By Renate Walker and Erin Dougherty Foley

Seyfarth Synopsis: Plaintiffs often have difficulty producing evidence of comparators when attempting to prove unlawful discrimination because records contained in personnel files are confidential, but any attempts to gather such evidence must be lawful. An employee’s unauthorized review and disclosure of confidential personnel files, in violation of state law, was recently ruled not to be protected activity under Title VII.

The Fourth Circuit recently held that Title VII does not protect an employee from being terminated for conduct that violates a state law, even when that action is taken in furtherance of a Title VII claim, so long as the state law does not pose a direct conflict with Title VII. Netter v Barnes, No. 18-1039 (4th Cir. 11-15-2018).

Catherine Netter, a Black and Muslim woman, worked as a detention services supervisor for the Guilford County Sheriff’s Office in North Carolina. After receiving a disciplinary sanction that barred her from testing for a promotion, she filed complaints with her human resources department and the EEOC, alleging that similarly situated officers of other races and religions were not disciplined. When asked if she had evidence to support her claims, Netter reviewed and copied five employees’ confidential personnel files, without the employees’ consent or her own supervisor’s permission. Netter provided copies of the files to the county human resources investigator, the EEOC, and her lawyer. Upon learning of these events, Sheriff BJ Barnes terminated Netter’s employment, a decision based in part on her violation of a state law prohibiting “knowingly and willfully examin[ing] . . . , remov[ing], or copy[ing] any portion of a confidential personnel file” without authorization.

Netter argued that her termination constituted illegal retaliation because her copying and distributing the files was a protected participation activity, or alternatively, protected opposition activity, under Title VII. Protected opposition activity requires an employee to show (1) that she reasonably believed that the action she opposed violated Title VII and (2) that her conduct was reasonable. As such, the court quickly disposed of Netter’s alternative argument, noting that “unauthorized disclosures of confidential information to third parties are generally unreasonable,” and that even if she reasonably believed the county investigator had a right to access the files, Netter’s own unauthorized review was unreasonable.

Protection for participation activities is much broader and includes activities that are unreasonable or irrelevant; however, the plaintiff still bears the burden of proving that the retaliation (here, Netter’s termination) would not have occurred but for the protected activity. The court held that Netter’s conduct was not a protected participation activity because her actions violated a valid, generally applicable state law. In so doing, the court rejected Netter’s argument that the state law was preempted by Title VII because the state law has a valid purpose of protecting county employees’ personal information, and it neither contradicts Title VII nor impedes the pursuit of a Title VII claim. Furthermore, Barnes clearly established that Netter would have been terminated based solely on her violation of state law, so even if the other grounds for her discharge were invalid, Netter failed to prove that she would not have been terminated but for her participation in a protected activity.

Takeaways for Employers

While many employee activities can qualify as protected activity under the various discrimination statutes, they are not blanket protection statutes. Should you be faced with conduct that might otherwise violate an employee conduct standard or some other established law or public policy, disciplinary action can be considered for the underlying, unprotected conduct. Consider those actions carefully, in consultation with your Human Resources professional and/or legal counsel.

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

By Dawn Reddy Solowey and Latoya R. Laing

Seyfarth Synopsis: The 8th Circuit recently held that while a request for a religious accommodation  may qualify as a protected activity, it is not necessarily “oppositional” so as to give rise to an opposition-clause retaliation claim under Title VII. Employers considering requests for religious accommodation should, despite this Circuit’s narrow decision, proceed carefully when considering any request.

Last year we blogged about a Minnesota District Court’s decision holding that a religious accommodation request did not constitute a protected activity under Title VII. The plaintiff appealed the ruling.  On November 13, 2018, the Eighth Circuit Court of Appeals affirmed, holding that it could not “categorically” resolve whether a request for religious accommodation is oppositional activity for a retaliation claim, but that it would affirm the ruling for the employer on the summary judgment record in this case.

Case Background

The case is EEOC v. North Memorial Health Care, Civ. No. 17-2926 in the U.S. Court of Appeals for the Eighth Circuit. The Equal Employment Opportunity Commission (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 as a Seventh Day Adventist. On March 15, 2017, the employer moved for summary judgment. The employer argued that the retaliation claim failed on grounds including that a religious accommodation request did not amount to protected activity as a matter of law. The District Court agreed, granting summary judgment in favor of the employer.  The EEOC appealed, joined by amicus curiae that included the American Civil Liberties Union (ACLU).

What Did the Court Rule?

The 8th Circuit explained that it was considering an “issue of first impression,” namely whether “requests for religious accommodation are protected activity under Title VII’s anti-retaliation provision.”  The Court held that “the issue cannot be resolved categorically,” but affirmed the district court’s ruling on the summary judgment record in this case, holding that the applicant’s simple request for a religious accommodation was not “oppositional” activity as required for Title VII retaliation claims.

Title VII makes it unlawful for an employer to discriminate against an employee or an applicant for employment because the employee opposed an unlawful employment practice. To establish a prima facie case of retaliation, the EEOC was required to show that the applicant opposed an unlawful practice.

The Court relied on the Supreme Court case Crawford v. Metro. Gov’t of Nashville and Davidson Cty. 555 U.S. 271 (2009), emphasizing that when an employee communicates to the employer a belief that the employer had engaged in discrimination, that communication almost always constitutes the employee’s opposition to the activity.

However, in this case, the Court held that the applicant’s actions were not oppositional because “merely requesting a religious accommodation is not the same as opposing the allegedly unlawful denial of a religious accommodation.”

While the Court generally construes the statute “broadly to cover opposition to employment actions that are not unlawful,” the plaintiff’s request for religious accommodation, by itself, “did not reflect, much less communicate, any opposition or resistance to any North Memorial employment practice.”

The Court explained that at least for religious accommodation claims, “protected activity” is not always “oppositional activity.”  The Court held that in some circumstances, a religious accommodation request could form the basis for a retaliation claim, such as if an employer denied an accommodation on the grounds that it was not in fact based on a religious practice and fired the employee for making the request.  However, when the employee or applicant requests a religious accommodation, and the request is denied on the grounds that it cannot reasonably be accommodated absent undue hardship, there is no basis for an opposition-clause retaliation claim.  Instead, the employee or applicant’s exclusive claim is a disparate impact or disparate treatment claim under Title VII.

Finally, the Court noted that the applicant’s original EEOC charge had included a claim of disparate treatment.  However, the EEOC’s enforcement action alleged only unlawful retaliation.  Thus, while the Court held that the applicant’s “Title VII remedy as an unsuccessful job applicant was a disparate treatment claim under [the statute] for failure to reasonably accommodation,” there was in this case no disparate-treatment claim before the Court.

What Does This Case Signal for Employers Defending Retaliation Litigation?

In defending a retaliation claim, an employer should consider whether, in the relevant jurisdiction, there is a viable argument in its jurisdiction that a request for religious accommodation is not sufficient to establish protected activity as a matter of law.  This issue was one of first impression in the Eighth Circuit, and different courts are likely to reach different conclusions.  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?

Employers should follow a conservative approach in responding to religious accommodation requests.  Employers would be wise to assume — until there is settled, binding law to the contrary in the relevant jurisdiction on identical facts  — 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.  Further, an unlawful denial of a religious accommodation request can give rise to a disparate-treatment discrimination claim, even if there is no available retaliation claim.

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

By John P. Phillips and Linda Schoonmaker

Seyfarth Synopsis:  In a recent decision, the U.S. Court of Appeals for the Sixth Circuit ruled that former employees need not return severance pay before filing a lawsuit against an employer, when the employee alleges the severance agreement should be rescinded and is bringing discrimination claims under Title VII or the Equal Pay Act.  This decision means that notwithstanding the fact that the employee signed a severance agreement and accepted severance pay upon leaving the company, the employee may still be able to sue and keep the severance money—if the employee claims she was coerced into signing the agreement.  Given this, it is important for employers to review their severance practices, in order to ensure the process is fair, help protect against claims of coercion, and safeguard the company during the process.

When employers enter into severance agreements with departing employees, they do so with the expectation that the agreement will resolve all legal claims between the two parties.  In exchange for additional compensation, the employee promises not to sue the company, and the two parties part ways.  Most of the time this works, and the severance agreement is the end of it.

However, sometimes employees have second thoughts after signing a severance agreement.  In such circumstances, employees argue that the severance agreement should be set aside, often alleging that they were coerced into signing, did not know what was contained in the agreement, and did not “knowingly and voluntarily” execute the contract.  And if the employee can assert persuasive enough facts surrounding the presentation and execution of the agreement, sometimes employees can actually rescind severance agreements.

Notwithstanding this, at common law there was a legal doctrine that helped to preclude such attempts—the common law tender-back doctrine.  That doctrine held that before someone can rescind a contract and sue, that person must “tender-back” (i.e., return) the money they received under the contract.  In other words, if an employee claimed that she was coerced into signing a severance agreement, she would be required to return the severance payment before she could sue her former employer.  Recently, however, the Sixth Circuit held that the tender-back doctrine does not apply to claims brought under Title VII or the Equal Pay Act, and the Court held that a former employee need not return her severance pay before filing suit.

Background on the Case

In McClellan v. Midwest Machining, Inc., the plaintiff brought a pregnancy discrimination claim under Title VII and alleged that the employer maintained a “sex-segregated workplace.”  In addition, the plaintiff claimed that the company paid men substantially more than their female counterparts, asserting a claim under the Equal Pay Act.

Faced with this lawsuit, the employer informed the plaintiff’s attorney that she had signed a severance agreement when she was terminated, which released “any and all past, current and future claims” she had against the company in exchange for payment of $4,000.  Rather than concede that the severance agreement applied, the plaintiff claimed that she had entered into the agreement under duress and without knowledge that she was releasing her discrimination claim, alleging that the company’s president pressured her into signing, rushed her through the agreement, and used a “raised” tone of voice during the meeting.  The plaintiff then attempted to return the $4,000 to the company, but the employer refused the check, stating that “[t]here is no legal basis for rescinding the severance agreement.”

Ultimately, the district court allowed limited discovery on whether the plaintiff had “knowingly and voluntarily executed the agreement,” and the court asked for briefing on application of the tender-back doctrine.  The employer subsequently moved for summary judgment, alleging the severance agreement precluded the plaintiff’s lawsuit and that the plaintiff could not proceed with the case because she did not tender back the consideration prior to filing suit.

The district court held that there were fact issues as to whether the plaintiff had “knowingly” and “voluntarily” executed the severance agreement.  However, the court agreed with the employer that the tender-back doctrine precluded the plaintiff’s claims, and it dismissed the case.  The plaintiff appealed to the Sixth Circuit.

The Sixth Circuit’s Decision

A divided panel of the Sixth Circuit held that the common law tender-back doctrine does not apply to claims brought under Title VII or the Equal Pay Act.  The Sixth Circuit expressed concern that the tender-back doctrine would limit Title VII and Equal Pay Act claims and would frustrate the “remedial” nature of both statutes.  The Court stated:

Similarly, we worry that requiring recently-discharged employees to return their severance before they can bring claims under Title VII and the EPA would serve only to protect malfeasant employers at the expense of employees’ statutory protections at the very time that those employees are most economically vulnerable.  We therefore hold that the tender-back doctrine does not apply to claims brought under Title VII and the EPA.

Accordingly, at least in the Sixth Circuit, employees who have previously signed a severance agreement need not return their severance pay before filing Title VII or Equal Pay Act claims.  Instead, the Sixth Circuit stated that any severance pay previously paid to the employee could be deducted from any ultimate award in the lawsuit.

Takeaways

The Sixth Circuit’s decision is unwelcome news to employers because it removes a deterrent to suits by former employees who previously signed severance agreements.  However, it is important to remember that the Sixth Circuit’s decision only relates to whether employees must return severance pay; it does not address whether employees can disclaim and void the actual severance agreement itself.  Whether former employees can successfully do so depends on the circumstances under which the severance agreement was presented and executed.

Accordingly, now is a good time for employers to review their severance agreements and practices, to help avoid allegations similar to those brought in this lawsuit—that the employee was pressured into signing the agreement, rushed through the process, and not given an opportunity to fully understand its terms.  Following are some best practices to consider:

  • Give the employee time to review any severance agreement, even for younger employees. For employees over 40 years of age, employers must provide a 21-day period to review the agreement and allow the employee to revoke the agreement within 7 days.  This is not a requirement for younger employees, but providing the employee with a reasonable time to review (anywhere from a few days to a week) insulates the employer from claims that the employee was coerced into signing.
  • Allow the employee to take the severance agreement home with her. This allows the employee ample time to consider the proposal, and talk it over with her family.  And an employee will be hard pressed to claim she did not voluntarily enter into the agreement when she took it home, executed it, and then returned it to the company.
  • Inform the employee that she may consult an attorney, if she wishes. Although not necessary in every circumstance, encouraging that the employee consult an attorney will help protect the employer against claims of coercion.
  • Consider having two managers or supervisors present the severance offer to the departing employee. This provides the company with an additional witness in the event the employee raises issues about the meeting down the road, and it avoids any “he said, she said” scenarios.
  • Instruct the manager or supervisor relaying the severance offer to take notes, even if nothing of substance occurred during the meeting. This way, the company will have a record that the meeting occurred and knowledge as to whether any issues were raised during the meeting.  If issues were raised, the company can proactively resolve them.

Above all, the goal of any severance offer is to treat the employee fairly and professionally, while at the same time protecting the company and ensuring closure for all sides.  In order to accomplish this, it is important to protect the company during the severance process—including when presenting the severance offer to the employee—to limit after-the-fact allegations.  And while the Sixth Circuit’s McClellan v. Midwest Machining decision injects more uncertainty into severance agreements, with a little proactive planning employers can still ensure that severance agreements accomplish their goals.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Labor & Employment Team.

By Michael L. DeMarino and Dawn R. Solowey

Seyfarth SynopsisTitle VII requires employers to make “reasonable accommodations” for an employee’s religious practices. But what is “reasonable” has been the subject of much debate and litigation.  The Tenth Circuit’s decision in Christmon v. B&B Airparts, Inc., No. 17-3209, 2018 WL 2344628, at *1 (10th Cir. May 24, 2018) is a good reminder that an accommodation may be reasonable — even if it is not the employee’s preference. What matters is that the employee is allowed to engage in his or her religious practice.

In Christmon v. B&B Airparts, Inc., an employee sued his former employer under Title VII, claiming that his employer failed to accommodate his religious practices by not allowing him to change his overtime shifts from Saturday to Sunday so that he could observe the Saturday Sabbath. On appeal, the Tenth Circuit held that allowing the employee to skip Saturday shifts was a reasonable accommodation and that the employer was not obligated to provide an opportunity for overtime on Sunday.

The Decision

B&B Airparts requires its employees to occasionally work overtime shifts on Saturdays. Id. Jerome Christmon, a Hebrew Israelite, regards Saturday as the Sabbath and consequently requested to work his overtime hours on Sunday. But rather than allow Christmon to work  his overtime hours on Sunday, B&B simply allowed him to skip mandatory Saturday overtime shifts without any disciplinary action.

Christmon sued B&B Airparts in the U.S. District Court for the District Court of Kansas, under Title VII of the Civil Rights Act of 1964, claiming discrimination for failure to accommodate religious practices. Specifically, Christmon claimed that B&B Airparts was required to provide him with overtime hours on Sunday.

The District Court disagreed and granted summary judgment in favor of B&B Airparts, holding that B&B Airparts provided a reasonable accommodation by allowing him to miss his Saturday shifts. On appeal, the Tenth Circuit affirmed.

According to the Tenth Circuit, the undisputed evidence showed that B&B Airparts allowed Christmon to skip mandatory Saturday shifts after he had explained his religious concern. “This relief,” the Tenth Circuit concluded, “constituted a reasonable accommodation . . . .” Id. at *2.

Rejecting Christmon’s arguments, the Tenth Circuit explained that a “reasonable accommodation does not necessarily spare an employee from any resulting cost” and “may be reasonable even though it is not the one that the employee prefers.” Id. Rather, “‘[a]ccomodate . . . means allowing the plaintiff to engage in [his] religious practice despite the employer’s normal rules to the contrary.’” Id. Hence, although Christmon requested an opportunity to make up his overtime hours on Sunday, the Tenth Circuit determined that “Title VII did not require B&B Airparts to offer Mr. Christmon’s preferred accommodation.” Id. at *3.

Important to this conclusion was the Supreme Court’s decision in Ansonia Bd. of Educ. v. Philbrook, 479 U.S. 60, 70 (1986). There, the Supreme Court held that an unpaid leave that allows an individual to observe religious holy days is a reasonable accommodation because it avoids the “conflict between employment requirements and religious practices.” Id.

At the end of the day, B&B ‘s accommodation was reasonable because it “allowed Mr. Christmon to avoid the conflict with his religious beliefs even if he lost the opportunity for overtime.” Id.

Implication For Employers

The Tenth Circuit’s decision is a good reminder for employers of the parameters of their obligation under Title VII to provide a reasonable accommodation for religious practices. A reasonable accommodation does not necessarily have to be the employee’s first choice. Nor does it have to be free from any resulting cost to the employee.  A reasonable accommodation, however, should effectively avoid the conflict between the employee’s religious practice and the employer’s requirements.

Of course, the first step in providing an accommodation is recognizing when there is a conflict between an employer’s requirements and an employee’s religious practice. Employers should therefore be sure to provide a mechanism for their employees to express concerns over perceived conflicts or otherwise request a religious accommodation.

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

By Brian A. Wadsworth

Seyfarth Synopsis: In her appeal to the Fifth Circuit, Plaintiff Bonnie O’Daniel argues that the trial court wrongly concluded that it was unreasonable for O’Daniel to believe that a complaint about discrimination based on sexual orientation constituted a protected activity. The EEOC recently joined the fray by filing an amicus curiae brief, which argues that it was reasonable for O’Daniel to believe that opposition to sexual orientation discrimination constituted protected activity.

The EEOC argues that O’Daniel need only “reasonably believe[]” the opposed conduct was unlawful and that O’Daniel’s belief was reasonable when viewed in the context of recent decisions reached by the Southern District of Texas, Second Circuit, Seventh Circuit, and the EEOC. The EEOC also cites the ongoing national debate regarding sexual orientation issues as another reason O’Daniel’s belief was reasonable.

Plaintiff Bonnie O’Daniel filed suit against her employer, Plant-N-Power, and its parent company (Defendants) in the Middle District of Louisiana alleging, amongst other things, retaliation on the basis of her sexual orientation—heterosexual. O’Daniel alleged that Defendants terminated her employment because of one of her Facebook posts. In the post, she included a photograph of a man wearing a dress at a Target store and expressed discontent with his ability to use the women’s restroom and/or dressing rooms. O’Daniel alleged that this offended the President of Plant-N-Power, a member of the LGBT community, and that the president subsequently suggested O’Daniel’s termination.

Defendants responded to the lawsuit with a motion to dismiss and argued that O’Daniel’s retaliation claim failed in part because she did not “plead any protected activity … under Title VII.” By consent of the parties, a magistrate judge heard Defendants’ motion to dismiss. The magistrate judge ultimately agreed with Defendants and dismissed O’Daniel’s retaliation claim because it was “unreasonable for [O’Daniel] to believe that discrimination based on sexual orientation constitutes protected activity” and cited the Fifth Circuit’s 1979 holding in Blum v. Gulf Oil Corp. to support its holding. The trial court noted that while Title VII may protect gender-non-conformity, O’Daniel did not allege discrimination on this basis. O’Daniel appealed the magistrate judge’s decision to the Fifth Circuit.

On May 2, 2018, the Equal Employment Opportunity Commission filed an amicus curiae brief with the court, taking issue with the trial court’s finding that it was “unreasonable” for O’Daniel to believe that opposition to discrimination based on sexual orientation was a protected activity. In arguing this, the EEOC pointed out that the employee need only “reasonably believe[] the opposed conduct was unlawful.” The EEOC maintains that, “given recent appellate decisions …, the EEOC’s view that Title VII prohibits sexual orientation discrimination, and the rapidly changing legal landscape,” O’Daniel had a reasonable belief that discrimination based on sexual orientation was impermissible.

The EEOC pointed to a number of decisions in the Southern District of Texas, the Second and Seventh Circuits, as well as holdings from the commission itself, to demonstrate that the “law on sexual orientation discrimination” had evolved and that at least some courts prohibit sexual orientation discrimination in employment. In addition, the EEOC noted the ongoing national debate regarding sexual orientation issues and the Supreme Court’s landmark decisions endorsing the right of gay and lesbian individuals to be free from discrimination in Obergefell v. Hodges and United States v. Windsor. Given this context, O’Daniel—“a layperson without legal expertise”—could “reasonably conclude that Title VII’s prohibition against sex discrimination encompasses discriminatory conduct based on sexual orientation.” This would extend, in the EEOC’s view, to discrimination on the basis that an employee is heterosexual.

The EEOC similarly noted that Fifth Circuit precedent did not preclude an individual from harboring a reasonable belief that sexual orientation is unlawful. To argue this, the EEOC distinguished Blum, in which the Court held that “[d]ischarge for homosexuality is not prohibited by Title VII.” The EEOC argued that Blum was decided on the issue of pretext and not on whether Title VII protected against discrimination on the basis of sexual orientation. Moreover, according to the EEOC, there were post-Blum decisions that recognize that Title VII prohibits discrimination based on sex stereotyping, to include Price Waterhouse v. Hopkins and EEOC v. Boh Brothers Construction, Co. Thus, O’Daniel could have relied on these post-Blum holdings to arrive at a reasonable conclusion that Title VII protected against discrimination on the basis of sexual orientation.

Defendants have not yet filed their appellate brief.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Labor & Employment Team.

By: Scott Rabe, Sam Schwartz-Fenwick, Marlin Duro

Seyfarth Synopsis:  In a largely symbolic ruling, in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, the Supreme Court ruled 7-2 in favor of a cake shop owner who refused to make a wedding cake for a gay couple based on his religious beliefs.  By limiting its holding to the facts of the case, however, the Court sidestepped an opportunity to delineate the intersection between free expression of religion and LGBT rights.  As a result, the decision provides little in the way of guidance to employers regarding the role of free expression of religion in the workplace.

In the highly anticipated decision in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, a case closely followed by the media, religious rights advocates, and gay rights advocates alike, the Supreme Court delicately avoided making a decision that could be declared a victory by either side.  Instead, the majority emphasized that the holding in Masterpiece Cakeshop was limited to the facts of the case and that further clarification as to the boundaries between religious rights and LGBT rights would have to play out in the courts.

The Case

Charlie Craig and David Mullins were looking to celebrate their marriage by purchasing a custom wedding cake at Masterpiece Cakeshop, a bakery in Colorado.  Jack Phillips, the owner of the bakery refused to make the wedding cake for the couple because of his religious opposition to same-sex marriage.

The couple filed a Charge with the Colorado Civil Rights Commission (the “Commission”), claiming that the baker’s refusal was in violation of the Colorado Anti-Discrimination Act, which makes it “a discriminatory practice and unlawful for a person, directly or indirectly, to refuse, withhold from, or deny to an individual or group because of  . . . sexual orientation, . . . the full and equal enjoyment of the goods [and] services” of “any place of business engaged in any sales to the public and any place offering services . . . to the public.”  The owner of the bakery, however, maintained that the First Amendment rights to freedom of speech and free exercise of religion protected his refusal to make custom wedding cakes for same-sex couples.

The Commission found in favor of the couple and determined that the actions of the bakery violated Colorado law.  Phillips appealed the Commission’s decision to the Colorado Court of Appeals, which affirmed the Commission’s ruling.

After the Colorado Supreme Court refused to hear his appeal, Phillips appealed to the United States Supreme Court.

The Supreme Court’s Decision

In a 7-2 decision, the Supreme Court reversed the judgment of the Colorado Court of Appeals and found the Commission had violated Phillips’ First Amendment rights of free speech and free exercise of religion.

In its decision, the Supreme Court acknowledged that the case presented “difficult questions as to the proper reconciliation of at least two principles,” one, the authority of the State “to protect the rights and dignity of gay persons who are, or wish to be married but who face discrimination when they seek goods or services” and two, the “right of all persons to exercise fundamental freedoms under the First Amendment.”  While acknowledging the tension between these two principles, the Court did not seek to reconcile them.

Instead, the Court first found the creation of wedding cakes was a “creative” endeavor implicating freedom of expression under the First Amendment, not merely selling a good which might not implicate the First Amendment.

The Court then explained that as Phillips’ refusal to bake  of a wedding cake implicated the First Amendment’s freedom of expression and free exercise of religion clauses, the Commission was obligated to weigh the cake shop owner’s First Amendment rights against the rights of the gay couple. Instead of performing this balancing with “the neutrality that the Constitution requires”, the Court found the Commission exhibited hostility toward Phillips’ beliefs throughout the hearing, making disparaging comments about his religious beliefs and treating the cake shop owner’s case differently than other cases addressed by the Commission involving cake shop owners with different beliefs.  The Court found that this treatment of Phillips’ case violated the First Amendment as it indicated a hostility to a religion or religious viewpoints.

The Court took great care to underscore that the holding in Masterpiece Cakeshop was limited to the facts of that case, stating that “[t]he outcome of cases like this in other circumstances must await further elaboration in the courts, all in the context that this disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.”

The Takeaway for Employers

Many anticipated that the decision in Masterpiece Cakeshop would provide employers and small-business owners with guidance on how to lawfully traverse the landmines that arise when religious beliefs conflict with civil rights statutes. By restricting the decision to the facts, the Court did not provide this guidance.

As such, employers, need not and should not change their EEO or other employment practices, policies, and trainings in light of the Masterpiece Cakeshop decision. Masterpiece Cakeshop does not place rights to the free exercise of religion over LGBT rights or other civil rights, and therefore employers should not take action that elevates the right to free exercise of religion within the workplace.

As always, we invite employers to reach out to their Seyfarth contact for solutions and recommendations regarding anti-harassment and EEO policies, addressing compliance with LGBT issues in the law, and tackling questions regarding the free exercise of religion in the workplace.

By John P. Phillips and Linda Schoonmaker

Seyfarth Synopsis: In recent months, sexual harassment has seized national headlines and raised significant questions about company policies, procedures, and culture. In response, many companies and HR personnel have questioned how to appropriately respond to complaints of sexual harassment. A recent decision out of the Western District of Wisconsin provides a helpful summary of the state of Title VII, the federal anti-discrimination and harassment law, and the appropriate company response to harassment. Given the national debate and this recent decision, now is a good time for employers to implement some best practices to (1) prevent harassment before it occurs and (2) take appropriate remedial action if it does.

Sexual harassment has been around for a long time, but recently it has garnered national headlines. Movements such as #MeToo and Time’s Up have appropriately focused the spotlight on company policies and procedures. It is important for companies to continue to improve workplace culture and their responses to harassment when it does occur. At the same time, it is important for companies to understand the legal framework for a harassment claim, and their legal responsibilities.

A recent decision out of the Western District of Wisconsin provides an important reminder on the state of the federal law prohibiting sexual harassment in the workplace, and an employer’s responsibility to prevent and correct any harassing behavior.

Background on the Case

In Lee v. Dairyland Power Cooperative, the plaintiff alleged that several of her co-workers sexually harassed her, and that the company failed to take adequate steps to prevent the harassment. After an analysis of the applicable framework for sexual harassment under Title VII, the Court dismissed the plaintiff’s case, finding that she could not prevail on her harassment claim as a matter of law.

The facts of the case were largely undisputed and simple: on one occasion, the plaintiff overheard her immediate supervisor, a co-worker, and a security contractor—all male—discussing their desire for her to wear her “spring outfits.” They also compared her physically to another employee, who they described in a sexually suggestive manner; and they discussed the sex life of yet another employee. These facts were undisputed, and the plaintiff complained to Human Resources the same day. HR immediately investigated the incident and concluded that the sexually demeaning conversation had occurred.

The plaintiff’s supervisor personally apologized to the plaintiff and promised that the action would never happen again; that he would not engage in any further sexual harassment; and that he would protect the plaintiff from retaliation. The company asked the plaintiff to return to work, but she refused, believing the company’s response was inadequate. The company followed-up, explaining that there were no positions to which she could be transferred to be away from the supervisor. Feeling that the company had not fixed the situation, the plaintiff quit her employment. That same day, the company suspended the supervisor for two weeks without pay, and ordered him to attend retraining on the company’s sexual harassment policy.

Application of Title VII

The Court laid out the legal standard for maintaining a sexual harassment claim under Title VII (the federal law prohibiting harassment in the workplace): the plaintiff must prove that (1) she experienced unwelcome harassment, (2) the harassment was based on sex, (3) the harassment was so severe or pervasive that it altered the conditions of her employment and created a hostile or abusive environment, and (4) a basis exists for holding the employer liable. Here, it was undisputed that the plaintiff had experienced unwelcome harassment based on her sex. However, the Court found that she could not meet the third and fourth prongs of the test.

First, the Court found that overhearing the statements on only one occasion did not create an abusive working environment. Indeed, the Court applied Seventh Circuit precedent for the proposition that “verbal harassment limited to a one-time incident that was overheard, rather than intentionally inflicted, does not rise to the severe or pervasive standard under Title VII.”

Second, the Court found that the employer could not be held liable for the wholly inappropriate conduct of the supervisor. The company maintained an anti-harassment policy, which the supervisor violated. And as soon as the company learned that harassment had occurred, it initiated an investigation pursuant to its no harassment policy; and the company instituted discipline reasonably calculated to end the harassment. The Court found that the two-week suspension, apology, promise to protect the plaintiff from any harassment, and retraining on sexual harassment issues were sufficient for the company to meets its legal burden to resolve the problematic work environment. Accordingly, the company could not be held liable under Title VII.

Takeaways and Best Practices

When sexual harassment occurs in the workplace, nobody wins. And as the Dairyland Power case makes clear, even companies that have and enforce no harassment policies can face costly litigation. Given the current national debate over harassment, now is a good time for employers to review and reevaluate their sexual harassment policies and procedures.

Employers should consider several proactive steps—to help prevent sexual harassment on the front-end and then to appropriately handle the situation if it were to arise—including: (1) ensuring the company’s no harassment policy and reporting structure is up-to-date and clear; (2) providing harassment and employment law training to supervisors and managers; (3) taking all allegations and complaints of harassment in the workplace seriously; (4) immediately performing a thorough and complete investigation of any harassment complaints; and (5) implementing swift, appropriate, and proportional remedial action, including termination or suspension if necessary.

Above all, employers should strive to ensure that their company’s culture is one where sexual, or any other form of harassment, is simply not tolerated. Instead, each employee should enjoy a safe and respectful work environment, and feel empowered to raise any workplace harassment issue with his or her supervisor, manager, or HR. At the same time, the company should feel secure that taking proactive action on the front-end to eliminate any harassment before it occurs, and taking immediate action to stop and remedy any harassment after it occurs, is sufficient to satisfy its legal obligations under Title VII. Fortunately, the Dairyland Power decision continues to apply this legal standard.

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

By Kristin G. McGurn and Bridget M. Maricich

Seyfarth Synopsis: A recent decision by the U.S. District Court for the Eastern District of Texas, part of the Fifth Circuit Court of Appeals, reaffirmed a growing circuit split regarding whether Title VII of the Civil Rights Act of 1964 preempts concurrent claims raised under Title IX of the Education Amendments Act of 1972. In Sara Slabisak v. Univ. of Tex. Health Sci. Ctr. at Tyler & Good Shepherd Med. Ctr., No. 4:17-cv-597, 2018 U.S. Dist. LEXIS 30884 (E.D. Tex., Feb. 27, 2018), Judge Amos Mazzant dismissed a former medical resident’s Title IX claims of sexual harassment and retaliation against the University of Texas Health Science Center at Tyler on the grounds that Title VII is the exclusive remedy for claims of employment discrimination on the basis of sex in a federally funded educational institutions. While consistent with precedent in the Fifth and Seventh Circuits, the decision stands at odds with prior decisions in the First, Third and Fourth Circuits holding that employees of institutions subject to both Title VII and Title IX may raise such claims under whichever statutory scheme they choose.   

Last March, we wrote about a watershed decision in the U.S. Court of Appeals for the Third CircuitDoe v. Mercy Catholic Medical Center, No. 16-1247 (3d Cir. 2017) – that held the nondiscrimination and anti-harassment protections of Title IX of the Education Amendment Act of 1972 apply to a private medical hospital’s residency programs, even those that lack a formal affiliation to an educational institution where Title IX has historically applied. The decision was also notable for holding that the concurrent applicability of Title VII of the Civil Rights Act of 1964 to such institutions did not preclude the plaintiff in that matter, a former resident, from filing her Title IX claim.   The Third Circuit’s decision contributed to a growing split among the federal Circuits regarding whether Title VII and its extensive administrative pre-requisites preempt concurrent remedies under Title IX for those individuals employed by institutions subject to both statutes.   In Doe, the Third Circuit joined the First and Fourth Circuits in holding that in a covered individual employed by such an institution may seek remedy under whichever statutory scheme he or she chooses. These decisions contradict case law in the Fifth and Seventh Circuits, which have affirmatively held that Title VII and its carefully crafted statutory administrative pre-requisites are the exclusive remedy for sex discrimination claims brought by employees of institutions covered by both Title VII and Title IX.

A recent decision by the U.S. District Court for the Eastern District of Texas – within the Fifth Circuit – put this precedent to the test. In Sara Slabisak v. Univ. of Tex. Health Sci. Ctr. at Tyler & Good Shepherd Med. Ctr., No. 4:17-cv-597, 2018 U.S. Dist. LEXIS 30884 (E.D. Tex., Feb. 27, 2018), a former medical resident at the University of Texas Health Science Center (“UTHSC”) and Good Shepherd Medical Center (“Good Shepherd”), alleged that her supervising resident subjected her to continuous verbal, physical and sexual harassment and that, when she reported his conduct, the hospital discriminated against her by failing to address the conduct and retaliated against her by suspending her indefinitely from the program. Slabisak asserted that, among other things, UTHSC and Good Shepherd violated her rights under both Title VII and Title IX. UTHSC moved to dismiss Slabisak’s Title IX claims on the grounds that Title VII preempted any recovery under Title IX.

Judge Amos Mazzant of the Eastern District of Texas agreed. In a brief decision, Judge Mazzant re-affirmed Fifth Circuit precedent, noting “the basis for Plaintiff’s Title IX claims – deliberate indifference and retaliation – revolve around the allegations that Plaintiff was subjected to a hostile work environment, which UTHSC failed to address and correct; and moreover that UTHSC retaliated against Plaintiff when she informed them of said hostile work environment. Such claims fall within the exclusivity of Title VII – employment discrimination on the basis of sex in a federally funded educational institutions.” Id. at *7-8. Judge Mazzant accordingly dismissed Slabisak’s Title IX counts, but permitted the Title VII claims to move forward. Of note, none of the parties appeared to challenge the notion that Slabisak, as a resident, was an employee for purposes of Title VII.

What does this mean? Medical centers, hospitals, and other healthcare institutions providing accredited teaching and training programs, particularly programs formally affiliated with educational institutions, should be familiar with the precedent in the federal Circuits in which they operate. Though the substantive protections of Title VII and Title IX do not differ substantially, the process for redress, the standards of liability, and the remedies may differ. Most notably, Title VII requires exhaustion of administrative remedies. Employees seeking redress under Title VII must first file a complaint with the Equal Employment Opportunity Commission (“EEOC”) or similar state administrative agency prior to filing suit in state or federal court. Title IX includes no such prerequisite. Individuals subject to the protections of Title IX may file a complaint with the Department of Education Office for Civil Rights (the DOE version of the EEOC), but they may opt to forego this step and file suit directly in court. The statute of limitations for Title VII claims – within 180 or 300 days, depending on the state – is much shorter than the statute of limitations for Title IX claims. Title IX does not include its own statutory time limitation and typically follows state tort law limitations, which are usually two or more years. Finally, the type of individual remedies available under Title IX is subject to some murky case law, but generally Title IX plaintiffs may seek actual and compensatory damages, injunctive relief, and attorneys’ fees.

This decision further highlights the importance, particularly in the current climate, of responding effectively and expeditiously to all complaints of discrimination, harassment, and retaliation. Healthcare institutions can mitigate risks associated with such complaints – whether Title VII or Title IX applies – by:

  • Maintaining wide-open, easily accessible and well-communicated procedures, using multiple avenues, for reporting, investigating, and resolving complaints of discrimination, harassment, and retaliation.
  • Ensuring those physicians, administrators, managers, and faculty who are most likely to witness or hear of reports of risky behavior are well trained in not only what and how to report, but also how to empower bystanders and effectively and sensitively manage those situations and any reports they receive.
  • Documenting the institutions actions with respect to all reports of discrimination, harassment, and retaliation – from report through investigation and resolution – so that the institution’s good actions and consistent approach can be proven in the event of an administrative charge or lawsuit.

If you have any questions regarding these issues, please contact the authors, your Seyfarth attorney or a member of the firm’s Health Law Group.

By Kyla J. Miller and Dawn Reddy Solowey

Seyfarth Synopsis: The Department of Justice filed a lawsuit on behalf of a nursing home employee alleging she was forced to receive a flu shot to keep her job when she could not provide a note from a clergy member in support of her request, causing emotional distress that made her fear “going to Hell.” U.S. v. Ozaukee Cty., No. 2:18-cv-00343, (E.D. Wis. March 6, 2018).

In a complaint against Ozaukee County in Wisconsin, the Department of Justice alleges the County engaged in religious-based discrimination in violation of Title VII when their nursing home required all health care workers to receive the flu vaccination unless they could provide a note from a clergy member.

The Employer’s Flu Shot Policy

Under the employer’s flu shot policy, employees could receive a religious exemption from the mandatory flu shot if they had a pastor, priest, or another member of the clergy submit a written note stating a clear reason and explanation for the exemption. If the note was accepted, the employee was required to wear a protective face mask throughout the flu season. If an employee refused the flu shot and did not provide the proper written statement, the employee would be considered to have “voluntarily resigned.”

Employee Feared “Going to Hell” if She Received the Shot But Could Not Provide A Clergy Note

The employee allegedly viewed her body as a “holy temple,” and believed the Bible forbids foreign substances including the flu shot in the body. During a meeting with her supervisor, the employee stated she was not affiliated with any church or formal religious organization at the time, and therefore could not provide a note from a pastor. Instead, she volunteered family and friends who would attest to her sincere religious belief. The supervisor told the employee it would be her last day if she could not provide a proper letter from a clergy member.

According to the complaint, the employee felt forced to receive the flu shot.  Shortly after taking the shot, the employee “cried uncontrollably,” and experienced emotional distress including “withdrawing from work and her personal life, suffering from sleep problems, anxiety, and fear of ‘going to Hell’ because she had disobeyed the Bible by receiving the shot.”

Employer Takeaway

 It is not a “best practice” for an employer to require a clergy note to support a religious accommodation request, because an employee need only have a sincerely held religious belief–it is irrelevant whether they are a part of an organized religion.  This is especially important in light of the EEOC’s aggressive approach to mandatory flu shots in recent years, targeting employers who terminate employees who refuse the shot based on a religious belief. According to Lynette A. Barnes, regional attorney for the EEOC’s Charlotte District Office, “Title VII requires employers to make a real effort to provide reasonable religious accommodations to employees who notify the company that their sincerely held religious beliefs conflict with a company’s employment policy.”

There are several ways employers can minimize the risk of becoming a target for this type of litigation. Employers should narrow the applicability of their flu shot policies to those employees for whom the employer can justify the policy on health, safety or other legitimate business grounds. If an employee has a sincere religious belief that conflicts with a  job requirement, the employer must provide a reasonable accommodation if it would not cause undue hardship. Employers should engage in the interactive process and properly assess what is a “reasonable accommodation” or “undue hardship” in the context of their workplace.  It is wise for employers to consult with counsel with expertise in religious accommodation to make this case by case assessment.

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

By Scott Rabe and Marlin Duro

Seyfarth Synopsis: In its recent decision in EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., No. 16-2424, 2018 U.S. App. LEXIS 5720 (6th Cir. Mar. 7, 2018), the U.S. Court of Appeal for the Sixth Circuit has sent the strong message that the Religious Freedom Restoration Act (RFRA) has minimal impact on the Equal Employment Opportunity Commission’s (EEOC) authority to enforce the anti-discrimination laws under Title VII of the Civil Rights Act of 1964 (Title VII).

The RFRA, enacted in 1993, prohibits the government from enforcing a law that is religiously neutral against an individual, if the natural law “substantially burdens” the individual’s religious exercise and is not the least restrictive way to further a compelling government interest. Importantly, the RFRA applies only in the context of government action, and therefore would not provide a defense for an employer in a civil suit brought by a private plaintiff.

In EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., a Sixth Circuit panel held in a unanimous decision that: (i) Title VII’s proscription of discrimination on the basis of sex encompasses a prohibition on discrimination based on transgender status, and that (ii) in this case the RFRA would not limit the EEOC’s authority to enforce anti-discrimination laws under Title VII. With this decision, the Sixth Circuit became the first federal Court of Appeals to address the extent to which the RFRA may limit the EEOC’s power to enforce Title VII.

By way of background, the EEOC brought suit against a funeral home on behalf of a transgender employee, Aimee Stephens, who was terminated from her employment shortly after informing her employer that she intended to transition from male to female. The EEOC alleged the funeral home violated Title VII by terminating Stephens’ employment on the basis of her transgender or transitioning status and her refusal to conform to sex-based stereotypes. The funeral home argued that Title VII did not prohibit discrimination on the basis of transgender status and that the funeral home was protected from enforcement of Title VII by the RFRA as the government action would constitute an unjustified substantial burden upon the funeral home owner’s exercise of his sincerely held religious beliefs.

Both parties moved for summary judgment and the district court found in favor of the funeral home on both motions The district court found that Title VII did not protect against discrimination based on transgender status and that, while Stephens had suffered discrimination based on sex stereotyping, the RFRA prevented the EEOC from suing on her behalf.

On the EEOC’s appeal, the Sixth Circuit reversed the district court with respect to both motions and granted summary judgment in favor of the EEOC. First, the Sixth Circuit held that the funeral home’s conduct violated Title VII, reinforcing its prior holdings that discrimination against employees because of their gender identity and transgender status are illegal under Title VII’s prohibition of sex discrimination based on sex stereotyping. The Sixth Circuit explained that “discrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex” and found that firing a person because he or she will no longer represent him or herself as the gender that he or she was born with “falls squarely within the ambit of sex-based discrimination” forbidden under Title VII. Id. at *18.

Second, the Sixth Circuit held that the EEOC’s enforcement of Title VII against the funeral home did not violate the funeral home’s rights under the RFRA. A viable defense based on the RFRA requires a demonstration that the government action at issue would substantially burden a sincerely held religious exercise. Although the Sixth Circuit treated the running of the funeral home as a sincere religious exercise by the owner, it held that the alleged burden caused by the enforcement of Title VII was not “substantial” within the meaning of RFRA. The Sixth Circuit reasoned that tolerating an employee’s understanding of his or her sex and gender identity was not “tantamount to supporting it” and that mere compliance with Title VII, “without actually assisting or facilitating transition efforts,” did not amount to an endorsement by the employer of the employee’s views. Id. at *59, *61. Nor, the Sixth Circuit explained, could the funeral home rely on customers’ “presumed biases” against transgender individuals to meet the substantial burden test. Accordingly, the Sixth Circuit held that the funeral home had not demonstrated a substantial burden on the its religious exercise.

While the Sixth Circuit could have ended its analysis there, it went on to hold that even if tolerating Stephens’ gender identity and transitioning status were a “substantial burden” on the funeral home’s religious exercise, the EEOC did not violate the RFRA because the agency had a compelling interest in eradicating all forms of invidious employment discrimination, and enforcement of Title VII through its enforcement function was the least restrictive means for eradicating discrimination in the workforce. This analysis, if found not to apply only to the facts of this case, could ostensibly doom any defense to a Title VII action within the Sixth Circuit where an employer raises a defense based on the RFRA.

The Sixth Circuit’s opinion is an important one, as it addresses two of the more hot button topics in employment jurisprudence: the scope of the definition of “sex discrimination” under Title VII and the impact of laws protecting the free exercise of religion in the workplace. On the former, this opinion joins the recent trend in decisions finding that gender identity is inextricably linked with sex and therefore is protected under Title VII. And on the latter, the Sixth Circuit has laid down a gauntlet as the first federal circuit addressing the RFRA’s impact on the EEOC’s Title VII enforcement power. The decision is clearly intended to send a strong message that the RFRA has limited application, if any, in defense of a Title VII action brought by the Commission. While time will tell whether other federal circuits will adopt a similar interpretation, if the Sixth Circuit’s legal rationale is followed, employers will be hard-pressed to defend Title VII claims brought by the EEOC based on the alleged exercise of religious freedom.

In light of the current uncertainty regarding the ultimate interpretation of Title VII as it applies to gender identity, employers should regularly review their policies to ensure that adequate protections are provided to employees on the basis of their gender identity, and transgender and transitioning status. As always, we also invite employers to reach out to their Seyfarth contact for solutions and recommendations regarding anti-harassment and EEO policies and addressing compliance with LGBTQ+ issues in the law.

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