation in finding that KAPL prevailed in its RFOA defense.  So at least there is hope that courts can keep this concept from spiraling out of control and being virtually impossible to prove at trial.
    A second important point from the court's decision is that a plaintiff in a case like this cannot simply say that the RIF decision is discriminatory -- he must point to a specific employment practice that is responsible for any observed statistical disparity.  In this case, the plaintiffs did so by having their statistical expert identify the two key factors used in the evaluation process that allegedly caused the selection of older employees for layoff.  But as the Court pointed out, this is not an easy thing to do and the requirement will dispose of many of these cases before they get to trial. 
    So, for employers dealing with older workforces and layoffs, it is absolutely essential that the criteria used to set up such a system are vetted so that a human resources professional can articulate clearly why the criteria were put in place, and the evaluators using them can articulate exactly how they were used and how the decisions were made with regard to the affected individuals.  Actually, that's good advice for any reduction in force.
 
posted Monday, June 23, 2008 2:15 PM by Lou Michels with 0 Comments

Oddball Gender Discrimination Issues

    A couple of odd fact situations make for interesting results in two gender discrimination cases out of Ohio and Pennsylvania, respectively. 
    A female crane operator gets a trial on her state and federal sex discrimination claims, in part on a unique disparate impact theory that I simply couldn't pass up noting.  Johnson v. AK Steel Corp., No. 07-cv-291 (S.D.Ohio, May 22, 2008).
    The policy creating the disparate impact?  That crane operators remain on the job for 12 hours at a time, suspended above the work area in their cabs.  The crane in question operated in and over something called a slab yard of a steel processing facility, in which hot slabs of steel were unloaded from trains and placed in line to be pushed into the furnaces. 
    When the female plaintiff was assigned to the job, she was advised of the 12-hour shifts and, apparently quite innocently, asked about bathroom breaks.  The Yard Manager allegedly told her that there were no crane operators available to give her a break, and that if she needed to use a bathroom, she would have to urinate off the back of the crane, like the "guys" did.
    The woman, quite reasonably in my opinion, thought the manager was joking and went to the other yard foreman, who confirmed that she was supposed to relieve herself above and over the work area.
    We'll stop here for a second.  One of the reasons the company was on 12-hour shifts at this time was because it was having trouble getting employees to work there during an ongoing labor dispute.  Somehow, I don't find it surprising that people might not want to work at a place where a walk through the worksite might result in your being splattered with something even worse than pieces of hot metal.  And where was the "just basic common sense" of the management team?  Apparently, the human resources policy was that operators took a break when they "had a chance to take a break."  In other words, when there was no work to be done, i.e., never.  This was a department practice; other managers who testified were unaware that the crane managers instituted this policy.
     The plaintiff, not being, shall we say, "equipped" to follow this policy, refused the work and ultimately left the job.  The court had little difficulty in finding that the bathroom policies at the yard had a disparate impact on women, even though they were, on their face, gender neutral.  I should note that the supervisors denied telling the plaintiff that she had to go "over the side," but at this stage of the proceeding, the court found enough evidence to go forward to trial.  Moreover, I'm pretty sure the court was analyzing the plaintiff's claims under the "you just can't make this stuff up" standard -- what she testified to was so weird that it was likely true. 
     So, for those of you in the crane business, figure out some way to either provide bathroom breaks, or astronaut diapers for your female employees.  Actually, make that for all your employees.  It will probably improve their morale, as well as the productivity of the people beneath them.
     The Pennsylvania case is a little more trivial, but does sketch out some of the boundaries for acceptable office behavior in the context of gender discrimination.  A woman was hired as a part-time receptionist and data entry clerk at a sales and supply company.  She was the only receptionist and was supervised by men. 
     One of the receptionist's duties was to prepare and provide coffee to office guests and to her supervisors when requested.  Although she agreed to do this for her bosses once or twice, she testified at her deposition that she found the request demeaning and embarrassing and believed that the company was reinforcing gender stereotypes.  She also testified that the office was a hostile work environment because a vice president noted in his interview of her (in his notes, no less, not to the plaintiff) that she "looks nice" and "dresses well."  She also was dissed by a male coworker inviting her to lunch in an email and saying to her that he felt bad that she had been working at the company for a few weeks and that they had not gotten to know each other yet.  The employee testified that she was very offended by the invitation, stating that there was "no reason why a man and a woman should go out to lunch together without any other party around.  To me, that's a date."  She also was upset when she walked into an office where two men were whispering and laughing over a joke that they would not share with her.
     Wow.  This place sounds like the kind of male chauvinist hellhole that just cries out for federal intervention.
     The plaintiff finally refused to serve coffee to her supervisors by sending an email to one of them saying that she did not expect to "serve and wait" on him by serving coffee and that if she had known that, she would never have taken the job.  The company responded by terminating her employment approximately nine minutes later. 
     A federal judge had no trouble dismissing this case at summary judgment.  The main reason was that there was absolutely no evidence that getting coffee was somehow related to the plaintiff's gender.  The plaintiff was not asked to perform any other acts conforming to traditional gender-specific stereotypes and that the other things that offended plaintiff were, in fact, innocuous and did not support her claim of harassment.
     The plaintiff's lawyers tried to argue that requiring a woman to get coffee for her male supervisors and firing her when she refused, if not exactly a quid pro quo discrimination case, was a "quasi" quid pro quo claim.  In my experience, trying to win your point with the judge by saying the conduct is almost discriminatory normally doesn't fly, and it didn't here, either.
                (My thanks to Kristin Case of the Case Law Firm in Chicago for pointing out the Pennsylvania case to me).
posted Monday, June 23, 2008 2:09 PM by Lou Michels with 0 Comments

No Percentage in Paybacks

    Recent Supreme Court rulings on retaliation, found here (CBOCS West, Inc. v. Humphries) and here (Gomez-Perez v. Potter), raise real concerns for both private and public sector employers in discrimination cases. 
     The Humphries case extended the reach of Section 1981 of the Civil Rights Act of 1866 in a major way, allowing anyone who complains about an employer's act of alleged racial discrimination to sue for an adverse employment action.  This kind of claim, normally reserved for Title VII cases which have caps on damages and a 300-day administrative statute of limitations, can now be filed up to four years after the adverse employment event.  In addition, because Section 1981 claims are not capped on damages, plaintiffs can recover substantially more than the $300,000 punitive cap in place under Title VII.
    Practitioners know that retaliation cases are generally easier to prove and harder to defend than a plain race discrimination charge.  The case law is replete with situations where a jury rejects the underlying charge of discrimination, but finds that the employer retaliated, even though it did not discriminate.  So in situations where a potential race discrimination claim exists, employers have to try tread especially carefully now.
    In Potter, the Court continued its habit of expanding retaliation rights even though the statute in question (the Age Discrimination in Employment Act) does not contain a retaliation provision.  What's interesting about Potter is that the ADEA expressly provides for a retaliation claim against private employers, but is silent as to such claims against a federal employer.  Normally, this would be more than enough evidence of Congressional intent to support a finding that there is no retaliation right for federal employees.  However, the Court seems hell-bent on expanding retaliation rights where there are none and did so in this case.
    This court's proving not to be nearly as employer friendly on a number of fronts (ERISA, retaliation, disparate impact analysis) as was once hoped.  How this will affect the upcoming legislative session, perhaps with a new Chief Executive, remains to be seen.
 
posted Monday, June 23, 2008 10:12 AM by Lou Michels with 0 Comments

Having an Abortion Creates a Protected Status

  What could be a important case out of the Third Circuit Court of Appeals holds that an employer may not justify termination of an employee based on her decision to have an abortion.  This is a first for the Third Circuit, although the EEOC has maintained since 1986 that the Pregnancy Discrimination Act covers all pregnancy-related medical conditions, which would include abortion.

     The facts of the case are relatively straightforward.  A female employee (unidentified in the case, presumably for privacy concerns) was fired five days after she terminated her pregnancy because of severe deformities detected in an ultrasound, and on advice of her physician.  The district court granted summary judgment for the employer, but the Third Circuit reversed, sending the case back for trial. 

     The employee was terminated when she failed to call in to report her need for time off following the abortion.  This was allegedly consistent with company policy, but the office administrator testified that there was a separate set of rules for each employee regarding leave and attendance, and that there were no uniformly enforced rules on vacation or sick time.  Moreover, there were several examples of employees who did not have to call in to request additional time off from work.  This administrative sloppiness undercut the employer's ability to argue that the actual reason it terminated the plaintiff was because she failed to call in. 

    The evidence that the Court of Appeals used to support its decision that the abortion could have been the reason for the employee's termination consisted of the short period of time between the abortion and the termination (in an incredibly bad bit of timing, the employer notified the employee of her termination on the day that she buried the aborted fetus), and a remark by the supervisor to the effect that the employee "did not want to take the responsibility."  This remark was in an admittedly confusing conversation, but the court determined that it could raise an inference of discriminatory animus. 

     Other than a need to be aware that abortion is a protected factor, I'm not sure this case tells us a lot about managing gender discrimination or pregnancy discrimination claims.  An employer who doesn't consistently treat its employees the same on matters of vacation and leave of absence is simply asking for trouble.  It's really no surprise that the Court reversed on this case.

 

posted Monday, June 23, 2008 8:37 AM by Lou Michels with 0 Comments