MAZANEC, RASKIN & RYDER CO · John T. McLandrich, Esq. Mazanec, Raskin Ryder & Keller Co., L.P.A....
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MAZANEC, RASKIN, RYDER & KELLER CO., L.P.A. 2010 EMPLOYMENT LAW UPDATE April 22, 2010 Todd M. Raskin, Esq. John T. McLandrich, Esq. Mazanec, Raskin Ryder & Keller Co., L.P.A. 100 Franklin’s Row 34305 Solon Road Cleveland, Ohio 44139 (440) 248-7906 Fax: (440) 248-8861 250 Civic Center Drive Suite 400 Columbus, Ohio 43215 (614) 228-5931 Fax: (614) 228-5934 Visit us on the Web at: www.mrrklaw.com Or E-Mail us at: [email protected] [email protected]
Transcript of MAZANEC, RASKIN & RYDER CO · John T. McLandrich, Esq. Mazanec, Raskin Ryder & Keller Co., L.P.A....
MAZANEC, RASKIN, RYDER & KELLER CO., L.P.A.
2010 EMPLOYMENT LAW UPDATE
April 22, 2010
Todd M. Raskin, Esq. John T. McLandrich, Esq.
Mazanec, Raskin Ryder & Keller Co., L.P.A.
100 Franklin’s Row 34305 Solon Road
Cleveland, Ohio 44139 (440) 248-7906
Fax: (440) 248-8861
250 Civic Center Drive Suite 400
Columbus, Ohio 43215 (614) 228-5931
Fax: (614) 228-5934
Visit us on the Web at: www.mrrklaw.com
Or E-Mail us at:
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TABLE OF CONTENTS I. STATUTORY UPDATES .................................................................................................. 1
A. The Lilly Ledbetter Fair Pay Restoration Act. ........................................................ 1
B. The Genetic Information Nondiscrimination Act of 2008 (“GINA”). ................... 1
1. Requesting Genetic Information. ................................................................ 2
2. Definitions................................................................................................... 2
3. Exceptions to Obtaining Genetic Information. ........................................... 3
4. Record Keeping Requirements if the Employer Obtains Genetic Information. ................................................................................................ 4
5. Disclosure of Genetic Information. ............................................................. 4
6. Remedies. .................................................................................................... 4
C. The ADA Amendments Act of 2008 (“ADAAA”). ................................................ 5
D. New Family Medical Leave Act Regulations ......................................................... 6
1. Employer Notice Obligations: .................................................................... 7
2. Employee Notice Requirements: § 825.302 and 825.303. .......................... 8
II. DISCRIMINATION CASE LAW INTRODUCTION ....................................................... 9
III. Recent Supreme court decisions ......................................................................................... 9
Ricci v. DeStefano et al, 129 S. Ct. 2658 (2009) ................................................................ 9
Crawford v. Metropolitan Government of Nashville, 129 S. Ct. 846 (2009) ................... 12
AT&T Corporation v. Hulteen, 129 S. Ct. 1962 (2009) ................................................... 14
Gross v. FBL Financial Services, Inc., 129 S. Ct. 2343 (2009) ....................................... 16
IV. Recent circuit court decisions ........................................................................................... 18
Serwatka v. Rockwell Automation, Inc., 591 F.3d 957 (7th Cir. 2010) ............................. 18
Smith v. Xerox Corp. 2010 WL 1052837 (5th Cir. 2010) .................................................. 20
Uphoff Figueroa v. Alejandro, 2010 WL 728784 (1st Cir. 2010) ..................................... 21
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Sanford v. Main Street Baptist Church Manor, 2009 WL 1410994 (6th Cir. 2009) ......... 22
Thompson v. North American Stainless LP, 567 F.3d 804 (6th Cir. 2009) ....................... 24
Hamilton v. General Electric Company, 556 F.3d 428 (6th Cir. 2009) ............................ 27
Lewis v. Heartland Inns of America, LLC, 591 F.3d 1003 (8th Cir. 2010) ....................... 28
Milholland v. Sumner County Board of Education, 569 F.3d 562 (6th Cir. 2009) ............ 30
Dobrowski v. Jay Dee Contractors, Inc., 571 F.3d 551 (6th 2009) ................................... 31
Bell v. Prefix, Incorporated, 2009 WL 877699 (6th Cir. 2009) ........................................ 34
Reed v. International Union et al., 569 F.3d 576 (6th Cir. 2009) ...................................... 35
EEOC v. Kelly Services, Inc., 2010 WL 1076058 (8th Cir. 2010) .................................... 36
Baden-Winterwood v. Life Time Fitness, Inc., 566 F.3d 618 (6th Cir. 2009) .................... 37
We acknowledge and thank our colleague Neil S. Sarkar for his assistance in preparing these
materials.
I. STATUTORY UPDATES
A. The Lilly Ledbetter Fair Pay Restoration Act.
On January 29, 2009, the Lilly Ledbetter Fair Pay Restoration Act became the first bill
signed into law by President Obama. The Fair Pay Restoration Act amends Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act; the Americans with Disabilities
Act; and the Rehabilitation Act of 1973. This Act is important because it permits an employee to
file a pay discrimination charge within 180 or 300 days (depending on whether their state has a
fair employment practices agency) of being affected by a discriminatory wage or practice. For
purposes of this Act, an unlawful employment practice occurs when (1) a discriminatory
compensation plan decision or other practice is adopted; (2) an individual becomes subject to a
discriminatory compensation decision or other practice; or (3) an individual is affected by the
application of a discriminatory compensation decision or practice. This includes each time
wages, benefits or other compensation are paid, resulting in whole or in part from the decision or
practice.
This Act is retroactive to May 28, 2007, so that it applies to pay discrimination claims
filed on or after that date.
The Fair Pay Act overruled the U.S. Supreme Court decision Ledbetter v. Goodyear Tire
& Rubber Co., a 2007 ruling where the Supreme Court held that the time limit for filing a
gender-based pay discrimination charge with the Equal Employment Opportunity Commission
(“EEOC”) begins when the employer makes a discriminatory decision concerning an employee’s
compensation.
B. The Genetic Information Nondiscrimination Act of 2008 (“GINA”).
• GINA protects against discrimination by employers, employment agencies, labor
unions, and insurers based on genetic information. GINA became effective November 21, 2009.
• Generally: Prohibits discrimination on basis of genetic information concerning
employment and health insurance decisions.
• Title II of GINA governs employment relationship.
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• Title II proscribes employers from discriminating against employees based on
their genetic information, limits access to genetic information of employees and their families
and prohibits retaliation against employees for exercising their GINA rights.
• GINA prohibits discrimination on the basis of genetic information concerning
employment and health insurance decisions.
• Generally, GINA’s employment provisions forbid an employer from
discriminating against an employee in hiring, termination of employment, compensation, or any
other term or condition of employment, “because of genetic information with respect to the
employee.” (42 U.S.C. § 2000ff-1(a)(1).)
• Further, GINA makes it unlawful for an employer to:
…limit, segregate, or classify the employees … in any way that would deprive or tend to deprive any employee of employment opportunities or otherwise adversely affect the status of the employee as an employee, because of genetic information with respect to the employee. (42 U.S.C. § 2000ff-1(a)(2).)
• On March 2, 2009, the EEOC released proposed regulations to implement GINA.
• GINA applies to employers with at least fifteen (15) employees. (42 U.S.C
§ 2000e.)
• GINA also applies to employment agencies, labor organizations and joint labor-
management organizations.
1. Requesting Genetic Information. With certain limited exceptions, GINA prohibits employers from requesting genetic
information.
It is an unlawful employment practice for an employer to “request, require, or purchase
genetic information with respect to an employee or a family member of the employee.” (42
U.S.C. § 2000ff-1-(b)).
2. Definitions.
Genetic Information – is defined under GINA to mean information about an
individual’s genetic tests, the genetic tests of an individual’s family member, and the
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manifestation of a disease or disorder in an individual’s family member. (GINA, Title II, § 201
(4)). Genetic information shall not include information about the sex or age of any individual.
Genetic test – is defined under GINA as “an analysis of human RNA, chromosomes,
proteins, or metabolites that detects genotype, mutations, or chromosomal changes. (GINA,
Title II, § 201 (7)(a).)
3. Exceptions to Obtaining Genetic Information.
Here are some limited instances where an employer may request genetic information:
• FMLA Certification: when the genetic information is used in compliance with
certification requirements of the FMLA or state family and medical leave laws;
• Inadvertent request or requirement.
− When the genetic information is inadvertently requested or required. (42
U.S.C. § 2000ff-1(b)(1).)
− GINA does not clarify what “inadvertent” means, but the EEOC’s
proposed regulations provide that the exception was meant to pertain to the “water cooler
problem,” where an employer gains genetic information during a casual conversation
with an employee or by overhearing the employee’s conversation with co-workers.
− If the employee or some other third party volunteers the genetic
information to the employer; this volunteered information could be in the instance of
where the employee does so as part of his or her Family Medical Leave.
− Where the employer purchases the genetic information from documents
that are commercially and publicly available, like newspapers, published periodicals or
journals, and books. However, this does not include medical databases or court records.
− Where the genetic information is obtained as part of health and genetic
services offered by the employer, including such services offered as part of an employee
wellness program. However, under this specific health and wellness program, the
employee must authorize the genetic information’s disclosure; and any genetically
identifiable information cannot be disclosed to the employer except in aggregate terms
that do not reveal the identity of specific individual employees.
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− Where the genetic information is used for genetic monitoring of the
biological effects of toxic substances in the workplace.
− Criminal Law Enforcement Purposes.
Any of these foregoing exceptions apply only if it is not used to violate GINA’s anti-
discrimination and anti-retaliation provisions. (42 U.S.C. § 2000ff-1(c).)
4. Record Keeping Requirements if the Employer Obtains Genetic
Information.
Employers acquiring genetic information under one of these exceptions above must store
this information in a separate file from the employee’s personnel file and treat it as a confidential
medical record. (42 U.S.C. 12112(d)(3)B).)
5. Disclosure of Genetic Information.
Employers cannot disclose genetic information unless the disclosure is being made:
• To the employee on his or her request;
• To an occupational or other health researcher;
• In response to a court order;
• To a government official investigating compliance with GINA if the information is relevant to said investigation;
• To a public health agency; and
• In relation to the employee’s compliance with the FMLA’s certification
provisions or that of state medical leave laws
6. Remedies.
• Remedies for a GINA violation are the same as those provided under Title VII.
• For most private employers, this means reinstatement, back pay, front pay, lost
benefits, compensatory and punitive damages, injunctive relief and possibly fees and costs
including attorney’s fees.
• GINA incorporates Title VII’s procedures, so an employee must first exhaust
administrative remedies by filing an EEOC Charge prior to filing a GINA cause of action in
federal court.
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C. The ADA Amendments Act of 2008 (“ADAAA”).
• Salient Points. The ADAAA was signed into law in September, 2008 and went
into effect on January 1, 2009. The ADAAA made a number of notable changes pertaining to
the definition of “disability.” Additionally, Congress directed the EEOC to amend its ADA
regulation to reflect the changes made by the ADAAA. The EEOC’s Notice of Proposed
Rulemaking was published on September 23, 2009.
• The ADAAA does not apply retroactively.
• What is ADAAA’s purpose? The ADAAA states that its purpose is “to reinstate
a broad scope of protection” by expanding the definition of the term “disability” under the ADA.
Congress found that people with many kinds of impairments—including epilepsy, diabetes,
multiple sclerosis, intellectual disabilities (formerly called mental retardation), major depression,
and bipolar disorder—had been unable to bring ADA claims because they were found not to
meet the ADA’s definition of “disability.”
• Congress, in enacting the ADAAA, expressly rejected certain U.S. Supreme
Court rulings, including Sutton v. United Airlines, Inc., of the term “disability.”
• How does ADAAA define “disability”? The ADAAA defines a “disability” as
(a) a physical or mental impairment that substantially limits a major life activity; (b) a record of a
physical or mental impairment that substantially limited a major life activity; or (c) when an
entity (e.g. employer) takes an action prohibited by the ADA based on an actual or perceived
impairment.
• The ADAAA also enacts a change in “regarded as disabled” claims. Prior to
the ADAAA, the employer had to actually perceive that the individual was substantially limited
in a major life activity. Perception of impairment alone was insufficient.
• Minor and transitory impairments. Under the ADAAA, an individual need
only prove that the employer perceived that the individual had an impairment—however,
perceptions of impairments that a ‘minor or transitory (i.e. less than six months) do not count as
showing that the employee was “regarded as” being impaired.
• What are “major life activities?” They are basic activities that most people in
the general population can perform with little or no difficulty. These include caring for oneself,
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performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, lifting,
bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and
working.
• When does an impairment “substantially limit” a major life activity? To
have a disability (or to have a record of a disability), an individual must be substantially limited
in performing a major life activity (see above) as compared to most people in the general
population. An impairment need not prevent, or significantly restrict, the individual in
performing a major life activity to be considered “substantially limiting.”
• What are mitigating measures? These are measures that eliminate or reduce the
symptoms or impact of an impairment.
• May the effects of mitigating measures be considered when determining
whether someone has a disability? Almost never. One of the ADAAA’s key features is that
the ADAAA directs that the positive effects from an individual’s use of one or more mitigating
measures be ignored in determining in an impairment substantially limits a major life activity.
Instead, with very limited exception, the determination of disability must focus on whether the
individual would be substantially limited in performing a major life activity without the
mitigating measures.
• Corrective Lenses. However, the exception to the mitigating measures rule
above is “ordinary eyeglasses or contact lenses.” That is, corrective eye lenses intended to fully
correct vision are considered when deciding if someone has a disability.
• Most of the ADAAA’s changes only affect the actual definition of the term
“disability.” None of the key ADA terms above, like “major life activity”, or the evidentiary
burdens of proof, have changed. The only change affecting the “reasonable accommodation”
duty is that an employer does not have to give one to an individual who only meets the “regarded
as” definition of disability.
D. New Family Medical Leave Act Regulations
• The new FMLA regulations took effect January 16, 2009. They are not
retroactive.
• These FLMA regulatory changes are numerous and comprehensive in scope.
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• In January, 2008, the FMLA amendments recognized two new types of leaves for
service members and their families:
a. Leaves for servicemembers’ families who must address exigent
circumstances associated with a reserve member’s call to duty; and
b. Leaves for servicemembers’ families to provide care for an injured or sick
service member.
1. Employer Notice Obligations:
There are four types of notice requirements that employer must now meet:
• General Notice.
The general notice must be provided in writing to employees advising them of their
FMLA rights and obligations. Further, for covered employers, a general FMLA written notice
must be in the employer’s employment handbook if the employer has one. An electronic
employment handbook posting can be done instead of actually giving the employee a hard copy
of handbook or FMLA policy hard copy handout, if the electronic posting is widely accessible to
all employees.
• Eligibility Notice.
An employer has 5 business days (no longer than 2 business days) measured from the
date the employer was put on notice of the possible need for leave to determine an employee’s
eligibility for FMLA leave.
Eligibility must be determined at the commencement of the first instance of leave for
each new FMLA qualifying reason within the 12 month period. All FMLA absences for the
same qualifying reason are considered a single leave and employment eligibility for that reason
cannot change during that 12 month period.
If the employee is not eligible for FMLA leave, he or she must be informed of the reason
for ineligibility.
Before an employer can tell if an employee is, or is not, eligible for FMLA leave, an
employer may need additional information.
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• Rights and Responsibilities Notice.
An employer must affirmatively place the employee on notice as to how the employer
will handle each and every aspect of the employee’s FMLA leave.
• Designation Notice.
If FMLA leave is approved, the employer must designate, if appropriate, the employee’s
right to paid leave; the duty to use paid leave (if applicable); and whether a fitness-for-duty
certification will be required (i.e., if the employee is taking FMLA leave based on his or her own
serious health condition).
If FMLA leave is approved, the employer is required to inform the employee, if possible,
of the number of hours, days or weeks, that will be designated as FMLA leave.
Sometimes employees do not properly notify the employer of the need for FMLA leave
until after first taking vacation or other paid types of leave. An employer can, at any time,
retroactively count the time away from work as FMLA leave, if the employee seeks to take
additional unpaid leave during their use of paid leave, or at the conclusion of the same, so long as
the time missed was for an FMLA-qualifying reason.
An employer may unilaterally retroactively designate any leave as FMLA leave with
appropriate notice to the employee (within 5 business days), so long as the employer’s failure to
previously timely designate the leave was due to the employee’s own failure to put the employer
on notice, or the employer’s own retroactive designation does not cause the employee harm.
An employer and employee can mutually agree to retroactively designate the leave as
FMLA leave at any time.
2. Employee Notice Requirements: § 825.302 and 825.303.
• Foreseeable FMLA Leaves.
The employee should give notice as soon as practicable after need for leave becomes
known. A day or next business day is deemed reasonable. If the employee knows of need for
FMLA leave more than 30 days in advance of the start date, then 30 days advance notice is
required.
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• Unforeseeable FMLA Leaves.
Employees should give notice as soon as practicable after the need for leave becomes
known. However, merely calling in sick to work, without more information, may be insufficient.
An employee who experiences demonstrable harm because of the employer’s failure to
provide notice of eligibility is entitled to the FMLA’s statutory remedies.
• Return to Work—Fitness for Duty.
Fitness-for duty-statement may address employee’s ability to perform the essential
functions of his or her position.
The employer must notify the employee of this requirement in the Designation Notice
and also provide a list of essential job functions with the Designation Notice.
For intermittent FMLA leave, an employer may require fitness-for-duty statement every
thirty (30) days if reasonable safety concerns exist regarding the employee’s ability to perform
his or her job duties.
Here, “reasonable safety concerns” means a reasonable belief of significant risk of harm
to the employee or others.
II. DISCRIMINATION CASE LAW INTRODUCTION
The following materials are intended as a primer on the various concepts and changes in
the area of employment discrimination and other employment-related litigation. While these
materials do not purport to reflect the current state of the law in every circuit court across the
United States, they do present an opportunity to examine the area of employment cases from a
national perspective.
III. RECENT SUPREME COURT DECISIONS Ricci v. DeStefano et al, 129 S. Ct. 2658 (2009) (Reverse Race Discrimination)
In its June, 2009 ruling, the United States Supreme Court established a new standard
called the “strong basis in evidence standard” to guide both employers and courts when there
may be a conflict between two different kinds of employment discrimination theories: “disparate
treatment” versus “disparate impact”. A “disparate treatment” theory involves the employer’s
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decision to intentionally discriminate against an employee, based on his or her legally protected
characteristic, including race, color, religion, gender, national origin, age or disability. By
contrast, a “disparate impact” involves no employer intent to discriminate. Rather, an employer
has a policy or practice that, while on its face, is neutral, actually has an effect that is
discriminatory on a specific legally protected class. The Supreme Court addressed what happens
when an employer is faced with engaging in “disparate treatment” respecting one class of people,
when at the same time it is concerned with potential liability to another class based on a
“disparate impact” theory.
In this case of reverse race discrimination, a group of plaintiffs consisting of White
firefighters and one Hispanic fire fighter who passed their promotional test sued the City of New
Haven and city officials, alleging that the city discriminated against them by refusing to certify
(i.e. throwing out) the test results based on the city’s belief that its use of the test results could
have a disparate impact on minority firefighters. The city discarded the results of a written test
used to promote firefighters because it worried that an insufficient number of minority
firefighters passed the test.
The U.S. Supreme Court held:
(1) The city’s refusal to certify these test results violated Title VII’s disparate
treatment prohibition, absent a valid defense;
(2) Before an employer can intentionally discriminate for the articulated reason of
avoiding an unintentional disparate impact, the employer must have a “strong basis in
evidence” to believe that it will be subject to disparate impact liability if it fails to take a
race-conscious action;
(3) The city, in this case, lacked “a strong basis in evidence” to believe that the tests
were not job-related and consistent with business necessity; and
(4) The city, in this case, lacked “a strong basis in evidence” to believe that there was
an equally valid, and less discriminatory, alternative use of tests that met the city’s needs
but the city refused to adopt.
By throwing the tests results out, the city showed that it was more concerned with
potential liability to minority fire fighters under a “disparate impact” theory than from a disparate
treatment one (based on reverse race discrimination of the predominantly white firefighters who
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wanted test results certified). Here, the Court established the “strong basis in evidence standard”
to help guide employers when the two Title VII-based discrimination theories, namely “disparate
treatment” and “disparate impact” may conflict with each other. The Ricci decision also holds
that, before an employer can intentionally discriminate (and subject employees to disparate
treatment) with an eye towards avoiding potential liability to other minority employees under a
disparate impact theory, the employer must have a “strong basis in evidence” to believe that it
will be subject to disparate impact liability if it fails to take the race-conscious discriminatory
action.
In light of this recent decision, before an employer can intentionally discriminate to avoid
or remedy some perceived concern with potential liability regarding unintentional disparate
impact, the employer first “must have a strong basis in evidence” to believe it will be subject to
disparate impact liability if it fails to take the race-conscious discriminatory action.
While the Court’s decision could affect workplace discrimination and diversity issues
under Title VII, the Court did not provide much clear guidance on precisely how to apply this
new standard.
Some important things to take away from this case:
1.) The Court’s decision applies to both public and private employers and will have
an impact on their hiring practices.
2.) Cities, towns and other municipal governments will likely be much more reluctant
to make race a factor in hiring or promotions, based on Ricci.
3.) Minority groups may fear this case will make challenges to testing more difficult
by limiting liability to situations where minority groups can prove they were victims of
intentional discrimination and would otherwise make a disparate impact claim.
4.) Although the Supreme Court did not limit an employer’s efforts to design
affirmative action programs to increase diversity in hiring or promotions, it did establish certain
“rules”.
5.) According to the Court, once the “process has been established and employers
have made clear their selection criteria, they may not then invalidate the test results, thus
upsetting an employee’s legitimate expectation not to be judged on the basis of race.”
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6.) An employer could then deviate from such practice once it began only if it had a
“strong basis in evidence” that the practice would be a “disparate-impact violation.”
7.) In light of this case, employers now must be even more cautious when using
written tests and other tests for hiring and promotion decisions and especially cautious about
invalidating results based on race.
8.) If an employer uses an employment tests, the employer must ensure they are fair
and objective. The employer must carefully plan and analyze the test content before
administering them and make sure to rule out other possibly less discriminatory alternatives it
could use.
9.) The test questions, therefore, should relate to the duties of the job for which the
employer is testing.
10.) Also, the employer should be able to show the tests were relevant in the hiring or
promotion process.
Crawford v. Metropolitan Government of Nashville, 129 S. Ct. 846 (2009) (Passive Opposition Protected)
In this case, the Court unanimously ruled that Title VII of the 1964 Civil Rights Act
protects an employee who opposes unlawful sexual harassment, but who does not personally
report the harassment himself or herself. In addressing this case, it is important to recall that
Title VII’s anti-retaliation provision protects two kinds of activities. Section 704(a) of Title VII,
42 U.S.C. § 200e-3(a), “makes it unlawful ‘for an employer to discriminate against any
…employe[e]’ who: (1) ‘has opposed any practice made an unlawful employment practice by
this subchapter’ (“the opposition clause”); or “(2) ‘has made a charge, testified, assisted, or
participated in any manner in an investigation, proceeding, or hearing under this subchapter’
(“the participation clause”). Here, the Supreme Court was concerned about how broadly to
define the scope of the “opposition clause.”
This case helps clarify the definition of retaliation under Title VII. Here, a former
municipal government employee filed a Title VII action against her ex-employer alleging
discrimination and retaliation. The trial court dismissed the plaintiff’s claims on summary
judgment. The 6th Circuit Court of Appeals affirmed. Reversing the 6th Circuit, the U.S.
Supreme Court held that the protection of the “opposition” clause of Title VII’s anti-retaliation
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provision extended to an employee who spoke out about sexual harassment, not on her own
initiative, but rather merely by answering questions the employer asked her during the
employer’s investigation of a co-worker’s complaints. The employer’s investigation was only
internal and not conducted based on or because of a Title VII discrimination or harassment
charge pending before the EEOC or state civil rights government agency. Also, the plaintiff did
not, herself, personally initiate any complaint prior to the employer’s investigation.
Under Title VII, an employer cannot discriminate against any employee who, among
other things, “has opposed any practice made an unlawful employment practice by this
subchapter (opposition clause).
The Supreme Court noted that the word “oppose” is undefined by statute, so it carries its
ordinary dictionary meaning of “resisting or contending against.” Therefore, the Court reasoned
that “oppose” goes beyond the mere definition of “active, consistent behavior.” Rather, the word
“oppose” may be used, as in this case, to speak of someone who has taken no action at all to
advance a position beyond disclosing it. Thus, the Court concluded, a person can “oppose” by
merely responding to someone else’s questions just as surely as by acting affirmatively to
provoke the discussion.
It is important to note that the 6th Circuit, when it first heard this case, affirmed its
dismissal. The 6th Circuit read the “opposition clause” to mean that this clause demanded
“active, consistent” opposing, which the facts indicated that the employee, Crawford, simply did
not do. For instance, Crawford did not ever initiate her own complaint to her employer or to the
EEOC. All she did, rather, was answer questions her employer posed to her during its
investigation of a complaint made by someone else. The Supreme Court could have affirmed the
6th Circuit’s reading of the Opposition Clause and dismissed the plaintiff’s claim on this basis.
However, the Court instead chose to permit a broader reading of the word “oppose” to include
“passive opposition” like responding to someone else’s questions.
The Court further rejected the employer’s argument that employers will be less likely to
raise questions of possible discrimination if a retaliation charge is easy to raise. The Court stated
this is not true because employers have a strong incentive to identify and take remedial action of
any discriminatory activity or harassment. This is based on other prior Supreme Court cases,
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like Farragher and Ellerth from 1998 that expose employers to vicarious liability if they fail to
investigate employee complaints of discrimination and/or harassment.
The Court also reasoned that if it ruled in the employer’s favor, then people in the
plaintiff’s shoes would likely decide not to answer any questions asked of them by his employer
investigations of possible workplace discrimination or other misconduct, if there would be no
legal protection against retaliation.
Interestingly, Justice Alito wrote a concurring opinion where he agreed with the
majority’s decision, but separately stressed that he believes the Court’s holding “does not and
should not extend beyond employees who testify in internal investigations or engage in
analogous purposive conduct.” Justice Alito found that the majority’s interpretation of the
opposition clause could protect silent, passive conduct could “open the door to retaliation claims
by employees who never expressed a word of opposition to their employers.”
He noted that retaliation charges between 1992 and 2007 have doubled and fears that the
majority’s expansive interpretation of the “Opposition Clause” may only increase this trend.
In the wake of the Crawford, at least some of the circuit courts appear to have attempted
to stem the potentially vast reach of how far the scope of retaliation claims may extend.
AT&T Corporation v. Hulteen, 129 S. Ct. 1962 (2009) (Pregnancy Discrimination Act)
With this case, the U.S. Supreme Court decided last year that women who took
pregnancy leave before 1979, the year the Pregnancy Discrimination Act took effect, could not
sue to have their pre-act maternity leave fully count towards their retirement. In this decision,
from May 18, 2009, that the Court addressed the interesting and important question of whether
women who took maternity leave decades ago (before pregnancy discrimination became illegal)
can now sue to have their pregnancy leave time counted towards their pensions. In a 7-2 ruling,
the Supreme Court held that they could not.
Female employees brought a Title VII action against their ex-employer alleging sex and
pregnancy discrimination relating to the calculation of their pension benefits. Ultimately, the
U.S. Supreme Court held that:
(1) An employer does not necessarily violate Title VII when it pays pension benefits
calculated in part under an accrual rule, applied only prior to the Pregnancy
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Discrimination Act (“PDA”) of 1978, that gave less retirement credit for pregnancy leave
than for medical leave generally;
(2) An employer’s calculation of female employees’ pension benefits under such an
accrual rule did not violate Title VII (including the PDA); and
(3) The PDA did not apply retroactively, because pension payment calculations were
considered a bona-fide seniority system (i.e., with no discriminatory terms) and thus
protected under Title VII.
This case is important because it illustrates that Title VII § 703(h) makes it legal for an
employer to apply different standards of compensation based on a “bona fide” seniority system,
if such differences are not the result of an intent to discriminate because of sex. Here, the
employer’s system was “bona-fide” (i.e, without discriminatory terms) and the U.S. Supreme
Court held that the pre-PDA accrual plans such as the employer AT&T’s were legal. Third, the
presumption against the PDA’s applying retroactively was not overcome in this case by the
plaintiffs.
The U.S. Supreme Court rejected the idea that the Ledbetter Fair Pay Act demanded a
different result since AT&T’s pre-PDA decision not to award the plaintiff’s service credit for
pregnancy was discriminatory.
At bottom, if the Court had ruled in the plaintiffs’ favor, then literally thousands of
women who took maternity leave before the PDA was enacted in 1978 and, now, are on the
verge of retirement and leaving the workforce, would have been affected. The companies where
these women work would also have most likely been required to recalculate the pensions of these
affected women.
Under this decision an employer may be relieved of recalculating the pensions of the
women who took maternity leave before the Pregnancy Discrimination Act in 1979. However,
employers also should remember that no decision is ever necessarily set in stone, especially with
the current Congress and Administration. Congress could always enact legislation that could, as
a practical matter, reverse this decision.
16
Gross v. FBL Financial Services, Inc., 129 S. Ct. 2343 (2009) (Age Discrimination)
This case establishes that “mixed motives” claims—claims where the evidence indicates
that the employer was motivated by both unlawful and lawful reasons when taking an adverse
employment action—are not permissible under the Age Discrimination in Employment Act
(“ADEA”).
In a “mixed-motives” case, traditionally seen in Title VII cases, if a plaintiff has evidence
that the employer had both lawful and unlawful reasons for terminating the plaintiff, then, to
avoid liability, the employer has the burden of proving, by a preponderance of evidence, that it
would have taken the adverse action regardless of the employee’s legally protected
characteristic.
The Court of Appeals applied the prior 1989 Supreme Court ruling of Price Waterhouse
v. Hopkins, which was a decision that permitted Title VII claims based on “mixed-motives” to
the ADEA.
In a controversial 5-4 decision written by Justice Thomas, the Supreme Court in Gross
vacated the appellate court’s judgment for the plaintiff but, more importantly, threw out that
court’s rationale.
In this case, the employee brought an Age Discrimination in Employment Act (“ADEA”)
allegation, contending that he was demoted because of his age. The U.S. Supreme Court held
that a “mixed motives” jury instructions (which exists in the context of Title VII cases) is never
proper in an ADEA case. A “mixed-motive” instruction is one that indicates that the employer’s
decision to take adverse employment action against the plaintiff was the product of both lawful
and unlawful (i.e., discriminatory) motives. This mixed-motive analysis has been, and remains,
prevalent in the Title VII context.
At the close of the plaintiff’s trial, and over the employer’s objections, the trial court
instructed the jury that it must return a verdict for the plaintiff employee if he proved, by a
preponderance of evidence, that the employer demoted him and that his age was a motivating
factor in the decision. The jury was then further instructed that the plaintiff’s age was a
“motivating factor” if it played a part or role in the employer’s demotion decision. The jury was
also instructed regarding the employer’s burden of proof. According to the trial court, the
17
verdict must be for the employer if the employer has proven, by a preponderance of evidence,
that the employer would have demoted the employee regardless of his age.
The jury then returned a verdict in the employee’s favor and the employer appealed.
Discarding the rationales by both the trial and appellate courts, the U.S. Supreme Court first
indicated that its decisions in the Title VII context do not apply to Age Discrimination in
Employment Act (“ADEA”) cases. The Court explained that Title VII is materially different
with respect to the relevant burden of persuasion, so that the Title VII precedent does not control
the construction of the ADEA.
The Supreme Court held that the ADEA does not authorize a “mixed motives” age
discrimination claim. This, the Court reasoned, is because the ordinary meaning of the ADEA’s
requirement that the employer took adverse action “because of age” is that age was the “reason”
that the employer decided to act. Therefore, a plaintiff bringing a disparate treatment claim
pursuant to the ADEA must show, by a preponderance of evidence, that his or her age was the
“but for” cause of the employer’s adverse decision. Critically, the burden of persuasion does not
ever shift to the employer to show that it would have taken the action regardless of age, even if a
plaintiff has produced some evidence that age was one motivating factor in that decision.
Justice Stevens, in an impassioned dissenting opinion, stated that mixed-motive jury
instructions seen in Title VII cases are, in his view, also appropriate in the ADEA context.
Justice Stevens opined that the relevant language in Title VII and ADEA is identical, and that
courts have long recognized that the Supreme Court’s interpretations of Title VII’s language
apply “with equal force” in the context of age discrimination.
Interestingly, the specific question the Supreme Court in Gross was initially granted
certiorari to address was to clarify whether “direct evidence” was needed for a “mixed-motives”
claim under the ADEA. However, the Supreme Court stated that it first had to decide “whether
the burden of persuasion ever shifts to the party defending an alleged mixed motives
discrimination claim under the ADEA.”
The Court first established that Title VII’s language and precedent, including Price
Waterhouse did not control the Court’s interpretation of the ADEA. The Court noted that
Congress specifically amended Title VII to expressly authorize “mixed motives” claims. By
stark contrast, Congress did not expressly authorize “mixed motives” claims under the ADEA.
18
The Court then held that the ADEA’s text does not authorize “mixed-motives” ADEA
disparate treatment claims.
Again, the Court noted that the ADEA provides it is unlawful for an employer to
discriminate against an employee “because of such individual’s age” (emphasis added). Thus,
the Court reasoned, that an employee must show that age was the “but for” cause and not merely
a “motivating factor” for the decision.
As such, significantly, the employee must retain the burden of persuasion throughout
litigation of an ADEA claim (as opposed to Title VII claims where, as shown, a “mixed motive”
scenario shifts the burden of persuasion to the employer to prove that it would have taken the
adverse employment action regardless of the employee’s Title VII-protected trait (like race,
color, gender, religion, or national origin).
Please remember that the force of Gross pertains to disparate treatment ADEA claims.
Also, the “mixed-motives” claims remains alive and well in Title VII cases, based on
Congressional authorization for “mixed motives” claims under Title VII.
However, as we will see, in light of the Gross decision, other Circuits now have used the
analytical reasoning in Gross to extend to other federal laws besides Title VII.
For instance, in the 7th Circuit, the Court in 2010 has now used Gross as a primary basis
for ruling that the “mixed motives” claims are unauthorized by the Americans with Disabilities
Act (“ADA”). See Serwatka v. Rockwell Automation, Inc., 591 F.3d 957 (7th Cir. 2010).
IV. RECENT CIRCUIT COURT DECISIONS Serwatka v. Rockwell Automation, Inc., 591 F.3d 957 (7th Cir. 2010)
In Serwatka, an employee brought an ADA action against her ex-employer, alleging it
discriminated against her, by discharging her, because it regarded her as being disabled. The
trial court granted the employee’s request for a declaration that the employer violated the ADA
and the employer appealed.
Reversing the trial court, the 7th Circuit Court of Appeals held:
(1) The ADA did not authorize a “mixed motive” disability discrimination claim; and
(2) The employee’s perceived disability was not the “but for” cause of the
employee’s discharge.
19
The Court began by addressing the trial court’s decision to adopt a “mixed-motives”
analysis in addressing the plaintiff’s ADA claim. At trial, the jury answered “YES” to both of
the following questions on the special verdict form:
(1) “Did the defendant terminate the plaintiff due to its perception that she was
substantially limited in her ability to walk or stand?” and
(2) “Would the defendant have discharged the plaintiff if it did not believe that she
was substantially limited in her ability to walk or stand, but everything else remained the
same?”
Since the jury answered both questions “yes”, the trial court treated the answers as a
“mixed-motive” finding, meaning that the employer’s decision to terminate the plaintiff was the
result of “mixed motives”—both proper and improper motives. The 7th Circuit Court of Appeals
addressed whether the jury’s “mixed-motive” finding entitles the plaintiff to judgment in her
favor. The Court held no, citing the recent U.S. Supreme Court decision of Gross v. FBL Fin.
Services., Inc., 129 S. Ct. 2343 (2009). The 7th Circuit Court noted that Gross held that because
the Age Discrimination in Employment Act (“ADEA”) lacked the language in Title VII
expressly recognizing “mixed-motive” claims, such claims are not authorized under the ADEA.
The Court also found it significant that Congress amended Title VII to explicitly authorize
“mixed-motive” claims, while Congress did not so amend the ADEA, suggesting it did not
intend to authorize “mixed-motive” claims in ADEA cases.
The Court indicated that while Gross decision construed the ADEA, the importance that
the Supreme Court attached to the explicit incorporation of the mixed-motive framework into
Title VII suggests that when another anti-discrimination statute [like ADEA or ADA] lacks such
comparable language, a mixed motive claim will not be viable under that statute. Analyzing the
ADA’s statutory language, the 7th Circuit found no “mixed motive” claim.
Therefore, in light of Gross, the Serwatka Court found in the absence of “mixed-motive”
language in the statute’s text, that the ADA, like the ADEA, demands proof that the unlawful
action, namely the employee’s perceived disability, was the “but for” cause of the adverse
employment action.
Under this analytical framework, the Court concluded that the plaintiff could not show
that her perceived disability was the “but for” cause of her termination. While the jury found
20
that the employer’s perception of the employee’s alleged disability may have contributed to the
termination, the jury also found that the employer would have fired the plaintiff anyhow, in spite
of its consideration of her perceived disability. As such, the plaintiff’s ADA claim failed and the
employer was entitled to judgment.
Based on this case, it appears that other Circuits could also follow the path-- started by
the U.S. Supreme Court in Gross and continued by the 7th Circuit in Serwatka --to continue to
narrow “mixed-motive” claims outside the Title VII context. However, that being said, it is
important to remember, as another very recent 5th Circuit Case of Smith v. Xerox Corp indicates,
that the ‘mixed-motives” claims remain alive and well in the Title VII area.
Smith v. Xerox Corp. 2010 WL 1052837 (5th Cir. 2010)
In the Smith v. Xerox Corp. case, the 5th Circuit Court of Appeals, addressed the question
of a mixed-motive claim in the context of Title VII race and gender, in the wake of Gross v. FBL
Financial Services.
Discharged female employee sued her ex-employer under Title VII, alleging
discrimination and retaliation for filing an EEOC Charge. Affirming the trial court’s award for
the plaintiff, the 5th Circuit Court of Appeals held that direct evidence is not required in order to
obtain a “mixed motive” jury instruction in a Title VII retaliation case; and the trial court
properly submitted this case to the jury as a “mixed motive” case.
Regarding a “mixed motive” case, if a trial court has before it substantial evidence
supporting a conclusion that both a legitimate and non-legitimate motive may have played a role
in the challenged employment action, the court may give a mixed motive jury instruction.
The plaintiff, a 22 year employee of Xerox, was fired in January, 2006. She received
mostly positive performance reviews. In January, 2005, she was supervised by a different
manager and they immediately clashed. The plaintiff alleged that this supervisor was making
adverse decisions concerning her employment based on her age and gender. In later 2005, the
plaintiff received a performance warning letter, but refused to sign because she thought it was
inaccurate. Instead, she complained to Xerox’ human resources department and then, in
November, 2005, filed a race, gender and age discrimination charge with the EEOC and told her
supervisor that she did so.
21
Nonetheless, she was terminated less than two months later, on the basis of poor job
performance. Citing the recent 2009 U.S. Supreme Court decision of Gross v. FBL Financial
Services, this court noted that a “mixed motive” jury instruction in a Title VII case was improper
in an Age Discrimination in Employment Act (“ADEA”) case. However, the court reasoned that
since this case was a Title VII race and gender case, it analogized to other precedent to permit a
“mixed-motive” jury instruction to apply to this dispute. Here, despite the Gross decision, this
Court declined to extend Gross’ holding into the Title VII context.
Based on the Smith case, it appears that the “mixed motive” claims in the context of Title
VII claims remain viable claims. In fact, this is not inconsistent with Gross. It is important to
remember that Justice Thomas, who wrote the majority opinion in Gross, noted that Congress
clearly and expressly authorized mixed-motive claims, so they are authorized under Title VII.
Still, in light of the Gross, Smith and Serwatka decisions, it will be interesting to watch
for what, if any, applicability the mixed-motive claims will be have outside the realm of Title VII
claims.
Uphoff Figueroa v. Alejandro, 2010 WL 728784 (1st Cir. 2010) (Fair Labor Standards Act)
In an interesting case involving the Fair Labor Standards Act and Retaliation under Title
VII, the Court reaffirms that a plaintiff must prove he or she is covered by a law in which he or
she is seeking legal protection and that an individual person cannot be sued under Title VII.
An environmental attorney sued his ex-employer alleging, among other things, retaliation
under Title VII and the Fair Labor Standards Act (“FLSA”). The 1st Circuit Court of Appeals
held that the employee failed to state a retaliation claim under either Title VII or FLSA. The 1st
Circuit Court of Appeals held that the dismissal of the FLSA retaliation claim was proper
because the plaintiff never alleged, on the complaint’s face, that he engaged in any statutorily
protected activity. The plaintiff must prove (1) that he engaged in statutorily-protected activity;
and (2) the employer’s adverse action against him (3) was a reprisal for his having engaged in
the protected activity.
Not only did the plaintiff fail to plead such a claim in his complaint, but he had no claim
under the FLSA’s wage and hour provisions. Rather, he alleged in his lawsuit he was a lawyer
for the Puerto Rico Electric Power Authority and all the jobs he held were within the FLSA’s
22
“learned professional” exemption so he could not prove that he was an employee covered by
FLSA’s protections.
Further, the Court affirmed the dismissal of Plaintiff’s Title VII retaliation claims.
Plaintiff’s complaint alleged a claim for Title VII retaliation against individual employees only.
The Court, therefore, held that the plaintiff cannot bring a Title VII suit against individual
employees.
This case reaffirms that if an employee is exempt from the FLSA, then he or she cannot
have protection. Here, the employee did not allege any facts that his exempt status was
somehow destroyed. For example, the employee did not allege that the employer failed to pay
him on “the salary basis” (where an exempt employee must be paid a fixed amount of salary
each regular pay period regardless of the quality or quantity of hours worked). Further, this case
should give employers some comfort that, at least under the federal law of Title VII, individual
employees are not “employers.” Of course, it must be remembered that this principle does not
necessarily hold true for state law-based claims for discrimination.
Sanford v. Main Street Baptist Church Manor, 2009 WL 1410994 (6th Cir. 2009) (Supervisor Sexual Harassment)
This is a 6th Circuit Court of Appeals case involving Title VII claims for sexual
harassment under both a sexually hostile work environment and quid pro quo theory. This case
is significant concerning the “quid pro quo” claim, in that the 6th Circuit found that the plaintiff’s
“quid pro quo” claim could not survive summary judgment and that it failed “as a matter of law”.
Male employee sued employer for Title VII claims of sexually hostile work environment
and quid pro quo sexual harassment. The 6th Circuit Court of Appeals reversed the trial court’s
decision to award the employer summary judgment on the hostile environment claim, but
affirmed the trial court’s dismissal of the plaintiff’s quid pro quo claim as a matter of law.
The employer hired the employee as a summer maintenance worker. The employee
alleged instances of sexual harassment by a female supervisor, including her efforts to make him
take a trip with her out of town and take measures to ensure his shift was covered if he would go
with her. He allegedly reported the harassment to other management, but no remedial action was
taken and he ultimately lost his job. Here, regarding the hostile environment claim, it was
23
undisputed that the plaintiff was a member of a protected class (i.e., male); was subjected to
unwelcome harassment; and the harassment was based on his gender.
The trial court, however, applied the employer affirmative defense set in Farragher v.
City of Boca Raton, 524 U.S. 775 (1998). The trial court held that the employer could prevail on
the Farragher defense, as a matter of law, since (a) the employer exercised reasonable care to
prevent any sexual harassment; and (b) the plaintiff unreasonably failed to avail himself of any
preventive or corrective measures provided by the employer or to avoid harm otherwise.
The 6th Circuit disagreed, noting that the employer’s sexual harassment policy was not a
reasonable or effective harassment prevention policy. Indeed, the Court indicated that the
employer’s “grievance procedure,” which the employer offered into evidence as its “sexual
harassment prevention policy,” did not even mention unlawful discrimination or workplace
harassment. The Court also noted that employer’s policy, as written, did not allow the employee
to bypass complaining to the immediate supervisor or otherwise require the supervisor’s
involvement. The 6th Circuit Court believed this aspect particularly problematic--especially
since the alleged harasser was the plaintiff’s direct supervisor. As such, it reversed the trial
court’s dismissal of plaintiff’s sexually hostile work environment claim.
However, the Court affirmed the trial court’s dismissal of the plaintiff’s quid pro quo
claim as a matter of law. Plaintiff’s claim was based on his supervisor’s promise that she would
ensure plaintiff’s shift was covered if he traveled out of town with her while he was supposed to
be working at his shift. However, the Court stated that the plaintiff lacked evidence that an
adverse tangible employment action occurred because he refused to submit to his supervisor’s
sexual advances.
In its reading of the facts, the Court found that the plaintiff could not prove that his
refusal to submit to his supervisor’s (unwelcome) sexual demands resulted in an adverse
employment action. The Court held that, as a matter of law, the plaintiff could not show a causal
connection between his refusal to submit to his supervisor’s sexual demands and his subsequent
job loss, as the alleged harasser (the plaintiff’s direct supervisor) had no formal role in making
the decision to terminate the plaintiff’s employment.
Judge Clay of the 6th Circuit Court of Appeals wrote a dissenting opinion arguing that the
plaintiff’s “quid pro quo” claim, like the sexually hostile work environment claim, should have
24
survived summary judgment and that a jury should have been able to determine whether the
employer was liable on both claims. Judge Clay opined that, in reality, all the plaintiff’s claims
revolve around his being harassed, resisting the harasser, complaining of the harassment, and
subsequent job loss.
As the dissenting opinion emphasized, the plaintiff presented evidence that he refused to
submit to his supervisor’s sexual advances and this ultimately caused the “adverse, tangible
action” of his job loss. Taking this evidence most favorably to the plaintiff, the 6th Circuit
nonetheless chose to grant summary judgment in the employer’s favor respecting the quid pro
quo claim. That the Court did not permit a jury to consider the plaintiff’s quid pro quo claim,
under these facts, suggests that it could become more difficult in the future, in and out of the 6th
Circuit, for a quid pro quo claim to proceed to trial.
Thompson v. North American Stainless LP, 567 F.3d 804 (6th Cir. 2009) (No Third Party Retaliation Claims)
In the wake of the U.S. Supreme Court’s decision in Crawford v. Metropolitan
Government of Nashville, the very appellate court whose decision in Crawford was reversed by
the Supreme Court once again had an opportunity to determine the reach of a Title VII’s anti-
retaliation claim. In Crawford, the Court was concerned with the breadth of the anti-retaliation
provision’s “opposition clause.” However, in this case, the issue concerned whether a third party
can legally bring a claim for retaliation for allegedly being fired because of his fiancée’s EEOC
Charge.
Male employee was fired after his fiancée, who also worked for the same employer, filed
an EEOC gender discrimination charge. The male employee then sued his employer for
retaliation under Title VII. The trial court entered summary judgment for the employer and the
plaintiff appealed. The 6th Circuit Court of Appeals held:
(1) An employee terminated after his fiancée filed an EEOC gender discrimination
charge was not a member of a protected class; and
(2) Title VII does not create a cause of action for third-party retaliation for persons
who have not, themselves, personally engaged in statutorily protected activity.
From early 1997 to early 2003, the Plaintiff worked as an engineer for the defendant
employer. He met a female co-worker with this same employer hired in 2000. The plaintiff and
25
this co-worker then began dating shortly thereafter and the employer knew of this. At the time of
his discharge, the plaintiff and this co-worker were engaged to be married and they now are
married. In 2002, the plaintiff’s fiancée had filed a gender discrimination charge with the EEOC.
On February 13, 2003, the EEOC notified the employer of the fiancée’s EEOC Charge. On
March 7, 2003, the employer terminated the plaintiff’s employment, citing poor work
performance. Before filing his own Title VII claim, the plaintiff went to the EEOC. He filed a
retaliation charge, asserting that Title VII prohibits an employer from terminating an employee
based on his fiancée’s protected activity, where she also works for the same employer. The
EEOC agreed and found probable cause for retaliation, but chose not to file a lawsuit and elected
instead to issue the plaintiff a notice of suit rights letter. Accordingly, the plaintiff sued his
employer under Title VII in federal court. That court stated that the plaintiff lacked a claim for
retaliation because he did not, himself, personally engage in statutorily protected activity, which
is one of the necessary elements for a retaliation claim.
The 6th Circuit Court of Appeals agreed. The Court stated that Title VII’s plain language
does not include the plaintiff in the class of people for whom Congress intended a retaliation
claim which the plaintiff, himself, did not personally oppose the employer’s unlawful practice.
The 6th Circuit’s majority refused to extend Title VII’s anti-retaliation provision to third parties,
holding that the anti-retaliation provision’s scope does not extend to third parties, including
friends and family members who, personally, have not engaged in the required “protected
activity.”
In reaching this result, the Court majority also noted that no other circuit court of appeals
has extended such protection of Title VII’s anti-retaliation provision beyond only those people
who personally engaged in “protected activity.” Thus, the Court held that Title VII’s anti-
retaliation provision does not create a legal cause of action for third party retaliation for people
who have not personally engaged in statutory protected activity.
Interestingly, two 6th Circuit Judges, Martin and Moore, each wrote dissenting opinions.
Judge Martin’s dissent criticized the majority’s narrow and “relentless reliance” on Title VII’s
plain meaning. He also notes that the U.S. Supreme Court in 2009 had just reversed the 6th
Circuit’s “plain meaning” approach in Crawford v. Metropolitan Government of Nashville, 129
S.Ct. 846 (2009) (also referenced and discussed in these materials). Judge Martin reasoned that
26
the U.S. Supreme Court in Crawford reinforced the need to take a broader approach beyond
“plain meaning” and adopted a broader meaning of the word “oppose” under Title VII’s anti-
retaliation provision. Judge Martin opined that Thompson is really about an employee who was
fired because the employer retaliated against him for his own opposition to an unlawful
employment practice, namely the gender-based disparate treatment affecting his fiancée. Judge
Martin stated that the plaintiff had, in his view, a legally cognizable claim based on the text,
structure, history, and congressional purpose in enacting Title VII’s anti-retaliation provision.
Judge Moore’s dissent states that the majority’s decision flies in the face of the U.S.
Supreme Court’s Crawford decision, disregarding the High Court’s pronouncement that a
broader approach beyond the statute’s plain meaning should apply in interpreting statutes meant
to protect employees against employer retaliation for protected activity. Judge Moore also stated
that the plaintiff opposed the employer’s sex discrimination of his fiancée, and knowing their
personal relationship as spouses-to-be, it is reasonable to infer that the employer believed the
plaintiff (as the fiancée of a co-worker who filed an EEOC sex discrimination charge against the
employer) himself opposed the employer’s discrimination against his fiancée and terminated him
for that opposition.
Here, the 6th Circuit Court notes that no other appellate court has extended such
protection of Title VII’s anti-retaliation provision beyond only those people who, themselves,
personally engaged in “protected activity.” Interestingly, the dissenting opinions would have
extended Crawford’s holding and analysis of the “opposition clause” (discussed earlier) in order
to allow the plaintiff, by virtue of his relationship to his fiancée who filed the EEOC Charge, to
bring his claim because he “opposed” the employer’s alleged discrimination of his fiancée.
Had the 6th Circuit’s majority adopted this view, this may have extended the broadened
view of the “opposition clause” potentially to “open the floodgates” of retaliation litigation. In
that event, third parties could legally bring such claims even if they did not, themselves,
personally engage in statutorily protected activity. For now, at least, the 6th Circuit and other
circuits do not seem prepared to extend Crawford’s holding or otherwise permit a legal cause of
action for third-party retaliation.
It also should be noted that the EEOC is of the view that “associational retaliation” is
actionable, and will likely continue taking that position outside those Circuits specifically
27
rejecting it. When faced with an EEOC Charge or discrimination complaint from an employee
who is associated with or related to other employees in an employer’s workplace, an employer
should still proceed carefully in making any hiring, promotion, discipline or termination
decisions.
Hamilton v. General Electric Company, 556 F.3d 428 (6th Cir. 2009) (Close Temporal Proximity)
This case that helps show that a “causal link” can be shown for retaliation claims,
between protected activity and adverse action, even when an employee is be fired a long as three
months after he engages in the statutorily protected activity.
In this case, a terminated employee sued his former employer, alleging he was fired in
retaliation for filing an EEOC Charge of age discrimination. The plaintiff worked for his
employer for about thirty (30) years. While his disciplinary record was relatively clean prior to
2004, he was suspended twice between May, 2004 and June, 2005. After his second suspension,
he filed an Age Discrimination Charge with the EEOC. Less than three months after that, he was
terminated. The company stated that it fired the plaintiff for unacceptable conduct, including
refusing to follow his supervisor’s directions and using foul language. The plaintiff denied
engaging in this misconduct.
In his lawsuit, which was based on retaliatory discharge, the plaintiff alleged that after he
returned to work from his second suspension and after the employer learned of his EEOC
Charge, the employer intensified the scrutiny of his work and harassed him more than before.
He presented evidence that he heard two supervisors discussing the EEOC Charge he filed and,
shortly thereafter, met with his supervisor to discuss problems with his job performance.
The trial court awarded the employer summary judgment. Reversing the trial court, the
6th Circuit Court of Appeals held that the employee established a causal link between filing an
EEOC Charge and the adverse action (i.e., termination), thus showing a prima facie case of
retaliation. The Court further held that an issue of triable fact existed as to whether the
employer’s proffered reason for firing the employee was pretextual.
Here, the Court noted that the 6th Circuit has previously recognized that in some cases,
temporal proximity between the protected activity and adverse action, alone, suffices to show a
causal link here. The Court stressed the fact that the plaintiff was fired not even three months
28
after he filed the EEOC Charge against his employer. The plaintiff also produced evidence that
the employer, after receiving notice of his EEOC charge, heightened its scrutiny of his work.
The Court found that these facts, taken together, were enough to make out the causation element
of a prima facie case of retaliatory discharge.
The Court further indicated that a jury should hear the plaintiff’s evidence of the
employer’s pretext, based on the plaintiff’s evidence of the employer’s increased surveillance of
his work after he filed his EEOC age discrimination charge, as well as the plaintiff’s contesting
the factual basis for the employer’s articulated reasons for his discharge.
The key in this case is that, aside from the three-month time frame between when the
employee engaged in the protected activity and he was fired, the employee presented evidence of
the employer’s heightened scrutiny of his work. It appears that circuit courts, like the 6th Circuit,
are taking these two pieces of evidence (relatively close temporal proximity combined with post-
protected activity heightened employee scrutiny) to find a causal nexus for purposes of a
retaliation claim.
Lewis v. Heartland Inns of America, LLC, 591 F.3d 1003 (8th Cir. 2010) (Gender Stereotyping)
This case involves the issue of discrimination based on gender-based stereotypes. This
topic was first addressed in 1989 in the Price Waterhouse. There, the plaintiff, a female
employee, prevailed against her employer under Title VII because she proved that it made an
adverse employment decision against her based on its impermissible gender-stereotyping. That
employer denied the female employee a partnership that similarly-situated male employee were
offered because the female acted “too aggressive.” The Court noted that the male employees
were rewarded for their aggressive behavior, but the female employee was not. This constituted
an unlawful gender-based stereotype the employer had regarding the kind of way it believed that
a woman should behave. Now, in 2010, the 8th Circuit Court analyzed a similar issue,
concerning an employer’s expectations regarding the type of dress and look a female hotel staff
employee should have.
This case shows that the Eighth Circuit joined other U.S. appellate courts that have
addressed claims that an employer violated Title VII by imposing a sex-based stereotyped stigma
on an employee.
29
The plaintiff, Ms. Lewis, worked the front desk of a chain hotel. Her job performance
was good but the employer’s new director noted that the plaintiff was not a “female dresser.” In
fact, the plaintiff described her own appearance as “slightly more masculine” and her manager
stated it was “an Ellen DeGeneres kind of look.” The plaintiff wore loose fitting clothes, men’s
shirts and slacks. She wore no make-up and wore her hair short. She had been mistaken for a
man. The employer hired a new director who supervised the plaintiff. This director indicated
that she believed that most front desk staff should be “pretty.” This director also wanted to
videotape any interviews with prospective front desk employees so that she could decide if they
met her standard of attractiveness. The plaintiff protested this interview process as illegal.
This director thereafter replaced the plaintiff because she said that plaintiff lacked “the
Midwestern girl look” and ultimately, the plaintiff was fired, supposedly for performance
reasons. Plaintiff sued the employer under Title VII, alleging she was terminated as a hotel front
desk worker for not conforming to sex-based stereotypes and because she protested the director’s
desire to conduct videotaped interviews. The trial court awarded the employer summary
judgment. In reversing the trial court’s decision, the 8th Circuit Court of Appeals held that
genuine issues of triable fact precluded her discrimination and retaliation claims.
Significantly, the Court stated that the evidence shows the employer enforced a de facto
requirement that a female employee conform to gender stereotypes in order to keep working at
her shift.
The Court held that Title VII protects against adverse employment actions motivated by
sex stereotyping. It also held that a jury could find that the employer’s articulated reasons for
firing Ms. Lewis, namely poor job performance, was pretext. The reasons it believed that the
employer’s articulated reasons for termination were pretextual included the plaintiff’s history of
good performance at Heartland; that the plaintiff had no prior disciplinary record and that she
received two merit-based pay increases. Further, the two individuals who previously supervised
her during her employment at Heartland both stated they had no problem with her appearance
and at least one customer had never seen customer service like Lewis had provided.
On this record, the Court determined that a reasonable fact finder could infer a
discriminatory motive in Heartland’s actions to remove Lewis. The Court also remanded the
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plaintiff’s retaliation claim, for her opposing the employer’s proposed videotaped interview
process.
This case helps show that gender-based stereotyping remains a concern for employers.
Further, it should be noted that the Court found a lack of credibility in the employer’s contention
that it fired the plaintiff for poor job performance. Therefore, if an employer has performance
issues with a certain employee, the issues should be well documented in writing, and at the time
the performance issues occur. Further, if an employee is truly not performing to meet the
employer’s expectations, then the employee should not be receiving any merit-based increases.
It is also important to recognize that these cases of illegal stereotyping can extend to other legally
protected traits beyond gender, including age and race.
Milholland v. Sumner County Board of Education, 569 F.3d 562 (6th Cir. 2009)
This recent case addresses the potential applicability of the ADA Amendments Act,
which became effective in 2009. One of the important things this case reaffirms is that the
ADAAA does not apply retroactively.
Ex-employee, a teacher, sued her former employer, a school district, alleging disability
discrimination in violation of the Americans with Disabilities Act (“ADA”). The trial court
awarded the employer summary judgment. Affirming the trial court’s decision, the 6th Circuit
Court of Appeals held:
(1) The amendments to the ADA did not apply retroactively; and
(2) Nothing indicated that the employer regarded the employee as disabled.
Plaintiff worked as a teacher and administrator for the employer for fourteen years. She
suffered from arthritis and alleged that her employer regarded her as disabled, and therefore
transferred her from an administrative position to a classroom teaching position. The Court held
that the recent ADA Disabilities Amendments Act (“ADAAA”) which became effective January
1, 2009, did not apply retroactively to this case. Further, under the prior, pre-2009 version of the
ADA, the ADA defined “disability” as: (A) a physical or mental impairment that substantially
limits one or more of the major life activities of such individual; (B) a record of such an
impairment; or (C) being regarded as having such an impairment. 42 U.S.C. § 12102(2). The
Court found that the employer was entitled to summary judgment, as the facts construed in the
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light most favorable to the plaintiff did not show a genuine issue of material fact that the
employer regarded the plaintiff as being disabled.
Had the new ADAAA applied to the plaintiff’s case, the Court noted that the ADA would
no longer require the plaintiff bringing the claim under subpart (C)(i.e., being regarded as having
such an impairment) to show that the impairment limited her life activity, including working in a
broad class of jobs. Under the ADAAA, “[a]n individual meets the requirement of “being
regarded as having such an impairment” if the individual establishes that he or she has been
subjected to an action prohibited under this chapter because of an actual or perceived physical or
mental impairment whether or not the impairment limits or is perceived to limit a major life
activity.
The Court further noted that Congress enacted the ADAAA in order to reinstate a broad
scope of protection to be available under the ADA.
However, as the employer’s conduct at issue in this case occurred before the ADAAA
was enacted, application of the ADAAA does not apply to pre-amendment conduct. The
employer, therefore, prevailed.
As noted, the ADAAA emphasizes that the term “disability” should be construed broadly
to the maximum extent permitted by the ADA’s terms and generally should not require extensive
analysis. Based on the ADAAA, and cases such as the Milholland decision, employers can have
confidence that the new ADA Amendments Act, while meant to be more protective of
employees, does not apply to facts occurring before January 1, 2009. Had the factual issues in
this case occurred after January 1, 2009, then the plaintiff may well have been able to recover
against her employer under the ADAAA.
Dobrowski v. Jay Dee Contractors, Inc., 571 F.3d 551 (6th 2009)
This is a case brought under the Family Medical Leave Act (“FMLA”). This case is
interesting in that the Court addressed how the doctrine of “equitable estoppel” applied to the
question of the employee’s eligibility for FMLA leave.
In this Family Medical Leave Act (“FMLA”) case, an employee terminated after
returning to work an FMLA-approved leave of absence for a surgical procedure, filed suit
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against his ex-employer alleging an FMLA violation. The trial court granted the employer’s
summary judgment motion and the employee appealed. The 6th Circuit Court of Appeals held:
(1) The employee alleging that an employer’s statement regarding the employee’s
FMLA eligibility equitably estopps the employer from challenging the employee’s
entitlement to FMLA leave need not prove that the employer knew of true facts of the
employee’s ineligibility for such leave or intended that the employee rely on the
employer’s statement; but
(2) The plaintiff lacked evidence that he changed his position in reliance on the
employer’s statements.
The 6th Circuit decided the standard of proof needed to establish an equitable estoppel
claim in response to an erroneous FMLA-eligibility determination. The Court held that the
plaintiff need only show (1) misrepresentation of the employee’s FMLA eligibility; (2) the
employee’s reasonable reliance on the misrepresentation; and (3) reliance on the
misrepresentation to the plaintiff’s detriment.
Plaintiff suffered from epilepsy and decided to have surgery to treat his seizures. He
notified his employer of his need for leave and was then given a form to apply for Family and
Medical Leave (“FMLA) leave, which the employer approved. Later the plaintiff received a
letter from the employer stating, “Pursuant to the Family and Medical Leave Act, we will leave
[the plaintiff’s] position open for at least twelve (12) weeks from [the date of surgery].”
The employer’s letter also stated that the plaintiff’s first week of leave would be taken as
paid vacation and the remaining weeks would be supplemented with short-term disability
benefits.
Also included in this letter to the plaintiff was a U.S. Department of Labor (“DOL”) form
indicating that the plaintiff was eligible for FMLA leave. However, when he returned to work
(less than 12 weeks later), he was fired for lack of work. The employer also realized that the
plaintiff was not, technically, an “eligible employee for FMLA leave”, as it did not have fifty
employees within a seventy-five mile radius of the plaintiff’s work site. As such, the employer
concluded that the employee was never eligible for FMLA leave.
The plaintiff then sued under the FMLA. The employer moved to dismiss the lawsuit,
asserting that the plaintiff was not eligible for FMLA leave because it did not employ the
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requisite 50 employees within 75 miles as required for FMLA protection. The trial court agreed,
and dismissed the plaintiff’s FMLA case.
Affirming the trial court, the 6th Circuit Court of Appeals recognized that there are
situations where an employer may be “equitably stopped” from challenging an employee’s
FMLA eligibility. The Court reasoned that the doctrine of equitable estoppel may apply when an
employer simply is mistaken about the employee’s FMLA leave eligibility, even if the employer,
in fact, has no intent to misrepresent this issue to the employee. The Court further noted that the
employer should bear the risk of a mistaken determination because it is (or should be) better
informed than the employee regarding the employee’s FMLA eligibility requirements.
The 6th Circuit held that the plaintiff need only show (1) misrepresentation of the
employee’s FMLA eligibility; (2) the employee’s reasonable reliance on the misrepresentation;
and (3) reliance on the misrepresentation to the plaintiff’s detriment. That is, the plaintiff need
not have to show the employer’s intentional or knowing misrepresentation of the facts.
The Court agreed that the plaintiff did not prove that he relied, to his detriment, on the
employer’s erroneous FMLA eligibility determination. The plaintiff had previously decided to
have surgery even before notifying the employer of his desired leave. To equitably estop the
employer from challenging the employee’s FMLA leave eligibility and entitlement, the
employee needed to prove that his decision to have surgery depended on the employer’s FMLA
eligibility determination. This did not occur.
This is an important case insofar as it may apply to employers in the 6th Circuit and other
circuits when making determinations concerning an employee’s FMLA eligibility. It is also
important to note that the only reason the employer was not liable to the employee in the
Dobrowski case is because the employee had already scheduled his surgery prior to being told
anything by the employer regarding his FMLA eligibility and rights.
That is, had the employee scheduled his surgery in reliance on what the employer’s initial
(albeit mistaken) representation that he was eligible for FMLA leave, then he could have showed
“detrimental reliance” and the employer could be held liable for an FMLA violation.
Employers should keep this decision in mind when making their determinations of an
employee’s FMLA-eligibility.
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Further, this case is important because it is possible in the future that the 6th Circuit, and
other circuit courts, could expand this case to other FMLA-eligibility requirements, including an
employer’s representations concerning an employee’s FMLA eligibility based on other things
like the 12 month length of service requirement or 1,250-hour service requirement.
Bell v. Prefix, Incorporated, 2009 WL 877699 (6th Cir. 2009)
This case, which is another FMLA case, addresses the issue concerning what type of
conduct an employee seeking FMLA protection may engage in order to “care” for someone with
a “serious health condition.”
In this FMLA case, the former employee sued his ex-employer claiming he was fired in
violation of FMLA. The trial court entered summary judgment for the employer and the
employee appealed. Reversing the trial court, the 6th Circuit Court of Appeals held that genuine
issues of material fact existed as to whether the employee was terminated in retaliation for leaves
of absence he had recently taken to care for his dying father.
To make a prima facie case of FMLA retaliation, the plaintiff may show that (1) he
engaged in a statutorily protected activity; (2) he suffered an adverse employment action; and (3)
there was a causal connection between the adverse action and the protected activity. Here, the
employer argued that the plaintiff did not engage in the requisite “protected activity” because he
did not “care” for his dying father as required by the FMLA. 29 U.S.C. § 2612(a)(1)(C).
The Court disagreed, stating that an employee may “care” for a sick family member in a
number of ways, including by: providing physical care, providing “psychological comfort and
reassurance”; discussing the family member’s medical condition and treatment with doctors; and
authorizing medical procedures. See 29 C.F.R. § 825.116. Additionally, the Court reasoned, an
employee like the plaintiff could provide such “care” even if they are only “filling in” for the
primary caregiver. The Court found that a reasonable fact finder could determine that the
plaintiff’s evidence of, among other things, his involvement with his father’s medical treatment
met the “care” definition. The Court further determined that a jury should decide the remaining
issues concerning the plaintiff’s FMLA claim, including the question of whether the employer’s
articulated legitimate, nondiscriminatory reason for the plaintiff’s termination (reduction in force
35
based on the poor economy) was pretextual and that his FMLA leave influenced the employer’s
decision to terminate him.
The Bell decision, once again could be extended to other factual scenarios in order to
provide FMLA-protection for an employee with an ill parent or other FMLA-qualifying reason.
It also is important to remember that once an employee can satisfy this statutory definition, then
he or she is also engaging in “statutorily protected activity” for purposes of an FMLA retaliation
claim.
Reed v. International Union et al., 569 F.3d 576 (6th Cir. 2009) (Religious Discrimination)
This case is a Title VII religious discrimination case. In general, there are two kinds of
religious discrimination cases. One involves “disparate treatment.” The other involves
“religious accommodation.” This is a recent religious accommodation case where the 6th Circuit
Court clarified the degree of proof an employee would need in order to show a prima facie case
of religious discrimination.
An employee, who was a religious objector to membership in an employee union, and
who therefore was allowed to make payments to one of three charities designated by the union
and the employer instead of paying union dues, sued the union under Title VII. In his lawsuit, he
alleged that payments to a charity, which exceeded the amount of payments he would have made
to the union, did not constitute a reasonable accommodation of his religious beliefs. The trial
court granted summary judgment for the union. The employee appealed. Affirming the trial
court, the 6th Circuit Court of Appeals held that the employee failed to show a materially adverse
employment action supporting his Title VII religious discrimination claim.
The Court reviewed that under Title VII, two types of religious discrimination cases
exist: disparate treatment claims and religious accommodation cases like this one. The Court
further noted that in analyzing any religious accommodation case, the first question is whether
the plaintiff has shown a prima facie case of religious discrimination. To show a prima facie
case, the plaintiff must show that (1) he holds a sincere religious belief that conflicts with an
employment requirement; (2) he has informed the employer (or union) of the conflict; and (3) he
was discharged or disciplined for failing to comply with the conflicting employment
requirement. In holding that the specific accommodation the plaintiff has requested does not rise
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to the level of an adverse employment action, the question becomes whether the a plaintiff can
proceed with showing an “adverse” action that does not entail “discharge or discipline” since the
plaintiff was neither discharged nor disciplined. The Court determined that the plaintiff has no
evidence that the union caused him to suffer any such materially adverse action regarding his
employment terms and conditions. The Plaintiff’s claim therefore failed.
Most often, in the context of religious accommodation cases, a plaintiff must show,
among other things, that he or she was terminated or disciplined for failing to comply with an
employer’s requirement that conflicts with his or her sincere religious belief. But not always.
Here, the Reed Court explored to what extent an adverse action, short of firing and
discipline, can fail to rise to the level of “materially adverse.”
Using this case as precedent, this Circuit and other circuits courts could further limit an
employee’s ability to bring a religious failure to accommodate case. It could do this by finding
that any action for failing to comply with an employer’s conflicting employment requirement, as
long as the employee was not disciplined or fired, was not “materially adverse.”
EEOC v. Kelly Services, Inc., 2010 WL 1076058 (8th Cir. 2010) (Religious Discrimination)
Introduction
In this case, the U.S. Equal Employment Opportunity Commission (“EEOC”) sued a
temporary employment agency alleging it discriminated against a female Muslim temporary
worker by failing to refer her to a commercial printing company for employment because it had a
dress policy prohibiting headwear and loose-fitting clothing and she refused to remove her
khimar for work. The employer moved for summary judgment, which the trial court granted.
Affirming the trial court’s ruling, the 8th Circuit Court of Appeals held:
(1) The EEOC failed to show a prima facie case of religious discrimination, absent
showing that the employer had an available position to which the agency could refer the
plaintiff on the day she applied for temporary work through that agency; and
(2) In any event, the employer provided legitimate, non-discriminatory reasons for its
failure to refer the muslin temporary worker to that business, and the EEOC failed to
show that the employer’s articulated reason was pre-textual.
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Here, the employer temporary agency’s legitimate, non-discriminatory reason for not
referring the Muslim temporary worker to the commercial printing company for employment
was that company’s facially neutral, safety-driven dress policy. This dress policy prohibited all
employees (regardless of religion or any other legally protected trait; and regardless of whether
such employees were permanent or temporary) from wearing loose-fitting clothing or headwear
of any kind, including the khimar that the Muslim worker wore. The employer produced
evidence that this policy was based on safety reasons. The Court found that the EEOC could not
show that the commercial printing company’s safety-driven dress policy was a pretext for
religious discrimination.
Baden-Winterwood v. Life Time Fitness, Inc., 566 F.3d 618 (6th Cir. 2009)
Wage and hour claims remain an important topic in employment litigation, as we have
previously seen in the Uphoff Figueroa v. Alejandro (1st Cir. 2010), previously discussed.
This is a Fair Labor Standard Act case where the 6th Circuit addresses the question of
how an employer’s pay deductions may affect several of its employee’s eligibility for overtime.
Employees sued their employer, alleging Fair Labor Standards Act (“FLSA”) violations.
The trial court ruled that some of the employees were entitled to overtime for only those pay
periods where pay deductions were made. Both parties appealed. The 6th Circuit Court of
Appeals held:
(1) Auer’s salary-basis test for determining applicability of Fair Labor Standards Act
(“FLSA”) “bona fide executive, administrative, or professional capacity” exemption
applied to pay periods occurring before the effective date of the new Department of
Labor (“DOL”) regulation, which constituted a departure from the Secretary of Labor’s
position in Auer, and the new regulation applied to pay periods occurring after the
regulation’s effective date;
(2) The employer’s compensation plan met Auer’s subject-to-reduction test for the
period prior to effective date of the new regulation; and
(3) Under the new regulation, the FLSA did not allow for the reduction of guaranteed
pay to recoup overpayments made under a purposeful, incentive-driven bonus
compensation plan.
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In this case, the 6th Circuit Court of Appeals addressed a case about pay deductions.
While rejecting some of the employee’s arguments, the Court ultimately did accept the trial
court’s view that the employer violated the FLSA by improperly making certain deductions from
an otherwise exempt employee’s pay, thereby destroying the “salary-basis” mode of payment.
First, to be exempt from the FLSA, an employee must satisfy a “job duties” test (which is
not at issue in this case) and also a “salary-basis” test, which is relevant in this dispute. To show
that the salary-basis test applied to these exempt employees, an employer must show that these
employees were paid (1) a fixed amount (2) that was not subject to reduction and (3) that is
based on neither the quality nor quantity of work performed.
Here, the employer, which owns and operates fitness centers nationwide. The plaintiffs
were employees who were classified as exempt employees from FLSA (and thus ineligible for
overtime). These employees were subject to the employer’s compensation plan that consisted of
various different versions, varying from 2004, 2005 and 2006. However, two provisions of this
plan remained constant: (1) exempt employees subject to the plan were paid a guaranteed base
salary in addition to bonus payments; and (2) if the employer determined that the job
performance of the exempt employee who was subject to this plan dropped below a certain level
of quality, the employer could deduct a certain amount of pay from the guaranteed salary to
“recoup” bonuses paid out previously.
The employer did deduct eight exempt employees’ salaries under the plan in 2005, which
prompted these employees to sue. These employees alleged that the employer’s compensation
plan and its pay deductions violated the “salary-basis” test and destroyed their exempt status. As
such, the employees contended that once their exempt status was gone, they became eligible
employees for FLSA protection and, therefore, entitled to overtime pay for hours worked over
forty in a given work week, liquidated damages and attorney fees. In 2006, after their lawsuit
commenced, the employer further revised its compensation plan to state that no deductions
would be made to the guaranteed base salary for the employees covered by the plan.
The trial court divided the time periods based on the dates each different compensation
plan was in effect. Before the fairly recent August, 2004 DOL regulations took effect, the Court
held that the employee’s claims were controlled by the U.S. Supreme Court’s pre-2004 decision,
Auer v. Robbins. After the time when the new DOL regulations took effect in August, 2004,
39
then the Court reasoned that the new regulation controlled the analysis. Adopting this approach,
the trial court stated that the employees were entitled to overtime only for the pay periods when
deductions were actually taken from the employees’ paychecks. Both the employees and the
employee appealed the trial court’s decision.
The 6th Circuit affirmed the trial court’s decision to divide the time periods applicable to
the employees’ claims; and the Court agreed that the FLSA violations occurred in 2005, under
the new DOL regulations. However, the Court disagreed with the trial court that the employer’s
2004 compensation plan did not violate the FLSA.
The Court noted that, when Auer controlled for the time period prior to August 2004, the
Court held that while the employer made no actual deductions during that time of the exempt
employees’ pay, the trial court was incorrect in finding that insufficient evidence existed that the
employer intended to enforce its policy. The plan, in the Court’s view, created a substantial
likelihood in 2004, that improper deductions would be made and the plan therefore violated the
FLSA before the new DOL regulations took effect on August 23, 2004.
The Court then addressed the period when the new DOL regulations controlled, in 2005,
and the employer actually took deductions from the plaintiffs’ pay. Since the actual deductions
were taken, the 6th Circuit upheld the trial court’s finding that the employer violated the FLSA in
2005 since these deductions violated the “salary basis test” and destroyed the plaintiff’s exempt
status.
This is a fairly technical case, but the overarching theme is important. Courts can hold an
employer liable under the FLSA for making certain improper deductions from an exempt
employee’s pay.
Is also is important to note that there are certain limited exceptions where an employer
can make deductions from an exempt employee’s pay and still not disturb the employee’s
exempt status. Such limited exceptions include:
(a) when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability;
(b) the exempt employee’s absences of one or more full days caused by his or her sickness or disability (including work-related accidents) if the deduction is made in accordance with a bona fide plan, policy, or practice of providing compensation for loss of salary occasioned by sickness or disability;
40
(c) when deductions from an exempt employee’s pay are made for penalties made in good faith for infractions of safety rules of major significance; or
(d) when deductions from an exempt employee’s pay are made for unpaid disciplinary suspensions of one or more full days imposed in good faith for infractions of workplace conduct rules, where such suspensions are imposed pursuant to a written policy applicable to all employees.
(29 C.F.R § 541.602)
The Baden-Winterwood decision did not involve facts where any of the above exceptions
would apply. Therefore, employers must be aware of wage and hour laws when drafting
compensation plans for employees and, especially, when employers even consider making
deductions from exempt employees’ pay. Doing so could potentially destroy the “salary basis”
exemption and cause the employee to become protected by the FSLA’s protections.
In this event, an employer could held liable to the employee for back overtime, liquidated
damages and other relief provided for under the FSLA.
