Chris Vrountas, Chair of the Employment Counseling and Litigation Practice Group, has offered the following on the recent activity at the United States Supreme Court:
The Quick Summary
In a closely held decision, the Supreme Court yesterday held that the City of New Haven could not reject its firefighter test results which favored white candidates over minorities solely because of the disparate impact the test had against minorities absent a “strong basis in evidence” that the test was either arbitrary or that there existed an equally valid alternative test that would not have resulted in such a disparate result. See Ricci, et. al. v. DeStefano, et. al., No. 07-1428 (June 29, 2009). The dissent suggested the City should have been held to a mere “good faith” standard, but the majority viewed such a standard as an inadequate protection for candidates against expressly race based decision-making which would lead to informal and unlawful quotas.
The Background
The saga began when the City developed a test for firefighters to take to determine who may be eligible for promotions. The majority opinion noted that the City expended significant resources to develop an effective test calculated to determine qualified candidates for promotion. Only after administration of the test and only after the results came in did the City reject the test as inappropriate, and the City did so solely based on the fact of the racial demographics of those who passed. Specifically, those eligible for promotion were all white save for one Hispanic. No African Americans passed the test for promotion eligibility.
The Reasoning
From the Court’s perspective, such rejection based solely on the racial makeup of those who passed constituted nothing more than race discrimination, regardless of the allegedly benign intent. First, the Court reviewed the basics. Disparate impact liability under Title VII arises when an employer’s neutral business practice or decision results in a disparate impact against a protected class such as race, unless the employer can show the business practice or decision is supported by a business necessity. Alternatively, an employer can justify a business practice or decision that has a disparate impact against a protected class of people if it can show such practice or decision is “job related,” unless those challenging the practice or decision can show an equally valid alternative that would have had a less discriminatory impact.
In this case, the majority conceded that a prima facie case for disparate impact liability against the City existed after the test results came in, as the winning candidates were nearly all white. But the majority insisted that no evidence in the case legitimately supported a finding that the test was either unrelated to the jobs subject to promotion or that the test could have been replaced with an equally valid alternative test that was less discriminatory.
The majority also acknowledged that the City had been threatened with a lawsuit based on the test results. But the Court said that fear of litigation alone does not justify a race based employment decision. Rather, the employer must, according to the Court, must have a “strong basis in evidence” that it in fact would truly be subject to disparate impact liability in the event a lawsuit would be filed. Otherwise, a lesser standard would allow race based employment decisions based on potentially specious claims.
What tipped the balance for the firefighters in this case was the post-facto disregard of the test results based solely on the racial makeup of those who passed. The Court expressly discussed how there would have been nothing inappropriate for the City to have worked to develop an alternative test in advance of its administration with the intent to achieve a more balanced racial makeup of passing candidates. What offended the Court, it seems, was the after the fact change in the rules by the employer because it did not like the racial makeup of the passing candidates. Such conduct, from the Court’s perspective, could only be described as race discrimination outlawed by Title VII.
The Dissent
The dissent challenged the Court’s view of the facts, but it also disputed the Court’s proffered legal standard. The dissent asserted that the employer should be held to a mere “good faith” standard, and the dissent argued that the substantial disparate impact in this case, coupled with the history of discrimination in the department generally, allowed the City to maintain such a good faith concern of potential disparate impact liability.
The Implications
Finally, the dissent drew an important analogy to affirmative action which suggests the majority opinion may further restrict the extent to which employers may act to remedy discrimination. Citing Johnson v. Transportation Agency of Santa Clara, 480 U.S. 616 (1987), the dissent argued that if an employer may take membership in a protected class into account as just one of several factors to be considered when making an employment decision, then certainly an employer should be able to make a race based decision to avoid what it in good faith may be potential liability under a disparate treatment lawsuit that could be filed against it. The fact the majority did not find this argument convincing may suggest that affirmative action could face further legal restrictions in the future.
In the end, the “post hoc ergo race discrimination” analysis prevailed yesterday, but whether the impact of the Court’s decision will remain tied to such timing or whether it will spread to other employment decisions and goals remains to be seen.
Stephen Coppolo, a member of the Firm’s Employment Counseling and Litigation Group, reported the following:
In the case of Gross v. FBL Financial Services, Inc., the Supreme Court by a five-to-four vote threw a curveball that few people, including the parties arguing before the Court, saw coming. In Gross, the parties asked the Court to decide what type of evidence must be offered by an employee to in order to obtain a “mixed motive” jury instruction in an ADEA-discrimination case. The Court did not answer that question, instead determining that a “mixed motive” jury instruction is never warranted in an ADEA disparate treatment claim.
In plain English, the (former) practice in federal age-discrimination cases where the employee produced evidence that age was “a motivating factor” in the adverse employment decision was to shift the burden of proof to the employer to prove that it would have made the same decision even if it had not taken age into consideration. This is the same analysis used in race, gender, religion, or national origin cases under Title VII of the Civil Rights Act of 1964. After Gross, the burden of proof is the same in all ADEA claims, regardless of whether or not the employer offers a permissible motive for the employment action: the employee must prove that but for the impermissible reliance on age, the adverse employment action would not have occurred. Thus a special jury instruction in such “mixed motive” cases is improper.
While the decision is based on a technical statutory analysis and deals with slightly arcane evidentiary concepts, Gross is a win for employers as it relieves them of a heightened evidentiary burden. Strikingly, the Court’s five-Justice majority hinted that it might reevaluate the burden shifting approach in Title VII cases as well. This remains to be seen.
It also remains to be seen whether Congress will attempt to legislatively overturn Gross as it succeeded in doing with Ledbetter v. Goodyear Tire & Rubber Co.
Last week, the EEOC voted to amend its regulations concerning disabilities discrimination to implement the provisions of the ADA Amendments Act of 2008. The revisions are not final, however, as they must now undergo a comment period with other federal agencies and pass review at the OMB. In the meantime, the approved revisions may well suggest the EEOC’s interpretive position on the ADA generally going forward.
An employee in Puerto Rico was forced to take a demotion and claims that this demotion was motivated by discrimination against him because of his age. The law requires that such an employee seek the review of the Equal Employment Opportunity Commission (“EEOC”) before he can bring a lawsuit. Because of this requirement, the statute of limitations is paused (or “tolled”) until the employee learns from the EEOC whether there is some basis to his claim.
Puerto Rican law gives the family of a discriminated-against employee the right to sue the employer. The relatives claims against the employer are not based on discrimination but on the pain and suffering they have incurred: therefore, the employees are not required to seek EEOC review.
In a recent decision, the First Circuit held that the statute of limitations on the family’s claims is not tolled while the employee seeks EEOC review. The Court noted that the relatives could have preserved their claims against the employer by filing a lawsuit within the statute of limitations, or – if they did not wish to litigate prematurely or wanted to await the EEOC review – by making an extrajudicial claim against the employer.
The Court also held that the statute of limitations was tolled with respect to the claims of the minor son of the employee, as under Puerto Rican law statutes of limitations are tolled until the person bringing the claim has reached the age of 18.
In another sign of the times, the Department of Employment and Training has announced that over 5,000 unemployed workers currently await their hearing on their unemployment claims, roughly three times the number as last year. Not only are there more in line, the line is moving slower as the time from initial denial of a claim to the hearing has increased by months while people now wait up to 6 months or more for a determination by the Department.
According to reports provided by NPR the backlog has resulted not only from the layoffs expected from a down economy but also from an apparent trend among employers increasingly to challenge unemployment claims rather than agree to pay them. Generally, while an employee discharged due to poor performance or lack of business will typically be entitled to unemployment benefits, employees who resign or who have been discharged due to misconduct will not be entitled to such benefits. Employers have, according to NPR, stepped up their challenges to benefits along these lines which has lead to even more requests for hearing than one would expect just from the increased numbers of the unemployed due to the recession. Meanwhile, the unemployed wait without benefits, which has stirred discussion for possible reform to the system. What that means for employers remains to be seen. For example, will employers be forced to pay benefits during the waiting period with the hope of a refund when and if they prevail down the line? Or will employers need to pay interest or some form of penalty in the event they lose at the hearing thereby deterring potentially less meritorious challenges to benefits? The reform movement is in its early stages at this point and it is uncertain if anything will change in time for those looking for work during these recessionary times.
Three states have passed menu labeling legislation in the past two weeks. Connecticut, Maine, and Oregon legislatures have all voted to approve bills requiring restaurants to post calories and other nutrition information on their menus, menu boards, and other marketing material. In each of these states, the bills require further action before they become law. What will menu labeling mean for your restaurant?
Tune in tomorrow for a free webinar featuring Chris Vrountas and Adam Prizio, who will present on how to navigate this new legal landscape.
Remember the MEAL and LEAN Acts? Last week, lawmakers backing both acts reached a compromise to produce a single, unified bill on menu labeling across the United States. On Wednesday, June 17, at 2:00 pm, Chris Vrountas and Adam Prizio of the Food & Hospitality Practice Group will discuss menu labeling and restaurant compliance in a free webinar.
The compromise bill has not been written yet, but reporting on the compromise contains several facts of interest to restaurant operators.
The compromise bill would set a single standard for compliance by preempting State menu labeling laws.
The compromise bill would cover restaurants operating 20 or more locations under the same name.
Menu labeling will be required for standard menu items available more than 60 days per calendar year.
The bill would contain a “safe harbor” provision protecting restaurants from private legislation arising out of the accuracy of labeling.
In the past, we have posted about the $100 million verdict award by a San Diego jury to a class of baristas against Starbucks for the company’s practice of distributing pooled tips to its shift supervisors as well as its baristas. The baristas case is based on California Labor Code section 351, which precludes an employer or its “agent” from taking any part of tips left for an employee. The trial court had ruled that shift supervisors qualified as “agents” of the employer, who are thus “precluded from sharing in tips from the tip pool.” Thus even though the shift supervisors prepared beverages and served them to customers just as did the baristas, they were ineligible to share in the tip pool. This eye-popping damage award led to copycat suits in Massachuetts and New York.
In early June 2009, the California Court of Appeals dealt a significant blow to the tip-pooling litigation trend by reversing the $100 million verdict that started it all. According to the court’s opinion, which can be found here, the question of whether a shift supervisor was an “agent” of the employer was immaterial, because the trial court incorrectly construed prior case law. Specifically, the appellate court criticized the trial court for applying decisions where a tip was given to a specific employee, such as a waiter or waitress at a restaurant.
Starbucks utilizes a “team” concept where multiple employees, both baristas and shift supervisors, provide service to complete a single customer’s order. By leaving a tip in the unmarked receptacle, the court reasoned, the patron intended to give the gratuity to the entire “team” of service personnel, including both baristas and shift supervisors. The Court of Appeals therefore held that the trial court’s reliance on a line of cases dealing with forced sharing of a tip given to one employee was improper, and reversed the verdict.
This is likely not the last word, however, as lawyers for the baristas have signaled their intention to appeal the ruling to the California Supreme Court.
Maine employers can be liable for sexually harassing acts of an employee if they fail to take immediate, corrective action. In a recent case, the Maine Supreme Judicial Court adopted the position that an employee who is harassed by another employee has a claim against their mutual employer.
The employer can avoid this claim by showing that it took immediate and appropriate corrective action. Whether the employer’s actions are appropriate is subject to what the Court called the “Rule of Reason.” This is the sort of evaluation, the Court notes, that is “best left to a jury.”
As this is a new development in Maine employment law, we expect Maine courts, or the Maine Commission on Human Rights, to develop it further so as to provide guidance for employers seeking to follow the law.
We had so much fun with that webinar that we’re doing another one! Coming up on June 17, 2009, Chris Vrountas and Adam Prizio will talk about a topic that promises to shake up the restaurant business: menu labeling.
Many states as well as the federal government are considering mandatory disclosures of nutrition information on restaurant menus. Chris and Adam will talk about how to comply with the various state laws already on the books, and the ones coming down the ‘pike; how to avoid accidental false advertising lawsuits; and how to incorporate compliance into your branding strategy.
Look for an e-blast notification soon, or contact us for more details!
Daniel Gross has an article on Slate about how upscale-casual restaurant P.F. Chang’s has weathered the recession. The key?
The company has avoided wholesale restructuring and panicky discounting. … Rather, it simply has worked hard at doing a better job running things. Co-CEO Rick Federico says that in early 2008, when traffic first softened, management went through “all elements of our business that don’t touch our guests or our product” in a search for efficiencies. P.F. Chang’s cross-trained prep cooks and line cooks, so the folks who dice chicken and vegetables can fry them up in woks, too. It also hired an expert to develop a new scheduling tool to manage staffing better. In a period when growth is muted, this unglamorous focus on operations and seemingly minor efficiencies will allow all types of businesses—not just restaurants—to distinguish themselves from their competition.
The article attributes the above strategies to Chang’s pursuit of kaizen, the Japanese concept of continuous slow improvement as pioneered by Japanese manufacturers such as Toyota.
An employee who suffered a demotion during his government-employer’s reorganization could not prove he suffered an adverse employment action in retaliation for his alleged public criticism of his department, and the court granted summary judgmenton his claims in favor of the employer.
The employee, William Carlberg, sued his employer, the New Hampshire Department of Safety, after it completed a reorganization which, among other things, downgraded his job title and salary grade. Carlberg claimed that he was wrongfully demoted and that his employer violated the First Amendment by demoting or constructively discharging him in retaliation for publicly criticizing the department.
The United States District Court for the District of New Hampshire found that once his employers lawfully reorganized the department, Carlberg possessed no right to continued employment at his former rank and salary grade and was thus not entitled to any procedural due process under those circumstances. Carlberg claimed a property right in his rank stemming from a New Hampshire statute that mandates a hearing for any police employee that is demoted for cause, as well as a personnel rule that calls for a hearing in disciplinary demotions. Dismissing Carlberg’s argument, the court noted that both of these sources deal only with disciplinary demotions for cause, not demotions as a result of a lawful reorganization. The court held that New Hampshire law draws a distinction between disciplinary actions and personnel actions taken in the course of reorganization. Accordingly, while employees have a right to a hearing when their employer seeks to demote them for cause, they have no vested right to protection from a reorganization.
The court further found that Carlberg was also not deprived of any reputation-based liberty interest when his title was changed, because the reorganization was not personal to him, but affected all employees, and because there was no evidence that his employer defamed him when it announced the title changes.
Finally, in assessing whether Carlberg was demoted for publicly criticizing the department, the court declined to determine whether the reorganization was an adverse employment action because Carlberg offered no evidence to show that his speech was a substantial or motivating factor in his change of position, and the only evidence presented (Carlberg’s public comments, the lawfulness of the reorganization, and the treatment of similarly-situated employees) indicated that Carlberg was neither a target of any disciplinary action nor treated any differently than other employees that did not complain publicly.
In 2006, a former employee file suit against Federal Express (“FedEx”), alleging (among other claims) that FedEx violated his rights under the Massachusetts Civil Rights Act (“MCRA”). The MCRA prohibits interference in rights granted under federal or state law by “threat, intimidation or coercion”. See MGL c. 12 sec. 11H. The United States District Court for the District of Massachusetts entered summary judgment in favor of the defendant FedEx, and the plaintiff appealed.
The plaintiff argued that FedEx had retaliated against him after he filed a complaint with the Occupational Safety and Health Administration (“OSHA”) concerning fumes in his delivery vehicle. The plaintiff recited various alleged failures to respond to his inquiries, to provide material safety data sheets on request, to provide a copy of his personnel file, an alteration in his service route, and performance counseling. The court found that none of these actions constituted “threat, intimidation or coercion” as required by the MCRA.
However, the plaintiff also alleged that during a meeting with a senior manager, the manager screamed at him and slammed her hands against the table. The plaintiff alleged she told him that because he had retained an attorney, his in-house appeal of various matters would no longer be considered. The plaintiff claimed he was “terrified” of her, and withdrew his request for both his personnel file and tuition reimbursement (the latter submitted pursuant to FedEx policy) as a result.
The court noted that whether the plaintiff himself was “terrified” was not dispositive. An objective test, not a subjective one, is applied to determine whether conduct rises to the level of “threat, intimidation or coercion”. The court held that under a subjective standard, no reasonable person would have been “terrified” by the conduct complained of. The court also noted that the manager was new to FedEx, and had not been involved in any of the prior incidents or the handling of the OSHA complaint. She had no knowledge of the OSHA action. Therefore there was no connection between her conduct and the statutory rights claimed by the plaintiff. The First Circuit Court of Appeals affirmed the grant of summary judgment.
BREAKING NEWS – The Massachusetts Public Health Council is voting today on a proposed regulation that would require Massachusetts restaurants to post calories on their menu boards. The regulation is modeled closely on the New York City ordinance, passed last year, and is expected to pass.
Many states, and the Federal government, are considering menu labeling legislation, but Massachusetts is only the second U.S. state, after California, to pass a menu labeling law. The California law superseded ordinances passed by cities and counties in California, creating a single, statewide standard for menu labeling. Unlike California, the Massachusetts regulation will not supersede county or city ordinances which impose more stringent requirements on restaurants.
In 2000, the Equal Employment Opportunity Commission (“EEOC”) found in favor of former postal clerk Robert DesRoches on his Rehabilitation Act Claim. The EEOC ordered DesRoches reinstated with back pay. The parties were unable to agree on a suitable position, and in 2002 DesRoches filed an enforcement petition with the EEOC. While that Petition was pending, the postal service offered to reinstate DesRoches and instead later ultimately paid him just over $300,000 in back pay and interest. DesRoches accepted the payment, but did not withdraw the enforcement petition because he believed he was owed additional back pay.
Only a month later, the EEOC reversed itself, denying the plaintiff’s enforcement petition. The EEOC found that DesRoches voluntarily ceased work before the alleged discrimination. Therefore, the defendant postal service owed DesRoches no back pay damages at all. DesRoches applied for judicial review of the EEOC opinion, and his request was denied. He then filed an amended Complaint requesting de novo review of his Rehabilitation Act claim. The postal service counterclaimed for unjust enrichment, and moved for summary judgment.
The United States District Court for the District of New Hampshire, Barbadoro, J., presiding, entered summary judgment in favor of the postal service on the Rehabilitation Act claim. The court based its ruling on it independent finding that DesRoches was never qualified for the position he sought. The postal service then moved for summary judgment on its counterclaim for unjust enrichment, seeking repayment of the $300,000 in damages.
The court ruled that the plaintiff had been unjustly enriched, and that the postal service was entitled to recover the damages paid. Specifically, the court noted that the award of damages was based on an alleged violation of the act that was found (by the court on de novo review requested by the plaintiff) never to have occurred. Therefore, reasoned the court, DesRoches “has no entitlement under the Rehabilitation Act to the money re received from the [postal service]”.
Object lesson: overreaching by Claimants and plaintiffs may render adverse judgments vulnerable to attack by the defense. If the Claimant had accepted the position offered by the postal service, the EEOC would never have reviewed the matter under his Petition for Enforcement. If he had accepted the $300,000 damages payment and withdrawn his Petition, the EEOC would never have reached its adverse finding. If the Claimant (now plaintiff) had never filed for de novo review, the court would not have had an independent basis for issuing the summary judgment ruling underlying the successful counterclaim.
If a Respondent or defendant receives an adverse ruling, look backward down the procedural trail. Concurrent or subsequent filings by the Claimant/plaintiff may leave him vulnerable to reversal.
On the heels of yesterday’s roundup of EFCA news comes this: longtime Republican Senator Arlen Specter has changed his party affiliation and joined the Democratic Party. In his press release today, Senator Specter specifically mentioned that he would not vote for the EFCA. Senator Specter was the sole Republican who voted for cloture when the EFCA was being considered in 2007, but he has come out against the bill this year.
Despite Specter’s assurances, political pressure from labor-heavy Democratic constituents in Pennsylvania may cause him to change his mind on EFCA. Stay tuned.
The FDA and USDA inspect food that travels in interstate commerce, but state health agencies do a lot of the early investigating of foodborne illness outbreaks. Operators may know that laws can vary from state to state, but a recent article in the New York Times talks about different levels of investigation among different states. Minnesota, for instance, investigates every reported case of foodborne illness, while the Kentucky board of health does not have the resources to track every case. The state of Minnesota was responsible for identifying the Peanut Corporation of America as the source of a recent salmonella outbreak.
Regardless of how diligently a state enforces the health code, producers and operators should always take care to comply with every applicable law.
Labor organizers have resolved to put intense lobbying pressure on U.S. Senators in order to make sure that the EFCA has the 60 votes it needs to overcome a filibuster. This resolve comes in the face of news that support for the EFCA is wavering in the Senate.
Some observers have noted that the EFCA may have become a wedge issue between those who want to pass health care reform and those who want to pass the EFCA. Senator Mike Bennet of Colorado, believes that the EFCA will drive a wedge between business and labor that will damage the passage of health care reform later on.
Senator Sherrod Brown believes that the EFCA is not in shape to pass as written, and that it will undergo a substantial re-write before it hits the Senate. Senator Brown’s belief has some support in comments made on Friday by SEIU head Andy Stern, who indicated that he might be willing to compromise on certain language, including the controversial “card-check” provisions of the bill. Stern commented that unions should commit to getting some substantive reform instead of supporting a bill that cannot pass, year after year. In 2008, a substantially similar EFCA bill passed the House but was voted down in the Senate.
Most customers at fast-food restaurants do not seek out, or even look at, the nutrition information that has been made available to them, according to a new study. Researchers at the Yale psychology department observed 4,311 customers at fast-food restaurants in New York City, New Haven, Ct., and other nearby towns. Out of all the customers they observed, only six looked at the nutrition information that those fast-food restaurants made available to them.
The study’s authors conclude that nutrition information should be more prominently displayed.
The Maryland General Assembly recently rejected menu-labeling legislation that would have required fast-food and full-service chains to post caloric content of regular menu items on their menu boards. The bill, H.B. 601, would also have required full-service chains to post saturated and trans fat, carbohydrate, and sodium content on menus.
In rejecting the bill Maryland drops out of the menu-labeling trend that, to date, includes California, Indiana, Massachusetts, New York State, New York City, and Philadelphia. Some industry watchers, including the National Restaurant Association, are recommending that the federal government produce a single, unified menu labeling law such as LEAN or MEAL.
