By Paul Galligan and Samuel Sverdlov

Synopsis:  The Seventh Circuit affirmed a summary judgment decision in favor of the employer on the plaintiff’s race discrimination and civil conspiracy claims where the employer did not hire the plaintiff after the plaintiff tested positive for marijuana at orientation.

Last month, in Turner v. Hirschbach Motor Lines, the Seventh Circuit affirmed the district court’s granting of summary judgment in favor of Hirschbach Motor Lines (Hirschbach) on plaintiff, Robin Turner’s claims of race discrimination under Title VII of the Civil Rights Act of 1964 (Title VII) and civil conspiracy under state law.

Background

Mr. Turner, an African American, was initially offered a job at Hirschbach as a commercial truck driver on the condition that he complete both the company orientation and a drug test. During orientation, Turner tested positive for marijuana.  Pursuant to Department of Transportation (DOT) regulations, Turner’s drug test was carried out at an independent medical facility, the urine sample was split into two, and the results of the first half of the sample were given to Turner through Hirschbach’s independent medical review officer.

Once Turner was given his results, Hirschbach’s safety officer explained to Turner that he had the right to request that the second half of his urine sample be tested at different laboratory. Turner told the safety officer that he wanted the second split test, but for disputed reasons, the second split test never happened.  Turner alleged at deposition that the safety officer cancelled the second split test.

Hirschbach ended up not hiring Turner. Pursuant to DOT regulations, Hirschbach reported Turner’s positive drug test “to an industry consortium from which future employers could, with Turner’s permission, seek his previous test results.” In turn, Turner filed race discrimination and conspiracy claims against Hirschbach.  Specifically, Turner alleged that: (1) Hirschbach did not hire him because of his race; (2) Hirschbach reported his drug tests to the industry consortium because of his race; and (3) Hirschbach conspired with the independent medical review officer to cancel the second split test.

Decision

Hirschbach moved for summary judgment on all of Turner’s claims. Turner argued that he could withstand Hirschbach’s summary judgment motion on a “cat’s paw theory.” Said otherwise, Turner argued that Hirschbach’s safety officer, who was not a decision-maker in Turner’s hiring, had racial animus towards Turner, which was a proximate cause of the decision to not hire Turner.  The district court was unpersuaded.  The court held that Turner did not put forth any evidence that: (1) the initial drug test was unreliable; (2) the second test would have been negative; or (3) the decision-maker based her decision on race rather than the positive drug test.  Further, the court held that reporting Turner’s negative drug test to the consortium was non-discriminatory because it was required by federal regulations.  Finally, the district court held that Turner’s conspiracy claim failed because there was no evidence on the record that Hirschbach and the independent medical review officer had an agreement to cancel the split test.

On appeal, Turner challenged the district court’s decision, and argued that he should have defeated summary judgment based on the simple assertion that the cancellation of the second split test violated DOT regulations. However, the Seventh Circuit held that Turner’s burden is greater than demonstrating a mere violation of a federal regulation.  Rather, given that the employer had put forth evidence that Hirschbach would not have hired someone who failed a drug test, Turner had “to support his cat’s paw theory with evidence casting doubt on the reliability of the initial drug test.”  Turner’s lack of evidence that the first test was a “false positive,” or that a second test would have come back negative, is fatal to Turner’s discrimination claim.  Regardless, the court held that Turner has not put forth evidence that Hirschbach actually violated any federal regulations.

Outlook

The Seventh Circuit’s decision in Hirschbach is a big win for employers, especially those employers who are subject to DOT or other onerous regulations.  Employers should rejoice in the Seventh Circuit’s willingness to hold Turner accountable for his burden of establishing a connection between the alleged racial animus and the adverse action.  However, employers should remain cautious and vigilant when taking adverse action against employees for hot-button issues such as failed drug tests.  Although the employer prevailed in Hirschbach, the court reminded employers that employees could prevail on a race discrimination claims where there is evidence of similarly situated employees of other races being treated differently.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Teams.

By Michael W. Stevens

Seyfarth Synopsis:  With Justice Neil Gorsuch joining the Supreme Court in April, and the apparent re-emergence of a 5-4 split, we expect to see the Court issue more expansive opinions and be less reticent to grant certiorari.  The addition of Justice Neil Gorsuch is likely to have particular impact in the field of labor and employment law.

Since Justice Antonin Scalia’s death in February 2016, the lack of a ninth justice on the U.S. Supreme Court left the Court without a discernible majority of liberal or conservative justices. The four-four split between more liberal and more conservative justices led to two outcomes:  first, some opinions contained narrower holdings than they otherwise may have in order to command a majority.  Second, it appears the remaining eight justices voted more defensively on certiorari, as the outcome of cases may have been more difficult to predict.  The addition of Gorsuch could impact a number of labor and employment cases currently pending or awaiting certiorari from the Court.

The most important employment law case on the Court’s docket is Epic Systems Corp. v. Lewis, No. 16-285.  In Epic, the Seventh Circuit held that the inclusion of a class action waiver in an arbitration agreement violated the National Labor Relations Act, finding that participating in a class is a “concerted activity” protected by the NLRA.  This holding is directly contrary to other circuit courts, which have found that class action waivers are enforceable under the Federal Arbitration Act.

In deciding Epic, the Court may provide further guidance on its approach to statutory construction, and make a key ruling affecting employers’ ability to channel disputes with employees to arbitration on an individualized basis.  Although it is always difficult to prognosticate Supreme Court decisions, many observers believe that Justice Gorsuch is likely to favor arbitrability of disputes.

With other employment cases queueing up for Supreme Court review, Justice Gorsuch’s addition to the Court is likely to have an important impact on how cases are decided.   Gorsuch has taken a strictly textualist approach to resolving matters of statutory construction, and has called into question Chevron deference. See, e.g., Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1152 (10th Cir. 2016) (Gorsuch, J., concurring) (describing Chevron deference as an “abdication of the judicial duty”).  For example, in TransAm Trucking, Inc. v. Administrative Review Board, 833 F.3d 1206 (10th Cir. 2016), then-Judge Gorsuch dissented from a finding that an employer trucking company impermissibly terminated an employee for operating a vehicle in contravention of the employer’s instructions, but who claimed to be doing so for his own safety.  Because the statutory phrase provided protection for employees who “refuse[] to operate a vehicle,” Gorsuch asserted that the statute did not protect an employee who operated a vehicle against the employer’s instructions.

This strictly textualist approach may have substantial ramifications in labor and employment cases. Just last month, the Seventh Circuit found that Title VII of the Civil Rights Act protects lesbian, gay, and bisexual (“LGB”) employees from discrimination based on sexual orientation. See Hively v. Ivy Tech Community College, 853 F.3d 339 (7th Cir. 2017).  In Hively, the Seventh Circuit reasoned that an LGB person who is discriminated against because of the gender of her partners (i.e., a female employee who has a female partner is terminated, but a male employee who also has a female partner is not) has experienced discrimination because of sex.  Although it appears that the employer in Hively is not planning to seek certiorari, there is a circuit split on this issue, and it is easy to imagine that this will soon be teed up for Supreme Court review.  It is unclear whether Justice Gorsuch’s strict textualism would support the Seventh Circuit’s decision, but that may be unlikely.

Justice Gorsuch’s addition to the Court will also have impact on employers in other areas of the law that intersect with employment issues. For example, Masterpiece Cakeshop v. Colorado Civil Rights Commission, No. 16-111, has been pending on the Supreme Court docket for an unusually long time, and certiorari has yet to be granted or denied.  In Masterpiece, a baker was found to have violated Colorado’s Anti-Discrimination Act by refusing to bake a wedding cake for a same sex couple.  The baker is seeking Supreme Court review, claiming that the anti-discrimination law violates the First Amendment and religious liberty protections.

While on the Tenth Circuit, Justice Gorsuch wrote a concurrence in Hobby Lobby in favor of expansive interpretations of religious liberty.  However, with Justice Kennedy routinely writing watershed opinions in favor of legal protections for LGBT people, it is unclear how a case like Masterpiece Cakeshop would be decided, and considering the conflicting issues, whether there are four votes in favor of certiorari.

Becoming the 101st Supreme Court Justice, Neil Gorsuch is likely to have a tremendous impact on labor and employment cases. Stay tuned to this blog as we examine new decisions as they are handed down.

FUN FACT: The photo of Justice Gorsuch is courtesy of Seyfarth Shaw L&E partner Kyle Peterson (second from right), who was recently sworn in before the US Supreme Court as part of a trip to Washington, DC, sponsored by the Women’s Bar Association of Illinois. 

 

By Dawn Reddy Solowey

Seyfarth Synopsis: In a recent federal case the employer has challenged the EEOC Enforcement Guidance on Retaliation taking the position that a religious accommodation request does not meet the test for protected activity under Title VII. In defending retaliation litigation, employers should consider whether there is a viable argument that a request for religious accommodation is not sufficient to establish protected activity as a matter of law –and, in any event — to proceed carefully when considering the request.

The Equal Employment Opportunity Commission (EEOC) has maintained in its Enforcement Guidance on Retaliation that “persons requesting religious accommodation under Title VII are protected against retaliation for making such requests.” In its Questions and Answers: Religious Discrimination in the Workplace, the EEOC “has taken the position that requesting religious accommodation is protected activity.”

In a federal case pending in Minnesota, one employer has challenged this guidance by the EEOC, and taken the position that a religious accommodation request does not meet the test for protected activity under Title VII.

Case Background

The case is EEOC v. North Memorial Health Care, Civ. No. 0:15-cv-3675, in the U.S. District for the District of Minnesota.  In that case, the EEOC sued the employer hospital claiming that the employer had retaliated against an applicant by withdrawing a conditional job offer because she asked for a scheduling accommodation for her religious beliefs.  On March 15, 2017, the employer moved for summary judgment.  The employer argued that the retaliation claim fails on grounds including that a religious accommodation request did not amount to protected activity as a matter of law.

The Employer’s Argument

The employer argued that the EEOC’s informal guidance is inconsistent with Title VII’s plain language, and therefore was not entitled to any deference.

Title VII provides for two categories of protected activity: (1) opposing any practice that violates Title VII; and (2) making a charge, testifying, assisting, or participating in any manner in an investigation, proceeding, or hearing under Title VII.  In its motion for summary judgment, the employer argued that a religious accommodation request falls in neither category.

The employer argued that requesting a religious accommodation is not opposing an unlawful practice, and neither is it making a charge or otherwise assisting in a Title VII investigation. The employer maintained that the EEOC has conceded as much in its retaliation guidance, by stating that a person requesting accommodation “might not literally ‘oppose’ discrimination or ‘participate’ in a complaint process.”

The employer’s motion cited two Circuit Court of Appeals opinions that have assumed, without deciding, that a religious accommodation request can amount to protected activity. However, the employer maintained that no federal appellate authority has directly and specifically analyzed the issue.  The employer cited two federal district courts, the District of Maryland and District of Columbia, that have held that a request for religious accommodation, without more, does not amount to protected activity.

Anticipating a likely argument by the EEOC, the employer sought to distinguish a request for religious accommodation from a request for an ADA disability accommodation, which has been held by some courts to amount to protected activity. The employer pointed to differences in the language of Title VII and the ADA.

Employment lawyers will be watching for the EEOC’s Opposition to the Motion for Summary Judgment, and ultimately the decision of the District Court to see how the employer’s theory fares.

What Does This Case Signal for Employers Defending Retaliation Litigation?

In defending retaliation litigation, an employer should consider whether, in the relevant jurisdiction, there is a viable argument that a request for religious accommodation is not sufficient to establish protected activity as a matter of law.   As always, it is important to keep in mind that the law governing retaliation claims under Title VII may differ from that under state and local laws.

What Does This Case Signal for Employers Managing Accommodation Requests?

A more conservative approach should guide an employers’ response to religious accommodation requests. Employers responding to a religious accommodation request would be wise to assume — until there is settled, binding law to the contrary — that a request for religious accommodation may be construed as protected activity under Title VII.  As a practical matter, this means that an adverse action that an employer takes against an employee, and that post-dates a religious accommodation request from the employee, may be challenged as retaliatory by the employee and/or the EEOC.

Best Practices for Responding to Religious Accommodation Requests

Best practices for employers to respond to religious accommodation requests, and minimize the risk of retaliation liability, include:

  • Set up a policy and process for managing religious accommodation requests in a manner that is consistent and compliant with the jurisdiction’s law. Ensure that managers and HR are trained in the policy and process, and that employees know how to request a religious accommodation.
  • Review each religious accommodation request individually on a case-by-case basis. You can read our Roadmap for Responding to a Request for Religious Accommodation here. Given the complexities of this area of the law, it is wise to enlist the help of counsel who specializes in this area.
  • Ensure that any adverse actions taken against an employee, including those subsequent to a religious accommodation request, are based on legitimate, non-discriminatory and non-retaliatory reasons, and that the business reasons for those adverse actions are well-documented .

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Absence Management and Accommodations Team.

By Steve Shardonofsky and John P. Phillips

Time WarpSeyfarth Synopsis:  The U.S. Fifth Circuit Court of Appeals recently held for the first time that the continuing violation doctrine applies even when a plaintiff was subject to harassment that was severe enough to put the employee on notice of the duty to file a complaint.  The lower court will now consider conduct many years outside of the 300-day limitations period under Title VII. This decision alters prior Circuit precedent, widens the reach of the continuing violation doctrine, and serves as warning for HR professionals and litigation counsel.

Unlike discrete acts of retaliation or discrimination, conduct that may support a hostile work environment claim often occurs over a period of time and cannot be said to occur on any particular day.  Because of this difference, most courts have long recognized the “continuing violation doctrine,” which essentially says that as long as one harassing act occurs within the filing period, the entire time period of the hostile work environment may be considered by the court for the purpose of determining liability.

In Panagiota Heath v. Southern University System Fdn. et al., a university professor (Heath) alleged that she was subject to ongoing harassment because of her sex by her immediate supervisor as far back as 2003.  The alleged harassment included having her re-write exams, coercing students to make complaints against her, denying her request for a sabbatical, telling her that he did not believe she was capable of writing a book, and excluding her from meetings because she talked “too much for a woman.”  Heath initially filed a lawsuit in Louisiana state court in 2009 alleging sex discrimination, but the suit was dismissed when she stopped pursuing it. She then took a sabbatical in 2010-2011 for job-related stress, but alleged that the harassment continued after she returned to work, including being subject to belittling comments and intimidating conduct from her supervisor. More than 200 students signed a petition asking for Heath to be changed to a “non-hostile” and “non-harassing” work environment.  Heath complained about the conduct in 2009 and 2012.  But there was no indication that the University responded.  In early 2013, she filed a charge with the EEOC and eventually filed her second lawsuit.

The district court granted summary judgment to Southern University on Heath’s hostile work environment claim, holding that she could not rely on any conduct that occurred outside of the limitations period (300 days before filing her EEOC charge) and that the conduct inside the limitations period was not sufficiently severe or pervasive to establish a claim. The district court relied on the Fifth Circuit’s Celestine v. Petroleos de Venezuella (Celestine I) decision from 2001, which addressed the continuing violation doctrine and required courts to consider numerous related factors, including whether “the act has the degree of permanence which should trigger an employee’s awareness of and duty to assert his or her rights.” Under Celestine I, if the harassing conduct was sufficiently severe to put the employee on notice of the need to file a complaint, the employee typically could not rely on the continuing violation doctrine.  Rather than wait until 2013, the district court found that Heath should have filed a claim in 2011 when the harassment continued after her sabbatical.

The Fifth Circuit reversed and remanded, acknowledging for the first time that the Supreme Court’s 2002 National R.R. Passenger Corp. v. Morgan decision overruled Celestine I to the extent that the Fifth Circuit and other Circuits held that “the plaintiff may not base a suit on individual acts that occurred outside the statute of limitations unless it would have been unreasonable to expect the plaintiff to sue before the statute ran on such conduct.”  Thus, at least in the Fifth Circuit, the date on which a plaintiff becomes aware that he or she has an actionable Title VII claim is no longer relevant.  Nevertheless, courts are left with other factors to consider in deciding whether apply the continuing violation doctrine, including (1) whether the separate acts are related, (2) whether any intervening acts by the employer “severed” the acts that preceded it from later conduct, and (3) whether there are any equitable factors that should prevent the court from considering the full scope of the continuing conduct.  Based on these other factors, the Fifth Circuit found that Heath had properly alleged a continuing violation and remanded for a determination about whether the claim relating to conduct since 2011 could survive summary judgment.

The case is a cautionary tale for HR professionals and litigation counsel, and a reminder that over-reliance on the statute of limitations in hostile work environment claims is not an ideal tactic.  Because stale internal complaints and allegations going back many years can be revived in subsequent litigation, HR professionals and employment counsel should take care to always accurately and thoroughly document employee complaints and related investigations, take prompt and effective remedial action when appropriate, follow-up with the complainant, and consider what other actions to take in order to “sever” or “break” a possible continuing violation.

For more information on this or any related topic, please contact the authors, your Seyfarth attorney, or any member of the  Labor & Employment Team.

By Paul Galligan and Samuel Sverdlov

iStock_000042612884_MediumSeyfarth Synopsis: The District Court of the Southern District of New York granted an employer’s motion for summary judgment on an employee’s failure to accommodate claims, holding that the plaintiff did not hold a bona fide religious belief, and failed to provide notice to the employer regarding his need for religious accommodation.

Requests for religious accommodations are challenging for employers because employers have limited means to determine the veracity of an employee’s religious obligations, yet risk liability for discrimination and retaliation under federal, state, and local laws if they outright refuse to accommodate an employee’s request for religious accommodation. In fact, more often than not, employers take an employee’s purported religious obligations at face value rather than asking the employee to justify their obligations.  In Bob v. Madison Security Group, Inc., the District Court for the Southern District of New York granted an employer’s motion for summary judgment on a pro se Plaintiff’s claims of failure to accommodate, retaliation, and unlawful termination under Title VII of the Civil Rights Act of 1964 (Title VII), New York State Human Rights Law (NYSHRL), and the New York City Human Rights Law (NYCHRL).

In Bob, the plaintiff was a Muslim security guard employed by Madison Security Group (Madison).  The plaintiff alleged that Madison refused to accommodate his religious beliefs – that he could not work on Fridays to observe the Sabbath.  The plaintiff alleged that despite his religious needs, the employer continued to schedule the plaintiff for Friday shifts.  When the plaintiff failed to report to any shifts that included hours on a Friday, his schedule was reduced and ultimately eliminated (though the employer contended that they have never formally terminated the plaintiff’s employment).

Madison denied any wrongful conduct, and moved for summary judgment on all of the plaintiff’s claims. With regard to the plaintiff’s failure to accommodate claim, Madison challenged whether the plaintiff actually held a bona fide religious belief preventing him from working on Fridays, and averred that in any case, they did not have notice of the plaintiff’s need for religious accommodation.

The court granted the employer’s motion. The court was convinced that the plaintiff did not hold a bona fide religious belief, given that Madison produced records from the plaintiff’s prior employer showing that the plaintiff regularly worked 8-hour days on Fridays, and the plaintiff himself testified during deposition that he could work on Fridays, but prefers not to.

The court was also persuaded that the plaintiff never put Madison on notice that he required a religious accommodation. The plaintiff alleged that he told his interviewer that he could not work on Fridays when he applied for the job, but Madison put forth evidence that they never employed the interviewer identified by the plaintiff.  Further, although the plaintiff often wrote to Madison to complain about working conditions, he never complained about being scheduled to work on Fridays.

Outlook

Although the employer prevailed in this case, employers generally should be cautious and risk- averse when dealing with employee requests for religious accommodation. Employers must remember that they have an obligation to reasonably accommodate religious requests absent an undue hardship, which can be difficult to establish.  Accordingly, we advise that employers engage in, and carefully document, the interactive process with employees requesting such an accommodation.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of the Firm’s Absence Management and Accommodations Team.

By Sam Schwartz-Fenwick and Lucas Deloach

Seyfarth Synopsis: Increasingly, courts have held that discrimination on the basis of sexual orientation and gender identity violates Title VII. Federal district courts in Nevada and Pennsylvania have recently joined their ranks.  Nonetheless, the issue remains unsettled.

In the previous two months, federal courts in Nevada and Pennsylvania held that Title VII’s prohibition on sex discrimination includes discrimination based on gender identity and sexual orientation, respectively. These rulings accompany the Seventh Circuit’s recent decision to vacate its panel ruling that Title VII did not extend to claims of sexual orientation discrimination and to re-hear the case en banc.

In Roberts v. Clark County School District, a transgender police officer brought suit in the District of Nevada after the Clark County School District prohibited him from using either the men’s or women’s restrooms.  The school district argued in its motion for partial summary judgment that Title VII only prohibits discrimination based on “biological sex.”  In an October 4, 2016 ruling, the court disagreed and “join[ed] the weight of the authority” concluding that discrimination based upon an individual’s transgender status violated Title VII.  It further concluded that the plaintiff was entitled to summary judgment on his discrimination claim, as he was “clearly treated differently than persons of both his biological sex and the gender he identifies as ­­- in sum, because of his transgender status.”

In EEOC v. Scott Medical Health Center, P.C., the Equal Employment Opportunity Commission (EEOC) sued a pain management and weight loss clinic and alleged that a gay male employee was constructively discharged after a manager created a sexually hostile work environment.  The complaint recited a number of the manager’s alleged homophobic slurs and statements. The defendant moved to dismiss the complaint on the grounds that Title VII does not protect discrimination on the basis of sexual orientation.  The court denied the defendant’s motion exactly one month after the Roberts decision.  The court remarked that “the singular question” is “whether, but for [the employee’s] sex, would he have been subjected to this discrimination or harassment.”  The court thought not and held that Title VII’s “because of sex” provision prohibits discrimination on the basis of sexual orientation.

Of course, these decisions are not the final word. As President-elect Trump assembles his administration, it is not yet clear whether the executive branch and its agencies will depart from the position that the protections of Title VII extend to LGBT statuses.  Additionally, the U.S. Supreme Court has agreed to hear an appeal which asks the Court to weigh in on the issue of restroom access for transgender students.  While the appeal directly implicates Title IX, the ruling could also impact courts’ interpretations of prohibitions on sex discrimination under Title VII.

Given this uncertainty and the patchwork of court decisions across the country, employers should consult with counsel to review their policies, practices, and procedures as they relate to sexual orientation and gender identity claims.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Team.

 

 

 

By Johanna T. Wise and Arielle Eisenberg

Seyfarth Synopsis: On November 18, 2016, the EEOC issued new guidance on its enforcement of anti-discrimination laws related to national origin. The guidance provides clarification on the scope of national origin under Title VII and supersedes the 2002 update to the EEOC Compliance Manual, Volume II, Section 13.

Immigration, and thus the number of employed immigrants, has been steadily rising. In the wake of this increase in national origin diversity within the workplace, the EEOC issued an updated guidance to inform both employers and employees how it interprets, approves, and/or disapproves of court interpretation of national origin discrimination cases.  Tellingly, this is the EEOC’s first update to its national origin guidance since 2002, which reflects the EEOC’s current focus on national origin discrimination, harassment, and retaliation.

The guidance clarifies the definition of “national origin,” and what constitutes discrimination based on “place of origin” and “ethnicity” under Title VII of the Civil Rights Act of 1964:

  • National Origin: “discrimination because an individual (or his or her ancestors) is from a certain place or has the physical, cultural, or linguistic characteristics of a particular national origin group.”
  • Employment Discrimination Based on Place of Origin: “discrimination ‘because of an individual’s, or his or her ancestor’s, place of origin.’ The place of origin may be a country . . . may be the United States . . . may be a geographic region, including a region that was never a country but nevertheless is closely associated with a particular national origin group.”
  • National Origin Group/Ethnic Group: “a group of people sharing a common language, culture ancestry, race, and/or other social characteristics.” This includes discrimination based on ethnicity and physical, linguistic or cultural traits.

The EEOC has also added Native American, or tribe members, to the definition of national origin. The guidance then provides an analysis of the intersection of national origin discrimination and other protections under Title VII such as race, color and religion.

The guidance further includes a non-inclusive list of all aspects of employment to which Title VII applies, as well as a list of “promising practices” or employment practices which “may help reduce the risk of violations.” Some highlights include:

  • Recruitment: “use a variety of recruitment methods to attract as diverse a pool of job seekers as possible.”
  • Hiring, Promotion and Assignment: establish “written objective criteria for evaluation candidates; communicating the criteria to prospective candidates; and applying those criteria consistently to all candidates.”
  • Discipline, Demotion, and Discharge: develop “objective, job-related criteria for identifying the unsatisfactory performance or conduct that can result in discipline, demotion, or discharge.”
  • Harassment: communicate clearly “to employees through policies and actions that harassment will not be tolerated and that employees who violate the prohibition against harassment will be disciplined.”

Other areas the new guidance covers are national origin as it relates to human trafficking, harassment, language barriers, citizenship, retaliation and foreign employers in the United States.

Lastly, the EEOC has also published a FAQ to be used in conjunction with the guidance and a small business fact sheet.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Policies and Handbooks Team.

By Annette Tyman, Lawrence Z. Lorber, Jaclyn W. Hamlin, and Brent I. Clark

 

Seyfarth Synopsis: The first of several anticipated challenges to Executive Order 13673, “Fair Pay and Safe Workplaces,” has resulted in a preliminary injunction staying the implementation of some – but not all – aspects of the Executive Order and its implementing regulations. In a significant victory for the government contracting community, the Associated Builders and Contractors of Southeast Texas won an injunction staying the application of the reporting and disclosure requirements, as well as the prohibition on entering into mandatory pre-dispute arbitration agreements.  The Judge left the paycheck transparency provisions in effect, however, and as a result, government contractors must still plan for compliance with those requirements.

Introduction

For our readers that are interested in occupational safety and health topics, we are blogging our colleagues “Management Alert” below, with this introductory note. OSHA citations are covered among the labor laws covered by the Executive Order 13673 (Blacklisting Order). The way the Blacklisting Order reads is that the covered violations include citations which are not final, which are being contested by the employer, and which may ultimately be withdrawn through settlement or by a Judge once the employer has had a chance to present its defense.  The Blacklisting Order is another example of the government’s “guilty until proven innocent” approach to regulating businesses and employers.

Note also that the Blacklisting Order will be applicable under:

  • The Fair Labor Standards Act
  • The Occupational Safety and Health Act of 1970 (including OSHA-approved State Plans equivalent to State Laws)
  • The Migrant and Seasonal Agricultural Worker Protection Act
  • The National Labor Relations Act
  • 40 U.S.C. chapter 31, subchapter IV, also known as the Davis-Bacon Act
  • 41 U.S.C. chapter 67, also known as the Service Contract Act
  • Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity)
  • Section 503 of the Rehabilitation Act of 1973
  • The Vietnam Era Veterans’ Readjustment Assistance Act of 1972 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974
  • The Family and Medical Leave Act
  • Title VII of the Civil Rights Act of 1964
  • The Americans with Disabilities Act of 1990
  • The Age Discrimination in Employment Act of 1967
  • Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors)

In a significant victory for the government contracting community, a federal judge sitting in the U.S. District Court for the Eastern District of Texas partially stayed the implementation of Executive Order 13673, “Fair Pay and Safe Workplaces,” referred to in the government contracting community as the “Blacklisting Order.”  As discussed in more detail here, the Blacklisting Order would:

  1. Require government contractors to disclose “labor law violations” under fourteen different statutes and Executive Orders when bidding for or modifying contracts;
  2. Prohibit employers from entering into mandatory pre-dispute arbitration agreements with employees; and
  3. Require certain disclosures to independent contractors and employees concerning their employment status and information related to wages and hours worked.

When the White House issued the Executive Order, the government contracting community expressed concerns about the substantial burdens it would impose on businesses and noted that the Order seemed to exceed the limits of Executive power.  Judge Marcia Crone, a federal judge in Texas, agreed.  Late on October 24, 2016, Judge Crone issued a preliminary injunction blocking: (1) the labor law violations disclosure requirements and (2) the prohibition against entering into mandatory pre-dispute arbitration agreements.  The preliminary injunction applies to all federal contractors subject to the Executive Order and it blocks all aspects of the requirements and the implementing regulations, except the paycheck transparency provision.

The Plaintiffs, an association of government contractors in Texas, argued that the Executive Order and its implementing regulations and guidance exceeded Executive power and would impose irreparable harm on their businesses.  Judge Crone found the Plaintiffs’ arguments compelling with regard to the reporting and disclosure requirements and arbitration clause prohibitions, and stayed the implementation of those requirements.

In her decision, the Judge addressed several of the arguments raised by the contracting community Plaintiffs and the government Defendants.

  • The Judge found that the Executive Order and its implementing regulations and guidance likely exceeded the limits of Executive power.
  • She noted that fourteen statutes and Executive Orders of which the Blacklisting Order requires contractors to publicly disclose “violations” all have their own detailed enforcement mechanisms and penalties.
  • The Judge noted that under the Blacklisting Order, a contractor could face debarment or disqualification even if it was contesting a violation or over nothing more than the issuance of a citation by an individual government agency official.
  • Judge Crone also found persuasive the Plaintiffs’ arguments that the provisions of the Executive Order and Final Rule which restrict or prohibit certain mandatory pre-dispute arbitration agreements are in violation of the Federal Arbitration Act and the government’s general policy in favor of arbitration.
  • The Judge found the reporting and disclosure requirements to be “compelled speech” that likely violates the contractors’ First Amendment rights and also agreed that the Executive Order likely violates contractors’ Due Process rights by “compelling them to report and defend against non-final agency allegations of labor law violations without being entitled to a hearing at which to contest such allegations.”
  • Judge Crone found that the Executive Order is likely arbitrary and capricious “in view of the complex, cumbersome, and costly requirements . . . which hamper efficiency without quantifiable benefits.”

Although the contracting community’s victory is substantial, it was not complete, as Judge Crone left the paycheck transparency provisions to take effect on their regular schedule (starting on January 1, 2017).  The paycheck transparency provisions require that contractors with procurement contracts of $500,000 provide their employees with a document disclosing “the individual’s hours worked,  overtime hours, pay, and any additions made to or deductions made from pay.” For exempt employees, the document may omit information concerning overtime hours worked so long as the individual has been informed of his or her exempt status.  Covered contractors in states with equivalent paycheck transparency laws, such as New York and California, are deemed to be in compliance with the Executive Order’s requirements so long as they comply with their state’s paycheck transparency law.  Contractors should also be aware that there is always a possibility that the preliminary injunction may be lifted – whether by the Fifth Circuit or another federal court – and in that event, the reporting and disclosure requirements could be reinstated.  For that reason, covered contractors may wish to continue to collect data in case they find themselves once again subject to the reporting and disclosure obligations.

The request for – and subsequent partial granting of – a preliminary injunction staying the implementation of certain provisions of the Blacklisting Order is only the opening salvo in what is likely to be a long fight between the contracting community and the federal government.  As we discussed in our previous alert on the topic, multiple court challenges are possible, and the Blacklisting Order’s provisions may appear before Congress at some point.

Meanwhile, thanks to Judge Crone’s preliminary injunction, the reporting and disclosure requirements and the prohibition on mandatory pre-dispute arbitration agreements are enjoined until further notice, while we continue to closely monitor developments.  Preliminary injunctions typically remain in effect at least until the conclusion of the underlying litigation.  The Plaintiffs may petition the court for the preliminary injunction to become permanent, blocking the government from enforcing the reporting and disclosure requirements and the prohibition on mandatory pre-dispute arbitration agreements (unless the injunction is overturned).  Or the government Defendants may appeal to the U.S. Court of Appeals for the Fifth Circuit, perhaps paving the way for an ultimate ruling by the U.S. Supreme Court.  The ultimate resolution of the contracting community’s concerns about the Blacklisting Order remains to be seen.  One thing is clear, however: while government contractors should be pleased with their victory in Texas, they must still plan to comply with the paycheck transparency provisions.  The contracting community has won the first battle, but the war over blacklisting continues.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the OFCCP & Affirmative Action Compliance Team, the OSHA Compliance, Enforcement & Litigation Team, or the Workplace Policies and Handbooks Team.

By Sam Schwartz-Fenwick and Kylie Byron

Seyfarth Synopsis: A Seventh Circuit panel’s ruling that Title VII does not cover claims of sexual orientation discrimination will be heard en banc by the Circuit.  Whether an en banc ruling affirms or reverses the panel’s decision, it is likely that this issue will only be resolved with certainty by the Supreme Court.

On October 11, 2016, in response to a petition for rehearing filed by the Appellant, and as we predicted in our blog, the Seventh Circuit vacated its panel ruling that Title VII did not extend to claims of sexual orientation discrimination, and decided to hear the case before the entire Seventh Circuit en banc.

The panel decision, issued in August 2016, was controversial and for many inconclusive.  The Court was friendly to the reasoning of the EEOC, which has been arguing that sexual orientation discrimination is per se sex discrimination covered by extant law.  Despite negating the rationale for not covering sexual orientation discrimination, the panel held fast to stare decisis and upheld the district court’s decision that sexual orientation discrimination claims were not covered by Title VII.

Reading the tea leaves, many believe the Seventh Circuit may be poised to reverse the panel decision.  Judge Posner, most notably, has recently been outspoken in his opinions on LGBT issues.  He wrote a scathing dissent in a recent Seventh Circuit case, Fuller v. Lynch, No. 15-3487, lamenting an immigration judge’s denial of relief to an asylum seeker on, in Posner’s words, “a supposed lack of ‘proof’ of bisexuality.”  Posner also previously authored the opinion striking down Wisconsin’s ban on same-sex marriage in Wolf v. Walker, on the basis of equal protection.

Judge Posner is not, of course, the only Judge in play.  He is, however, singularly and vocally outspoken on the issue, acting as a correspondent on LGBT rights in the law in the media.  Between Judge Posner’s vocal position, the panel’s internally conflicted initial opinion, and the willingness of the Seventh Circuit to take the case up for rehearing, many see the case as a ripe opportunity for the Seventh Circuit to become the first Circuit Court of Appeals to endorse the EEOC’s outlook on Title VII’s protection on the basis of sexual orientation.

However the Circuit Court rules will hardly be the last word on this issue.  The rehearing may result in some stabilization of the law in the Circuit, but is unlikely to portend for consistent results nationwide.  A Circuit split is likely to emerge, a split that will only be resolved by legislative or Supreme Court action.

In this time of flux, employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye towards sexual orientation claims.

If you have questions regarding this topic, please contact the authors or your Seyfarth attorney.

 

By Meredith-Anne Berger and Tracy M. Billows

Seyfarth Synopsis: Recently, the Second Circuit held that the “cat’s paw” theory of liability may be used to support recovery for claims of retaliation where an employer negligently relies on information provided by a low-level employee with an “unlawful animus,” allowing employees to have an “outsize role” in an employment decision.

In Vasquez v. Empress Ambulance Service, the plaintiff complained of sexual harassment and the company began conducting an investigation, which led to the company’s downfall.  After getting wind of the complaint, the alleged harasser, Gray, himself produced false evidence that the plaintiff, Vasquez consented to and solicited a sexual relationship of her own accord and had in fact harassed Gray, which resulted in Vasquez’s termination.  The court found the company’s reliance on the information Gray provided during the investigation to be unjustifiable.  The court held that as a matter of law, the company could be found liable for Gray’s acts, despite the fact that he was a low-level employee.

The company’s investigation got off on the wrong paw from the start. First, Gray walked into the room where Vasquez was writing a formal complaint, and confronted her about reporting him.  Adding fuel to the fire, Gray then asked his coworker to lie for him and tell the supervisors that the harasser and the plaintiff were in a romantic relationship.  The coworker refused, but meanwhile, Gray manipulated a text message conversation between he and the Vasquez to make it appear as though another person with whom he exchanged sexual banter was actually Vasquez.  He then presented these doctored texts to the company, to show that he had been in a consensual relationship with Vasquez. The court was skeptical that the company could believe that Gray conveniently had printed copies of amorous text messages with Vazquez, at the very time she reported sexual harassment.

Vasquez’s supervisors thanked her for telling her story, and promised to sort the situation out, but refused to allow Vasquez to show them explicit photos sent to her by the alleged harasser. On the basis of the doctored text messages given to them by Gray and a “racy” selfie purportedly sent to Gray by Vasquez (which only showed a fraction of a face and was by no means “unequivocally” a photo of the plaintiff), the company fired Vasquez for sexual harassment. The supervisors refused to see any evidence from Vasquez that would refute Gray’s evidence and refused to show Vasquez the purported photo of her.  The court later noted that Gray “more closely resembl[es] a vengeful suspect than an independent informant.” The company failed to see the problem with blindly trusting Gray’s evidence that pointed the finger at the complainant while conducting an investigation into his own conduct.

The Second Circuit considered whether cat’s paw liability would allow the company to be held liable for its reliance on the alleged harasser’s (a coworker of plaintiff) retaliatory information. The court found that where an employer, through its own negligence, gives effect to the retaliatory intent of one of its low-level employees, it may be held liable for retaliation under Title VII.

However, the court also held that an employer who relies on a false report of an employee, but does so non-negligently and in good faith, cannot be held liable under the “cat’s paw” theory under Title VII. Further, the court found that an employer who, albeit negligently, relies on a low-level employee’s false accusations is not liable under Title VII unless the employee’s statements were the product of discriminatory or retaliatory intent, though the company may still face liability under state law for common law negligence.

This case highlights the importance of an independent, prompt, and thorough investigation (including looking at all of the evidence, not just select evidence) of any complaints of harassment, however unlikely litigation may seem at that stage. An investigation may later prove to be a sword, not a shield.