As 2008 begins, the U.S. Supreme Court has signaled its keen interest in employment litigation by agreeing to review an unusually large number of such cases, as well as one case that will give management a clearer idea how the Court will balance its rights against those of organized labor. The cases raising these significant issues are summarized below.
Sprint/United Management Co. v. Mendelsohn, No. 06-1221.
Question: In an age discrimination case, should a trial court be required to admit testimony by other older employees terminated in the same reduction in force that they also were discriminated against by the defendant, even though the supervisor who decided to terminate the plaintiff was not involved in deciding to terminate the other employees?
A company underwent a reduction in force (“RIF”) that affected thousands of employees, including a 51-year-old named Mendelsohn. Employees were selected for reduction by their individual supervisors, and the employer said that Mendelsohn’s supervisor picked her based on her relatively weak performance. Mendelsohn, however, disagreed, and filed suit claiming she had been selected because of her age.
Mendelsohn sought to call as witnesses five other older employees from her work location who had been terminated in the same RIF to present evidence that they also had been victims of age discrimination. The employer sought to exclude that testimony as irrelevant because none of those former employees had worked for the same supervisor who decided to fire Mendelsohn. Alternatively, the employer argued that even if the testimony had some relevance, it should be kept out because it would unfairly prejudice and confuse the jury to hear five other witnesses testify that they had been fired based on age, transforming the case into a series of “mini-trials” over whether each such witness had been subject to discrimination.
The trial court barred the witnesses from testifying without making clear whether it thought the evidence was irrelevant or unduly prejudicial. After the jury ruled for the employer, Mendelsohn appealed. The Tenth Circuit Court of Appeals held that the trial court had no discretion to exclude such evidence because Mendelsohn was entitled to show that her employer had engaged in a company-wide policy of age discrimination in which several supervisors had participated. The court held that so long as the other witnesses were in the protected age group and terminated in the same RIF, the court had no choice but to let them testify because their testimony could show “an atmosphere of age discrimination” affecting several employees from which a reasonable jury could find that Mendelsohn herself had been subject to discrimination. The court also held that although this might require the employer to defend against a series of alleged discriminatory acts, it did not justify excluding the evidence.
The Supreme Court granted review to decide whether the Tenth Circuit had erred in holding that such “me, too” evidence must always be admitted. Taking the opposite view, the employer argues that such evidence should always be excluded as irrelevant where, as here, it comes from employees terminated based on decisions made by different supervisors. In response to the Court’s request that the federal government weigh in, the Solicitor General, joined by the Equal Employment Opportunity Commission (“EEOC”), filed a brief arguing that that trial courts should admit such evidence only if: (1) there is some connection between the other supervisors’ acts and the alleged discrimination by the plaintiff’s supervisor so as to “concretely suggest a company-wide campaign” or “pattern or practice” of discrimination; and (2) the prejudicial effect of the evidence and the risk of confusing the issues does not substantially outweigh the probative value of the evidence. The Court heard oral argument Dec. 3, 2007, and a decision is expected by June. Based on how the argument went, many observers expect the Court to reject the Tenth Circuit’s position that such “me, too” evidence must always be admitted, while giving lower courts better guidance on how to decide when to exclude it.
Federal Express Corp. v. Holowecki, No. 06-1322.
Question: When an employee, before the deadline for filing an EEOC charge, files an “intake questionnaire” and supporting affidavit with the EEOC describing alleged acts of discrimination and naming the responsible employer, but the EEOC does not tell the employer about those filings until after the employee sues the employer, should the suit be dismissed on the grounds that the employee failed to file a charge before filing suit?
The ADEA requires an employee, at least 60 days before filing suit, to file a charge with the EEOC describing the discrimination and naming the responsible employer. That requirement is designed in part to give the employer prompt notice that a claim has been filed, and to allow the EEOC the chance to investigate and, if it believes the claim has merit, to try to persuade the parties to settle the claim before suit is filed.
Kennedy filed an “intake questionnaire” with the EEOC, explaining what happened to make her believe that FedEx had discriminated against her, as well as a supporting affidavit. Nearly five months later she sued FedEx, alleging that she and 11 other similarly situated employees had been subject to age discrimination. In the meantime, however, she never filed a formal charge of discrimination with the EEOC, nor did the EEOC ever notify FedEx that Kennedy had accused it of discrimination. Only after filing suit did Kennedy finally file an EEOC charge.
The district court dismissed Kennedy’s suit on the grounds that she had failed to file a charge at least 60 days before bringing suit. The court held that the questionnaire and affidavit did not amount to a charge, particularly because FedEx had never been notified about them and given a chance to conciliate before suit was filed. The Second Circuit Court of Appeals reversed, holding that Kennedy’s questionnaire and affidavit met the key requirements for a charge by naming the employer and generally describing the discriminatory acts, and thus, in the words of an EEOC regulation, reasonably reflected a “manifest intent” that a charge be filed. The court held that it would be unfair to dismiss Kennedy’s suit simply because the EEOC had failed to alert FedEx about her claim.
The Supreme Court granted review to decide whether an intake questionnaire is equivalent to a charge, even where there is no evidence the EEOC treated it that way or told the employer about it. FedEx argued that the district court correctly dismissed the case because the Age Discrimination in Employment Act (“ADEA”) effectively requires an employee to wait until after the EEOC has had a chance to attempt conciliation before filing suit, something that never happened here. FedEx also argued that even if Kennedy should not be blamed for the EEOC’s failure to notify FedEx about her questionnaire, it should not be treated as a charge because there was no evidence Kennedy herself viewed it as one. The respondents, on the other hand, argued that Kennedy’s submissions adequately met the requirements of what constitutes a charge because they named her employer, generally described the discrimination, and reflected her intent to charge her employer with violating the ADEA. They also argued that the Second Circuit correctly held that Kennedy’s rights should not turn on something beyond her control, such as whether the EEOC failed to notify the employer about her claims. The Solicitor General filed a brief supporting Kennedy, arguing that the Court should defer to the EEOC’s definition of a charge, which does not require that the employer be notified.
The Court heard oral argument Nov. 6, 2007, during which Justice Scalia blasted the EEOC for issuing vague regulations and then inconsistently applying its practices, sowing confusion over when a filing would be treated as a charge. Most of the Justices also seemed decidedly unsympathetic to FedEx’s position that Kennedy’s filings did not constitute a charge or that her case should be thrown out just because the EEOC failed to notify FedEx that she had filed a claim. At the same time, they pressed the respondents’ attorney on how a complaint that is never communicated to the employer can fulfill one statutory purpose of a charge, namely, to give the employer a chance to resolve the claim before it ends up in court. The Court’s decision is expected sometime this spring.
BCBOCS West, Inc. v. Humphries, No. 06-1431.
Question: Can an employee who believes that he was subject to retaliation for complaining about race discrimination bring suit under 42 U.S.C. § 1981, which prohibits race discrimination in the making or enforcement of contracts?
Humphries, an African-American restaurant manager, alleged that he had been fired because of his race and because he had complained about race discrimination by his supervisor. He sued under Title VII of the Civil Rights Act of 1964 and under 42 U.S.C. § 1981 (Section 1981), a law enacted just after the Civil War, which prohibits race discrimination in the making and enforcement of contracts.
Section 1981 offers plaintiffs three key advantages over Title VII. First, although Title VII prevents plaintiffs from suing until they have first filed a charge of discrimination with the EEOC and waited for that agency to issue a right-to-sue notice, Section 1981 plaintiffs may sue without exhausting any administrative process. Second, while Title VII has a fairly short statute of limitations, requiring plaintiffs to sue within 90 days after receiving the EEOC’s right-to-sue notice, Section 1981 gives plaintiffs a leisurely four years after being subject to discrimination in which to sue. Third, although Title VII allows employees to recover all actual out-of-pocket losses (such as lost wages and benefits), it limits how much a successful employee can collect for emotional distress and punitive damages, with the cap for such other damages ranging from $50,000 to $300,000, depending on the employer’s size. Section 1981, on the other hand, allows unlimited damages.
Because Humphries missed the 90-day deadline for filing a Title VII suit, the district court dismissed his claims under that law. Although his Section 1981 claims were timely, the court dismissed those claims because he failed to establish a prima facie case of race discrimination or retaliation. The Seventh Circuit Court of Appeals reversed as to the retaliation claim, holding that such claims could be brought under Section 1981, and that Humphries had presented enough evidence of retaliation to warrant a trial.
The Supreme Court granted review to decide whether Section 1981 prohibits retaliation for complaining about race discrimination. The employer argues no, pointing out that unlike Title VII, Section 1981 says nothing about retaliation, and even though Congress amended the law in 1991 to reverse what it viewed as the Court’s overly narrow view as to what rights the law protected, Congress did not add anything about retaliation. The employer also argues that retaliation is a different type of wrong than discrimination, being motivated by conduct rather than an immutable characteristic, and that allowing plaintiffs to pursue retaliation claims under Section 1981 will defeat congressional intent that such claims be subject to the conciliation procedures and shorter statute of limitations under Title VII. The employee argues that Section 1981 should be interpreted as covering retaliation, citing two recent Supreme Court cases holding that other laws that on their face prohibit only discrimination, effectively outlaw retaliation as well.
Oral argument in the case is set for Feb. 20, 2008, with a decision expected by the end of the summer. In a related case, Gómez-Pérez v. Potter, No. 06-1321, the Court will decide whether the ADEA, which prohibits retaliation against employees for opposing age discrimination only if they are employed by someone other than the federal government, should nonetheless be interpreted as outlawing retaliation against federal employees, on the grounds that it is, in effect, a form of age discrimination. Oral argument is scheduled to occur one day before Humphries is argued.
Meacham v. Knolls Atomic Power Laboratory, No. 06-1505.
Question: When employees allege that their employer violated the ADEA by applying a policy or practice that has a disproportionate effect on older employees, and the employer defends by saying that it instead relied on “reasonable factors other than age” as permitted by the ADEA, is the burden on the employer to show that it relied on such reasonable factors or on the employees to show that it did not?
In Smith v. City of Jackson, 544 U.S. 228 (2005), the Supreme Court held that employees age 40 or older may bring so-called “disparate impact” claims under the ADEA, alleging that their employer applied a facially neutral policy or practice that had a disproportionate adverse effect on older employees. The plaintiffs in this case, whose jobs had been eliminated in an RIF, brought such a suit, claiming that the factors that their employer had used in deciding which employees to terminate—comparative performance, critical skills, ability to perform more than one job, and seniority—had a disparate impact on older employees and thus violated the ADEA.
Citing that part of the ADEA that permits employers to take an action otherwise prohibited by the statute “where the differentiation is based on reasonable factors other than age,” the Second Circuit Court of Appeals held that in this case, the question was whether the employer’s reliance on factors other than age was a reasonable way to achieve its legitimate goal of reducing its workforce. It held that because the plaintiffs had failed to show that their employer’s method of choosing which employees to terminate as part of the RIF had not been based on reasonable factors other than age, their suit should be dismissed.
The Supreme Court granted review to decide whether the Second Circuit properly required the employees to make such a showing, or whether the law instead requires the employer to show that its decision was based on reasonable factors other than age. In seeking review, the employees argued that the circuit courts are split on that question and that their position—that the burden is on the employer to establish, as an affirmative defense, that it relied on reasonable factors other than age—reflects how the EEOC interprets the law. They also argued that employees are in a poor position to be able to disprove the reasonableness of an employer’s practice because they have no access to why the employer chose one method over another, or any evidence that would support or undercut the reasonableness of that choice. The Solicitor General weighed in on the employees’ side, arguing that courts have regularly interpreted the types of exceptions in that part of the ADEA where the “reasonable factors other than age” language is found as affirmative defenses on which employers bear the burden of proof. The employer, however, argues that employers should bear only a burden of producing evidence that they relied on reasonable factors other than age, and that it remains the employees’ burden to prove that the employer acted unreasonably.
Because the Court only recently granted review, it is too soon to know when oral argument will occur or a decision will be issued.
Crawford v. Metropolitan Government of Nashville, No. 06-1595.
Question: Does Title VII’s protection against retaliation make it illegal to fire an employee because she mentions, during the employer’s internal investigation of a co-worker’s sexual harassment complaint, that she was also sexually harassed by the same person?
In the course of investigating an employee’s sexual harassment complaint, the employer interviewed another employee, Crawford, who said that she had been sexually harassed by the same man alleged to have harassed the complaining employee. The employer later fired Crawford, who sued under that part of Title VII that prohibits retaliation because an employee has opposed discrimination or because she has participated in an investigation under Title VII. The district court, affirmed by the Sixth Circuit Court of Appeals, dismissed Crawford’s suit on the grounds that her participation in the employer’s internal harassment investigation did not qualify her for protection, because it was not the type of “overt opposition” to suspected discrimination needed to qualify for protection under Title VII, and that her involvement in the employer’s internal investigation, in the absence of any pending EEOC charge, did not amount to protected “participation.”
In seeking review of the Sixth Circuit’s decision, Crawford argued that it conflicted with the decisions of several other circuit courts, as well as with the EEOC’s interpretation of Title VII. At the Court’s invitation, the Solicitor General submitted a brief outlining the federal government’s position which, echoing the EEOC, supports Crawford’s view that her activity was protected from retaliation. The employer, however, argues that the Sixth Circuit’s decision was correct, and that Crawford’s approach would deter employers from conducting internal investigations out of concern that they could never take action against anyone who gave a statement as part of such an investigation without creating a real risk of being sued for retaliation.
It is not yet clear when oral argument will occur or whether a decision will be issued by the time the Court’s term ends in June.
Chamber of Commerce of the United States v. Brown, No. 06-939.
Question: Does federal labor law preempt a state law prohibiting employers who receive state funds, including government contractors, from spending any part of those funds on communications aimed at opposing or supporting union organizing?
Claiming that it wanted to prevent taxpayer money from being used to influence the employees’ decision on whether to unionize, California passed a law that prohibits employers who receive more than $10,000 in state funds or state grants of any amount, contractors that do business with the state, private employers that do business on state property, and public employers, from using any state funds to “assist, promote, or deter union organizing,” including “any attempt…to influence” employees on “whether to support or join a labor union.
Private taxpayers or the state can sue offending employers for injunctive relief, treble damages and attorneys’ fees.
Several employer groups sued to enjoin the law on the grounds that it was preempted by federal labor law, in particular, that it interfered with employers’ federal right to freely express their views about unions. The district court granted those groups partial summary judgment, holding that those parts of the law covering private employers who receive state grants were preempted by the National Labor Relations Act (NLRA). Once an appeal was filed, the National Labor Relations Board directed its general counsel to file an amicus brief with the Ninth Circuit arguing in favor of preemption. A three-judge panel of the appellate court affirmed the lower court’s decision, but the full Ninth Circuit, after agreeing to rehear the case, ruled that no part of the law was preempted. After noting that California employers remained free to use their own money to express views about unionization, the court rejected the idea that the law was preempted under a Supreme Court case that forbids states from regulating activity that Congress meant to leave to “the free play of economic forces,” reasoning that state rules about how parties may spend public funds is “by definition not controlled by the free play of economic forces.” The court also held that the law was not preempted by the Supreme Court’s 1959 decision in San Diego Building Trades v. Garmon and later cases, which prohibit states from regulating activity that is actually or arguably covered by the NLRA. The court held that even though the NLRA prohibits using what an employer has said to prove most unfair labor practices, it does not explicitly give employers the right to participate in union organizing campaigns.
In their effort to persuade the Supreme Court to reverse, the employer groups argued that the Ninth Circuit’s analysis conflicts with that of the Second and Seventh Circuits in finding similar New York and Wisconsin laws to be preempted. The Solicitor General filed a brief also urging reversal, noting not only the conflict cited by the employer groups, but also that the Ninth Circuit’s decision “departs significantly” from Supreme Court precedent on NLRA preemption.
Oral argument in the case is expected to occur in March, with a decision anticipated by the end of June.
Engquist v. Oregon Dep’t of Agriculture, No. 07-474.
Question: Can a public employee who alleges that she was arbitrarily treated less favorably than similarly situated co-workers recover for denial of equal protection, even with no evidence that her disparate treatment resulted from membership in a protected class?
Engquist sued after being laid off from her job with the State of Oregon, claiming, among other things, that it had denied her equal protection of the law. The jury ruled for Engquist on that claim, finding that the employer had treated her less favorably than similarly situated co-workers “without any rational basis and solely for arbitrary, vindictive, or malicious reasons.” Oregon appealed to the Ninth Circuit, which reversed, holding that a public employee cannot recover on such facts where she is a “class of one,” that is, where she cannot show that her unequal treatment resulted from membership in a protected class such as gender or race. The court expressed concern that allowing public employees to bring such “class of one” claims would open the floodgates to cases challenging every sort of employment decision, contrary to the well-established rule of employment at will.
The Supreme Court granted review to resolve the conflict between the Ninth Circuit’s holding and those of seven other circuits that have recognized such “class of one” equal protection claims by public employees. Oral argument has not yet been set.
Although they are currently not on the Court’s docket, two other cases are noteworthy:
Progress Energy Inc. v. Taylor, No. 07-539.
Question: Can an employer enforce a former employee’s agreement to release claims under the Family and Medical Leave Act?
The Fourth Circuit Court of Appeals held that an employee was free to sue her former employer under the Family and Medical Leave Act (“FMLA”), even though, in return for severance pay, she had earlier signed a full release of any and all claims she might have against the employer, including any FMLA claims. The court held that private settlements or releases of FMLA claims are unenforceable, relying on a Department of Labor regulation that provides that “employees cannot waive, nor may employers induce employees to waive, their rights under the FMLA.” The employer has asked the Supreme Court to review the case, noting that it directly conflicts with a decision by the Fifth Circuit, as well as the Department of Labor’s own view that its regulation prohibits only prospective waivers of rights, not releases covering past events. After several employer groups, including the U.S. Chamber of Commerce, filed amicus briefs supporting the employer’s petition for review, the Court asked the Solicitor General to present the government’s view on whether the Court should hear the case.
Huber v. Wal-Mart Stores, Inc., No. 07-480.
Question: Does an employer’s duty of reasonable accommodation under the Americans with Disabilities Act (ADA) require it to reassign a disabled employee who cannot perform his or her current job to a vacant, equivalent position, without the employee needing to compete with others for that job, or is an employer free to fill such a vacancy with a better qualified applicant?
This issue, which arises frequently, has divided the lower courts. In this case, the Eighth Circuit Court of Appeals ruled in favor of Wal-Mart, holding that the ADA did not require it to reject a better qualified applicant in order to accommodate a disabled employee. The Supreme Court granted the employee’s petition for review in December 2007, but dropped the case from its docket less than six weeks later when the parties settled. Employers will need to wait for another similar case to reach the Court to learn how it will resolve the lower courts’ split of authority.